Home GLOBAL ECONOMY Asia Stronger Ethics for Better Leadership Using Confucianism and Systems Theory

Stronger Ethics for Better Leadership Using Confucianism and Systems Theory

February 14, 2017

The lack of high ethical standards in Korea as noted in its current presidential corruption scandal destabilises its political system, produces suboptimal organisational performance, and results in high economic and human costs. Part of this phenomenon can be traced to Confucian and collectivistic sources, where speaking against authorities or group norms is viewed as disrespectful and disharmonious. However, ethical standards in Korea can be strengthened by organised leadership development programs that address current limitations, incorporate complex adaptive systems concepts, reflect neuroscience principles, and harness the Confucian principles that underpin cultural norms and societal expectations.

Much has developed since a previous article was published on the political crisis of President Park of South Korea (http://www.worldfinancialreview.com/?p=11543 and http://www.koreatimes.co.kr/www/news/opinon/2016/11/197_217694.html). Such developments include the allegation by the Prosecutor’s Office that Park not only allowed Ms. Choi Soon-sil, her personal friend of forty years, to have access to highly sensitive national intelligence, but proactively extorted contributions from top chaebols to the non-profit organisations Choi was using as a front to accumulate personal wealth. This alleged extortion incited massive public demonstrations to the tune of over one million protestors and propelled impeachment movements from the opposition parties.

According to the latest World Economic Forum Corruption Index,¹ Korea is ranked the 9th most corrupt country among the world’s 35 wealthiest countries of the OECD (Organisation for Economic Co-operation and Development). These revelations of corruption at the highest levels of Korean government and business call for a critical review of:[unordered_list style=”bullet”]

The relationship between ethics and governmental leadership
The relationship between ethics and business leaders
Organised leadership development practices in the Korean government
Guidance on the implementation of such practices

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Ethical standards in Korea can be strengthened by organised leadership development programs, but these programs must:[unordered_list style=”bullet”]

Address the inherent limitations of current prevailing leadership development approaches
Incorporate the systemic nature of people and organisations
Reflect neuroscience principles, especially the implicit need for safety
Harness the deep cultural roots and social norms of Confucianism and collectivism (the current misguided application of which contributes to the lack of strong ethical standards in Korea).

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Leadership development organised with these components will not only improve ethical standards in business and government practices, but will also improve Korea’s capacity for innovation.

1. Ethics and Leadership

Although most of us agree ethics are critical to business and military leadership,² we don’t have a clear understanding why. My recent research on global leadership for innovation, published in Harvard Business Review, revealed the reason: demonstrating strong moral and ethical values establishes safety because both parties agree on a common set of rules of how the game will be played.³ People handle losing the game a lot better than not knowing the rules.

According to neuroscience principles, our need for safety undermines any other needs we have, including those for connection and learning. Safety is established in the brain stem– the oldest, most primitive part of our brain – and is governed through the autonomic nervous system. The determination of safety happens within eight milliseconds after the incoming signal is received. That same signal takes up to 2 seconds to reach our cognitive cortex brain, where we assign meaning, and activate the amygdala if the executive decision-making function determines that our safety is threatened. Before our cognitive brain is even fully aware, we have already reacted to the threat with a suboptimal response of contracting, withdrawing, attacking, or saying what we think they are looking for with no intention of following through. These are suboptimal reactions because the best part of the human brain – the cortex, where executive decision-making and innovation happens – doesn’t even get a chance to engage when we are battling for safety in the lower, less-evolved regions of the brain. And all of this happens below our conscious awareness.

When we see leaders being inconsistent between their words and actions, and who don’t demonstrate high ethical values, our sense of safety is violated, and our brain stem working with the amygdala activates those suboptimal responses. Strong ethics activate a sense of safety; we can then move to the higher regions of the brain, where we form connection and use our best executive decision-making capabilities. Thus, ethical leaders create more cohesive teams and gain influence and commitment by demonstrating strong personal characteristics and values.

2. Ethics and Business Results

In 2015, one of the stories seen most frequently on the front pages of Korean newspapers was how 78 people died from using dehumidifier disinfectants sold by Oxy Reckitt Benckiser (ORB, the Korean office of Reckitt Benckiser) and three others manufacturers in Korea. Government investigators found that ORB manipulated the safety research report by bribing the professors who conducted the research to advertise the disinfectant as safe to the public. They also found evidence of false advertising of safety by other manufacturers. Subsequently, some of the leaders of these organisations have been sentenced to prison terms.

Fast forward one year, to the analysis of why Korea slid four places in a prominent international corruption report since last reported in 2015. The Korea Institute of Public Finance (KIPF) made the connection between the decline in national competitiveness and low business ethics, as well as lack of transparency, explicit.⁴ KIPF specifically cited the heavily publicised disinfectant scandal as they partially attributed the ranking decline to damaged business ethics.⁵ According to the 2016 World Competitiveness Yearbook, published by the International Institute for Management Development in Switzerland, Korea ranks 29th out of 61 countries evaluated in overall competitiveness.⁶

Studies have shown that countries with higher levels of corruption have lower levels of human development, as measured in terms of education, health, and gross national income.⁷ An increase of corruption by one index point dampens GDP growth by somewhere between 13 and 90 basis points (.13 – .90%) and lowers per capita GDP by $425. These are important indicators that call for organised development programs to strengthen moral and ethical behaviours and improve transparency in business dealings.

3. Organised Leadership Development Programs

Given that all seven South Korean presidents preceding Park have been embroiled in some sort of corruption scandals, that many corporate corruption scandals have plagued the Korean economy, and that corruption has a direct link to human development and national income, a different approach to leadership development is called for in Korea: that of an organised leadership development program in both public and private sectors.

This leadership development program must address the following four limitations of the current prevailing leadership development approaches:[unordered_list style=”bullet”]

Current leadership development efforts focus only on what is visible, and only on certain parts of the system as opposed to the whole. Accordingly, the results are temporary and limited in scope. All living organisms – people, termites, trees, economies, and organisations – are complex systems. Because we are systems, any change must be approached at the systemic level to be effective. Any individual change isolated from the system s/he is part of runs into the system’s resistance; hence, the effect of change is limited and short-lived. Current learning models aim to change individual components in isolation from the system and its environment, and so are ineffective.
Most current leadership development approaches do not consider the rapidly changing business environment. They are primarily about the individual behaviour and/or belief systems of the leader, including personal leadership, and his/her relationship with followers. This approach is flawed because what is happening in the environment sets the criteria for effective leadership competencies. For example, the leadership development programs in Circuit City and Borders Books didn’t protect the companies from their demise partly because the goal of the programs was not tied to winning in the rapidly changing environment.
Leadership development efforts must focus on changing the beliefs and behaviours of individuals. Organisational change happens when individuals change beliefs and behaviours. Problems and desired behaviours must be clearly defined; individuals must understand tangible actions they can take to improve.
Most current leadership development approaches provide no quantitative mechanism to understand the bottom-line impact of the necessary change. This is where an ethical dilemma is likely to turn into an ethical lapse. Clearly establishing the bottom-line impact of desired leadership competencies helps leaders understand that being good produces good business. For instance, if leaders are given change goals to improve their leadership competencies and they are up against a quarterly close, without a solid understanding of the bottom-line impact of the change they are trying to bring about, they are all too likely to fall into the trap of “Just this once” or “Once I have met my quarterly goals, then I will…”[/unordered_list]

To address these limitations, a leadership development approach must reflect the systemic nature of people and organisations in the context of an environment.

We are not islands; we work and live in a context of team, organisation, society, country, world, and universe, all of which work as systems that influence and are influenced by each other. Therefore, any leadership development efforts that do not address this systemic, constructive nature of complex adaptive systems will likely produce suboptimal results. Systemic thinking and considering consequences of their decisions many steps ahead and on other constituencies, not just the immediate rewards, will likely strengthen ethical behaviours.

A leadership development program must be based on neuroscience principles of hierarchical input processing of safety, connection, and executive decision-making (in that order). Leaders must be taught what constitutes a sense of safety among their employees, and that safety trumps all other needs: all goals are likely to be underachieved if safety needs are not met. Leaders must be taught that demonstrating high ethical and moral standards and consistency between words and actions is critical for establishing safety. These neuroscience principles also help us understand that some of the defences we build in response to past perceived threats to safety tend to outlive their usefulness, producing suboptimal, often irrational over-reactions.

When people recognise how their previous misguided beliefs affect their interactions with others, and consciously choose more adaptive beliefs, the result is a dramatic transformation of interpersonal dynamics, leading to breakthrough growth at both individual and organisational levels. A holistic pattern emerges, in which two people or teams can create a whole much greater than the sum of their parts.

Effective leadership development programs must also specify the bottom-line impact of each tangible behaviour or belief change. For example, when leaders understand the impact of the behaviour they are attempting to change (eg: consistency between words and actions) in terms of turnover of the employees they oversee, which translates into operating expense, they are much more likely to prioritise the change, even if they face a higher level of stress at quarter end.

4. Cultural Norms and Social Expectations

Confucian principles of filial piety, kinship, loyalty, and righteousness have subtle but far-reaching influence over culturally accepted business practices in Korea. Collectivism prioritises group goals before individual goals; individual needs are sacrificed for the good of the group. These beliefs set the norms and expectations for how relationships are governed, such as between ruler and follower, father and son, older brother and younger brother, husband and wife, and friends. Part of what makes it challenging to establish strong business ethics in Asian countries is rooted in the deep Confucian and collectivistic belief that challenging the hierarchal order and confronting the behaviour of those in power is viewed as disrespectful and disharmonious. This belief makes the whistle-blower wrong. The Confucian principle that reciprocation is expected when kindness is offered is also distorted in practice, as people in authority expect something in return when they make decisions that benefit others.

Due to their ubiquitous influence over societal norms and cultural expectations, effective design and implementation of leadership development programs must harness Confucianism and collectivism to establish strong ethics.

Confucianism presents two archetypal leaders – gunja (gentleman) and soin (small person). Gunja refers to a leader who possesses moral scruples, strong personal characteristics, political capabilities, and cultured humanistic viewpoints.1 He is a leader who constantly censors himself and aims to perfect his moral compass. His ultimate goal, in all his dealings with others and self, is in (mercy). He fulfils his duty as a leader, follower, parent, child, husband, older brother, younger brother, and friend. He practices the Confucian Golden Rule: he does not force on others something that he himself dislikes. Gunja is also characterised by ye (courtesy, or proprieties of behaviour).

On the other hand, soin literally means a small person, and refers to a leader who seeks personal gain even if it means harming others in the process. Soin does not practice mercy or courtesy.

Unfortunately, somewhere along the process, some of these Confucian principles have been distorted and other parts exaggerated out of balance, resulting in the current lapse of strong ethics in leaders in high office. Returning to these Confucian roots, which underpin the Korean collective subconscious, and bringing them to the forefront of leadership development, can raise the overall ethical standards.

Conclusion

The recent presidential corruption scandal in Korea calls for organised leadership development programs that address some of the inherent limitations of current practices in both business and government. These programs must incorporate complex adaptive systems principles which factor in the current environment as well as the interactions between the members of a unit. They must also utilise neuroscience principles, especially the primal need for safety, to unleash the full potential of the human brain. Although part of the corruption observed in Korea can be traced to its Confucian roots, returning to core Confucian principles and capitalising on the concept of the Confucian Golden Rule and gunja can be a powerful tool in restoring the high ethical standards originally intended in Confucianism.

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About the Author

Dr. Sunnie Giles, is President of the Quantum Leadership Group, which is based in the United States. She works as an executive coach, leadership development consultant, and organisational scientist. She has an MBA from the University of Chicago and Ph.D. in Marriage and Family Therapy from Brigham Young University. She worked as an executive in several Fortune 500 companies, including Samsung, IBM, and Accenture. For more information, visit www.sunniegiles.com.