Authentic leadership focuses on the moral aspects of being a leader. Authentic leaders know who they are, know what they believe in, and act on those values and beliefs openly and candidly. Their followers consider them ethical people. The primary quality produced by authentic leadership is trust. Authentic leaders share information, encourage open communication, and stick to their ideals. The result: People come to have faith in them. Related to this behavior is the concept of humility, another characteristic of being authentic. Research indicates that leaders who model humility help followers to understand the growth process for their own development.61

Authentic leadership, especially when shared among top management team members, can create a positive energizing effect that heightens firm performance.62 Transformational or charismatic leaders can have a vision and communicate it persuasively, but sometimes the vision is wrong (as in the case of Hitler), or the leader is more concerned with his or her own needs or pleasures, as were Dennis Kozlowski (ex-CEO of Tyco), Jeff Skilling (ex-CEO of Enron), and Raj Rajaratnam (founder of the Galleon Group).63 Authentic leaders do not exhibit these behaviors. They may also be more likely to promote corporate social responsibility (CSR; see Chapter 3).

Leadership is not value-free. In assessing its effectiveness, we need to address the means a leader uses to achieve goals as well as the content of those goals. The role of the leader in creating the ethical expectations for all members is crucial.64 Ethical top leadership influences not only direct followers, but all the way down the command structure as well, because top leaders create an ethical culture and expect lower-level leaders to behave along ethical guidelines.65 Leaders rated as highly ethical tend to have followers who engage in more organizational citizenship behaviors (OCBs; see Chapter 1) and who are more willing to bring problems to the leaders’ attention.66 Research also found that ethical leadership reduced interpersonal conflicts.67

Ethical and authentic leadership intersect at a number of junctures. Leaders who treat their followers ethically and authentically—with fairness, especially by providing honest, frequent, and accurate information—are seen as more effective.68 Transformational leadership has ethical implications since these leaders change the way followers think. Charisma, too, has an ethical component. Unethical leaders use their charisma to enhance power over followers, directed toward self-serving ends. To integrate ethical and charismatic leadership, scholars have advanced the idea of socialized charismatic leadership—conveying other-centered (not self-centered) values through leaders who model ethical conduct.69 These leaders are able to bring employee values in line with their own values through their words and actions.70

Although every member of an organization is responsible for ethical behavior, many initiatives aimed at increasing organizational ethical behavior are focused on the leaders. Because top executives set the moral tone for an organization, they need to set high ethical standards, demonstrate them through their own behavior, and encourage and reward integrity in others while avoiding abuses of power. One research review found that role modeling by top leaders positively influenced managers throughout their organizations to behave ethically and fostered a climate that reinforced group-level ethical conduct. The findings suggest that organizations should invest in ethical leadership training programs, especially in industries with few ethical regulations. Leadership training programs that incorporate cultural values should be especially mandated for leaders who take foreign assignments or manage multicultural work teams.71

Scholars have recently considered ethical leadership from a new angle by examining servant leadership.72 Servant leaders go beyond their self-interest and focus on opportunities to help followers grow and develop. Characteristic behaviors include listening, empathizing, persuading, accepting stewardship, and actively developing followers’ potential. Because servant leadership is based on the value of serving the needs of others, research has focused on its outcomes for the well-being of followers. Perhaps not surprisingly, a study of 126 CEOs found that servant leadership was negatively correlated with the trait of narcissism.73

What are the effects of servant leadership? One study of 123 supervisors found it resulted in higher levels of commitment to the supervisor, self-efficacy, and perceptions of justice, which all were related to OCB.74 This relationship between servant leadership and follower OCB appears to be stronger when followers are encouraged to focus on being dutiful and responsible.75 Second, servant leadership increases team potency (a belief that your team has above-average skills and abilities), which in turn leads to higher levels of group performance.76 Third, a study with a nationally representative sample found higher levels of citizenship were associated with a focus on growth and advancement, which in turn was associated with higher levels of creative performance.77 Other research found that servant leadership and a resulting culture of service increased employee job performance and creativity while reducing turnover intentions.78

Servant leadership may be more prevalent and effective in certain cultures.79 When asked to draw images of leaders, for example, U.S. subjects tended to draw them in front of the group, giving orders to followers. Participants from Singapore tended to draw leaders at the back of the group, acting more to gather a group’s opinions together and then unify the group from the rear. This suggests the East Asian prototype is more like a servant leader, which might mean servant leadership is more effective in these cultures.