SLC 300 (601) Fall 2024 Leading with an Ethical Perspective

In Chapter 7 of Do the Kind Thing, Daniel Lubetzky emphasizes the importance of transparency and authenticity in building trust and driving a values-driven business. Lubetzky argues that genuine transparency is more than a superficial display—it’s about fostering an environment where customers, employees, and stakeholders feel connected to the core values of the organization. This message resonates strongly, especially in today’s marketplace where consumers increasingly support companies they perceive as sincere and ethical.

Lubetzky’s insights remind us that transparency should be a proactive commitment rather than a reactive measure. He mentions that KIND makes an effort to be transparent about product ingredients and business practices, which fosters loyalty and trust. This approach contrasts sharply with companies that only disclose information when required by law or in response to a crisis. Lubetzky’s example serves as a reminder that trust must be built continually; it is much harder to regain once it has been compromised.

The chapter’s focus on authenticity also resonates with broader discussions about corporate social responsibility. Lubetzky makes the case that authenticity isn’t just about appearing ethical but actually embedding these values into decision-making. This aligns with the idea that companies should prioritize genuine engagement with ethical practices rather than “performative” actions meant only for public approval.

Overall, Lubetzky’s points about transparency and authenticity offer a powerful perspective on building trust in business. As consumer awareness grows, companies that genuinely embrace these principles are more likely to build lasting relationships with their customers.

LuLaRoe, a direct-selling clothing company, is facing a lawsuit in Washington State for allegedly operating a pyramid scheme. The Washington State Attorney General, Bob Ferguson, claims the company enticed consultants with deceptive promises of high profits and easy returns on unsold inventory. Instead, many consultants accumulated debt and unsellable stock. LuLaRoe’s business model targeted stay-at-home mothers and others seeking supplemental income, requiring an “onboarding” fee up to $9,000 to become consultants. A primary ethical issue lies in LuLaRoe’s sales strategy. The company allegedly focused more on recruiting new consultants, each paying a substantial onboarding fee, than on supporting existing sellers with a marketable inventory. Consultants reportedly had limited choice over the styles and sizes of items they purchased after their initial investment, receiving only pre-selected bundles. Prior to July 2017, LuLaRoe’s compensation model awarded bonuses based on the recruitment of new sellers, violating Washington’s Antipyramid Promotional Scheme law. The ethical framework violated here includes principles of honesty, transparency, and fairness in business practices. LuLaRoe’s misleading promises and recruitment-focused model undermined consultants’ trust and left many financially burdened. Such practices highlight the ethical concerns in multilevel marketing models where profit depends on continuous recruitment, often at the expense of those involved. By promoting these deceptive strategies, LuLaRoe’s approach raises significant questions about corporate responsibility and the exploitation of individuals seeking entrepreneurship. The lawsuit aims to hold LuLaRoe accountable and prevent further harm to vulnerable sellers.

Covid 19 was an unprecedented experience for everyone around the world. With unprecedented experiences come hard decisions. In the playing favorites article, we see first-hand difficult decisions at play with the ever-so-coveted and scarce COVID-19 vaccine. In this case, hospitals were pricking favorites and allowing early access for board members and large donors to get the vaccine. This decision by the hospital poses all sorts of ethical questions. Why should people who have lots of money be able to get the vaccine before patients who actually need it in order to survive the pandemic? This directly clashes with most ethical frameworks I have learned about. The two that come to mind right away are duty-based and utilitarianism.  Utilitarianism is choosing the path or outcome that leads to the most overall satisfaction or good. Choosing the board members to get the first doses does the exact opposite. There were other patients that were more at risk for infection and possible long-term effects than most of the board members. For duty, the whole point of a hospital and the health system is to treat the sick and vulnerable. By offering donors and board members the vaccine first the hospital neglected its duty to look after the sick and vulnerable. Yes, Covid was unpredictable and a hard time for everyone which led to this poor decision in the end but when you take a step back the hospital should have realized they were violating their own ethical code of conduct. 

Playing Favorites? Hospital Boards, Donors Get COVID Shots article discusses the controversial prioritization of COVID-19 vaccinations for hospital board members and donors. This raises different concerns about proper leadership in healthcare settings.

Fairness means prioritizing frontline workers and vulnerable populations at a higher risk of severe outcomes from COVID-19 in the context of vaccine distribution. The article highlights instances where influential individuals received vaccinations ahead of these groups, suggesting a deviation from fair practice. Such actions can lead to public disillusionment and reduce trust in healthcare systems, as wealth and influence may be prioritized over genuine needs.

The article points out a need for clearer communication regarding the criteria used for vaccination prioritization. Without transparency, stakeholders may assume favoritism and unethical behavior. Transparency in this context involves openly sharing the rationale behind distribution decisions, the criteria for prioritization, and any deviations from standard protocols. This transparency fosters trust and understanding among the public.

Proactive leadership involves acknowledging and taking responsibility for decisions and their consequences. The actions described in the article challenge the accountability of those in leadership positions within hospitals. By doing so, they demonstrate a commitment to high standards and the well-being of all community members.

The decision to vaccinate board members and donors ahead of others suggests a compromise in integrity, where personal or organizational benefits may have been prioritized over public health ethics. Maintaining integrity involves following guidelines and prioritizing those most in need, regardless of their social or economic status.

The article underscores the importance of fairness, transparency, accountability, and integrity in decision-making. Healthcare leaders must uphold these principles to ensure equitable access to resources and maintain public trust, especially during a pandemic. They fulfill their obligations and contribute to a more just and effective public health response.

The article on the Boeing 737 MAX explores the tragic crashes of two Boeing 737 MAX aircrafts, ultimately grounding the entire fleet. These events raised important questions about engineering and practices at Boeing.

The flight control software, the Maneuvering Characteristics Augmentation System, was designed to prevent stalls but had several design flaws. These issues were not adequately addressed or communicated, leading to catastrophic consequences.

Internal pressures at Boeing quickly developed and certified the 737 MAX to remain competitive with Airbus, which has compromised safety standards and ethical decision-making. Boeing’s lack of transparency regarding software changes and the associated risks significantly contributed to the accidents. This lack of openness was evident in their communication with pilots and airlines. The FAA’s oversight during the certification process needed to be improved. The agency relied heavily on Boeing’s assessments, revealing a conflict of interest and a lack of independent evaluation.

The article emphasizes the ethical responsibilities of engineers involved in the design and certification processes. They must prioritize safety and transparency, especially when faced with corporate pressures. Engineering organizations are encouraged to adopt a more proactive approach in promoting standards and providing guidance on navigating complex dilemmas. Engineers must feel empowered to voice concerns and challenge unsafe practices.

The article calls for changes in how organizations teach, practice, and enforce engineering development. By learning from these lessons, the engineering community can work towards preventing similar tragedies in the future.

One key point in this article that stands out is the idea that language both shapes and limits the development of values. Through language, we can articulate and share beliefs, norms, and cultural ideals. For example, words like “justice,” “freedom,” and “equality” carry meanings that are socially constructed and shared, enabling communities to rally around common ideals. The language we use to describe our values thus becomes essential for building collective understanding and commitment.

However, language also constrains our ability to develop values fully. Limited by cultural and historical contexts, language can lack precise words for certain concepts, or those concepts may be entirely absent in some cultures. This is especially apparent in cross-cultural comparisons: while some cultures may lack a word for “personal success,” they may have rich terminology around “community harmony.” The absence of specific terms does not imply a lack of value but rather a different framework for what is deemed important. Without language for certain values, it becomes challenging to fully articulate or explore them, which restricts how they’re developed and understood within that linguistic framework.

Language can also reinforce stereotypes and biases, influencing how we perceive values in ourselves and others. For example, euphemisms for marginalized groups can affect societal attitudes and limit a community’s ability to develop inclusive values. Similarly, vague or euphemistic language can dilute values’ meanings, making it harder for people to connect with or advocate for them. This limitation is particularly impactful when considering that many values are instilled early in life, often shaped by parental influences and lived experiences, extending to the language used to describe and contextualize these values.

Source: Guth, William D., and Renato Tagiuri. “Personal Values and Corporate Strategy.” Harvard Business Review, 1965.

The article “Uber’s Key CEO Candidate Backs Out at the Last Minute” highlights different moments moment in Uber’s leadership transition when Jeff Immelt withdrew his candidacy for the CEO position. This situation raises questions about ethical leadership, particularly in high-stakes corporate environments.

Jeff Immelt’s last-minute withdrawal may suggest a lack of transparency in the decision-making, leaving stakeholders uncertain about his reasons for stepping back. Leaders are expected to communicate openly, particularly during critical moments that impact an organization’s direction.

The timing of Jeff Immelt’s withdrawal illustrates the pressures leaders face when making decisions that impact their organizations. Leaders must navigate these pressures while adhering to moral standards. Jeff Immelt’s choice to withdraw reflects the difficulty of maintaining ethical integrity when both external and internal stakeholders are closely watching.

Uber was already facing significant reputational challenges. Jeff Immelt’s exit could further erode trust among investors and employees, who might view such instability as a sign of deeper issues within the company. Trust is a critical component of effective leadership, and sudden changes can lead to skepticism among stakeholders.

This situation underscores the role of leaders in crisis management. Uber needed a strong and stable leader to navigate its tumultuous environment. Jeff Immelt’s withdrawal highlight gaps in leadership succession planning and the need for a resilient corporate governance structure.

Overall, the incident surrounding Uber’s CEO candidacy withdrawal illustrates various dimensions of leadership. It emphasizes the importance of transparency, the challenges of decision-making under pressure, the necessity of maintaining trust, and the critical nature of effective crisis management in corporate governance.

Reference
Fingas, J. (2017, August 27). Uber’s key CEO candidate backs out at the last minute (updated): GE’s former chief is withdrawing right as a vote is taking place. Engadget. https://www.engadget.com/2017/08/27/uber-ceo-candidate-backs-out/

While reading this text, several points resonated strongly with me. First, the concept of establishing credibility by under-promising and over-delivering is compelling. In my engineering entrepreneurship class, it’s clear how challenging it can be to not only recognize a product’s limitations but also share those weaknesses with investors and consumers. When pitching products, the natural inclination is to highlight every positive feature and potential, not the areas where it falls short. Yet, the honesty in acknowledging limitations can ultimately strengthen credibility and build trust with stakeholders.

Another valuable takeaway is the emphasis on accountability. When mistakes are made, taking responsibility by openly communicating what went wrong and explaining the reasoning behind certain decisions is essential. This ability to self-reflect and assess one’s role in a larger issue is an important skill for leaders and is essential for ethical leadership. 

Lastly, I appreciated the point that KIND values collaborative decision-making with its trading partners. This approach creates a community-driven framework for problem-solving and helps build a sense of shared purpose and motivation for outsourced teams. It not only enhances partnerships but also promotes alignment on values, strengthening the ethical foundation of the organization.

In summary, I found this section insightful and informative, answering many questions I had about implementing ethics and values in the workplace. The guidance on credibility, accountability, and collaboration provides a practical blueprint for transparent ethical leadership.

Source: Lubetzky, D. (2015). Transparency and Authenticity: The Value of OpenCommication. Ballentine Books. https://moodle-courses2425.wolfware.ncsu.edu/pluginfile.php/654233/mod_resource/content/2/Lubetzky_Do_The_Kind_Thing_Chap7_Transparency%20and%20Authenticity.pdf

The article “LuLaRoe Was Little More Than a Scam, a Washington State Lawsuit Claims” discusses the practices observed in the LuLaRoe business model. It highlights allegations against the company concerning deceptive business practices and ethical violations, which starkly contrast with the ideals of ethical leadership.

Due to its business practices, LuLaRoe, has come under scrutiny. Recent reports highlight a lawsuit asserting that LuLaRoe misled its sellers and consumers. Key concerns include more transparency regarding profit potential and the significant costs linked to inventory acquisition.

Ethical leadership prioritizes integrity as a core principle; however, the LuLaRoe business model has been criticized for potentially compromising this value. Reports indicate that the company may have misrepresented the earnings potential for its sellers, resulting in significant financial losses for many individuals involved. This situation raises concerns about honesty, a fundamental aspect of ethical leadership.

LuLaRoe’s practices have been criticized as exploitative, especially towards its sellers. Many of these individuals invested significant amounts of money with minimal returns. The lawsuit highlights systemic issues within the company, suggesting that its growth prioritized profit over the well-being of its independent sellers.

Leaders take responsibility for their actions. However, LuLaRoe’s leadership has faced criticism for avoiding accountability, as highlighted by lawsuits claiming deceptive marketing practices and inadequate support for their sellers. This avoidance of responsibility is in direct contrast to the principles of ethical leadership.

Ethical leadership and the practices of LuLaRoe highlight significant ethical shortcomings within the company’s operations. While ethical leadership emphasizes integrity, fairness, and accountability, the alleged practices at LuLaRoe suggest a violation of these core principles. This case serves as a reminder of the importance of ethical conduct in leadership roles and the potential consequences of disregarding these values.

References

Jones, C. (2019, January 28). LuLaRoe was little more than a scam, a Washington State lawsuit claims. *USA Today*.

I would like to make a text-to-self reference from the Harvard Business Review article “Personal Values and Corporate Strategy.” The article states, “For our purposes a value can be viewed as a conception, explicit or implicit, of what an individual or a group regards as desirable, and in terms of which he or they select, from among alternative available modes, the means and ends of action.” I see this explanation of a value play out in the workplace. I work for a nonprofit and we have core values that I deeply understand and pursue on a daily basis. The group, in this case, are the employees that work for the company. The group desires the 16 core values because they lead to the desirable actions that will help the company accomplish their goals/mission.

Another quote from the same article states, “Values may be identified by noting differences between individuals or groups in dealing with similar problems.” I think this speaks to conflict resolution in the workplace. Even though different employees have different roles with the company, each person has the company’s core values in common. As conflict is addressed, employees must remember the values that they must uphold as they are in partnership with the company. Another example is from my personal experience. As a part of a team, there will be times where I want to approach something with my individual interest as a priority. I must remember our core values of the company calls to humbly step into compassion. I take on the challenge of those core values by redirecting my actions to be more of a team player for the betterment of the mission and to lower myself to serve others.

Personal Values and Corporate Strategy