Revisiting the Literature Review on Ethical Leadership and Humanocracy

Abstract

Bureaucratic organisations are inertial, incremental, and dispiriting. In a bureaucracy, the power to initiate change is vested in a few senior leaders. When those at the top fall prey to denial, arrogance, and nostalgia, as they often do, the organization falters. That’s why deep change in a bureaucracy is usually belated and convulsive. Bureaucracies are also innovation-­phobic. They are congenitally risk averse, and offer few incentives to those inclined to challenge the status quo. In a bureaucracy, being a maverick is a high-­risk occupation. Worst of all, bureaucracies are soul crushing. Deprived of any real influence, employees disconnect emotionally from work. Initiative, creativity, and daring—requisites for success in the creative economy — often get left at home. (Hamel and Zanini, 2020) The main purpose of this research paper is to understand ethical leadership and humanocracy, a word coined by Gary Hamel and Michele Zanini in 2020. Ethical leaders possess diverse thinking about long term consequences, limitations and benefits of the decisions they are required to make within the organization. The main job of the ethical leaders is, they should take into consideration, norms, principles, values, standards and ethics, when they are carrying out various job duties and convey the same to the other members. Ethical leaders set high standards and carry out tasks and activities in accordance to them. They convey to the other members, how to implement ethics in their work, hence, they themselves need to be professional and skilled in their conduct. They influence ethical values of the organization through their behaviour. Leaders serve as role models for their followers and show them the behavioural boundaries set within an organization. They are perceived as honest, truthful, trustworthy, responsible, reliable, courageous, fair and authentic. In this paper, thankfully, bureaucracy isn’t the only way to organize human activity at scale. Around the world, a small but growing band of post-bureaucratic pioneers are proving it’s possible to capture the benefits of bureaucracy — control, consistency, and coordination — while avoiding the penalties — inflexibility, mediocrity, and apathy. When compared to their conventionally managed peers, the vanguard are more proactive, inventive, and profitable. These companies were built, or in some cases rebuilt, with one goal in mind — to maximize human contribution. This aspiration is the animating spirit of humanocracy, and stands in stark contrast to the bureaucratic obsession with control. Both goals are important, but in most organizations, the effort spent on ensuring conformance is a vast multiple of the energy devoted to enlarging the capacity for human impact. This gross imbalance is dangerous for organizations, a drag on the economy, and ethically troubling. Bureaucracy as Hamel and Zaninin (2020) put it is particularly problematic for large companies. As an organization grows, layers get added, staff groups swell, rules proliferate, and compliance costs mount. Once a company hits a certain threshold of complexity — around two hundred to three hundred employees, by experience, bureaucracy starts growing faster than the organization itself. That’s why big companies have more bureaucracy per capita than small ones, and why they’re burdened with managerial diseconomies of scale. The link between girth and “bureausclerosis” would be less worrying if large organizations weren’t so dominant and managers lack ethical leadership. Despite all the talk of the gig economy, a greater percentage of the US labor force works for large companies than ever before. In 1987, 28.8 percent of US employees worked in companies with more than five thousand employees. Thirty years later, the percentage was 33.8. Today, the number of employees working in companies with more than ten thousand employees exceeds the number who work in businesses with fifty or fewer employees. Defenders of the status quo will tell you that bureaucracy is the inevitable correlate of complexity, but our evidence suggests otherwise. The vanguard companies prove that it’s possible to build organizations that are big and fast, disciplined and empowering, efficient and entrepreneurial, and bold and prudent. The paper will show how humanocracy and ethical leadership can bring an end to bureaucracy.