Promoting Ethical Behavior in Organizations through Ethical Leadership

Johnathan K. Nelson, George Mason University

Well publicized ethical breaches in organizational settings have brought a great deal of
attention to the issue of ethical behavior in organizations. While corruption is typified by
companies such as Enron and Tyco, there are examples of wrongdoing in a wide variety
of organizations including, but not limited to, education, athletics, the news, as well as
the boardroom. This wrongdoing is associated with a number of undesirable outcomes for
organizations and their stakeholders, and has been blamed in part for the economic woes
now being experienced in the United States and around the world. As a result there has
been a call for leaders to practice ethical leadership and better manage ethical behavior in
organizations.
While ethics has long been considered an important aspect of leadership, recently, a
growing body of research on ethical leadership has begun to explicitly investigate how
leaders can proactively promote ethical behavior and prevent unethical behavior in
organizations.
Perceptions of ethical leadership are positively associated with a number of desired
outcomes related to their subordinates at the individual and group levels. These outcomes
include willingness to exert extra effort and help others, task performance, job
satisfaction, commitment to the organization, perceptions of an ethical climate
(particularly when individuals feel that they are treated well), optimism in the future
regarding the organization and their place within it, perceptions of task significance and
autonomy, and voice, including a willingness to report problems to management.
Additionally, ethical leaders are more likely to be viewed as having the potential to reach
more senior leadership positions than those who are not perceived as ethical leaders.
Finally, perceptions of ethical leadership are also negatively related to deviance and
counterproductive work behaviors.
These important outcomes are achieved primarily through observing the behavior of
others and the consequences of those actions. By the nature of their status as a leader,
ethical leaders are influential role models. They also engender feelings of trust and
responsibility by nature of the relationship they have with their subordinates. Outcomes
of ethical leadership are influenced by other variables as well. For example, ethical
leaders help subordinates feel a greater sense of autonomy and that their work is
significant, which leads in part to improvements in job performance and willingness to
help and exert extra effort. Similarly, voice behaviors (e.g., willingness of subordinates to
share problems and concerns) are explained in part by the feeling of psychological safety
or comfort in expressing thoughts and feelings engendered in subordinates by ethical
leadership.
Having now examined some of the benefits of ethical leadership, it is time to look at
some of the specific behaviors by which ethical leaders achieve these outcomes. At its
broadest level, ethical leadership involves being both a moral person and a moral
manager. That is, ethical leaders exhibit a high standard of personal moral conduct in line

with accepted standards (moral person) and promote moral conduct in others (moral
manager). This definition of ethical leadership is sensitive to differing norms in different
cultures and industries. That is, ethical leadership may look slightly different in the
United States as compared to the display of ethical leadership in another country. Thus,
while the moral norms an ethical leader is expected to demonstrate and promote are
determined in part by the context they are leading in, ethical leadership always involves
being both a moral person and a moral manager regardless of the context.
Moral Person
Being a moral person involves acting with integrity and being perceived as a trustworthy
person. Ethical leaders exhibit traits such as integrity, honesty, and trustworthiness.
Specifically, ethical leaders:

Ensure that moral behavior in their private life is consistent with the moral
standards they publically espouse.
Do the right thing and act morally in their actions.
Take responsibility for their actions.
Show concern for others.
Treat others fairly.
Use values to guide their behavior and decisions.
Implement decisions that are objective and fair.
Make decisions based on sound ethical principles.

Moral Manager
Ethical leadership involves not only being a moral person, but being a moral manager as
well. Being a moral manager involves proactively promoting ethical behavior in others
through the use role modeling, communication, and the use of formal rewards systems.
Ethical leaders recognize that subordinates are searching for ethical guidance and that
they can influence the ethical behavior of others in a positive way. Specifically, ethical
leaders:

Role model ethical behavior and ethical decision-making for subordinates.

Explain decisions not only in rationale terms making a business case, but in
ethical terms as well.
Discuss ethical issues in their communication.
Encourage ethics-centered discussions.
Explain ethical rules and principles.
Encourage subordinates to speak up about their ethics-related questions and
concerns.
Give subordinates a say in decision making and listen to their ideas and concerns.
Clarify responsibilities and role expectations.
Cleary describes and ensures that individuals abide by ethical standards.

Set clear ethical standards and enforce those standards through the use of
organizational rewards and punishments.

Taken together, this research suggests that ethical leadership is important for achieving
improved ethical behavior and other critical outcomes in organizations. Achieving ethical
behavior is not just a matter of weeding out a few bad apples, but instead involves
helping others achieve high ethical standards which can be accomplished through the
demonstration of ethical leadership.

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