Ethics and Judgment in the Age of Paradoxes
As the world becomes more globalized, accelerated, hyper-competitive and filled with political tensions, the success of businesses increasingly depends on their ability to process vast amounts of data and navigate a flow of information and conflicting interests and agendas.
Despite numerous management technologies, leaders experience their tasks as increasingly complex and overwhelming. This paper will focus exclusive on two of the most prevalent societal and organizational tendencies and based on this, I will argue why we need to stay in contact with competing ethical demands. Leadership today is closely connected to moral and ethical judgment.
First, Digitalization has accelerated communication and human connectivity, contributing to an unprecedented level of busyness, particularly in creating and maintaining an ever-growing number of connections and competing demands simultaneously.
Second, increased complexity: Although our understanding of organizations has expanded, the context in which leadership is exercised has become even more complex. Leaders must simultaneously address market strategy, law, societal trends, sales, marketing, technology, values, opinions, human relations, work environment, change management, IT, and procedures.
Leading in complex organizations requires an acceptance of high complexity and paradoxes while necessitating ethical and value-driven decisions and a strong sense of judgment. Some of the contradictory concerns that leaders must balance include:
- Thinking globally while acting locally
- Red ocean strategies vs. blue ocean strategies
- Competing vs. cooperating with other businesses
- Creativity in products vs. on-time delivery
- Pursuing the best quality vs. pursuing the lowest cost
- Niche production vs. mass production
- People vs. results
- Sustainability vs. profit
Fundamental management theories are undergoing a transformation. Traditional management literature has been based on perspectives such as Scientific Management, Human Relations Theory, Trait Theory, Contingency Theory, Behavioral Theory, Total Quality Management, multiple intelligences, Theories X, Y, and Z, among others. These traditional approaches often share the assumption that human behavior can be mapped, leading to universal theories on effective leadership and organizational development (Drøhse, 2020). And last but not least theories have been based on the assumption that THE answer to managerial problems can be found.
In contrast, newer perspectives advocate for strategy as a local phenomenon grounded in specific contextual challenges (Tanggard), business models being rethought in light of rapid societal changes and more complex global orders (Jacob Munk-Stander), organizational work operating within the tension between control and disruptive empowerment (Salamon & Sjørslev), and new organizational forms that challenge traditional leadership positions, pushing towards more inclusive structures and agile organizing (Thybring). These trends also call for at changed understanding from solving organizational problems to instead manage in and with them.
Our understanding of organizations is shifting from viewing them as entities to be controlled and steered, to recognizing them through concepts such as agility, complexity, paradoxes, diversity, synthesis, sensemaking, and communication. These concepts reflect contemporary challenges in navigating, rethinking, and leading within an organization rather than simply managing it.
Organizations in Complexity and Paradoxes
Leadership often takes place under pressure between professional judgment and demands for standardized, uniform execution of tasks. In banking, for example, employees value professional advisory services and personalized customer interactions. However, prioritizing professional discretion may result in failing to comply with standardization, documentation, and national guidelines, thus neglecting due diligence. Conversely, emphasizing uniformity and compliance may hinder personalized service, risking customer dissatisfaction. The organization is caught in a paradox, unable to fully meet all expectations simultaneously.
One perspective that has gained traction in recent years is paradoxical thinking (Smith, 2010; Lewis et al., 2014; Lüscher, 2018; Mowles, 2015). Majgaard (2017) provides an example of paradoxical leadership in public sector organizations: Hospitals must provide the best possible treatment for individual patients while simultaneously ensuring financial sustainability so that healthcare remains accessible for all. These requirements often stand in direct contradiction. In a manufacturing company, leaders must set a clear direction while ensuring that employees take initiative and ownership of their work. In schools, teaching must align with the latest knowledge on subject matter and pedagogy while allowing teachers the autonomy to design and implement their own lessons. Leaders thus find themselves in an ongoing balancing act between multiple, often conflicting agendas.
What is a Paradox?
Why do paradoxes matter in our understanding of organizations? To answer this, we must first define what a paradox is:
The term paradox originates from Greek, where "para" means "beside" and "doxa" means "knowledge or opinion." A paradox refers to a situation where our logic or understanding no longer holds. A paradox arises when two elements appear mutually exclusive, yet are fundamentally interdependent. Recognizing a paradox often leads to feelings of absurdity or paralysis because two opposing logics are at play simultaneously (Lüscher, 2020).
Majgaard also emphasizes that paradoxes become dynamic when we accept them as fundamental conditions rather than problems to be resolved. He references Stacey, who argues that paradoxes must be acknowledged as inherent patterns of organizational life:
“We choose to remain in the tension that the paradox creates—nevertheless, we can reformulate the sides of the paradox, thereby generating new meanings and revealing new possibilities for action.” (Stacey, 2007, p. 441 in Majgaard, 2008, p. 20)
Many traditional decision-making strategies, where one alternative is simply chosen over another, are difficult to apply in complex and unpredictable organizational environments. Leaders cannot navigate the future with one-sided answers, as they must simultaneously pursue global and local strategies, reduce costs while making bold investments, and increase central control while promoting decentralized autonomy. These tensions require a reflective leadership practice that embraces paradoxes and explores integrated solutions.
Ethics and Judgment in Leadership
With paradoxical thinking in mind, we turn to the major global pressures that all organizations must address to varying degrees: the United Nations' 17 Sustainable Development Goals (SDGs). These goals, established at a UN summit in 2015, challenge organizations to actively engage in environmental and climate issues, gender equality, health, and organizational partnerships. The SDGs place business leaders in contradictory situations where clear-cut solutions are difficult to find.
For instance, organizations must compete on price while transitioning to more sustainable production methods that are often more costly. Businesses must continue creating consumer demand while encouraging reduced consumption. Patagonia, a sustainable outdoor brand, exemplifies this paradox by promoting their products with slogans like "Don't buy this product."
The complexity of these contradictions necessitates judgment as a crucial leadership skill. Judgment (Phronesis), as described by Aristotle, Kant, and Hannah Arendt, involves the ability to integrate ethical, aesthetic, professional, political, practical, and scientific considerations into decision-making. Unlike formalized management methods, judgment develops through experience and engagement with competing interests.
The Future of Leadership: Managing Through Paradoxes
Leaders who succeed in such complex times will be those who can tolerate uncertainty, embrace paradoxes, and remain in strategic reflection processes to integrate conflicting demands. Based on an enormous accelerated degree of complexity, leaders must communicate an overarching vision that unifies diverse agendas.
Paradoxical thinking is not a new concept. Peters and Waterman (1982) argued that "excellent companies master paradoxical leadership." Collins and Porras (2004) warned against the "tyranny of either-or thinking" and instead advocated for "both-and thinking." Roger Martin (2007) praised leaders for their ability to engage in "integrative thinking"—holding contradictory ideas simultaneously to find more innovative solutions.
By fostering a paradox mindset, leaders can identify tensions between opposing elements, explore them separately, and then reconnect them in ways that generate new insights. When leaders accept paradoxes between ethical, practical, economic, and human perspectives, they enhance their ability to navigate complexity while maintaining strategic clarity.
Traditional leadership questions such as "Should we focus on ourselves or contribute to society?" must evolve into "How can we run a profitable business in ways that also contribute responsibly to societal development?" Only by integrating well-established business logics with future demands for social responsibility can organizations truly thrive in an era of paradoxes.
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By Lotte Lüscher, Msc. In psychology, PhD in management