Abstract
Years of research clearly shows that relying on traditional organizational power bases is not effective when companies want to promote business ethics and performance. It is not only that the use of legitimate power to establish ethics codes and coercive power to punish employees who do not comply does not work; this study—based on a multi-method research approach in the retail industry—indicates that the classic iron fist leads to unethical business values and lower service performance. But there is a light at the end of the tunnel for forward-looking managers. The ethical attitudes and behaviors of employees within international organizations is a dynamic variable that is possible to change by the use of values-based leadership. Our extensive study of a large grocery store chain owned by a multinational corporation indicates that managers who lead by example will boost team values and commitment.
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All authors have contributed equally to this research. We acknowledge the help and assistance of Lars Kjærstad, Geir Myhre Jacobsen and Roger Grønberg.
Appendix: Variables Used in the Study
Appendix: Variables Used in the Study
Constructs | Definitions |
|---|---|
Ethical behavior | Ethics is defined with a focus on the underlying ethical values in a company rather than the specific ethical issues concerning products, services, or industry-specific issues. |
Coercive power | Coercive power rests on unit store manager’s assumption that they will be penalized by the retail company’s central management for noncompliance |
Reward power | Reward power is the central retail-manager influence over retail unit managers based on the ability to mediate positive outcomes and to remedy or diminish negative feedback received by the manager |
Referent power | Reference power means the power of a retail manager to attract unit managers and make them identify with the retail company. |
Expertise power | Expertise power measures the degree to which the unit managers need the skill or expertise of the retail managers. |
Legitimate power | Legitimate power occurs because of the relative position and duties of the retail manager’s position |
Company commitment | The retail unit manager’s bond to the retail company. |
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Nygaard, A., Biong, H., Silkoset, R. et al. Leading by Example: Values-Based Strategy to Instill Ethical Conduct. J Bus Ethics 145, 133–139 (2017). https://doi.org/10.1007/s10551-015-2885-9
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DOI: https://doi.org/10.1007/s10551-015-2885-9