Ethical Leadership And Unethical Behavior Management Essay

Ethical leadership, is a form of leadership including attributes such as integrity, trustworthiness, fairness, concern for others, and behaving ethically. A more systemic definition divides ethical leaders into two parts – “moral persons” and “moral managers” (Treviño, Hartman, & Brown, 2000).

For “moral persons”, it refers to the “ethical” part of the term “ethical leadership”, suggesting that ethical leaders should be moral persons who are honest, trustworthy, taking good care and be fair to their followers, having right behaviors in both personal and professional lives.

For “moral managers”, it refers to the “leadership” part, focusing on more transactional efforts to influence the ethical behavior of followers (Trevino, Brown & Hartman, 2003). As moral managers, ethical leaders communicate with their subordinates about their ethical and values-based expectations, use reward and punishment to encourage ethical conduct or prevent unethical behaviors. (Treviño & Brown, 2004).

As ethical behaviors refer to behaviors that are generally morally acceptable to the larger community; conversely, we define unethical behaviors as behaviors that are morally unacceptable generally. (Jones, 1991; Treviño, 2006) And in this paper, the ethical (unethical) behaviors refer to the behaviors conducted in companies or organizations.

After defining the terms, we base on two theories or processes to explain the effects of ethical leadership on the unethical work behavior, which is consistent with the recent relevant studies about the topic. (Mayer, Aquino,Greenbaum & Kuenzi, 2012; Mayer et al., 2009; Brown, Treviño & Harrison, 2005; Kirkman, Chen, Farh, Chen & Lowe, 2009)

Social Learning Theory

Social learning theory posits that leaders influence their subordinates through the process of role-modeling. (Bandura, 1977, 1986) Employees learn what ought to do and what ought not, by observing the leaders’ behaviors and the corresponding results. (Treviño & Brown, 2004).

Given the virtue and power in an organization, leaders are generally perceived as a credible and legitimate role model (Mayer et al., 2012). So by mimicking the behaviors of the ethical leaders, the subordinates would also be more likely to do things in a morally desirable way. Apart from direct observation on leaders, employees would also pay close attention to behaviors that are rewarded and punished to themselves or others (Brown, 2005), and to do what is rewarded while avoiding what is punished, and thus reduce the unfavorable behaviors. (Treviño & Brown, 2004).

Ethical leadership highlights on ethical behaviors. So through behave ethically as a valid ethical role models, at the same time, encourage ethical behaviors and discipline unethical ones by putting forward proper rewards and punishments, ethical leader can have a role on preventing or reducing the unethical behaviors in the organization. (Mayer et al, 2012).

Social Exchange Theory

The effect of ethical leadership on the subordinates’ behavior can also be explained by social exchange processes (Blau, 1964; Treviño & Brown, 2004; Mayer et al., 2009). Social exchange is based on the norm of reciprocity (Gouldner, 1960), which means that if one party do something beneficial to the other party, the counter party will then assume the obligation to do something good as the reciprocation back to the first party. (Cropanzano & Mitchell, 2005).

So in the relationship of ethical leadership and unethical behavior, ethical leadership defines leaders with characteristics of having fairness, trustworthiness, integrity etc, if employees regarded themselves as being treated fairly and perceived organizational support create a closer relationship between employer and employee, they are more likely to reciprocate these favorable treatment by being more loyal and supportive to their leaders or organizations, thus tends to reduce the harmful behaviors (Bies & Moag, 1986 ; Phillips & Elkins ,2000 ; Treviño & Brown, 2004).

Besides, it is found that if employees maintain a high-quality relationship with their leader, they are less likely to engage in retaliation (Liden, Sparrowe, & Wayne, 1997). As ethical leaders are perceived as admirable leaders due to their trustworthiness, integrity and care and concern for others, they are likely to create a positive social exchange relationship with their subordinates. In return, more citizenship behaviors and less unethical conduct will be expected. (Treviño & Brown, 2004)

So base on the review of the two processes that ethical leadership takes effect, we propose the first hypothesis.

Hypothesis 1: Ethical leadership is negatively related to unethical behavior in organization.

Power Distance Orientation as Moderator

Power distance is defined as the extent to which one accepts the legitimacy of unequally distributed power in institutions and organizations. (Hofstede, 1980). And in this article, the research is on the individual-level, thus the term power distance orientation (Kirkman, Chen, Farh, Chen, & Lowe, 2009; Clugston, Howell, & Dorfman, 2000) was adopted.

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Recent studies and researches in the cross-cultural management field indicates that cultural value orientations, or individually held cultural values and beliefs, have an important role in how employees react to aspects of their work (Kirkman et al., 2009). And compared to other culture dimension, such as “individualism-collectivism,””uncertainty avoidance” and “masculinity-femininity” etc. (Hofstede, 1980), power distance orientation, in theory, has a more direct relationship to leadership reactions (Kirkman et al., 2009) or the individuals’ perception and reaction to authority (Lian, Ferris & Brown, 2012).

And according to the review of the ethical leadership – unethical behavior relationship, we note that ethical leadership can influence the subordinators’ unethical behavior through two processes – social learning and social exchange. Studies suggest that by influencing the two processes, power distance orientation can act as a facilitator or barriers (Kirkman et al., 2009) to the ethical leadership-unethical behavior relationship.

Power Distance Orientation and Social Learning Theory

In the social learning perspective (Bandura, 1973), subordinates’ behavior will be influenced by leaders through the modeling process(Treviño & Brown, 2004; Brown,Treviño,& Harrison, 2005), where the subordinates will take the leaders as their role models, and learn from or mimic what the leaders do; besides, the subordinates would observe the reward and punishment to themselves or to the others offered by the leaders to get to know what to do or not to do. (Treviño & Brown, 2004)

On the basis of this, with support from the studies, we argue that the power distance orientation will influence the effectiveness of the social learning in following ways. On one hand, compared to the low power distance orientation individuals, those who are with high power distance orientations will tend to view their leaders as the ones with high-status (Bochner & Hesketh, 1994; Kirkman et al., 2009; Lian, Ferris & Brown, 2012) and are superior as well as elite (Javidan, Dorfman, de Luque, & House, 2006;Kirkman et al., 2009), thus they will be more likely to take their leaders as role models and mimic their behaviors. (Mayer, Aquino, Greenbaum & Kuenzi, 2012; Lian, Ferris & Brown, 2012)

On the other hand, referring to the definition of power distance, we could note that subordinates with high power distance orientation accept unequally distributed power to a greater extent(Hofstede, 1980), thus they will hold a stronger belief, compared to low power distance orientation individuals, that one should not be against but to respect the leaders’ decision. (Bochner & Hesketh, 1994; Lian, Ferris & Brown, 2012), which means, the reward and punishment decision made by the leaders would be less likely to doubt and more likely to be accepted and followed by the high power distance orientation subordinators.

As stated earlier, ethical leadership can have effects on subordinators’ unethical behavior through the social learning process. And with the present of power distance orientation, we expect the effect of ethical leadership will be affected, compared to low power distance orientation, individuals holding high power distance orientation will be more likely to regard their leaders as the ethical role model and mimic them to behave ethically. Also, they would be more convinced by and learn from the rewards on ethical behavior and punishments on unethical behavior.

Power Distance Orientation and Social Exchange Theory

Besides of Social learning processes, the ethical leadership’s relationship with subordinates’ unethical behavior can be also explained by the social exchange processes. (Treviño & Brown, 2004; Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). As stated earlier, in social exchange theory and based on the norm of reciprocity (Gouldner, 1960), ethical leadership can help to prevent or mitigate the subordinators’ unethical behaviors when leaders and subordinators are in a positive social exchange relationship with elements such as perceived fairness, trust in leaders, etc. being satisfied. So by affecting these aspects, we expect power distance orientation will influence the ethical leadership’s effect.

For example, in the perceived fairness aspect, individuals with high power distance orientation will accept the unequally distributed power in a larger extent (Hofstede, 1980), so they will tend to be more tolerant for the unequally treatment and regard it as non unfair (Lian, Ferris & Brown, 2012). So we posited that, with the less perceived unfairness, subordinates with high power distance orientation would view the leaders as fair which would result in less undesirable behavior such as unethical behavior (Treviño & Brown, 2004).

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Similarly, in the aspect of trust in leaders or affection for leaders, high power distance orientation plays a role that subordinates with high power distance orientation are more likely to admit their leaders’ superiority and elite (Javidan et al., 2006;Kirkman et al., 2009) so are more likely to show their respect to and trust their leaders (Kirkman et al., 2009; Sully de Luque & Sommer, 2000;Lian & Ferris & Brown 2012). As a result, they will tend to behave favorably for the leaders or even the whole organization (Javidan et al., 2006; Kirkman et al., 2009) and reduce the undesirable behaviors including the unethical behaviors.

To sum up the above, we expect the moderating effect of power distance orientation on the strength of the relationship between ethical leadership and unethical behaviors, and as such we put forward the second hypothesis.

Hypothesis 2: The relation between ethical leadership and unethical behavior in organization is moderated by power distance orientation, such that the relation is stronger for individuals with high power distance orientation than for individuals with low power distance orientation.

3. Method

Sample and Procedures

This study is a quantitative study. Data would be collected in mainland China, the questionnaires will be translated to Chinese and back-translated into English for results analysis. (Kirkman et al., 2009). Sample size is expected to be around 200 subordinates in individuals.

Measures

Ethical leadership

Referring to the recent ethical leadership studies of (Mayer et al., 2009, 2012), in this paper, we measure ethical leadership by using the ten-item scale from Brown et al. (2005). (See Appendix 1)

Unethical behavior

To measure the unethical behavior, we adopt the 17-item-scale used by (Akaah’s ,1996) and (Mayer et al., 2012), which was originated from Newstrom & Ruch (1975). (See Appendix 2)

Power distance orientation

As this article is on the individual-level, we follow the previous studies (Brockner et al., 2001; Earley, 1999; Kim & Leung, 2007; Kirkman et al., 2009) to use the eight-item linkert scale from Earley and Erez (1997) for the measurement of the power distance orientation. (See Appendix 3)

Control variables

In this study, control variables including: age, gender, tenure, (Brockner et al., 2001; Kirtment et al., 2009; Lian, Ferris & Brown, 2012); we will also control the position factor, which refers to whether the employees hold the role of subordinate and supervisor at the same time. (Brockner et al., 2001).

Analysis Method

We will first use the bivariate regression to test the main effect (Hypothesis 1) and we will use multiple regression to test the moderating effect (Hypothesis 2).

5. Schedule

Reference

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Appendices

Appendix 1

10 items Ethical Leadership Scale (Brown et al., 2005)

Items will be rated on a scale from 1 (“highly unlikely”) to 7 (“highly likely”)

Conducts h/h personal life in an ethical manner

Defines success not just by results but also the way that they are obtained

Listens to what employees have to say

Disciplines employees who violate ethical standards

Makes fair and balanced decisions

Can be trusted

Discusses business ethics or values with employees

Sets an example of how to do things the right way in terms of ethics

Has the best interests of employees in mind

When making decisions, asks “what is the right thing to do?”

Appendix 2

17 items unethical behavior scale ( Newstrom & Ruch 1975)

Items will be rated on descriptive range from 1 “Never” to 7 “Frequently”

Personal use

Using company services for personal use

Doing personal business on company time

Pilfering company materials and supplies

Taking extra personal time (lunch hour, breaks, early departure)

Passing blame

Concealing one’s error

Passing blame for errors to an innocent co-worker

Claiming credit for someone else’s work

Bribery

Giving gifts/favors in exchange for preferential treatment

Accepting gifts/favor in exchange for preferential treatment

Falsification

Falsifying time/quality/quantity reports

Calling in sick to take a day off

Authorizing a subordinate to violate company rules

Padding expenses

Padding an expense account up to 10%

Padding an expense account more than 10%

Deception

Taking longer than necessary to do a job

Divulging con¬dential information

Not reporting others’ violations of company policies and rules

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