Business – 7.3 Leadership – Leadership | e-Consult
7.3 Leadership – Leadership (1 questions)
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Ethical behaviour influences performance through several mechanisms, illustrated in the table below.
| Aspect | Ethical Leader | Unethical Leader |
| Trust & Cohesion | High – team members feel safe and valued. | Low – suspicion and disengagement grow. |
| Motivation | Intrinsic motivation rises as employees identify with the leader’s values. | Extrinsic, short‑term motivation only; high turnover risk. |
| Decision Quality | Decisions are transparent, data‑driven, and consider stakeholder impact. | Decisions may be biased, risky, or self‑serving. |
| Reputation & Stakeholder Relations | Positive brand image attracts talent and customers. | Negative publicity can damage sales and recruitment. |
Overall, ethical leadership creates a virtuous cycle of trust, motivation, and high‑quality output, whereas unethical conduct erodes these foundations and hampers performance.