Integrity RULES

The New Zealand Leadership Survey
1999 provided the opportunity to test the perceptions of integrity that accompanied leadership from our managers.
Ethically led organisations have increased effectiveness due to strengthened organisational culture, lower turnover levels, and increased employee effort. In this way, ethical values are indispensable to real leadership.

Integrity helps the
One way integrity and ethical leadership benefit organisations is through the building of trusting relationships. Researchers have identified trust within and between organisations as core contributor to effective organisational practices. Moreover, integrity has been identified as core determinant of trust. Also, because leader integrity aids the development of trust it also creates relationships of respect and increased reciprocity between leaders and followers. Kouzes and Posner surveyed 1500 managers and found that integrity was the most admired and looked for quality in superiors.
Integrity can be clearly related to effective leadership and successful organisational performance.
The positive impact of ethical leadership on organisations suggests that ethical development is integral to manager’s success as leader.
However, although integrity and ethical leadership have recently enjoyed increasing focus, and most organisational leaders would agree on their importance, their relationship with leadership effectiveness remains poorly understood and under-researched until now. We asked managers across New Zealand to rate their direct reports on display of leadership and on perceptions of integrity.
Perceived integrity and the ?organisational psychopath’
In New Zealand, we found high levels of perceived integrity from our managers. In fact, levels are just as high as in North America. The levels of perceived integrity did not appear to be moderated by age, gender, ethnicity or industry category.
Interestingly however, although the mean integrity score remained high across all sub-populations, it was found that six percent of managers were above average in display of leadership and below average in perceptions of their integrity. In other words, they are doing the ?right’ thing (behaving like leaders) but other interactions with co-workers have led those co-workers to believe that they have unethical intentions, motivations or tendencies. Such figure is consistent with the findings of US research that approximately one in 20 of the population are ?aberrant self-promoters’, milder form of the organisational psychopath. We need to do more research on these managers and how they operate.

Integrity found when leadership displayed
Although the level of perceived integrity was not related to distinct demographic groups, it was found to be related to specific individual qualities such as leadership skills and outcomes. We found that perceptions of integrity were consistently observed when managers displayed leadership. Transformational leadership correlated .52 with perceived integrity and constructive transactional leadership correlated almost as highly. On the other hand, passive and avoidant leadership registered strong negative correlations (-.50) with perceptions of integrity.

Integrity and the bottom line
In earlier editions of Management, we reported that we found transformational leadership to correlate positively with the bottom line, while transactional leadership has lower impact. We also found that perceptions of integrity correlate positively with beliefs that the organisation achieves its ?bottom line’. Some other correlations are reported in the table.
We found that satisfaction was the outcome most strongly correlated with perceived integrity, suggesting that leaders who demonstrate high level of integrity will be involved in leadership that is highly satisfying for their colleagues. Similarly, as leaders display more integrity, they are likely to generate extra motivation and work effort from their colleagues, and have beneficial effect on the bottom line.

Correlations between Perceived
Integrity and Leadership Outcomes

Satisfaction with leadership0.61
Perceived leader effectiveness0.57
Motivation Organisational0.56
Extra Effort0.31
?Bottom-line’ achievement by
the organisation0.21

Just do it
Integrity is not only about not doing the wrong thing, but it is also about doing the right thing. At the very least, we have found that perceived integrity is about being seen to be doing something positive, active, proactive; not necessarily only doing ?ethical’ things. Passive/avoidant leadership involves being absent, uninvolved, not taking appropriate responsibility, and not dealing with problems until they are too late. Under such conditions, co-workers cannot rely on leadership being present and therefore lose trust in their managers to fulfil key responsibilities.
Thus, it appears that perceptions of low integrity can come from doing the wrong thing (ie unethical conduct) and from not doing what is expected and valued by followers. Also, perceptions of high integrity (and development of trust) may be based upon critical threshold of active and positive leadership being present (doing the right thing), whereas lack of such leadership (ie not being seen doing the right thing) may be sufficient to support assumptions of immoral and unethical intentions. Thus, in the case of passive/avoidant behaviours, where there is lack of leadership, followers, regardless of the presence or absence of actual unethical conduct may assume low integrity.

Develop leadership for
Well, the relationship between perceived integrity and organisational effectiveness is quite clear. Perhaps one could say that no longer is ethical conduct simply desirable ?feel good’ quality of organisational functioning, but rather it is becoming recognised as an essential component of success.
To ensure that high levels of integrity are maintained and enhanced, leadership style should become focus of future leader development. Moreover, given the finding that at least five percent of New Zealand managers seem to lack integrity, this need is even more apparent. Similarly, the use of leadership criteria in HRM decisions might help to ensure that integrity is fostered within one’s organisation. This is because we know that where we find leadership, we invariably also find integrity.
I would like to thank all members of the NZIM for their assistance in participating in the 1999 New Zealand Leadership Survey, and hope that you might be able to do so again in 2000.

Transformational leadership
? Idealised Attributes and Idealised Behaviours:
Leaders are seen as respected, trusted role models, they can be counted on, and demonstrate high moral and ethical standards.
? Inspirational Motivation:
Leader’s behaviour motivates and inspires followers, team spirit is aroused, enthusiasm and optimism is displayed and both leaders and followers create positive visions of the future.
? Intellectual Stimulation:
Leaders stimulate and encourage innovation, creativity, and questioning of old assumptions. New ideas are welcomed and there should be no fear of mistakes or going against the grain.
? Individualised Consideration:
Special attention is paid to each individual’s needs and differences. Effective listening, developing potential, and personalised interaction are all components of this leadership style.

Constructive transactional
Leader and follower agree on what needs to be done and for what reward; leader actively monitors errors, mistakes or any deviation from standards and norms.

Leader passively waits until problem or mistake arises then reacts; necessary decisions left unmade;

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