Based on the ironic–reflective interpretation of Kierkegaard’s modes of existence, we have described the connection between the three modes of existence and the three positions in leadership theory as a process of expanding consciousness. Later levels integrate and reinterpret the achievements of earlier levels. For example, when the means-end relation at the instrumental–aesthetic connection is interpreted from the consciousness characterizing the spiritual–religious connection, the relation between the variables is changed. Efficiency and profits are no longer ends in themselves anymore but rather the means to reach individual, social and ecological ends.
We will now concentrate on leadership theory as enlightened by the ironic–reflective interpretation and discuss the change process as it affects ontology, epistemology, ethics, image of man and organizational ends.
The instrumental position is based on a mechanical worldview characterized by the idea that pieces of matter are isolated entities (atomism), related to each other only externally. Both the organization and the market are nothing more than mere mechanisms based on the interplay between egocentric actors seeking their own ends. One of the most important consequences of the mechanical worldview is that the whole universe is completely causal and deterministic and offers no capacity whatever for creativity, spontaneity, self-movement or novelty. Interpreted within the mechanical worldview, the actors in the market are supposed to act independently of one another in order to maximize their self-interests.
A more responsible position is anchored in a cultural worldview based on the precondition that people in organizations have common beliefs, attitudes and skills. It is impossible, according to the cultural world view, to understand fully a person without understanding his or her culture. In the context of leadership theory, culture is defined as the patterns of behaviour, beliefs and values shared by a group of people within the organization or the wider society. Culture includes everything from language and superstitions to moral beliefs and food preferences. Any social or cultural force influencing human lives is important to the cultural perspective. Business administration and leadership theory can, according to the cultural perspective, only be fully understood, if culture, ethnic identity and gender identity are taken into consideration (Fig. 2).
The spiritual position is based on an organic worldview in which ‘life’ and ‘mind’ are interwoven with matter and motion. Patterns, designs and emerging parts of this worldview manifest itself in most of the things that are called alternative, holistic or ecological today. It is the essence of life that it exists for its own sake, as an intrinsic value. Essentially, we cannot understand physical nature or life unless we fuse them together as essential factors in the composition of the whole universe. This interconnectedness is non-linear in the sense that freedom is considered to be the claim for self-assertion. Spontaneity and originality of decision are the supreme expressions of individuality. In a civilised society, the general end is that the variously coordinated organizations or companies should contribute to community life. In this perspective, the individual and the community make each other and require each other at the same time. Organizations simply cannot be reduced to parts in a mechanical system, governed by law and scientific rationality—that is the most important consequence of the organic worldview. Instead, the market consists of partners integrated in a living system. A more complex and dynamic framework takes into consideration that economic behaviour is both multi-faceted and context dependent.
Inborn complex patterns of behaviour (instincts) characterize the instrumental position. Behaviour that occurs under the influence of the major instincts ‘often consists of chains of more or less stereotyped patterns of behaviour called fixed action patterns’ (Sheldrake 2009, p. 167). Any behaviour is instinctively motivated if performed without being based upon prior experience (that is, in the absence of learning) and is, therefore, an expression of innate biological factors. Humans have an inborn tendency to seek pleasure and avoid pain (Blackburn 2001). Utility and profit maximization are examples of instinctively motivated behaviour in the instrumental position. Instincts exist in every member of the species and cannot be overcome by force of reason or will. However, the absence of volitional capacity must not be confused with an inability to modify fixed action patterns. For example, people may be able to modify a stimulated fixed action pattern by consciously recognizing the point of its activation and simply stop doing it, whereas animals without sufficiently strong volitional capacity may not be able to disengage from their fixed action patterns, once activated.
Intelligence characterizes the responsible position. Today, researchers emphasize that there is no single form of intelligence. Rather than seeing intelligence as dominated by a single general ability, they classify intelligence into several different forms. According to Sternberg, there are three types of intelligence: analytical, creative and practical (Sternberg 2005). Analytical intelligence reflects how an individual relates to the internal world and refers to the ability of the mind to arrive at correct conclusions about what is true and how to go about solving problems. Creative intelligence (Sternberg 2006) reflects how the individual connects to the internal and the external world. It involves insights, synthesis and the ability to react to novel stimuli and situations. Practical intelligence reflects the individual’s ability to relate to concrete tasks in the external world. It refers to individual competence in dealing with everyday challenges. Leadership theory in the responsible position presupposes that economic activity is a result of intelligent behaviour. It refers to individual competence to deal with everyday challenges (Fig. 3).
In the spiritual position, intuition is introduced as a source of knowledge. Intuition is defined as understanding or knowing without conscious recourse to thought, observation or reason. ‘Intuition is the conscious experience, within what is purely spiritual, of a purely spiritual content’ (Steiner 1995, p. 136). It is not unusual to conceive of intuition as somehow mystical, referring to the ability to acquire knowledge without the use of reason. Some scientists contend that intuition is associated with innovation in scientific discovery. According to Popper, ‘every discovery contains an “irrational element”, or “a creative intuition”’ (Popper 2002, p. 8).
Intuition is often discussed in writings of spiritual thought, including spiritual leadership. Contextually, there is often an idea of a transcendent and more qualitative mind of one’s spirit towards which a person strives, or towards which consciousness evolves. Typically, intuition is regarded as a conscious commonality between earthly knowledge and the higher spiritual knowledge and appears as flashes of illumination. It is asserted that, by definition, intuition cannot be assessed by means of logical reasoning (Popper 2002).
Ethical egoism characterizes the instrumental position in leadership theory. According to Ketola; ‘Companies seem to have had an inherent tendency towards utilitarianism or egoism ever since the times of Adam Smith’ (Ketola 2008, p. 421). Ethical egoism claims that it is necessary and sufficient for an action to be morally right if it maximizes one’s own self-interest. Ethical egoism pre-supposes a mechanism (‘the invisible hand’) ensuring that no individual egoist pursues his or her own interests at other egoists’ expense. Following Adam Smith’s theory, based on ethical egoism, an action is morally right if the decision makers freely decide in order to pursue either their (short-term) desires or their (long-term) interests. Consequently, Smith avoids the serious problem connected to the fact that man only has limited insights into the consequences of his own actions. Based on this reasoning, Smith draws the conclusion that it is impossible to calculate the impact individual actions have on other peoples’ well-being.
Utilitarianism—another version of consequentialism—is an impartial or impersonal moral view accepting that morality is agent independent. Its aim is to maximize ‘the utility or happiness of the greatest number of people’ (Renouard 2011, p. 86). Relevant utilitarian criteria are pleasure and pain, as the sole good and bad things in human lives (ethical hedonism). According to utilitarian ethics, the outcome of an action is more important than the intentions. Utilitarian principles can be summarized in the following way: the goodness of a state of affairs could be assessed by looking at the sum total of all the utilities in that state, and it requires that every choice could be ultimately determined by the goodness of the consequent states of affairs. Ethical behaviour is ‘understood as the maximization of the global well-being or material growth in a society’ (Renouard 2011, p. 86).
The responsible position is anchored in duty ethics. Duty ethics is less abundant than utilitarian, because ‘the duty ethical approach is considered normative’ (Ketola 2008, p. 421). Duty ethics argues that it is not the consequences of actions that make them right or wrong, but rather the motives of the person carrying out the action. ‘The only thing good in itself, then, is a good will’ (Blackburn 2001, p. 102). To act morally, one must act purely from duty. Those things usually thought to be good, such as perseverance and pleasure, fail to be intrinsically good. Pleasure, for example, appears not to be good without qualification, because when people take pleasure in watching someone suffer this seems to make the situation ethically worse. We conclude that there is only one thing that is truly good: nothing can possibly be called good, except a good will (Fig. 4).
In duty ethics, the consequences of an act cannot be used to determine that the person has a good will; good consequences can arise by accident from an action motivated by a desire to cause harm to an innocent person, and bad consequences can arise from an action that was well motivated. People act out of respect for the moral law when they act in some way, because they have a duty to do so (Blackburn 2001). The only thing that is truly good in itself is a good will, and a good will is only good when the willer (person who wills) chooses to do something because it is that person’s duty, i.e. out of respect for the law.
Virtue ethics characterizes the spiritual position in leadership theory. Carette and King argue that ‘spirituality has become the ‘‘brand label’’ for the search for meaning, values, transcendence, hope and connectedness in modern societies’ (McGhee and Grant 2008, p. 62). Cavanagh and Bandsuch (2002, p. 112) introduce virtue ethics as a benchmark to help managers ‘recognize spiritualities that help to develop virtue and character’, in addition they claim that such spiritualities are appropriate for the workplace. A good and moral life, according to virtue ethics, is a life responsive to the demands of the world. Virtue ethics’ central concepts are good judgment, justice, courage and self-control. To possess a virtue is to be a person with a given complex mindset. ‘The most significant aspect of this mindset is the wholehearted acceptance of a certain range of considerations as reasons for action’ (Stanford Encyclopedia of Philosophy 2012). Virtue ethics focuses on the moral person’s character characterized by the ability to be aware of, to identify and to handle moral dilemmas in real-life situations. In other words, virtue ethics and spirituality represent ‘a higher level of understanding that enables the contextualization of lower levels’ (McGhee and Grant 2008, p. 62). Gotsis and Kortezi (2007, p. 577) argue that virtue ethics meets the main spirituality exigencies, character education and well-being. They claim that it is relevant ‘to develop a more inclusive framework for constructing and implementing spirit at work’.
Image of Man
In the instrumental position, the economic actor is described as narrowly self-interested. Economic actors make judgments towards their subjectively defined ends. Using rational assessments, the economic actor attempts to maximize utility as consumer and economic profit as producer. Economic man is a metaphor, indicating that economic actors act according to the ideas of ethical egoism. Economic man is seen as rational in the sense that well-being as defined by the utility function is optimized given perceived opportunities. That is, the individual seeks to attain very specific and predetermined goals to the greatest extent at minimum possible cost (Ingebrigtsen and Jakobsen 2009).
This kind of rationality does not say that the individual’s actual goals are rational in some larger ethical, social, or human sense, only that he tries to attain them at minimal cost. Only naïve applications of the economic man assume that this hypothetical individual knows what is best for his long-term physical and mental health and can be relied upon always to make the right decision for himself. Smith argued that the principle of pursuit of self-interest was acceptable because it produced a morally desirable outcome for society, given the assumption that economic decisions take into account sympathy and fellow-feeling. In the responsible position, the economic actors are described as social. Man is by nature social. Society is something that precedes the individual (Ingebrigtsen and Jakobsen 2009) (Fig. 5).
The spiritual position is based upon an idea that economic actors have a cosmic perspective characterized by having a sense of being part of the whole of life. The cosmic man has much in common with ‘Philosophy of Organism’ (Whitehead 1967) and ‘Deep Ecology’ (Næss 1989). Cosmic man is rooted in the idea that the superior goal of sustainability and quality of life cannot be reached within abstracted mechanistic or social worldviews. According to Kohlberg (1964), the ‘cosmic man’ is a person who engages scientists, humanists, modern men and women in a fundamental enquiry concerning basic questions such as humanity’s relationship to the source and ground of its being.
The instrumental position is based on shareholder value. Shareholder value assumes that corporations are primarily the means of its owners and that their corporate purpose is to maximize long-term shareholder value. Shareholder value is a business term (micro-perspective), sometimes phrased as shareholder value maximization or as the shareholder value model (Friedman 1970). Proponents of the shareholder value model believe that the success of an organization can be measured on a monetary scale by share price, dividends and profit. Shareholders obviously have a financial interest to invest in companies with high profitability. While there may sometimes be short-term tension between profits and ethics, ethical behaviour should be viewed as being consistent with a desire to maintain long-term profitability and financial soundness. Shareholder value proponents regard ethics as a means rather than as an end/purpose in itself. Hence, they do not believe that social responsibility is a matter for companies at all and think that society is best served by companies pursuing self-interest and economic efficiency (Fig. 6).
Stakeholder theory is the perspective characterizing the responsible position. All companies have responsibilities towards the welfare of a range of actors with a stake in what the company does. A firm’s stakeholders are individuals, groups or other organizations affected by, or themselves affecting, the firm’s decisions and actions (Carroll 1991). The various stakeholders may have competing, even conflicting, interests that need to be balanced. Clearly, different groups of stakeholders will place a different emphasis on what they expect from their company. Depending on the specific firm, stakeholders may include governmental agencies, NGOs, employees, shareholders, suppliers, distributors, the media and the community in which the firm is located.
A holistic perspective is essential to the spiritual position. Earth is a dynamic living organism whose complex processes have maintained the conditions for life to keep on evolving over millions of years. Humans are integral parts of this living process and depend on it for their well-being. Businesses are co-responsible for ensuring a mutually enhancing way to live on our planet, our only home. A Buddhist economic strategy (Zsolnai 2008) is a major alternative to the western economic mindset. Buddhism is centred on want negation and purification of the human character and leads to happiness, peace and permanence.
The Gaia (macro) perspective is essential, because all decisions have an influence and are themselves influenced by both lesser and greater wholes. A business, a community, or indeed the global community, cannot be managed without ‘looking inward to the lesser wholes that combine to form it, and outward to the greater wholes of which it is a member’ (Savory and Butterfield 1999, p. 17). In this perspective, the goal is quality of life, an expression of how people want their lives to be, and what they ultimately want to accomplish together.