Ideas for Leaders #377

Can a Leader Be Too Ethical?

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Key Concept

Ethical leadership reduces the risks of antisocial and selfish employee behaviour and encourages the kind of ‘pro-social’ behaviours that create value and promote the collective interest. There could, however, be a point at which it is counterproductive. Recent research suggests that leaders demonstrating particularly high ethical standards can weaken the psychological contract with employees through perceived ‘moral reproach’.

Idea Summary

High levels of ethical leadership can have unintended consequences, demotivating employees and making pro-social and co-operative behaviours less likely, according to recent research in Europe and the US.

The research, based on three field studies and an experiment, finds a negative, linear relationship between ethical leadership and employee deviance: the more ethical the leader, the lower the risk of moral failure. But it also finds a curvilinear relationship between ethical leadership and organizational citizenship behaviour (OCB): the likelihood of voluntary pro-social, co-operative behaviour increases at lower levels of ethical leadership, decreases at higher levels and peaks in between.

In other words, the research suggests highly ethical leaders are successful at prohibiting bad behaviours, less so at encouraging good ones. (They might, paradoxically, demoralize the organization by focusing more on curbing behaviours than encouraging employees to make positive contributions.)

The results might seem to run counter to received wisdom and the idea that leaders who ‘model’ the highest moral standards build the best organizations. What explains them? The research also points to perceptions of ‘moral reproach’ as the ‘mediating mechanism’ for OCB. It finds that both ‘high and low ethical’ leaders are perceived as being morally reproachful. They both appear to ‘look down on’ others  — either for being too ‘permissive’ or too ‘precious’ in their approach to morality — and, therefore, alienate followers.

Moderately ethical leaders, on the other hand, are perceived as being less morally reproachful and more sympathetic and, as a result, keep more people ‘on side’, increasing the likelihood of co-operation and OCB. Put very simply, the research suggests successful leaders combine personal integrity with tolerance for others: they’re principled but not priggish.

The fact that the researchers used samples from both Europe (Belgium and the Netherlands) and America — and that participants had worked in a variety of sectors — suggests their results might generalize to multiple regions and workplaces.

Business Application

The research implies there’s a trade-off between eliminating employee deviance and promoting positive co-operative behaviours. The former is linked to highly ethical leadership; the latter moderately ethical leadership.

This poses a significant challenge for organizations. How do you prevent moral failure and delinquency without creating workplace mediocrity — ‘suboptimal’ levels of engagement and commitment and low incidence of ‘discretionary effort’ — in its place?

The answer could be respectful leadership. Highly ethical leaders might be less likely to be seen as morally judgmental if they:

  • express their recognition of employees’ values;
  • discuss expected ethical standards and, crucially, ask employees how they feel about the application of ethical standards in their daily work;
  • help people behave ethically in their jobs.

By tackling employee behaviour respectfully and by giving employees a ‘voice’, organizations can decrease the (moral) gap between leaders and followers and build better, more ‘reciprocal’ relationships. They can create the kind of culture and environment in which people know they’ll be valued for doing the ‘right thing’ and making a positive contribution as well as reprimanded for doing the ‘wrong thing’ and flouting ethical codes. 

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