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December 15, 2018 Saturday 02:16:05 PM IST



The increasing agility and complexity of everyday business, diversity in lifestyles and opinions about what is right or wrong, as well as conflicting legal regulations make the job of leading responsibly in a globalizing economy more tough, intricate and ambiguous. A fluctuating world demands a new leadership style underscoring societal impact and commitment to the common good. Unfortunately, our business and political leaders have been slow to acknowledge the need for change, the repeated appearance of catchwords such as ‘CSR’ and ‘sustainability’ in management literature notwithstanding. 

At this point, many top officials may ask, “Why say that I should be responsible? The common good is the concern of governments, not business.” And of course, government plays a crucial role, through passing legislation. In many of the developing markets where corporations anticipate future growth to be concentrated upon, businesses may be better able to effect necessary changes than a government struggling to maintain power or mired in corruption.

As a result, individuals in leadership positions at organizations find themselves progressively facing demands to shoulder responsibility toward all stakeholders. Put simply, responsible leadership is about creating sustainable business decisions that take into account the interests of shareholders, workforce, customers, dealers, the society, the environment and the coming generations. The leader is thereby the one who empowers and regulates interactions with the stakeholders of the establishment. To become a responsible leader, you first need to gauge the type of questions you are asking about the way your business functions. If you can identify the obstacles to responsible leadership, you stand a decent chance of being able to make a constructive change. Here are some typical questions to ask about your business:

Are the business operations sustainable?

Nowadays, making money is very simple. But, making sustainable money while being responsible to the community and environment is very difficult. Jack Ma, the founder of the logistics giant Alibaba, keenly addresses environmental concerns like water, air, and food safety in China. He is also optimistic about making positive changes in information-driven sectors like finance, education and healthcare to reinforce the Chinese society. His passion to help his fellowmen and the society is mirrored in Alibaba’s policies: they offer stock options to the staff and are interested in improving the lives of employees who grow with the establishment. When it comes to his wealth, Ma disagreed with the title of being a rich individual. According to him, if you have one billion dollars, that is not your money. That is the trust that the society gives to you that you can manage the money. Instead of viewing wealth as a form of affluence, he employs it as a resource for him to develop future generations.

Are your practices ethical and in line with your own company policies?

Apple CEO Tim Cook believes that his organization has a moral responsibility to all nations in which it operates. Cook, who visited a new data centre of his firm, using 100% renewable energy, talked profusely about his belief that Apple, as a leading organization, must remember its place in society. In a recent interview, Cook stated that Apple’s US footprint is powered by renewable energy, and that the same holds true in 23 other nations across the globe. He also advertised Apple’s education initiatives, intended at training youngsters how to design apps. He said that he’s concentrating his efforts on community colleges to solve the diversity issue in technology, an acknowledgement that many professions within the industry are unreasonably executed by certain groups of people.

Is the workforce well looked after?

When he first became a business leader, Krister Ungerboeck, CEO of Courageous Growth, thought that the CEO should be the smartest person in the organization. That mentality led him to doubt the capabilities of his team resulting in an unproductive work environment. But after getting honest feedback on an employee survey, he realized his leadership style wasn’t working.  When he finally realized that his leadership style left his workforce struggling to feel motivated, he made a 360-degree transformation. He realized that criticism is lazy leadership that will pump up the ego of the boss by making the employee feel inferior. Since that epiphany, Ungerboeck has tried to do better by leading through encouragement and endorsing the employees’ right deeds.

Does the organization take short-term risks that could damage the business’ reputation?

The Wells Fargo debacle took the country by storm. It's tough to imagine that only a few employees got involved in the extensively dishonest practices that led to main sanctions for this reputable bank.  The wrong practices included covertly allotting credit card to clients who never asked for it and actually transferring customers' money back and forth between accounts, without consent. But how could over five thousand employees get involved? Naturally, the answer starts from the top, with leaders endorsing a culture that put metrics and other objectives ahead of the consumer. But current scientific research has revealed some additional lessons, including the fact that individuals cheat more when they see others around them cheating, and how one small innocuous lie can lead to a slippery slope of deception.

Undoubtedly, there is much to be attained from embracing responsible leadership. It seems that current business leaders have little justification not to abide by an idea that promises much. It is high time they acknowledged that what may have formerly been regarded by many as a fad is now an indispensable and adorable cultural change. Additionally, responsible leadership can contribute to deciphering pressing issues of our time. Eventually, responsible leadership, like all leadership, is an act. Responsible institutions generate the environments through which their stakeholders can take leadership action and that action is aligned with the unyielding values of the firm and the moral conscience of the actor.

Dr. Manu Melwin Joy

The writer is an Assistant Professor at School of Management Studies, CUSAT

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