July'23

Article

Examining the Influence of Principled Leadership Approach on Learning Organization Culture

Sunita Singh Sengupta
Professor, Faculty of Management Studies, University of Delhi, New Delhi, India; and is the corresponding author. E-mail: Sengupta.sunitasingh@gmail.com

Guangpuanang Kahmei
Assistant Professor, Indian Institute of Management, Jammu, Jammu & Kashmir, India. E-mail: guangpuanang@iimj.ac.in

This explorative and non-experimental study investigates how the Principled Leadership Approach (PLA) impacts the creation of Learning Organization Culture (LOC). The study defined PLA as an institutional system anchoring on three critical aspects-compassion, integrity, and inclusivity-and how this aspect supports the basic structure of the learning organization's culture-purposeful orientation, leadership support, and structure flexibility. This model was tested with the help of 604 sample data collected randomly from varied business professions in India between April 2020 and September 2021. The model for the study was tested using EFA and CFA. The study found that PLA's dimension has a significant favorable influence on LOC's dimension, indicating PLA builds a positive pathway to unfold the ideal of learning organization culture.

Introduction

The modern organization is deeply fragmented, where an invisible wall demarcates people based on gender, caste, creed, and region. In this culture, ethics is seen as an oxymoron that dwells only in theory. The ethical code is bulldozed as convenient to soothe individual agendas (Hicks, 2003). For instance, a study found many cases in large corporations where managers forced their subordinates to break "every one of the articles in the company's code of ethics" to meet the cut-throat competition demand in order to meet the production target (Ciulla, 1998). Such culture has become the norm and a new habit of people in power (Lysova et al., 2023). However, in "respectful pluralism," Hick (2003) demonstrated that the fervent role of leadership essentially requires breaking the wheel of power to make employees fall in line with the ethical norms in speech and action. Hence, he strongly advocates for a culture of respectful pluralism, a culture where people welcome new ideas, insights, and expressions that would foster creativity to a greater degree (Hicks, 2003; and Rupeie, 2023). However, ethical research revealed that modern institution systems need to pay more attention to the issue of ethics in their institutional design and process (Zyglidopoulos, 2021; and Aftab et al., 2022). Therefore, beyond mere words, ethical leaders must take action (Chen et al., 2023). Failing to uphold ethical principles results in business scandals, shattering society and turning great institutions to dust (Zyglidopoulos, 2021; and Deeg and May, 2022).

For decades, research has been persistent on the significance of ethics for an organization's success (Lee et al., 2022), and the vital role of ethical leadership (Zyglidopoulos, 2021) has been expounded widely (Lips-Wiersma et al., 2020; and Deeg and May, 2022). However, the challenge remains to imbibe this aspect into the management system and embed it into the firm's action, mainly due to failing leadership style (Zyglidopoulos, 2021). Hence, the paper primarily focuses on failing leadership style. Moreover, to adequately capture this virtue of ethics, we have used the term "Principled Leadership Approach (PLA)" as a model. This model is also integral to the conception of learning organization practice, deeply rooted in the idea of creating a humane workspace where collective aspiration can be set free (Senge, 2006). Towards this end, the study examines how principled leadership practice can create the desired organizational culture that is true to the collective aspiration, based on the ideal of human welfare to deepen the construct of learning corporate culture. Thus, the study examines the significance of PLA as a contributing factor to creating the desired Learning Organization Culture (LOC).

Dimension of the Learning Organization Culture
Ethics is relational and should manifest in the ideal of human aspiration. The quest for an ethical, humane work culture has been the dream of all industrial workers (Edmondson et al., 2020; Sulaiman et al., 2022). This aspiration is stronger today as our consciousness grows (Lysova et al., 2023). Thirst for inclusive and empathic work culture becomes paramount (Bhatia and Baruah, 2020). Therefore, the growth and development agenda must be inclusive to touch the lives of every working human being (Syed and Shanmugam, 2022). This is the new way of this era, and all technological advancement, globalization, etc. should aid in making this ideal possible. Therefore, the corporate world is progressively fine-tuning the idea of a "global citizen," that care must extend to all (Al Zaidi et al., 2023). This is the new consciousness, and within this consciousness, we observe the evolution of the modern corporation and its quest for ethical practice. The revolutionary movements such as "human relation," "action learning," "living company," and "learning organization," "workplace spirituality," and "healing organization," to name a few, can be considered the product of this consciousness and people's desire for a humane culture (Marques et al., 2005; and Pedler, 2020). It is within this developmental line of human consciousness that the Learning Organization Theory was built (Bennet and Bennet, 2008), which is fundamentally rooted in the human system (Geus, 1999) that strives to create a living culture (Senge, 1994) and ethical living in every sense (Senge, 2006). Thus, Senge has adopted a humanistic approach to the learning organization, emphasizing the "realization of human potential, higher-order attributes of self-actualization, self-development, creativity and ethics" (Akella, 2021). Therefore, the quest for the learning organization is rooted in liberation both in thinking and action, which is currently bounded by unsympathetic, undemocratic processes compounded by unethical organizational practices pervading modern organizations causing enormous pain (Rynes et al., 2012; and Kahmei and Bhatt, 2020). Hence, the objective is to create a humane culture that values human lives and cares for and protects them at all costs. In the absence of such ethical values, torture culture will continue seemingly, or unseemly behavior will be illustrated. Therefore, we assume that ethical practice creates a healthy workplace that protects and respects human lives. Ethics provides a guiding principle of action, attitude, and discourses. It liberates and empowers people (Basar et al., 2018), which is the essence of creating a respectful, learning organization culture.

Illustration
"I have a friend who was one of the first American pilots shot down and captured by the North Vietnamese. In the early days of his seven-year captivity, he and his fellow prisoners of war were systematically tortured. ...his captors were engaging in fully conscious organizational behavior. They knew exactly what they were doing. They were conscious of their intent, and the effect their beatings and even more brutal practices had on their victims. They knew that anyone would break under enough pain and that their torture would extract confessions-no matter how false-useful for propaganda and serving their organizational mission.... Civility is more than organizational behavior that is merely "consciously motivated." It must be ethical as well. Moreover, all but the morally insane would agree that torture is inherently and grossly unethical. ... it is so gross not to sidestep the fact that much more subtle incivility is our society's real, pervasive problem. Moreover, it, too, is unethical. To be ethical is, at the very least, to be "humanistic," which means having the attitude that people are precious and should be treated accordingly insofar as possible. We do not torture people if we think of them as precious" (Excerpt from "To My Fellow Travelers," Scott, 1997, p. 174).

Purposeful Orientation (POS)
There is a purpose to lives and our engagement because search for meaning is an intrinsic motivation of human beings (Lysova et al., 2023). Meaningfulness is one of the most powerful things that enables us to "break through the most difficult obstacles" (Twerski, 2000, p. 97). However, this purpose should be guided by strong ethical principles that orient work culture beyond simply making profit (Milliman et al., 2003). Moreover, principled leadership can provide a pathway to these values (Metcalf and Urwick, 2005, p. 282). Thus, purposefulness is the core motivating factor of members' work engagement compared to the organizational core values (Irving and Berndt, 2017). This aspect is critical for creating the learning organization (Sidani and Reese, 2018 and 2020).

Leadership Support (LDS)
Growth is natural, and it is fundamental to life. Allowing to grow is right and moral. We are for more; there is no joy in stagnancy. However, more does not mean hoarding or accumulation but enriching every aspect of life (Finnestrand, 2023). Thus, moral responsibility is vested in leadership to stimulate growth; fulfilling this responsibility is ethically sound and necessary. Many studies have recognized the vitality of this aspect (Battistella et al., 2021). The concept assumes that achieving high performance with support from the top management is easier (Haight and Marquardt, 2018, p. 334). Moreover, without leaders' confidence, the dream of empowering, inclusive, and compassionate culture will not materialize. It is far less possible for a shared sense of organizational spirituality that nurtures collective conscience because no organization can be at a higher level of consciousness than its leader's consciousness (Neal, 1997). Hence, a learning organization's success depends heavily on its leadership (Garvin et al., 2008), and they are the beating heart of the learning organization culture (Hariharan and Anand, 2023).

Structure Flexibility (SFT)
In the world of dynamics, rigidity is complacent. It pulls away from reality and inhibits meaningful expression and growth because everything is interpreted and acknowledged in a context (Lips-Wiersma et al., 2020). Moreover, within the organizational structure, work can express itself in a valuable and meaningful way. Therefore, the system must be fluid enough to incorporate the dynamics of a new reality and strong enough to hold its fort (Battistella et al., 2021), which Hicks (2003) terms "limit norms" (p. 191). Structure creates a discipline that needs to be followed. Status quo maintains the sanctity of the organization's functioning. If we observe business development, there is a fundamental shift in how people engage with work and how people associate meaning with their work (Mortimer, 2023). In this new era, business becomes less physical, and more of networking relationships that span globally (Prewitt, 2004). The learning organization structure must be flexible enough to adapt, model, and respond to new changes (Nguyen et al., 2022).

Theoretical Background
Ethical theories, particularly utilitarianism and deontology, are taken as observed theories for the study. Firstly, the Consequentialist theory-utilitarianism-emphasizes the action's consequences. Bentham (1982) believed that actions are morally right if the total pleasure outweighs pain (Dion, 2012). According to him, pleasure is good, and pain is evil. Hence, any action that reduces pain is morally justified as it increases the total level of happiness (Dion, 2012). This implies that decision-makers make a subjective assessment identifying positive and negative consequences on the people. However, deontology views the morality of an action as inherently right or wrong independently from its consequences (Dion, 2012). According to Immanuel Kant (1959), action is considered morally right if it consistently applies moral principles, and this moral law is valid for all rational beings. Actions are governed by moral law (principles), hence a moral duty (priori) for every rational being is to cultivate goodwill. According to Kant, the principle of action is universal and consistent and must apply to all that must follow these moral principles as a duty. No one is subjected to ill-treatment or considered an object or tool for other's interest (Dion, 2012). Kantian principles imply that employing someone exclusively to further our goals is immoral. Kantian principles (1959, pp. 40-48) imply that 'using someone' against that person's will to advance our own goals-violates that person's essential autonomy and freedom. Disregarding their thoughts, beliefs, or deeds and treating them as means is immoral (Dion, 2012).

Research has shown that value creation that emphasizes "wellbeing" for all stakeholders improves firm value (Harrison et al., 2015). The management must embrace the utilitarian quest for wellbeing rather than strict concern for maximizing wealth (Pirson, 2019). Then, it will eventually lead to improved performance and wealth creation (Silva et al., 2023). To this, a mainstream philosophical tradition, like 'utilitarianism,' 'deontology,' etc., provides a value system that is an inclusive framework needed to be developed in an organization (Gotsis and Kortezi, 2008; and Newey et al., 2023). It provides a foundational ethical framework essential for creating the learning organization culture (Tomkins and Bristow, 2023). Hence, studies found that ethical leadership (ETL) significantly enhances employees' perceived values about themselves and their work, thereby considerably improving trust in an organization and performance (Xu et al., 2016; and Eluwole et al., 2022). It also fosters employees' attitudes and desirable behavioral outcomes (Aftab et al., 2022) which are the foundations of the learning organization (Granrusten, 2019). Thereby, contributed the best proximal outcomes to LOC (Xu et al., 2016; and Eluwole et al., 2022).

Hypothesis Development
Principled Leadership Approach

The idea of principled leadership has been introduced previously. However, the concept remained nascent because no proper study has been done thus far, except for Covey's book (originally published in 1989). No theoretical model is available for investigation and measurement, although the concept is crucial and relevant in today's organizational context (Anthony and Huckshorn, 2009). PLA approach is rooted in the ethical foundation of leadership and their action, which is strongly reflected in policies and functioning (London, 1999). It encompasses 'fairness, equality, justice, integrity, honesty, and trust', which, according to Covey (2003), is an unchanging natural law that is relevant for all times, which leaders must uphold regardless of time and space. His work, Principle-Centered Leadership anchors on two traits-'principles' and 'values.' These traits help transform organizational and personal relationships, which deepens ethical leadership discourse. According to Covey, principles and values dictate our behavior and judgment. However, principles supersede values as value is temporal. It helps us navigate challenging situations, a moral campus that points us toward the rightful course of action.

According to Business Ethics Resource Center (BERC), principled leadership is about creating and implementing ethical culture for business success that benefits all. GeorgeTown University's McDonough School of Business defined it as "a set of ethical principles that foster the integrity and efficacy of global markets and activities, as well as hold themselves and others accountable for honorable conduct that promotes worthy collective objectives." Literature has indicated that "Principled Leadership" is a hermeneutically rich concept championing 'ethical practice' intertwined with 'morality' and 'righteousness'. The concept is built on "several concepts embedded in other non-western cultures" (London, 1999); for instance, kyosei, a Japanese belief system that believes "people can live and work together for a common good or cause" (Kaku, 1995); Tikkun Olam, a Hebrew concept that believes all share the responsibility to make the world better; the Buddhist faith that insists on goodness and peace (London, 1999); and Imago Dei, the Christian belief that all are created equal in the image of God. Covey argues that no organization can indeed be free when organizational leadership is not guided by corrupt principles but by alternative centers such as profit, program, policy, competition, image, technology, etc. In such conditions, a leader's attitude tends to control and exploit, making everything vulnerable. However, if leadership is centered on correct principles, external circumstances cannot easily threaten the organization, and Covey suggests that competition will become a healthy learning source. Hence, based on this literature review, the present study defines principled leadership as an approach that consistently measures the ethical decision process for the welfare of all. In this leadership approach, the prospect of profit is superseded by ethics in the decision-making process. The model is shown in Figure 1. Therefore, taking note of this line, the present study attempts to define PLA and provide a theoretical model for measurement. This conceptual model is shown in Figure 2.

Compassion (CPS)
The truest human quality lies in our capacity to be compassionate. Kahmei (2021) called this element a "divine us" that makes humans a person (p. 80). It is an interpersonal process nurtured within a human relationship (Dutton and Spreitzer, 2014). Many studies have a narrow view of compassion (Shapiro et al., 2011). However, such experience (compassion) reshaped the organization as a whole (Zoghbi-Manrique-de-Lara et al., 2019). Research shows that a level of human kindness holds the power to lift the suffering soul and restore the newness of life beyond one's imagination (Rynes et al., 2012, p. 503). Our compassion creates a sincere desire to end suffering (Neff et al., 2007) and provides the will to act upon it (Dutton and Spreitzer, 2014). Furthermore, it cultivates "patience" (Dutton and Spreitzer, 2014, p. 34) and "self-kindness" (Neff, 2009) on an individual level which is crucial to stabilize one's emotions (Kahmei, 2021). It provides a way for healing, leading to a peaceful environment and enhancing organizational commitment (Yang, 2020).

Frost (1999) claimed that where there is a lack of compassion, the outcomes are flawed, and expressed deep concern about disappearing professional practices. It is in compassion that the rubber touches the road. Without it, there is no ethical basis for any professional activity because a lack of compassion in the ethical decision-making process breeds greed and aggressiveness, and such an outcome could be disastrous (Kelly and Dorian, 2017).

Ethical research suggests that caring is central to ethical practice (Lips-Wiersma et al., 2020). It means that our actions should not harm others but seek the welfare of everyone, borne out of deep concern for people's wellbeing (Allen and Fry, 2023). That includes recognizing the distinct nature of different groups in our society and their struggle. As we observed earlier, many successful corporate managers are forced to take a short-term worldview to please immediate shareholders (Coopey, 1998, p. 366). The consequences of corporate failure to uphold ethical principles do not harm them alone but significantly affect the larger community. This is mainly due to the power shift that flows from the "state" to the "corporation," that investors have now become increasingly more powerful than the voters (McCloughry, 2001, p. 43-44). (MacCloughry, 2001). However, the success story of a corporation does not reach the needy even though they (people from the bottom of the pyramid) are the real engine of growth (Prahalad, 2010). Hence, today, business leaders have a greater responsibility to be more ethical than ever. Instead, globalization has endangered many indigenous practices; foreign commercial activities sabotage indigenous culture, traditions, and identity, yet corporations are widely seen as indifferent to it. Today, businesses push their products into the local market in the Western way that commercial activities have lost their local identity (McCloughry, 2001). This concern should be acknowledged, and care must be extended to what people value. This is compassion. Acknowledging and owning up to these ethical responsibilities is possible only if they have compassion. Thereby, we hypothesize that:
H1a: CPS has a positively significant influence on POS.
H1b: CPS has a positively significant influence on LDS.
H1c: CPS has a positively significant influence on SFT.

Inclusiveness (ICS)
In an equal society, people wrestle for acceptance. Acceptance is the ideal where people's aspirations converge. To be truly learning and truly free requires being inclusive in every sense. The central idea of inclusion runs deep in acknowledgment, worth, sacrifice, and embracement. This concept is deeply intertwined with the idea of tolerance, compassion, and justice (Adapa and Sheridan, 2018; and Bhatia and Baruah, 2020). Thus, being ethical requires being inclusive-a model guiding complexity management. Therefore, inclusive leaders emerge as role models for employees (Brown et al., 2005). The inclusive practice assumes equal importance for every individual, irrespective of who they are. It creates a space for interaction a free environment where people are invited or encouraged to express themselves and their deeply held values without tension, and allowed to enjoy authentic relationships with one another. Inclusiveness promotes human relationships and nurtures trust. Furthermore, inclusion focuses on the lower sections of society and is strongly associated with empowerment (Laloux, 2014; and Wuffli, 2016). Therefore, inclusive practice fundamentally starts by acknowledging the equal value of each person and working out a model that can hold a diverse view of life. Moreover, the purpose of this practice is not because it rewards. Although it brings many advantages to the organization's endeavor, the reason is simply it is the right thing to do, which is the moral responsibility of principled leadership. In the process, it harbors new learning, enabling "experience sharing across societal segments" and "expands the leadership pool at all levels" (Wuffli, 2016, p. 4). Thus, the study hypothesizes that:
H2a: ICS has a positively significant influence on POS.
H2b: ICS has a positively significant influence on LDS.
H2c: ICS has a positively significant influence on SFT.

Integrity (ITG)
Integrity is a gift; there is nothing like it. In a fragmented culture where mistrust pervades, integrity shines as a beacon of hope. Therefore, Cacioppe (1999) called integrity "our own divine power" (p. 51). Research also revealed that "integrity" is linked to the transcendental character of the soul manifested in human activities (Reams, 2012), which is "constantly revealing itself" (Bohm, 1992, p. 167), in the holistic attributes of honesty and trustworthy (Trevino et al., 2000). According to Zenoff (2013), "integrity" is ethical conduct that takes social responsibility in "doing the right thing" (p. 36). It means being true to "oneself" and "telling the truth to others" (Neal, 1997). It means completeness (Reams and Caspari, 2012). Thus, a lack of integrity will lead to "self-betrayal" and "self-justification" (Warner, 2001). This is crucial and holds leaders accountable for their decisions in directionless cultures such as the "spiritual value" determining leadership success (Reave, 2005; and Miller, 2020). Thus, the concept is a nexus of ethical leadership practice (Zyglidopoulos, 2021) that "lies at the very heart of understanding what leadership is," denoting "wholeness" and "coherence" (Badaracco and Ellsworth, 1989, p. 98), a character that is consistent, credible, predictable (Trevino et al., 2003), and effective (Lips-Wiersma et al., 2020). (Lips-Wiersma et al., 2020). Research also revealed an association between lack of integrity and leadership failure (Reave, 2005). Harden (2002) found that most big corporate leaders engaged in unethical behavior, bending ethical codes to their personal agenda, causing distrust and hurt. Therefore, Dutton and Spreitzer (2014) proposed carrying out an "ethical audit" in organizations to enhance ethical practice and also provide psychological safety and freedom to report wrongdoings without fear of negative repercussions (Dutton and Spreitzer, 2014, p. 97). Research also revealed that leaders' integrity stimulates subordinates (Lee et al., 2022) and gives a sense of completeness (Lips-Wiersma et al., 2020) and meaning to their work (Lysova et al., 2023). Thus, the study hypothesizes that:
H3a: ITG has a positively significant influence on POS.
H3b: ITG has a positively significant influence on LDS.
H3c: ITG has a positively significant influence on SFT.

Data and Methodology
Measurement

The study adopted the "Integral Leadership Questionnaire" to measure PLA (Sengupta, 2021) and the "Energy-Based Organizational Culture" item to measure LOC (Sengupta, 2021). The items are measured on a 4-point scale, where 1 = quite false, 2 = false, 3 = true, and 4 = quite true. However, some of the items were modified to suit the study context better. Sample Size and Population
Random sampling was used to collect data between April 2020 and September 2021 from various professionals working in various sectors in India. 80% of the data was obtained using Google Forms (see Appendix) from an organization in Delhi NCR region. The sample comprised 50 employees with '10 years of experience. The study identified 2,676 potential respondents, however, only 726 completed the survey, of which we accepted only 604 sampled responses. The literature also indicates that the adequate sample size for research is 1:5 per variable (Gupta and Gupta, 2020). The main objective of this study is to examine the effect of PLA on LOC on three dimensions each. Also, the sample size for the infinite population gave n = 323 as adequate size. Thus, we consider it adequate for the study. The demographic profile of the respondents is shown in Table 1.

Managerial Implications
The study revealed that job profile (position) significantly affects PLA's dimensions, particularly LDS and POS. Therefore, a Mann-Whitney U test was conducted to identify the point of significance, and the test results revealed that the senior management orientation toward LDS and POS is statistically significant compared to other managerial levels. This finding suggests a dysfunctional relationship or lack of effective communication between senior management and different levels of control. This requires immediate attention because organizations that aspire to create a learning organization must ensure that the collective aspiration of the members represents organizational functioning. Moreover, care should be taken to improve all people's esteem needs, particularly those at the lower rung of the hierarchy. This case is reinforced by the above condition (significance of age), considering that the age group below 25 years is the least experienced group and forms the lower managerial position. Hence, the significant result of their orientation toward inclusiveness indicates the prevalence of opaque and strict hierarchical management systems in an organization (e.g., Newman and Newman, 2015). This is an essential concern for a management that aspires to create a learning organization. For a learning organization, it is crucial to have an inclusive culture where employees feel safe expressing their values irrespective of their tenure, experience, and profile so that everyone can engage with each other with an open mind for self-growth and institutional development (e.g., Kahmei, 2021). Moreover, the study also found an indifferent approach of the senior management toward the practice of PLA in the organization, particularly concerning inclusiveness, empathy, leadership support, and purpose orientation dimensions from other managerial positions (Kuntz et al., 2023). However, as a caveat, we cannot be certain as the sample of senior-level respondents is relatively low compared to different managerial positions. Therefore, it is logical to assume that an increased sample size of senior management positions may likely improve the discrepancy (e.g., Pedler and Burgoyne, 2017).

Conclusion
The paper shows that creating learning organization culture is strongly tied with a humane approach within the larger framework of organizational consciousness. The study demonstrates that PLA will foster the creation of desired learning organization culture. For instance, the study hypothesized PLA's dimensions (predictor) as the strand of LOC. Also, the relationship between the two was examined. The findings suggest that PLA's dimensions have a positive significant impact on creating LOC. Thus, based on the results, we can conclude that PLA will significantly contribute to the desired learning organization culture. In other words, PLA is the predictor of LOC. The descriptive statistics show that for the 'inclusive practice,' 89.07% responded positively, 8.15 times more than the negative responses with M = 3.20 and SD = 0.56. Likewise, for all the dimensions, the positive responses score was above 80% with M > 3.10, clearly indicating the growing consciousness of PLA in an organization and its impact on organizational culture. However, the study also identified a few critical areas that require managerial attention, i.e., inclusiveness, structure flexibility, and purpose orientation. The study observed that of all the sampled respondents, the age category below 25 years and the maintenance department, which comprised a significant sampled portion of the lower rung showed low self-esteem about themselves and their job. They find it difficult to fully express themselves within the organization on both thinking and actionable levels. On the other hand, the senior management orientation is indifferent to creating such an inclusive environment, acting as a countering force rather than nurturing. Hence, the study strongly suggests that the senior management requires a behavioral change and needs to interact more with the lower level and establish communication channels, ensuring better human relations and improved employee commitment.

Limitations and Future Scope: The study has several shortcomings, which may open new directions for future research. This study is non-experimental exploratory research using cross-sectional data for analysis. This limits the scope of the investigation and draws an explicit framework for PLA. Moreover, the data was randomly collected from a pool of organizations. This may lead to the problem of generalization, as the nature of operation and ethos are unique from sector to sector. Moreover, the data skews slightly with regard to gender, age, and senior management representation. Therefore, in future studies, this aspect can be taken into consideration. Moreover, the PLA model itself is new and needs further research to validate its effectiveness.

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