Ethical Leadership: Tony Fernandes and Volkswagen

This assignment analyzes ethical leadership by comparing the approaches of Tony Fernandes, founder of AirAsia, and Martin Winterkorn, former CEO of Volkswagen. It explores how Fernandes' ethical leadership style fostered employee well-being and customer satisfaction, contrasting it with Winterkorn's approach that ultimately led to unethical practices and scandal. The 4V model of ethical leadership is used as a framework for understanding the values, vision, voice, and virtue underpinning these different leadership styles.

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Name of the Student
Name of the University
Author Note

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Ethical leadership refers to the leadership guided by regard for ethical values and
principles towards the morale and rights of others. The style of is related to notions of honesty,
reliance, charisma, consideration and justness (Northouse 2015). An ethical leader must be just
and fair. He should treat everyone equally. The employees working under the leadership of an
ethical leader face unbiased treatment in the respective work field. An ethical leader should have
respect for his fellow employees. Honesty is a particularly important quality that should be
present in an ethical leader. There must be transparency in the conveyance of facts by the ethical
leader. Another important quality of the ethical leaders is humanity. They should be humane and
kind. Team building is the primary focus of ethical leadership.
All implemented decisions by an ethical leader are driven by value. An ethical leader
encourages and rewards his employees on coming up with innovative ideas. The leader expects
the employees to follow the example that he sets for them. An ethical leader ensures a regular
understanding over the company. An ethical leader does not overlook any violations on the
organizational ethics (Stem-researchethics.org, 2017).
Ethical leadership ensures that the job satisfaction of the workforce members faces an
increment due to the focus on cooperation and association. This ensures that the employees
promptly report to the authorities concerned on experiencing problems. It also provides
collaborative benefits on an additional basis. This leadership style ensures low business liability
thereby preventing expensive internal errors within the organization. Ethical leadership has some
disadvantages as well. The organizational vision should fall in line with the ethical framework of
the ethical leader (Northouse 2015). Ethical leadership depends on the leader’s ability to
influence. At times for the leader may find upholding lofty ethical standards extremely difficult.

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Organizations practicing ethical leadership have to spend attention towards their policies. The
consistency requirements also prove to be a drawback at times.
Ethics can be broadly divided into two principle theories, the deontological ethics and the
teleological ethics. An example of a deontic relationship is the relationship between an employee
and his employer. The set of rules that focuses on the duties and concentrates on the activities of
people more than on the effects are referred to as deontological ethics. According to this set of
principles, vices and virtues are discernible from the action. Kantian ethics may be cited as an
example for deontological ethics. According to Kant, acts from the duty sense are morally
correct. Kant further opines that judgement of whether an action is right or wrong depends on the
motives of the doer and not on the consequences of the action. Deontology helps a person to stay
consistent to their works as they work in a same manner each time they do satisfy their
commitments. People practicing deontology are often seen to become supererogatory in their
actions. This principle of ethics does have disadvantages as well. The followers have chances of
not violating his duties to avoid several other violations by others. They operate, at times,
without any logical reason. Moreover, the system does not provide with ways for dealing with
situations of conflicting duties.
Unlike deontological ethics, the outcomes of the action justify the means of action in
case of teleological ethics. The consequences affect the righteousness of the act. A number of
philosophers like Bentham, Mills and Machiavelli promote this principle of ethics. Teleological
ethics are based on the increment of happiness and decrement of the antonym. Practitioners of
teleology base the principle on the consequences of the actions of the doer. This principle is
easily understandable and is based on common sense. Despite all the advantages, teleological
principle of ethics has disadvantages as well. The followers of this principle find difficulty in

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predicting consequences of the action. There are found discrepancies in the followers as to the
assessment procedures in the calculation of good consequences. The results of an act may vary
according to the person responsible for the act. The ethical principles that are based on results lay
more importance on the outcomes of an action rather than the process. Teleological ethics is not
consistent with the human rights.
Figure 1: The 4 V Model
(Source: Ethicalleadership.org, 2017)
One such ethical leadership model is the 4-V model, created by Dr. Bill Grace
(Ethicalleadership.org, 2017). The core values of leader need to be influenced and understood.
The leader should have a clear vision as to where would these core values lead him and the
organization. These leaders must convey their visions and ideas to the employees about the
services that the organization should provide. The leader must aim to identify the right from the
wrong and implement the knowledge indecision making.
Air Asia is one of the most popular and the largest economic airline of Malaysia.
Founded by the Malaysian government in 1996, Air Asia was taken up by the business tycoon

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Mister Anthony Franchis Fernandes. The airline has a net income of RM 1.574 billion per
annum. It has the title of the world’s best airline in the low cost service provider category for
eight consecutive years (Airasia.com, 2017).
Figure 2: Air Asia logo
(Source: Airasia.com, 2017)
The leadership of Tony Fernandes has brought in drastic transformational changes in Air
Asia. The values that he has inculcated in his company, has made the employees much more
organized (King, 2013). He fulfilled the visions he had, by the virtue of his strength. He took the
audacious step towards standardizing and communizing the infrastructure of the airlines.
According to him, the customers will be taken care of if the workforce of the concerned
organization is well looked after. The costumers are facilitated with the best commodities an
economic airline can have and the voice of the stakeholders do not go in vain (Yee and Pei,
2014).
The ethical leadership technique of Tony Fernandes can be well identified in contrast to
that of Martin Winterkorn, the former CEO of Volkswagen. This leader was known for his habit

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of calling out on his employees and criticizing them for their shortcomings or mistakes. This may
have led to the employees in believing that cheating was not a fault on their part till the company
met its lofty goals (Ethicalsystems.org, 2017). This is considered an unethical practice according
to the 4V model as it compromises on the values of the company thereby compromising with the
core values of the honest employees.
In conclusion, thus, it may be said that irrespective of its kind, a model regarding
leadership is pivotal in setting up of any industry. The 4-V model, discussed above, of ethical
leadership helps in understanding of the means to conduct an ethically sound business. Ethical
leadership also had added negative aspects to it; the leader needs to have a strong vision to
satisfy the employees associated with the business organization. The example Tony Fernandes,
founder of Air Asia provides a bona fide example of how to bring the concept of ethical
leadership in business to actuality.

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References:
Airasia.com (2017). Tony Fernandes recognised for his contribution to the growth of ASEAN
and US-ASEAN relationship | AirAsia. [online] Airasia.com. Available at:
https://www.airasia.com/ot/en/press-releases/tony-fernandes-recognised-for-his-contribution-to-
the-growth-of-asean-and-us-asean-relationship.page [Accessed 22 Sep. 2017].
Ethicalleadership.org (2017). Concepts and Philosophies. [online] Available at:
http://www.ethicalleadership.org/concepts-and-philosophies.html [Accessed 22 Sep. 2017].
Ethicalsystems.org (2017). Very Worrying: VW, Leadership and Ethical Culture | Ethical
Systems. [online] Ethicalsystems.org. Available at:
http://ethicalsystems.org/content/VW_Culture [Accessed 4 Oct. 2017].
King, B.E., 2013. Transactional and transformational leadership: A comparative study of the
difference between Tony Fernandes (Airasia) and Idris Jala (Malaysia Airlines) leadership styles
from 2005-2009. International Journal of Business and Management, 8(24), p.107.
Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.
Stem-researchethics.org (2017). Characteristics of Ethical Leaders. [online] Stem-
researchethics.org. Available at: http://stem-researchethics.org/ethics100/node/57 [Accessed 22
Sep. 2017].
Yee Liau, B. and Pei Tan, P., 2014. Gaining customer knowledge in low cost airlines through
text mining. Industrial Management & Data Systems, 114(9), pp.1344-1359.