Preparing for Ethical Leadership in OrganizationsSummarize below article in 1 page essay.Abstract True and effective leadership is that in which the leader?s hehaviour and the exercise of the leadership influence process are consistent with ethical and moral values. This paper explores the need f o r ethical leadership and the ways in which it is manifested in organizations. It identifies the three components of the ethical leadership model proposed by Kanungo and Mendonca (1996): the ethics of the leader?s motives, influence process strategies, and the nature of the self-transfotmation needed f o r ethical leadership. As a central theme, the paper then examines what the leader can do to prepare f o r ethical leadership in organizations. More specifically, it identifies some of the sources that the leader can tap to develop as a moral person possessed of inner strength and resourcefulness that lead to the selftransformation of both the leader and the followers.Rksumk Le leadership veritable et efficace en est un d a m lequel le comportemerit du leader et l?exercice du processus d?influence de leadership sont consistants avec des valeurs morales et e?thiques. Cette e?tude explore le besoin d?un leadership e?thique et les facons dont il est manifest6 dans les organisations. Elle identifie les trois composantes du modtle de leadership e?thique propose? par Kanittigo et Mendonca (I 996) :l?e?thique des motifs du leader, les stratggies du processus d?influence et la nature de la transformation de soi-me*me requises pour le leadership e?thique. Comtne thPrne central, 1?dude examine ce que le leader peut faire pour se prkparer au leadership Pthique dans les organisations. Spe?cifiquement, elle identifie quelques-unes des sources auxquelles le leader peut avoir accPs pour se de?velopper en tant que personne morale posse?dant une force inte?rieure et qui est pleine de ressources qui tntnent h la transformation personnelle du leader et de ses adeptes. mation. It then discusses how leaders can prepare themselves for their own self-transformation and that of their followers that is necessary to meet the challenging demands of ethical imperatives.Leadership behaviour-in the sense of leading others-is more than the routine maintenance activities of allocating resources, monitoring and directing followers, and building the organization?s esprit de corps. True leadership assesses the followers? needs and expectations and inspires them to realize a vision that best serves the followers and the organization. However, it is the leader?s moral principles and integrity that give legitimacy and credibility to the vision and sustain it. When the leader?s moral integrity is in doubt, then the leader?s vision-however noble, wellcrafted, and articulated-is viewed with skepticism by the followers, loses its vigour, and is incapable of moving them to work towards its realization (Kanungo & Mendonca, 1996). This paper first explores the need for ethical leadership in organiLations and identifies the three dimensions of ethical leadership in terms of the leader?s motives, influence strategies, and self-transfor*Faculty of Management, McGill University, 1001 Sherbrooke West. Montreal, QC. Canada H3A IG5. E-mail: email@example.comDo We Need Ethical Leadership??At a time when impressive breakthroughs in technology are providing new and better products and services, when improved communications are transforming the world into a global village, the following items make us question whether so much progress is indeed ?progress?. ?What several European revolutions, two world wars and numerous depressions could not d o to London?s Barings Bank in more than 200 years, one 28-yearold employee accomplished with a few computer keystrokes. And the bank collapsed ? management was alerted months ago to the inadequacies of its oversight systems. But management chose to ignoreCanadian Joumal of Administrative Sciences Revue canadienne des sciences de I?administration u ( 4 ) . 266-2160 ASAC 2001266PREPARING FOR ETHICAL LEADERSHIP IN ORGANIZATIONSMENDONCAthat advice, presumably because everyone seemed to benefit from the system as it was? (Finlay, 1995, p. 21). Two experimental design studies in the U.S. involving 179 top executives and 203 controllers found that 47% of top executives and 41% of the controllers made fraudulent decisions that artificially inflated profits to increase their promotion chances (Brief, Dukerich, Brown, & Brett, 1996). A study of AACSB (Association to Advance Collegiate Schools of Business) Business School Deans found that deans are more likely to participate in unethical actions if they result in a substantial donation to their school (Siguaw, Rockness, Hunt, & Howe, 1998). Indeed, evidence of the declining moral fibre of organimtional leaders is not restricted to North America. After three top executives of Adam Ope1 AG in Germany were alleged to have been involved in corruption scandals, many wondered whether German corporate ethics, once the model of good behaviour, ?should be compared more with those in France, Italy and Spain? (Nash, 1995, p. 1). There is an increasing realization today that organizational leaders need to be more sensitive to their moral obligations to the larger society, which includes all their stakeholders such as consumers, employees, suppliers, governments, local communities. It is the recognition of these obligations that has led several large corporations to formulate codes of ethics, ethics committees, communication systems for employees to report abuses or seek guidance, ethics training programs, ethics officers, and disciplinary processes (Weaver, Trevino, & Cochran, 1999). The code of ethics can be an important reminder that individuals, not the organiLation, engage in ethical or unethical practices. It serves ?to map a high road to economic and ethical performance-and to mount guard-rails to keep corporate wayfarers on track? (Andrews, 1989, p. 99). However, such ethical codes and structures need to be more than mere ?window dressing?; much less should competitive business advantage become the reason for them. A survey of 10,000 randomly selected employees from all levels of six large U.S. corporations that had a formal code of ethics found that ?specific characteristics of the formal ethics or compliance program matter less than broader perceptions of the program?s orientation toward values and ethical aspirations. What helps the most are consistency between policies and actions as well as dimensions of the organization?s ethical culture such as ethical leadership? (Trevino, Weaver, Gibson, Toffler, & Ley, 1999, p. 131). An organization?s code of ethics establishes ethical principles that should governthe leader?s decisions and behaviours in order that the leader can fulfill the mission of uplifting the moral climate of the organization. Through their principle-centred behaviour, people in leadership positions determine the moral calibre of organizational members, and thereby contribute to the strengthening or the deterioration of the moral fibre of society. This assertion is also confirmed by a study of all of the Fortune 500 Industrial and Fortune 500 Service companies which found that ?much of the guidance for how programs are implemented comes from a firm?s top managers and their commitment to ethics? (Weaver et al., 1999, p. 54). Undoubtedly, the role of a leader has always carried with it grave and onerous responsibilities. In our time, the burden of this role poses rather unique and formidable challenges because of the fundamental shift in societal norms and values in two ways: ?economic imperialism?, and the cult of ?self-worship? (Kanungo & Mendonca, 1996). Economic imperialism demands that money and material possession be the primary yardstick to measure success and failure in every sphere of human life, and therefore be valued more than everything else in society (Hirsch, 1976). The cult of self-worship is based on the assumption that egoism or self-centred reward is the only functional ethical principle that should guide one?s conduct. Undcrlying these approaches is the emphasis on the rights of the individual to fulfill their life ambitions in any form or manner they choose without much regard to or concern for one?s duties and obligations to others. This focus on self is an ?extreme expression of individualistic psychology first created by a frontier society and now supported and corrupted by consumerism? (Vitz, 1994). As a psychologist had observed two decades ago, there is in psychology today a general background assumption that the human impulses provided by biological evolution are right and optimal, both individually and socially, and that repressive or inhibitory moral traditions are wrong. This assumption may now be regarded as scientifically wrong. Psychology. in propagating this background perspective in its teaching helps to undermine the retention of what may be extremely valuable social-evolutionary systems which we do not fully understand. (Campbell,1975)There is indeed an absolute and urgent need for moral leadership in organizations and in society if we truly want to achieve the common goal of human welfare at personal, organizational, and societal levels. Does an organization need ethical leadership in order to be effective and successful? Undoubtedly, there are examples of unethical leaders who have created successful organizations, but the enduring quality of such leadership is highCanadian Journal of Administrative Sciences Revue canadienne des sciences de I?administration261a ( 4 ) . 266-276PREPARING FOR ETHICAL LEADERSHIP IN ORGANIZATIONSMENDONCAly questionable. The organization?s success, in fact its very survival, over the long term is dependent on ethical leadership. As discussed later, the leaders? character is the essential factor that makes them trustworthy and attractive to the organization?s stakeholders-stockholders, employees, customers, suppliers, and the community. The habitual practice of virtue forms the leaders? character, and enables them to continually strive for personal mastery and excellence in their function or task through the exercise of the basic competencies of managerial resourcefulness, and to serve as a role model for their followers. Organizational effectiveness on an enduring basis is greatly enhanced by the self-transformation of the leader and of the followers that is inherent in ethical leadership.Dimensions of Ethical Leadership in OrganizationsTo identify the dimensions of ethical leadership, we specify what we mean by the terms ??leadership?? and ?ethical?, drawing on Kanungo and Mendonca (1996). Leadership refers to a set of role behaviours or actions on the part of a person who assumes the leadership role in an organization either by a formal appointment or by the informal choice of organizational members. The term also implies the nature of the influence proccss adopted by the leader to change the followers? values, beliefs, and behaviour. Leadership therefore can be viewed from two perspectives. One, as a set of role behaviours to accomplish the task and maintain cohesion in the?organization. The other, as an influence process-a set of strategies and tactics to influence the followers? values, beliefs, and behaviour towards the attainment of the organization?s objectives. However, these role behaviours and influence strategies acquire legitimacy and credibility, and have an enduring effect on followers when these reflect motives and actions that are perceived by followers to be ethical or morally right. Ethical means that which is morally good, and morally right, as opposed to legally or procedurally right. Leadership is ethical when leaders are guided by altruism. The philosophical argument for altruism rests on the fact that a human being, by its very nature, does not begin and end in itself. A human being has a social dimension that creates the responsibility to reconcile its concern for self with concern for others. Altruistic behaviour expresses the social dimension in the form of utilitariarz or nzurual altruism-a helping concern for others combined with concern for one?s own self-interest; or in the form of moral altruism that reflects a helping concern for others even at considerable personal sacrifice or inconvenience. Egotistical behaviour, on the other hand, always involves a concern for self with noconcern for others. The values inherent in the choice of ?others before myself,? or moral altruism, are universal and form part of the heritage of all cultures. Leaders are responsible for the organization?s moral climate that, in effect, reflects the moral development of the leader and of the followers. Through the use of morally appropriate influence strategies and tactics that are motivated and guided by moral intent, leaders can facilitate the moral development of followers. The leader?s personal moral development results from character formation through the practice of virtue in private as well as in public life. Ethical leadership therefore manifests itself in three ways or on three dimensions: a) the leader?s niotives, b) the leader?s influence srrategies, and c) the leader?s character formation. Stated differently, the leader?s motives and itzjluence strategies are the fruits of the leader?s character: We briefly discuss the ethics of the leader?s intent and influence process strategy in the light of altruism as a principle of moral behaviour. The leader?s character formation is dealt with in greater detail in the next section which explores the nature and sources of self-transformation of leaders and of followers.Leader?s Intent and Influence Process StrategyAltruistic Versus Egotistic The ovcrarching motive for ethical leadership is the leader?s altruistic intent as opposed to egotistic intent. Organizational members expect the leader?s vision, goals, and objectives to benefit the organization and its members, as well as the society at large. Hence, leadership effectiveness is assured only by altruistic acts that reflect the leader?s incessant desire and concern to benefit others despite the risk of personal cost inherent in such acts (Kanungo & Mendonca, 1996). Leaders can influence the followers? beliefs, attitudes, and behaviours either through the transactional or the transformational modes of influence (Bass, 1990; Conger & Kanungo, 1998). In the transactional mode, leaders view followers as programmed robots and elicit followers? compliance through control strategies that offend against the dignity of the human person. Therefore, the transactional mode is an unethical social influence process. In the transformational influence mode, leaders use empowerment strategy and expert and referent power to bring about a change in the followers? core beliefs and values as they move the organization toward its future goals. The attitude change in followers is through the identification and internalization processes (Kelman, 1958). The transformational influence enables followers to function as autonomous persons and reflects the leader?s altruistic value and orientation and, thereCanadian Journal of Administrative Sciences Revue canadienne des sciences de I?administrcltion u ( 4 ) . 266-276268PREPARING FOR ETHICAL LEADERSHIP IN ORGANIZATIONSMENDONCAfore, is more likely to be ethical, more effective, and more enduring (Kanungo & Mendonca, 1996).was taken for granted by the contemporaries of Socrates. Plato first formulated the four cardinal virtues: prudence, justice, fortitude, and temperance. This particular intellectual framework, the formula which is called the ?doctrine of virtue?, was one of the great discoveries in the history of man?s self-understanding, and ? has become a basic component of the European consciousness, as the result of centuries of persistent intellectual endeavor by all the creative elements of the emerging West, both the Greeks (Plato, Aristotle) and the Romans (Cicero, Seneca), both Judaism (Philo) and Christianity (Clement of Alexandria, St. Augustine). (Pieper, 1966, p. xi) These virtues are termed cardinal-the Latin word for ?hinge?-because around them hinge human acts or practices that acquire moral significance when these practices are consistent with the moral principles implicit in the cardinal virtues. The cardinal virtues conform to the order or dictates of reason. Unlike the technical jargon usual in the sciences, these virtues are expressed in words that are frequently used in ordinary conversation, thereby confirming that these ideas ?constitute the vocabulary of everyone?s thought? (Adler, 198 1, p. 3 ) . We briefly discuss each cardinal virtue in the context of its importance to moral behaviour. Prudence. The practice of this virtue requires the habitual assessment, in the light of right standards, of the situation or issue on which a decision is to be made. The assessment also includes the likely favourable and unfavourable consequences of the decision for oneself and for others. The leader who is in the habit of practicing prudence will not abdicate his or her responsibility for unethical behaviour by followers through messages such a s :?do whatever you have to do, just don?t tell me about it.? The prudent person will not only not resent that others disagree with his or her views but will actively seek such information to better assess the situation and exercise sound judgment. Justice. The virtue of justice requires the individual to strive constantly to give others what is their due. The ?due? means more than the legalistic notion of the contractual rights of others. It includes whatever others might need to fulfill their duties and exercise their rights as persons, that is, the right to life, to cultural and moral goods, material goods, and so on. In the leadership context, i t means the exercise of a sense of responsibility that balances, i n a fair manner, the rights of all the stakeholdcrs-customers, suppliers, government, and community-as well as of the owners. Fortitude. This is the courage to take great risks for an ideal that is worthwhile. A courageous leader faces difficult situations and strives to act positively to overCanadian Journal of Administrative Sciences Revue canadienne des sciences de I?administration f i ( 4 ) .266-276The Nature and Sources of Self-transformation of Leaders and of Followers Ethical leadership is essentially transformational in nature. The preparation for ethical leadership therefore involves the self-transformation of both the leader and of the followers. However, our focus is chiefly on the selftransformation of the leader. The leader is a role model to the followers in respect of both task performance and ethical behaviour. Undeniably, the leader is indeed the soul of the organization, whose beliefs, values, and behaviours influence and shape, for better or worse, the organization?s moral environment, and has all-encompassing, serious ramifications both within and outside the organization. For this important reason, the discussion will centre mainly on the self-transformation of the leader. We first discuss the nature of self-transformation. We then identify some of the sources leaders can tap to develop, as a moral person possessed of inner strength and resourcefulness that leads to the self-transformation of both the leader and of the followers.The Nature of Self-transformation for Ethical Leadership The self-transformation needed for ethical leadership revolves principally around character development. Yet, a survey of the codes of conduct of more than 200 companies found that ?the most ignored item was personal character-it seemed not to matter? (Walton, 1988, p. 170). The Concise Oxford Dictionury defines character as ?moral strength, backbone?. It constitutes an inner-directed and habitual strength of mind and will. To develop this concept further, we draw on three sources. First, we describe the role of the cardinal virtues, first formulated in ancient Greece, in character formation. Second, we examine the empirical findings on basic competencies in managerial resourcefulness (Kanungo & Misra, 1992). Third, we look at personal mastery, one of the critical disciplines of the learning organization (Senge, 1990). Interestingly enough, although our sources span nearly 2500 years and varied disciplines, the concepts, principles, and processes that emerge are congruent or complementary and, therefore, serve to provide a sound foundation for self-transformation in ethical leadership.Role of the Cardinal Virtues in Character FbrtnationThe idea of virtue as signifying human rightness269PREPARING FOR ETHICAL LEADERSHIP IN ORGAKIZATIONSMENDONCAcome obstacles to do what is good and noble. One of the underlying characteristics of fortitude is perseverance and endurance against great odds. ?Determined people try to make it happen because they believe in it, not because the odds are on their side? (Leavitt, 1986, p. 95). Temperance. The practice of temperance involves distinguishing between what is reasonable and necessary and what is self-indulgent. Although it includes the reasonable use and satisfaction of one?s sense appetites, it also involves the efficient and effective allocation of one?s time, effort, and resources. In essence, temperance means the exercise of self-control that, in general, would lead one to avoid and resist the temptation to overindulge in hedonistic behaviours. ?Temperance or intemperance of outward behavior and expression can have its strengthening or weakening repercussion on the inner order of man? (Pieper, 1966, p. 204). Through the practice of the virtues, leaders acquire the inner-directed and habitual strength of mind and will to incorporate moral principles in their behaviour and thereby form their character. ?Character is more than what simply happens to people. It is what they do to themselves? (Walton, 1988, p. 175). If good moral character is of the essence of every human being, then with much greater reason does it become so of transformational leaders who by their ?vision, values, and determination add soul to the organization? (Leavitt, 1986, pp. 222-223). The practice of virtue offers individuals the spiritual experience inherent in fully realizing the unique and unrepeatable potential that is in each person, to continuously struggle to place concern for others, even at personal sacrifice, before concern for self. Transformational leaders cannot do without this spiritual experience that deepens their character and generates the moral strength they need to transform themselves and their followers (Kanungo & Mendonca, 1994).The Basic Competencies in Managerial ResoiircefiilnessThe nature of the tasks that leaders perform does not significantly differ in kind from the nature of tasks i n managerial jobs. However, leadership involves tasks that can be described as non-specific, complex, discretionary, relatively unstructured, and subject to constant change. What are the specific skills that leaders need?? After a review of the research in the past two decades on the nature of managerial jobs and skills, Kanungo and Misra (1992) found that the studies agree on the nature of managerial jobs, but lacked a coherent scheme to understand and identify the core skills components. They proposed an alternative conceptual framework that focuses on managerial resourcefulness, which includes both skills and competencies.According to this framework, skills are overt behaviours that are task-specific, suitable for routine or programmed tasks and a stable environment. Competencies refer to intelligent functioning and the abilities to engage in cognitive activities that are person-generic dispositions necessary for non-routine or unprogrammed tasks and for a complex volatile environment. The competencies that mediate the utilization of the task-specific skill are affective competence, intellectual competence, and action-oriented competence. As components of resourcefulness, the competencies are the learned abilities of managers to employ self-regulating and self-controlling procedures on their jobs. Thus, affective competence is the self-regulation of emotions and feelings; intellectual competence is the self-regulation of thought processes and beliefs; and action-oriented competence is the selfregulation of intentions and actions. An empirical study involving 485 managers found a positive correlation between resourcefulness and managerial success as measured by income level. Factor analysis of items reflecting resourcefulness revealed four factors: proactive analytical orientation, problenifocused perseverance, emotional equanimity, and goaldirected orientation (Kanungo & Menon, 1996). The items forming the first three factors reflect the competencies suggested by Kanungo and Misra ( I 992). Thus, proactive analytical orientation items reflect intellectual competence, problem-focused perseverance items reflect action-oriented competence, and emotional equanimity items reflect affective competence. The fourth factor, goal-directed orientation, reflects the tendency to have a goal at all times. Individuals who possess the affective, intellectual, and action-oriented competencies arc clearly those who are goal-oriented at all times. The goaldirected orientation is implicit in each of the three competencies and can, therefore, be regarded as an overarching dimension of these components of managerial resourcefulness. To return to the question posed at the beginning of this section, what are the specific skills that leaders need? The discussion on managerial resources strongly suggests that leaders need to have three competencies in addition to specific task-related skills. These competencies are affective competence, intellectual competence, and action-oriented competence. Expressed in terms of the findings of the empirical study, we can say that effective leaders are those who have an overall goal-directed orientation, along with proactive analytical orientation, problem-focused perseverance, and emotional equanimity. These competencies or orientations are essential for effective leadership because the tasks that leaders face are often non-specific, complex, discretionary, relatively unstructured, and subject to constant change.Canadian Journal of Administrative Sciences Revue canadienne des sciences de I?administration u ( 4 ) . 266-276270PREPARING FOR ETHICAL LEADERSHIP IN ORGANIZATIONSMENDONCAMorality and Managerial ResourcefulllessThe earlier discussion on cardinal virtues concluded that the practice of virtue enables leaders to incorporate moral principles in their behaviour and thereby form their character. The Competencies or orientations just discussed bear a striking correspondence to the four cardinal virtues. We now explore the nature and significance of this correspondence in the context of leadership in organizations. Goal-directed orientation is the tendency of the individual to have a goal at all times. This orientation corresponds to the virtue of justice. Organizations entrust leaders with responsibility for a variety of issues and resources-human, materials, financial. Justice requires that leaders utilize these resources efficiently and effectively with due regard to the rights of all the stakeholders involved. This responsibility can be properly exercised only when the organization?s goals and objectives consistently guide the leaders? decisions in respect of these issues and resources. The practice of the virtue of justice facilitates the development of a goal-directed orientation. Proactive analytical Orientation involves the intellectual competence to assess the situation and plan a course of action through analytic and synthetic thinking that serves the organization?s goals and objectives. The leader?s exercise of this competence is greatly enhanced by the practice of the virtue of prudence. Prudence requires that the individual habitually assess, in the light of right standards, the situation or issue on which a decision is to be made. For this purpose, the prudent leader will keep an open mind, actively seek relevant information, and conduct a dispassionate analysis in order to exercise sound judgment. Problem-focused perseverance involves the actionoriented competence to perform the tasks and activities, including attention to details and time frame, needed to achieve the goal despite the overwhelming difficulties and obstacles one may encounter. The practice of the virtue of fortitude gives leaders the courage to take risks, face difficulties, and work at overcoming obstacles in the pursuit of a worthwhile goal. Emotional equanimity relates to the affective competence that involves self-regulation of emotions and feelings. As one undertakes the various tasks involved in goal attainment, it is normal to experience failure as well as success. The affective competence enables individuals to learn and grow from both their failures and successes. The practice of the virtue of temperance enables leaders to exercise restraint and discipline in order that irrational expression of emotions does not cloud their judgment and prevent them from viewing persons, things, and events in their proper perspective.Are Virtues and Managerial Resourcefulness Mutually Exclusive ?The cardinal virtues enable leaders to habitually incorporate moral principles in their behaviour. The practice of these virtues involves the exercise of the basic competencies critical to managerial resourcefulness and, as a consequence, strengthens the basic competencies. However, the continued exercise of the basic compctencies does not guarantee that these will be done in a virtuous manner. There are criminals who have exceptionally high goal-directed orientation. It is only when these competencies are exercised consistent with moral principles that the practice of virtue is reinforced. The cardinal virtues are the hinges on which the basic competencies acquire moral significance. The competencies of managerial resourcefulness are the necessary but not sufficient condition for the practice of virtue. Leaders provide ethical leadership when they exercise the basic competencies in the pursuit of virtue. Personal mastery, discussed in the next section, further underscores the need for leaders to cultivate virtues and managerial resourcefulness to foster and promote an ethical environment in the organization.Persoiial Mastery arid Self-TransformationPersonal mastery, at all levels, is one of the critical disciplines of the learning organization because it is not organizations but people who learn. A learning organization is one where ?people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is sct free, and where people arc continually learning how to learn together? (Senge, 1990, p. 3). Creating a learning organization would indeed be the objective of ethical leaders. To achieve this objective, the leader first acquires personal mastery and then assists and empowers all employees to d o the same. We briefly explore the critical elements of personal mastery: shared vision, objective assessment, focused energies, and creative tension (Senge, 1990). Shared vision. Leaders with high personal mastery devote much effort and care to ensure a shared vision for the organization, one that incorporates the beliefs, values, and aspirations of the employees, who are seen and treated as valued members of the organization?s community. The employee-organization relationship is that of a covenant and ?rests on a shared commitment to ideas, to issues, to values, to goals, and to management processes? (De Pree, 1989). In such a relationship there is no tradeoff between economic success and moral principles. Rather, adherence to moral principles constitutes the organization?s higher purpose. Such a broad vision proCanadian Journal of Administrative Sciences Revue canadienne des sciences de I?administration u ( 4 ) . 266-27627 1PREPARING FOR ETHICAL LEADERSHIP IN ORGANIZATIONSMENDONCAmotes among employees a better understanding and appreciation of and empathy for each other that moves them away from self-centredness. ?Individuals committed to a vision beyond their self-interest find they have energy not available when pursuing narrower goals? (Senge, 1990, p. 171). Objective assessment. Leaders with high personal mastery cultivate a culture of openness that permits a meaningful dialogue and sharing of information, and the testing of assumptio
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