Does Effective Leadership Have to Be Moral Leadership?

In short, yes—especially at the organisational level. As humans, we naturally strive for cooperation and mutual gain as part of a tribe. When a leader acts in favour of the group, the group is more likely to support them in their endeavours. While this principle may seem obvious, it is often overlooked in practice, particularly in high-pressure environments where short-term results dominate long-term considerations.

Leadership is undeniably paramount to organisational success. But what constitutes effective leadership? At its core, effective leadership is the kind that achieves its goals. Yet the reality is that leadership must adapt to context, as different situations demand different approaches. Despite this variability, there is a general consensus: effective leadership requires a combination of competence and ethics. Lacking either can undermine long-term success. For example, Coca-Cola’s operations in Nigeria faced significant organisational challenges due to poor leadership. While a subsequent leadership change improved the company’s direction, employee performance itself didn’t dramatically increase, highlighting the critical role leadership plays in guiding an organisation toward its potential.

The link between moral leadership and effective leadership is well-documented. Research within a military context, for instance, found that the ability to activate mature moral justice schemas was positively associated with transformational leadership—a style that has overwhelming evidence linking it to employee satisfaction and increased performance. However, this ability can be severely hindered by factors such as sleep deprivation. Sleep-deprived leaders often show diminished moral reasoning and instead focus more on rigid, rule-based thinking. In business, this can have dire consequences. High-pressure environments, often fuelled by shareholder and upper management demands to achieve targets “at any cost,” create a cycle of stress and sleep deprivation. This, in turn, leads to less ethical decision-making. While these short-term approaches may achieve immediate goals—such as profit targets—they often come at the expense of the organisation’s long-term health and sustainability.

The perception of morality within an organisation is critical for fostering trust and long-term stakeholder support, and this starts with moral leadership. Research shows that when organisations are seen as genuinely moral, their actions—such as CSR initiatives, charity donations, or DEI policies—carry significant weight, building loyalty among consumers, employees, and investors. Leaders who prioritise ethical decision-making and align their organisation’s mission with genuine efforts to solve consumer problems create a cycle of reciprocity: consumers reward these organisations by paying premiums, spreading positive word-of-mouth, and remaining loyal. In turn, this strengthens the organisation’s longevity and resilience, establishing it as a trusted entity in the market.

Conversely, when leadership prioritises profit over purpose, the organisation risks losing stakeholder trust. Performative or insincere efforts—whether in CSR or the quality of products and services—fail to resonate and often lead to disengagement from customers, employees, and investors. Moral leadership, on the other hand, not only fosters authenticity but also sets the tone for an ethical culture that drives long-term success. By focusing on ethical practices and a genuine commitment to solving consumer problems, leaders ensure their organisation thrives through mutual benefit and loyalty.

To conclude, effective leadership is not just about achieving goals—it’s about how those goals are achieved. Moral leadership, characterised by ethical decision-making and consideration for the well-being of others, is a cornerstone of long-term success. Moreover, perceived morality at the organisational level plays a vital role in fostering trust and support from both internal and external stakeholders. Organisations that fail to align their actions with a genuine moral framework risk losing credibility, making even their most virtuous efforts seem hollow.

In a world where short-term gains often dominate decision-making, it’s worth asking: Are we trading long-term success for immediate results? Perhaps the real challenge lies not in defining effective leadership but in ensuring that its moral foundation remains intact under pressure. After all, the true measure of a leader—and an organisation—is not just in what they achieve, but in the legacy they leave behind.

References

Ciulla, J. B., & Ciulla, J. B. (2020). Ethics and effectiveness: The nature of good leadership. The search for ethics in leadership, business, and beyond, 3-32.

Ellemers, N., & Chopova, T. (2021). The social responsibility of organizations: Perceptions of organizational morality as a key mechanism explaining the relation between CSR activities and stakeholder support. Research in Organizational Behavior, 41, 100156.

Ibrahim, A. U., & Daniel, C. O. (2019). Impact of leadership on organisational performance. International Journal of Business, Management and Social Research, 6(2), 367-374.

Olsen, O. K. (2010). Are good leaders moral leaders? The relationship between effective military operational leadership and morals.