Professor Celia Moore, David Mayer, Flora Chiang, Craig Crossley, Matthew Karlesky and Thomas Birtch. ³Ô¹ÏºÚÁÏ Business School, University of Michigan, China Europe International Business School, University of Central Florida, Suffolk University and University of South Australia. Published in the Journal of Applied Psychology, 2019.
Problem
When organisations discover misconduct, the most common response is to replace the leader at the top. But the people around a leader, the ones who stayed silent, bent the rules or looked the other way, are still there. And the question of why they behaved that way in the first place has not been answered. Most research focuses on individual character and treats misconduct as a problem of bad individuals rather than bad leadership. That framing can lead organisations to the wrong solutions.
Science
We ran four studies across the United States and China to test whether the ethical behaviour of a leader changes how employees think about moral decisions. We measured the mental habits people use to justify doing something they know is wrong. We tested whether having an ethical leader reduces employees' tendency to behave this way and whether that in turn reduces the likelihood of misconduct. We used multiple measures of misconduct, rated by supervisors and colleagues independently of the employees themselves.
Outcome
Across all four studies, ethical leadership consistently reduced employees' tendency to morally disengage, and that reduction directly lowered rates of misconduct and rule-breaking. The effect held in both American and Chinese organisations, suggesting it is not specific to one culture. The research also found that ethical leaders have the greatest positive effect on employees who have the weakest internal moral compass, acting as a saving grace for the people most at risk of behaving badly.
Change
We demonstratedddemonstrated that the context employees work in, and specifically the behaviour of their immediate leader, shapes how they think about right and wrong daily. Promoting the wrong person into a leadership role quietly increases the risk of misconduct across an entire team. Our research shows organisations that leadership promotion decisions is a risk management issue, not just a performance one.