In this chapter, we review two distinguished leadership styles and focus on servant leadership and a leader’s moral development. Leaders display their behavior which consistently influences the process of motivating subordinates with ethical and moral values equipped with the zeal to serve. This paper discusses the need for servant and ethical leadership and the ways they can be productively implemented in organizations. Moreover, ethical leadership focuses on transformational leadership with a flavor of moral foundation when compared to the attitude of serving the followers through stewardship in servant leadership. Servant leadership and ethical leadership models critically provide the best conglomerate model, fit for the organizational context which provides a blended concept of serving and the importance of moral training of leaders in identifying and promoting the common good.

1 Introduction

During the past decades, leadership studies have clearly moved away from a strong focus on, most notably, transformational leadership toward a stronger emphasis (Van Dierendonck 2011) on a shared, relational, and global perspective, where the interaction between the leader and follower is especially a key element (Avolio et al. 2009).

Brown et al. (2005) defined ethical leadership as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making”.

Trevino et al. (2000, 2003) say that ethical leaders are thought of and seen as honest, trustworthy, fair, and principled decision-makers who care about people and the broader society, and who behave ethically in their personal and professional lives. This characterizes the moral person aspect of ethical leadership, representing observers’ perceptions of the leader’s personal traits, character, and altruistic motivation. Whereas, moral managers represent the leader’s proactive efforts to influence followers’ ethical and unethical behavior. Moral managers make ethics an explicit part of their leadership agenda by communicating an ethics and values message, by visibly and intentionally role modeling ethical behavior, and by using the reward system (rewards and discipline) to hold followers accountable for ethical conduct. Such explicit behavior helps the ethical leader create a leadership message that gets followers’ attention by standing out as socially salient against an organizational backdrop that is often ethically neutral at best.

Brown & Trevino (2006a) suggest that ethical leaders are characterized as honest, caring, and principled individuals who make fair and balanced decisions. Rabindra (2001) states that ethical leaders also frequently communicate with their followers about ethics, set clear ethical standards and use rewards and punishments to see that those standards are followed. Finally, ethical leaders do not just talk a good game—they practice what they preach and are proactive role models for ethical conduct.

Van Dierendonck (2011) views organizations as needing more ethical, people-centered management; opportunistic and self-serving leadership have to be inspired by the ideas from servant leadership theory. Greenleaf (1977) presents a view of servant leadership that may be of particular relevance in this era in that it adds the component of social responsibility to transformational leadership (Graham 1991); besides, more than any other leadership theory, it explicitly emphasizes the needs of followers (Patterson 2003). Although influence is generally considered the key element of leadership, servant leadership changes the focus of this influence by emphasizing the ideal of service in the leader-follower relationship. It may, therefore, be a leadership theory with great potential.

2 Conceptual Model of Ethical Leadership

The conceptual model (Brown et. al. 2006a) emphasizes the situational influences on ethical leadership, individual characteristics of leaders, and the outcomes of the leadership style in view of organization effectiveness and the willingness of employees to accept this style of leadership. Rabindra and Manuel (2001) describe situational factors that are likely to influence employees’ perceptions of a leader as an ethical leader: ethical role modeling, the organization’s ethical context, and the moral intensity of the issues that the leader faces in his or her work (Fig. 7.1).

Fig. 7.1
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Conceptual model of ethical leadership

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2.1 Situational Influences

Brown et al. (2006a) emphasize that social learning theory throws light on understanding why some leaders are more likely to be ethical leaders. Not only followers learn from models but also leaders learn from models too. By observing an ethical role model’s behavior as well as the consequences of their behavior, leaders should come to identify with the model, internalize the model’s values and attitudes, and emulate the modeled behavior (Bandura 1986). Thus, having had an ethical role model in one’s career is likely to contribute to the development of ethical leadership. Trevino et al. (2000) argued that having an ethical role model was an important antecedent of ethical leadership.

Brown et al. (2006a) state that there are multiple ways to think about the ethical context of an organization; ethical climate and ethical culture are the most crucial aspects in determining the situational influences. Ethical climate has been defined as “the prevailing perceptions of typical organizational practices and procedures that have ethical content” or “those aspects of work climate that determine what constitutes ethical behavior at work” (Victor and Cullen 1988). Whereas Trevino (1986) proposed ethical culture as a subset or slice of the organization’s overall culture that can moderate the relationship between an individual’s moral reasoning level and ethical/unethical behavior.

Moral intensity influences moral awareness (as well as ethical intentions), the magnitude of consequences (the potential harm that might result from the situation), and social consensus (the existence of strong ethical norms in a given situation). Therefore, intense situations draw observers’ attention to the leader (Butterfield et al. 2000). Situations can be considered proving grounds for enhancing the effect of ethical context on ethical leadership (Brown et al. 2006).

2.2 Individual Characteristics

From the Big Five Factor Model (Tupes and Christal 1961), agreeableness (describing someone altruistic, trusting, kind, and cooperative) strongly related to transformational leadership. Agreeableness is most strongly correlated with the idealized positive influence dimension of transformational leadership, the dimension that is comprised of ethical content.

Neuroticism reflects the leader’s tendency to experience negative emotions such as anger, fear, and anxiety (Brown et al. 2006a). Neurotic leaders are thin-skinned and hostile toward others. From a social learning standpoint, thin skin and hostility are hardly the qualities that one associates with attractive and credible models showing neuroticism as negatively related to ethical leadership.

In psychology, Machiavellianism is defined as “the use of guile, deceit, and opportunism in interpersonal relations” (Christie 1970). In contrast to ethical leaders, Machiavellian leaders are motivated to manipulate others in order to accomplish their own goals. They have little trust in people and in turn, tend not to be trusted by others. This shows a negative relationship to ethical leadership.

Turner et al. (2002) found that those with higher levels of moral reasoning were more likely to be seen by subordinates as transformational leaders. “Leaders with more complex moral reasoning will be able to draw on more sophisticated conceptualizations of interpersonal situations, are more likely to think about problems in different ways, and are cognizant of a larger number of behavioral options” (Turner et al. 2002). Brown et al. (2006a) state that individuals who operate at higher levels of moral reasoning are more likely to make principled decisions, demonstrate concern for the rights of others, and value fairness as the foundation upon which relationships are built.

Locus of control (LC) is the perceived control that one has over the events in his or her life. Individuals with an internal LC perceive greater control, while those with an external LC perceive that fate or powerful others exert great influence on such events. Trevino (1986) proposed that internals would behave more ethically because they are more likely to perceive the connection between their own behavior and the outcomes produced by that behavior. As a result, they are more likely to take responsibility for the outcomes of their actions.

2.3 Outcomes

With a social learning perspective, followers emulate ethical leaders’ behavior because such leaders model normatively appropriate behavior. In addition, ethical leaders communicate the importance of ethical standards and use the performance management system to hold employees accountable for their conduct.

As a result, we propose that ethical leaders will influence ethics-related conduct such as employee decision-making, and prosocial and counterproductive behaviors primarily through modeling and vicarious learning processes. In addition, ethical leaders would influence employees’ positive and negative behavior because employees like to build their relationships with ethical leaders.

Brown et al. (2006a) state that as attractive role models, ethical leaders are going to be an important source of ethical guidance for their employees. Ethical leaders set ethical standards and communicate them to followers. In addition to this, (Rabindra 2001) states that because ethical leaders are higher in moral reasoning, they should also influence the moral reasoning of work group members, thus producing more decisions that are ethical.

Ethical leadership should influence employees’ prosocial behavior through social learning (Bandura 1986) as well as social exchange processes. Again, ethical leaders are attractive and legitimate role models who focus followers’ attention on their ethical standards and their normatively appropriate behavior. Thus, followers of ethical leaders should identify with these leaders and emulate their behavior rather than promote a simple economic exchange.

Counterproductive behavior (Detert et al. 2006) has to be reduced for fair treatment of employees (Greenberg 1990) and socialized charismatic leadership (Brown and Trevino 2006b). Employees, who have a high-quality relationship with their managers are less likely to engage in negative behaviors.

Brown et al. (2006a) represented follower satisfaction, motivation, and commitment as work attitudes. Leaders’ high ratings on transformational leadership are associated with followers’ satisfaction, commitment, and motivation (Lowe et al. 1996). These relationships have been attributed largely to shared values (Burns 1978) and the extent to which followers identify with these leaders, Brown et al. (2005) found ethical leadership to be associated with satisfaction with the leader and with job dedication.

3 Conceptual Model of Servant Leadership

The term servant leadership was coined by Robert Greenleaf (1904–1990) in his seminal work The Servant as Leader, first published in 1977:

The Servant-Leader is servant first … It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. … The best test, and difficult to administer is this: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, and more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit, or at least not further be harmed? (Greenleaf 1977: 7)

The servant-leader is governed by creating within the organization opportunities to help followers to grow (Luthans and Avolio 2003). Compared to other leadership styles where the ultimate goal is the well-being of the organization, a servant leader is genuinely concerned with serving followers (Greenleaf 1977).

Spears (1995) distinguished 10 characteristics that are generally quoted as the essential elements of servant leadership: (1) listening—emphasizing the importance of communication and seeking to identify the will of the people; (2) empathy—understanding others and accepting how and what they are; (3) healing; (4) awareness—being awake; (5) persuasion—seeking to influence others relying on arguments not on positional power; (6) conceptualization—thinking beyond the present-day need and stretching it into a possible future; (7) foresight—foreseeing outcomes of situations and working with intuition; (8) stewardship—holding something in trust and serving the needs of others; (9) commitment to the growth of people—nurturing the personal, professional, and spiritual growth of others; and (10) building community—emphasizing that local communities are essential in a persons’ life.

Laub (1999) developed six clusters of servant leadership characteristics that were the basis for measuring. These six key characteristics give a good overview of servant leadership behavior as experienced by followers. Servant-leaders empower and develop people; they show humility, are authentic, accept people for who they are, provide direction, and are stewards, who work for the good of the whole (Fig. 7.2).

Fig. 7.2
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Conceptual model of servant leadership

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3.1 Characteristics of Servant Leadership

A motivational concept focused on enabling people (Conger 2000), empowerment aims at fostering a proactive, self-confident attitude among followers and gives them a sense of personal power, encouraging personal development (Laub 1999).

The ability to put one’s own accomplishments and talents in a proper perspective (Patterson 2003) is important for servant leadership. Servant-leaders actively seek the contributions of others. Humility shows the extent to which a leader puts the interest of others first, facilitates their performance, and provides them with essential support.

Authenticity is closely related to expressing the true self, expressing oneself in ways that are consistent with inner thoughts and feelings (Harter 2002). A servant-leader’s authenticity manifests itself in various aspects: doing what is promised, visibility within the organization, honesty (Russell and Stone 2002), and vulnerability (Luthans and Avolio 2003).

Servant leadership presupposes the ability to understand and experience the feelings of others and where people are coming from (George 2000), and the ability to let go of perceived wrongdoings and not carry a grudge into other situations (McCullough et al. 2000). For servant-leaders, it is important to create an atmosphere of trust, where people feel accepted, are free to make mistakes, and know that they will not be rejected (Ferch 2005).

Providing direction ensures that people know what is expected of them, which is beneficial for both employees and the organization (Laub 1999). Providing direction is about providing the right degree of accountability, which has been suggested as a salient dimension of high-quality dyadic interpersonal relations (Ferris et al. 2009).

The willingness to take responsibility for the larger institution and to go for service instead of control and self-interest (Block 1993; Spears 1995) is extremely important for building harmonious interpersonal relationship. Leaders should act not only as caretakers but also as role models for others. Stewardship is closely related to social responsibility, loyalty, and team work.

3.2 Antecedents and Consequences of Servant Leadership

The model puts forward that the cornerstone of servant leadership lies in the combined motivation to lead with a need to serve (Van Dierendonck 2011). The resulting servant leadership characteristics, as experienced by followers, have their influence both on the individual leader-follower relationship and on the general psychological environment within a team or organization. The characteristics are also expected to influence the followers on three levels: the individual level—self-actualization, positive job attitudes, and increased performance; the team level—increased team effectiveness; and on the organizational level—a stronger focus on sustainability and corporate social responsibility (CSR).

3.3 The Motivation to Lead

The need to serve combined with a motivation to lead is the basis of the model. Internalized values such as honesty, integrity, fairness, and justice are characteristics that are expected to significantly impact a leader’s behavior (Russell 2001). In addition to this, power motivation refers to an underlying need for impact, to be strong and influential (McClelland and Burnham 1976). Relating this to servant leadership, it could be said that it is not so much about a low need for power. Greenleaf (1977) mentioned this motivation by stating that it starts with a need to serve that leads to a motivation to lead. The other way around is possible too, going from a motivation to lead to incorporating a serving attitude.

3.4 Individual Characteristics

Self-determination has been positioned as an essential condition to be able to act as a servant-leader (Van Dierendonck et al. 2009). A self-determined person will wisely use personal resources, build strong and positive relationships, and in helping others, develop their self-determination.

Kohlberg (1969) described six stages in the development from childhood to adulthood in which a person becomes aware of the complexity of distinguishing between right and wrong. Imagining how things look from the perspective of the other person becomes part of the decision and reasoning process.

Cognitive complexity reveals a person’s ability to perceive social behavior in a differentiated fashion. According to Van Dierendonck (2011), servant leadership asks for a balancing act between providing direction and standing back to allow others their experience.

3.5 Culture

Two cultural dimensions are most likely to influence the occurrence of servant leadership within organizations, namely, humane orientation and power distance.

According to Kabasakal and Bodur (2004), humane orientation is “the degree to which an organization or society encourages and rewards individuals for being fair, altruistic, friendly, generous, caring and kind to others.” A humane orientation is driven by cultural values such as concern for others, sensitivity toward others, friendliness, and tolerance of mistakes.

Power distance can be defined as “the extent to which a community accepts and endorses authority, power differences and status privileges orientation” (Carl et al. 2004). As Davis et al. (1997) assert, a culture with a low power distance is expected to be more encouraging toward developing servant leadership within an organization because the relationship between leader and follower is based on a more equal footing.

3.6 The Relationship Between Servant-Leader and Follower

Van Dierendonck (2011) finds that leaders who show humility by acknowledging that they do not have all the answers, being true to themselves, and adopting an interpersonal accepting attitude, create a working environment where followers feel safe and trusted. Relationships of this kind are characterized by mutual trust, respect, and obligation. Affect refers to positive feelings toward and a liking for the leader. Loyalty shows in being faithful and supportive, and in backing each other. Contribution is the extent that one perceives the other as working toward shared goals. Respect is closely related to a feeling of trust and holding the other person in high regard (Dienesch and Liden 1986). According to Van Dierendonck (2011), to build this high-quality relationship, servant-leaders rely on persuasion in their discussions with followers. There is a strong focus on striving toward consensus in the teams they lead.

3.7 The Psychological Climate

According to McGee-Cooper and Looper (2001), servant-leaders provide direction by emphasizing the goals of the organization, its role in society, and the separate roles of the employees. An atmosphere is created, where there is room to learn, yet also to make mistakes. According to Van Dierendonck (2011), a servant-leader’s focus on empowerment will create a climate, where decisions are made in a process of information gathering, and where time is taken for reflection. Thus, employees feel safe to use their knowledge and are focused on continuous development and learning, giving room for mutual trust and fairness in discharging one’s contribution towards the organization development.

3.8 Outcomes of Servant Leadership

Van Dierendonck (2011) states that servant leadership is a people-centered leadership style. It calls on the servant-leaders to work toward positive job attitudes by encouraging the psychological needs of their followers, which results in more satisfied, more committed, and better-performing employees. This improvises personal growth of the leader as well as the follower. Based on the servant leadership literature, it is observed that self-actualization, follower job attitudes, performance, and organizational outcomes are the main outcomes of servant leadership, whereas, the first three outcomes are related to follower outcomes, the latter is to the organizational outcome.

Striving for self-actualization and personal growth is a central motivator in a person’s life. It refers to a feeling of continuous personal development and of realizing one’s potential. Mayer et al. (2008) showed the relevance of servant leadership to followers’ psychological needs. Self-actualization gives life meaning. Meaningfulness through self-actualization includes a sense of wholeness and purpose in life. Van Dierendonck (2011) notes that servant leadership strengthens the self-actualization among the followers by igniting their thought process through goal-centered growth and seeking opportunities to achieve aspirations.

Laub (1999) argues that the model depicts that through psychological climate of trust and fairness; job attitudes follows the extent of employee’s attitudes towards their job satisfaction, organizational commitment, empowerment, and engagement. Van Dierendonck (2011) says existence of interrelatedness among the above said factors in the studies conducted by various researchers throws light on the relevance of servant leadership on follower job attitudes.

Performance is studied in terms of Organizational Citizenship Behaviour, (OCB) and team effectiveness. According to Graham (1991), servant leadership positively influences OCB because it encourages a higher level of moral reasoning in followers. Servant leadership is also believed to have a positive influence on team effectiveness as the leader balances the climate of trustworthiness by balancing self-interest with the interest of others. According to Van Dierendonck (2011), the most important leadership behaviors were providing accountability, being supportive, engaging in honest self-evaluation, fostering collaboration, having clear communication, and valuing the members in the team. This can be depicted as team leadership through personalized servant leadership characteristics, which has a direct and positive influence on team effectiveness.

Leaders need to integrate building a responsible business with the challenges of day-to-day operations, emphasizing the importance of integrity, open-mindedness, long-term perspective, ethical behavior, care for people, respectful communication, and managing responsibility outside the organization (Hind et al. 2009), all aspects that come close to the key servant leadership characteristics. Furthermore, Jin and Drozdenko (2009) argued and showed that CSR is related to a more organic, relationship-oriented organizational environment, where fairness and trust (psychological climate) are core values. As the concept of CSR broadly focuses on societal aspects; needs charismatic leadership strategies to understand and encourage the influence of the leader beyond transformational leadership.

4 Integrating Servant Leadership and Ethical Leadership

The reported studies have proven that there exists an integrating behavior of both servant leadership and ethical leadership. The cultural perspective of ethical leadership focuses on role modeling and ethical context. Servant leadership focuses on power distance and human orientation, which can be synergized with the cultural perspectives of ethical leadership. Unless there is a strong determination of the leader to be a role model, the leader cannot display ethical conscientious behavior to show the power distance with the followers Edward (2001). This mostly projects the openness, agreeableness, and fairness of the leader to uplift the morale of the followers. Van Dierendonck (2011) states that being agreeable is related to generosity and a greater willingness to help others. The motivation for leadership comes from this interest, and from empathy for other people (Fig. 7.3).

Fig. 7.3
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Integrated model of servant leadership and ethical leadership

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Additionally, the critical concept of moral cognitive development propounded by Kohlberg (1969) emphasizes the different stages through which people develop their cognitive reasoning.

It is expected that the power that comes with a leadership position is used to provide others with the opportunity to become self-determined as well.

The behavior of servant-leaders may influence the job attitudes and behavior of followers, and their behavior and disposition may in turn have an influence on how they are treated. This displays how the behavioral pattern of the followers can be determined by the ethical behavior of the leaders. Leaders can build a better working environment which enlightens the followers on their self-determination to be aligned with the organization’s set goals and objectives.

Whereas prosocial behavior of the follower has been subdued by the OCB, which provides the responsible and accountable attachment with the organization through servant leadership, giving way to team effectiveness rather than the concept of counterproductive behavior from the follower.

With regard to future research, it is important to realize that there are still some challenges to be met; servant leadership theory has a tendency of being too idealistic, and with minimal empirical evidence this theory requires more empirical research. The integration of ethical leadership with servant leadership is only possible through conceptual aids rather than through empirical integration.

5 Conclusion

Although ethical leadership has been a concern for generations, the rigorous theory-based social scientific study of ethical leadership is relatively new. Despite its newness, ethical leadership is a topic that has great potential for academic researchers. High-profile failures in ethical leadership have generated considerable interest in the topic. For this reason, the integration of servant leadership and ethical leadership allows leaders to encourage their followers through motivation to lead with a need to serve. Personal characteristics and culture are positioned alongside the motivational dimension. Servant leadership is demonstrated by empowering and developing people; by expressing humility, authenticity, interpersonal acceptance, and stewardship, and by providing direction. A high-quality dyadic relationship, trust, and fairness are expected to be the most important mediating processes to encourage self-actualization, positive job attitudes, performance, and a stronger organizational focus on sustainability and CSR. Leadership scholars have always been involved in research that aims to contribute to effective leadership. Because ethical leadership and servant leadership are related, the topic of ethical leadership should appeal to scholars with diverse motivations and interests.