Ethical Leadership Principles and Practices in the Automotive Sector

This essay provides a comprehensive analysis of ethical leadership, emphasizing its significance and application within the automobile industry. The paper begins with a definition of ethical leadership and highlights its advantages for businesses, including enhanced productivity, transparency, and improved brand reputation. It then delves into the principles of ethical leadership, such as respect, honesty, and community, and their positive impact on business operations. The automobile industry is selected as a case study, with a discussion on the importance of ethical leadership in this sector, supported by the trait theory of leadership. The study identifies challenges faced by leaders in maintaining ethics, such as sustainability issues and cultural barriers, and proposes solutions through ethical leadership and HRM practices. The essay concludes with a summary of key findings and recommendations, underscoring the benefits of ethical leadership for fostering a healthy work environment and achieving competitive advantages.

DISCUSSING ETHICAL LEADERSHIP THROUGH
ACADEMIC ARGUMENTATION
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Word Count: 2101
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Executive summary
A brief definition of ethical leadership has been discussed through this paper along with that
its advantages in the current businesses has been also evaluated here. Apart from that,
different principles of ethical leadership have been mentioned and its advantages business
operation has been identified in this study. Moreover, the automobile industry has been
selected to conduct this study. Importance of ethical leadership in this sector has been
discussed along with that Trait theory of leadership has been used to get proper justification
of the importance and benefit of ethical leadership. Challenges that leaders of the automobile
industry commonly face in order to maintain ethics have been highlighted in this paper. On
the other hand, maintaining ethical leadership during business operation and HRM practises
help the automobile companies to overcome those issues has been mentioned in this paper.
Lastly, an overall summary and in order to highlight the key points conclusion has been
added here.
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Table of Contents
Introduction................................................................................................................................4
The growth of ethical leadership................................................................................................4
Ethical leadership in automobile industry..................................................................................6
Conclusion................................................................................................................................10
Reference list............................................................................................................................11
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Introduction
Ethical leadership is one of the most effective leadership styles for businesses as with the
help of this leadership style productivity of a company can reach to maximum level. Along
with that a firm can maintain the transparency in its business operation with the help of
ethical leadership that will automatically improve the brand reputation. In this study a brief
discussion about ethical leadership and its importance in the businesses will be conducted
along with that the reason for its popularity will be explained here. Automobile sector is
selected for this study in order to discuss the various aspects and elements to ethical
leadership in context to the industry. The decision making issue faced by an ethical leader in
the industry will also be discussed by using leadership theory. Further, the way in which an
organisation within the sector can benefit from ethical leadership will also be discussed.
Lastly, the outcome of the study will be shown in the conclusion part of this study.
The growth of ethical leadership
Ethical leadership is a leadership style that gives all the focus on ethical beliefs and values.
Ethical leadership is also defined as leadership that promotes interpersonal relationships
along with that holding respect and equality for others (Qing et al. 2020). Leaders who follow
ethical leadership in the business always give their all focus on the collective values, morals
and beliefs of individuals. According to the description of Jambawo (2018), ethical leadership
has five principles; respect, service, community, justice and honesty that every leader should
maintain during the leadership. Ethical leaders always respect others and this is the main
reason they can manage employees in a better way than others. Honesty and maintaining
equality in the business operation help these leaders to gain more respect in the existing
market. People also get attracted towards these leaders for this transparency.
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Figure 1: Ethical leadership
(Source: Jambawo, 2018)
Ethical leadership is gaining more popularity nowadays as it is extremely important and
effective for businesses. As per the statement of Saha et al. (2020), running a business
operation in an ethical manner can easily catch the eyes of potential investors. Therefore,
businesses will get more funds and will be able to invest those funds to improve the service
quality. In this way businesses will achieve more success with the help of implementing an
ethical leadership style. On the other hand, one of the biggest benefits that a firm can get
from ethical leadership is it help to build customer loyalty. As mentioned by Agrawal and
Mittal (2019), customers always get attracted towards those brands that give maximum value
and maintain transparency throughout the business. Ethical leaders always give their more
focus on productivity and try to serve others better. Hence, a firm can get a loyal consumer
base with the help of ethical leadership.
Ethical leaders always promote creativity and innovation in the workplace therefore,
employees get more freedom in the workplace that automatically increases their motivation
level during the work. Therefore, productivity of employees will improve as leaders who
follow ethical leadership do not try to control employees always rather than that they always
try to give them responsibility and show trust. In this way a better and healthy workplace will
develop with the help of this leadership style. In the words of Fuchs et al. (2019), a company
can achieve good press with the help of ethical leadership as it helps in the brand name
development process. Nowadays, social media plays an important role in the decision making
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process of consumers as they get manipulated by influencers. Hence, maintaining ethical
leadership can maximise the leaders’ reputation. Therefore, social media and news channels
will also cover these types of leaders on their channels therefore, leaders will get more
exposure and recognition. This makes the company’s brand name more well-known
automatically.
It is important for a leader to develop a good relationship with stakeholders in order to run the
business operation in a smooth manner and get a competitive advantage as well. In the
opinion of Sarwar et al. (2020), following the principles of ethical leadership eases the
process for a leader to establish trust in partners and suppliers. Hence, multiple benefits
leaders can get from it such as necessary raw material for product development the company
will get therefore, an additional boost a company can achieve in their manufacturing process.
On the other hand, ethical leaders always try to make the morale high of the leaders that
automatically boost employees' performance level (Miao and Cao, 2019). In this way
productivity of the company will increase automatically. Ethical leadership has multiple
benefits such as it helps to develop a healthier working environment therefore, it will
automatically attract better employees towards the firm (Asif et al. 2019). In this way a
company can automatically enhance the quality of service and can get competitive
advantages in this digital era. This is the main reason ethical leadership is getting more
popular day by day and most of the leaders are adopting it in their leadership style.
Ethical leadership in automobile industry
Automobile sector is one of the most important sectors as this industry has a great
contribution in the economic development process. This sector makes the peoples’ daily life
easier with the help of providing them with advanced technologies that make peoples’ travel
process easier. Ethical leadership is extremely important for this industry as in order to make
an automobile company successful innovation is necessary for which employees play an
important role here. Hence, managing those employees and running the business
internationally the automobile industry needs to develop a healthy working environment and
have to eliminate cultural differences. Along with that the industry has to eliminate conflict
situations from the workplace in order to boost the productivity level of employees.
According to the description of Le and Lei (2018), an ethical leadership style will help in the
employee development process and leaders can manage employees in a more effective
manner. Hence, it indicates that ethical leadership is extremely important for the automobile
industry.
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Further, the number of people employed in the automotive industry is continuously
increasing and has reached around 864,000 people in the UK (Statista, 2021). Ethical
leadership becomes important to meet the needs of the rising workforce effectively and
support them in tough times like the Covid pandemic where millions of people lost their job.
On the other hand, motivation and commitment of employees is extremely high for this
industry as the manufacturing process of a car is not an easy job and lots of employees are
essential for developing a car. In order to make the manufacturing process faster teamwork is
important. Employees can work in a collaborative manner with the help of proper guidance.
Ethical leaders always promote equality and try to maintain a good working environment in
the workplace that make the employees motivation level higher therefore, they are able to
work in a collaborative manner without facing complexity.
Figure 2: Number of people employed in the automotive industry in the UK 2013-2020
(Source: Statista, 2021)
Trait theory of leadership:
According to the trait of leadership theory several inborn and innate qualities along with that
necessary characteristic make a leader successful. This quality can be personality factors,
physical factors or intelligence factors and many more. According to the description of Wyatt
and Silvester (2018), trait theory of leadership has various traits such as achievement drive,
leadership motivation, honesty and many more that leaders must develop in order to make
themself successful. A leader should be achievement driven, that indicates a leader must
have a high ambition and in order to achieve this ambition the leader must take effective
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initiative. On the other hand, leadership motivation is another important trait, it indicates that
a leader must set a common goal for the followers and have influenced them in order to
achieve those goals with the help of enhancing their motivation level. Honesty and integrity
means leaders have to make themself trustworthy and reliable in order to develop good
relationships with stakeholders.
Self-confidence is one of the most important traits of this theory as confidence of a leader
must be high as they have to take risks and believe in themselves. In this way a leader can
promote changes and can influence others also to accept these changes for betterment.
Cognitive ability and business knowledge is also essential for a leader as strong analytical
abilities and conceptual skill is essential for a leader to improve the business performance and
take it to the next level. Multiple benefits a leader can get from these theories such as an
individual can easily identify the strengths and weaknesses with the help of analysing this
theory. As mentioned by Gandolfi and Stone (2018), leadership traits theory is effective for
any organisation therefore, aunty leader can use all the information of this theory and can
benefit from it during the own leadership style.
Figure 3: Trait theory of leadership
(Source: Wyatt and Silvester, 2018)
After analysing the trait theory of leadership it can be said that an interconnection and
similarity is there between ethical leadership style and leadership traits. Honesty and giving
good values can easily help the automobile industry to build a strong customer relationship.
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However, multiple issues leaders of this industry faced during maintaining ethics in the
business operation. For example, in order to develop products for consumers the automobile
industry has to use natural resources that are increasing the carbon footprint of them. It is the
biggest challenge for leaders to make the business sustainable. On the other hand, conflict
and cultural barriers is another key issue of the automobile industry as most of the companies
are running their business operation globally hence cultural barriers always work in the
workplace that automatically destroy the working environment. Therefore, productivity of
employees minimises and leaders face difficulty in decision making and managing those
employees.
Tesla is one of the most well-known companies among the automobile industry for its electric
vehicles. Elon musk is the CEO of Tesla and this leader also follows the ethical leadership
style and this is the main reason in order to minimise the carbon footprint of the company and
make a sustainable business for improving customer relationship management. Consumers
are getting maximum value from electric vehicles that Tesla is providing therefore, a positive
impact on the brand name of this company is getting now. This is the main reason Revenue of
Tesla is rapidly growing. In the year 2020 the company generated around 31.5 billion U.S
dollar during the pandemic and after this year the company achieved almost 71 percent
growth in revenue. In the year 2021 the company generated around 53.8 billion U.S dollar
(Carlier, 2021). It indicates the effectiveness of an ethical leadership style in this digital age.
This is the main reason most of the leaders of this industry are adopting an ethical leadership
style.
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Figure 4: Tesla's revenue 2008-2021
(Source: Carlier, 2021)
As mentioned by Abraham and Rabin (2019), employees are one of the most important assets
of automobile companies as without them a company cannot run its business operation in an
efficient way. Therefore, human resource management of most of the automobile companies
need to maintain ethical leadership in their practises in order to boost the motivation level and
give the maximum benefit to employees. Toyota is another popular automobile company and
its HRM developed multiple policies for employees such as providing employees retirement
benefits. Pension program of the company is the main motivation factor of employees
(Toyota, 2021). In this way, with the help of adopting ethical leadership style companies are
growing rapidly. Toyota grabbed around 8.5 % market share in the year 2020 that makes the
company the largest car brand (Carlier, 2021). Hence, it can be said that ethical leadership
can help the automobile industry to expand the business more globally.
Conclusion
Leaders that follow ethical leadership always maintain equality, inspire employees and
establish a culture of trust and respect. Ethical leadership has multiple benefits that a
company can get from it such as it helps in the brand name development process, help leaders
to control employees in an effective way and boost their motivation level. Therefore, the
productivity level of employees automatically increases. Ethical leadership is extremely
important for the automobile industry as employees play an important role in this industry.
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Therefore, in order to manage employees in a better way and develop a healthy working
culture ethical leadership is extremely important. Hence, ethical leadership helps with the
development of the HRM practises and workplace culture of the automobile industry
contributing to the company’s overall performance.
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Reference list
Abraham, K.S. and Rabin, R.L., (2019). Automated vehicles and manufacturer responsibility
for accidents. Virginia Law Review, 105(1), pp.127-171.
Agrawal, S.R. and Mittal, D., (2019). How does transparency complement customer
satisfaction and loyalty in the restaurant business?. Global Business Review, 20(6), pp.1423-
1444.
Asif, M., Qing, M., Hwang, J. and Shi, H., (2019). Ethical leadership, affective commitment,
work engagement, and creativity: Testing a multiple mediation
approach. Sustainability, 11(16), p.4489.
Carlier, M., (2021). Global automotive market share in 2020, by brand. Statista. Available
from: https://www.statista.com/statistics/316786/global-market-share-of-the-leading-
automakers/ [Accessed on: 2nd February, 2022]
Carlier, M., (2021). Tesla's revenue from FY 2008 to FY 2021. Statista. Available from:
https://www.statista.com/statistics/272120/revenue-of-tesla/ [Accessed on: 2nd February,
2022]
Fuchs, M., (2019). The overlooked agenda of ethical leadership in tourism: a disciplinary and
philosophical critique. Critical Tourism Studies Proceedings, 2019(1), p.65.
Gandolfi, F. and Stone, S., (2018). Leadership, leadership styles, and servant
leadership. Journal of Management Research, 18(4), pp.261-269.
Jambawo, S., (2018). Transformational leadership and ethical leadership: their significance in
the mental healthcare system. British Journal of Nursing, 27(17), pp.998-1001.
Le, P.B. and Lei, H., (2018). Fostering knowledge sharing behaviours through ethical
leadership practice: the mediating roles of disclosure-based trust and reliance-based trust in
leadership. Knowledge Management Research & Practice, 16(2), pp.183-195.
Miao, R. and Cao, Y., (2019). High-performance work system, work well-being, and
employee creativity: Cross-level moderating role of transformational
leadership. International journal of environmental research and public health, 16(9), p.1640.
Qing, M., Asif, M., Hussain, A. and Jameel, A., (2020). Exploring the impact of ethical
leadership on job satisfaction and organizational commitment in public sector organizations:
The mediating role of psychological empowerment. Review of Managerial Science, 14(6),
pp.1405-1432.
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