Professor Bradley R Agle

Professor Bradley R Agle is the George W. Romney Endowed Professor of Ethics and Leadership in the Marriot School of Management at Brigham Young University, USA. In an interview with XEDGlobal, Prof. Agle gives his insights to the concept and practice of ethical leadership. Excerpts:

XEDGlobal: Is there a discussion on whether entrepreneurship can be taught or whether one is a born entrepreneur? Also, can ethical leadership be taught or not? Obviously you believe that it can be taught.

Prof Agle: Yes I do. My answer to the first question is yes and yes. Entrepreneurship is about who you are and that helps you become a better entrepreneur. Can you train somebody to become a good entrepreneur? Yes, absolutely. The same thing applies when it comes to ethical leadership. Values and ethics go hand in hand in making an ethical leader. Can I take someone who has really bad ethics and turn him into an ethical leader? The answer is No.

XEDGlobal: What you are saying is that to transform him, he should have reached a threshold level?

Agle: Correct. I think it is the same with an entrepreneur. It is very difficult to take someone who is a significant introvert or who has no desire to create things and turn that person into an entrepreneur. It is equally difficult to take someone who has really poor ethics, who is inward looking and doesn’t care about others, and turn that person into an ethical leader. Fortunately, when it comes to entrepreneurship there are many people who have some imagination and willingness to do something and so you can help them by working with them. When it comes to ethics, majority of the people want to do the right thing. Then we can help them become ethical leaders.
I have studied leadership a lot before I went into ethics. Leadership has two elements: leadership and management. In a Harvard Business Review article published some 40 some years ago, it was said that leadership is about creating a vision, motivating people and about change. Are these important qualities a leader should have? Yes, absolutely. The article went on to say that the other very important attribute to leadership is management. Management is not about change. It’s about creating security or reliability, about budgeting and about control. Those are the things that are critical. So in leadership development, you spend a lot of time on creating a vision, a strategy and on keeping people motivated etc.
We spend a lot of time teaching people management techniques, on how to create control systems, how to budget and so on. Those are really important. But there is a third element to leadership that is not discussed enough. That is the area of business ethics. It is all about identifying the values of an organisation, managing those values and also dealing with the conflicts in the value system in a productive fashion. Value conflicts are present in leadership. So how do you effectively manage them?
It is two-pronged: the intention to do the right thing and the skills it entails. Understanding the different kinds of value conflicts are, in other words, ethical dilemmas. And that is why I think my book is helpful. We broke it down to 13 fundamental ethical dilemmas that people face in business and then spoke on how you deal with specific types.

XEDGIobal: You mentioned the 13 dilemmas. What came to my mind on going through it is that when it is a decision to be taken between right and wrong it is easy and often crystal clear. The problem is when it’s nebulous area. How does a leader take a decision then?

Agle: That is correct. There are 13 dilemmas that are all right vs. right. The right vs. wrong is also easy. When your company is doing well financially, people are happy. Should you then lie to your consumer about your product? No.
There are more difficult issues like, one of your really good employees has done something wrong – say, he has broken a rule in the company. But he has a good reason for doing that. The company rule however says, you should fire the person for doing wrong. What do you do in such a situation? Should you fire your good employee for breaking a rule with a good reason? Going by the rules, you should. That is where your value system aids your decision making. The right vs. right. That is when ethical leaders really stand out. One, they recognise what those kinds of ethical dilemmas are and two, they know how to manage them.
One of the most common ethical dilemmas is conflict of interest. It is also one that is not easily recognised. There are many people who get themselves into situations where there is a conflict of interest. And they think that is bad. What a good ethical leader would say, on the other hand, is: ‘I have a conflict of interest, I need to deal with it proactively.’ One of the things I tell my students is, often times when people have a conflict of interest they want to run away from it. Embrace it, instead. The only people who don’t have conflicts of interest are people who have no friends and are not involved in multiple things. So if you are involved in multiple things and you have friends and family – there will be conflicts of interest. You need to recognise it and not run away from it. The focus then shifts to managing it right. We have suggestions on how you can deal with conflicts of interest.

XEDGlobal: Post-Enron in the US, may be even worldwide, there were several crises. The spotlight was on ethical issues, be it in a business school or among the managers of companies. The question is how do you maintain ethical leadership on a global level consistently?

Agle: It is cyclical. Whenever you have a crisis in ethics, all of a sudden, there is a lot of emphasis on it. And when people forget the crisis the emphasis is also lost. But sure enough, another crisis will make an appearance. I have seen as a business professor for the last 30 years, there will be a call to teach business ethics in business schools when there is a kind of energy around the subject. But sooner than later, when the crisis is forgotten, the teaching of ethics also takes a backseat. Till another crisis looms large and a call comes once again to bring ethics into the curriculum. There has to be more consistency.

XEDGlobal: With Indian companies, take for example Reliance Industries, they have no qualms about breaking rules because they enjoy a monopoly and exercise control over the government. Then there are the two companies – Infosys in Bangalore and Tata’s in Mumbai, both professing value-based leadership. But if you scratch the surface and look beneath, you will see that is not the case. Very often the PR outfits give companies an artificial glow. How do you identify authentic ethical leadership then?

Agle: Great question. The fact is PR firms get paid a lot of money to paint a good picture of companies. And they are very good at doing this.

XEDGlobal: Is this the case worldwide? Or is it only in India, in particular?

Agle: It is a worldwide phenomenon. I used to head the Pittsburgh Business Ethics Board’s program. We would award companies … give them awards for ethical behaviour. It requires a fair amount of time. They have to be willing to let us come in and talk to them. There were a few factors that helped. One really interesting factor was the stories recounted by them. I would ask the CEO or other executives to narrate to me an instance when they did the right thing when it was most difficult to do it that way. Some of the companies would give me answers immediately. It was information they had not shared, not even with the media. It will not be right for me to share it with you. But I can tell you there are really interesting stories on how some companies in US you have heard of, do incredibly ethical things and nobody knows about it. They did the right thing even if it hurt the profitability of the company. There are other companies, when I ask the question, just look at me. They struggle to come up with answers. I think, probably, the most uncomfortable two minutes of my life was when I asked that question to one of the top CEOs in Pittsburgh and he had nothing to say. He looked at me and he couldn’t come up with anything to say. Finally, he came up with a terrible answer. So, you see, stories tell you a lot.
Another thing good companies do is, they survey the ethical culture of their employees. There are a number of dimensions in ethical culture that are telling. That goes to show that the company is serious about creating an ethical culture, that those at the helm of affairs are serious about it. They do an evaluation, just like you would do a customer valuation. They do an evaluation on whether their employees, sometimes stretching it to their customers, suppliers and stakeholders, are ethical or not.

XEDGlobal: I read some research in the Indian media on the fact that women leaders tend to be more ethical than men. Your comments?

Agle: Yes, that’s right. There is data to back that fact. But I can tell you, that is marginal. It is one of the areas where, I tell people to be very careful about interpreting social science. In social science, we often talk about something being significant, statistically significant at .05 level. I don’t know if you study statistics. If you have a lot of power it means you have a big sample size. And if there are any differences, you will detect them at .05 level. What I always say is you need to look carefully at the size of the effect. On whether there is 100 per cent variance as the difference or 2 per cent variance as the difference? This is one area where I think the interpretation is really important to understand.
So a lot of these studies have a big subject pool which means they have a lot of statistical power. In other words, it only means that if there is any difference at all, you are going to be able to detect it. However, in almost all the studies it only explains, may be, 1 or 2 per cent of the variance. So the question from a practical perspective is: are men and women the same or are they different? If you use a strict statistically significant criterion, you would say men and women are different when it comes to ethics. If, on the other hand, you use the effect size, it essentially says they are the same, 99 per cent of the time. The interpretation then is that men and women are basically the same. You can interpret it whichever way you want. You can say the study shows they are different, and you are right. I can say that if you interpret the study statistically right, there is very little difference between men and women.

XEDGlobal: Between the developing and developed countries or between medium companies and the larger companies, in your experience where is ethical leadership more? Is there any correlation?

Agle: We don’t have any verifiable data on that. Not that I know of. I don’t know of any good studies that look at this issue: big organisations vs. middle-sized ones or at different countries. My friend Michele Brown is the Number One professor in ethical leadership. He will know better about that.

XEDGlobal: Thank you for your time.