The question of how to treat subordinates fairly and justly is a central ethical challenge for responsible leaders. Typically, leaders encounter challenges between differentiating their interactions with employees to build a more personal relationship and levelling their interactions with employees in an indiscriminate manner. This balancing act between two different priorities may pose an ethical dilemma for leaders. Though leader favoritism commonly occurs, it is conventionally regarded negatively as fairness norms require leaders to treat followers equally.
By taking a positive approach, Yang, Horak and Kakabadse (2020) develop an alternative to the conventionally negative view on leader favoritism and suggest that leader favoritism may not necessarily lead to negative outcomes when empathy‐based favoritism is applied. While controlling leader favoritism is unrealistic and ignorant to the relationship-building process between a leader and subordinates, the organizational social capital, goodwill, and resources leaders gain from their relationships with subordinates enables a leader to assemble the resources (e.g. knowledge) necessary for successful change. In this vein, the authors recommend drawing on the ethical principles of a utilitarian approach by balancing particularism and universalism, which is helpful to build organizational social capital.
In line with the greatest happiness principle of Mill’s utilitarianism to achieve a high level of organizational social capital, a leader should consider the radius of trust and/or externalities from her or his favoritism in an organization. The notion of social liability highlights the fact that personal ties are not necessarily helpful for all employees, as they benefit exchange parties at the expense of others. Ideally, the goal would be to maximize cohesiveness and trust (social capital) and minimize the radius of distrust (social liability) for the higher level of organizational social capital from leader favoritism. This may be achieved when an in-group’s social capital from leader favoritism produces positive externalities, during which the radius of trust can be larger than the group itself, with the potential for cooperation to spread beyond the in-group members. In other words, the factor affecting the supply of social capital is not the internal cohesiveness of in-groups per se, but rather the way in which these groups relate to outsiders.
We therefore suggest that a leader should focus on the empathic bond among in-group members (social concerns) rather than on loyalty (equity), since equity-based interactions cannot be free from bias. Since in-group clannism within organizations can increase the negative externalities associated with closure, restricting the free flow of information and knowledge (e.g. groupthink), a leader should encourage good particularism and discourage bad particularism. The novel idea the authors put forward in their study of building organizational social capital moves away from the conventional approach of looking at the divergent ethical views toward favoritism as competing or contradictory. While the suggested approach requires deeply humane skills from a leader, it is congruent to contemporary thoughts on responsible and effective leadership embedded in ideas on positive management and organization where compassion is a central ideal of corporate governance.
Yang, I.; Horak, S. & Kakabadse, N.K. 2020. An Integrative Ethical Approach to Leader Favoritism. Business Ethics: A European Review, forthcoming. DOI: http://dx.doi.org/10.1111/beer.12309