The Moral Capital of Leaders

The Moral Capital of Leaders

Why Virtue Matters

New Horizons in Leadership Studies series

Alejo José G. Sison

Sison studies a wide range of recent management cases from the viewpoint of moral capital: the sorry state of US airport screeners before 9-11, the Ford Explorer rollovers and Firestone tire failures, the battle for the ‘HP way’ between Carly Fiorina and the heirs of the founding families, the dynamics of Microsoft’s serial monopolistic behavior, the pitfalls of Enron’s senior executives, the sincerity of Howard Lutnick’s commitment to Cantor Fitzgerald families, how Andersen’s loss of reputation proved mortal and a fresh look at Jack Welch’s purported achievements during his tenure at GE.

Chapter 5: Character, Moral Capital’s Investment Bond

Alejo José G. Sison

Subjects: business and management, business leadership, human resource management, politics and public policy, leadership


We learned from the preceding chapter that moral capital grows primarily through the development of habits, which function in a manner akin to compound interest in financial capital. Habits, because of their permanence, represent a level of moral capital superior to that of actions. Habits are what remain in the form of acquired inclinations or predispositions after voluntary actions have been completed by a human agent. Habits indicate a higher degree – indeed, the perfection – of personal freedom insofar as they enable an agent to perform more actions of a certain kind and perform them better. This is true both objectively, from the viewpoint of the action itself, and subjectively, from the perspective of the agent. Thanks to habits, the results of an agent’s actions improve, and so does the agent, who then performs those actions with greater naturalness, pleasure and ease. Habits therefore create a positive feedback on an agent’s skills, reason and will, reinforcing their inclination towards a particular action or class of actions. Through habits our actions influence what we become, and ultimately, who we come to be. Habits, however, are not the last word in moral capital development and formation. Beyond them we find the level corresponding to character. A person’s character enjoys even greater permanence than habits; although in a sense, character is constituted by the different habits – each with its corresponding degree of development – that he has acquired. Again, as often is the case with matters concerning human beings, the whole is greater than the...

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