KEY CONCEPT

The ethical climate of an organization is not solely a reflection of the personality and morality of the leader. It is also a product of relationships. The interplay between leaders and followers and co-workers can cause the aggregate level of morality in an organization to rise and fall. People are motivated — and demotivated — to do the right thing partly by their environment and those around them. To reduce moral failures in organizations, you have to understand the bigger picture of human interaction.

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IDEA SUMMARY

The banking crisis and scandals involving companies such as Enron, Worldcom, Tyco and, more recently, Rupert Murdoch’s News Corporation, have made the need to understand moral behaviour in organizations more urgent. Research so far has tended to take a leader-focused approach, implying that the ethical behaviour of leaders translates directly to ethical behaviour in followers. While this ‘trickle-down’ model offers valuable insights, it has its limitations. It cannot, for example, explain why some people are more likely to match the behaviour of their leaders than others.

New research, which includes surveys, scenario experiments and fieldwork, takes an alternative, more multi-dimensional and interpersonal approach. It shows that the effects of ethical leadership are contingent on:

• Follower moral awareness (receptiveness to moral cues and understanding of the moral content of situations);
• Follower sense of belonging and attachment — high levels of ‘organizational identification’.

More than this, the research suggests a reciprocal model — in which leaders and followers have a mutual and dynamic influence on morality.

Importantly, it proposes that self-construal — the way people conceptualise their relationship with others — can (up to a point at least) be primed, and that this applies to both leaders and followers. You’re more likely to construe yourself in terms of ‘we’ rather than ‘me’ — and therefore more likely to act morally and in the collective interest — if those around you do.

Leaders with a ‘collective mindset’ can elicit a corresponding response in followers. Employees, meanwhile, can strengthen ‘interdependent self-construal’ in leaders by the way they communicate in e-mails and staff meetings and by ‘symbolic behaviours’ — such as assisting co-workers when they need help or working late to finish a team project. The ethical climate of an organization, therefore, is partly a function of the interaction between leaders and followers.

By showing the dynamic, malleable nature of self-construal, the research challenges the idea that morality is personality-based and ‘fixed’ — and helps explain why people behave differently in different groups.

It also suggests that unethical leadership can break the psychological contract with conscientious employees — and has the potential to turn ‘good’ people ‘bad’. The researchers find that highly morally aware people are likely to feel the strongest sense of outrage when leaders flout moral laws and treat them badly and are, therefore, more likely to reciprocate by ‘organizational deviance’. Instead of acting to restore the balance through moral acts, they might start to take longer breaks, ignore instructions and work less hard. They might not intentionally or directly mimic the bad behaviours of their leaders — but they might become worse corporate ‘citizens’. Immorality, in other words, can breed immorality.

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BUSINESS APPLICATION

The research suggests that:

• Individual training to make people more ethical and foster ‘organizational citizenship’ is of limited value — especially if the employee returns to an unchanged work environment.
• Social context and role models are more important than prescriptive ethical codes. (People, in any case, will tend to feel patronised if you tell them how to ‘be moral’.)
• Team culture is most likely to lead to the right behaviours — provided the wider organizational culture conforms to accepted moral norms. 
• Leaders can help create a virtuous circle of ‘organizational citizenship’ and ‘interdependent self-construal’ by actively encouraging employee feedback and upward communication.
• The importance of leading by example cannot be overestimated. Fairness and self-sacrifice — for example, forgoing bonuses and taking pay cuts during downturns — are powerful moral cues for followers.

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REFERENCES

‘Morality in Interactions: On the Display of Moral Behavior by Leaders and Employees,’ Suzanne van Gils, Erasmus Research Institute of Management, 2012.

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