Situational impacts on leader ethical decision-making

Leader ethical decision-making has received a great deal of attention in the academic literature. Most research examining ethical leadership has focused on the leader characteristics and subordinate outcomes associated with ethical leadership, but research examining the situational variables influencing leader ethical decision-making is limited. Thus, the purpose of this study was to examine a number of situational variables that may influence leader ethical decision-making. This study examined the impacts of performance pressure, interpersonal conflict, the leader's decision-making autonomy, the type of ethical issue at hand, and the level of authority of the other person involved in the interaction. The results indicated that when making a decision in response to a superior (as opposed to a peer or subordinate), leaders make worse decisions. Additionally, a number of interactions of the other variables negatively impacted leaders' ethical decision-making. The implications of these findings are discussed.     

Dispositional Factors Affecting Choices Surrounding the Purchase of Insurance and the Taking of Mitigating Measures Against Flooding

This research investigated the role of dispositional factors in decisions to purchase insurance and to take mitigating measures against flooding. Two dispositional factors—risk aversion in the domain of losses and time discounting rate—were found to be predictors of the decision to acquire flood insurance. The observation of a relationship between experiment-based risk attitudes and the decision to insure oneself against flooding replicates a finding of Petrolia et al. The finding that impatience negatively impacts decisions to take out insurance against flooding is novel. However, support was not found for analogous hypotheses concerning relationships between the two dispositional variables and decisions to take mitigating measures. Evidently, factors other than individual risk aversion and time discounting rate play a crucial role in this behavior.     

Formal Infrastructure and Ethical Decision Making: An Empirical Investigation and Implications for Supply Management

Building on Rest's (1986) conceptual model of ethical decision making, we derive and empirically test a model that links an organization's formal ethical infrastructure to individuals’ moral awareness of ethical situations, moral judgment, and moral intention. We contribute to the literature by shedding light on the importance of a multifaceted formal ethical infrastructure—consisting of formal communication, recurrent communication, formal surveillance, and formal sanctions—as a crucial antecedent of moral awareness. In so doing, we discern how these four elements of a formal ethical infrastructure combine to collectively influence moral awareness based on a second‐order factor structure using structural equation modeling. We test our model based on survey data from 805 respondents with significant work experience across three separate ethical scenarios. Our results across the three scenarios provide overall support for our model. We found that a second‐order factor structure for the formal ethical infrastructure explains the variance among the four infrastructure elements and that a multifaceted formal ethical infrastructure significantly increases moral awareness. Our results further suggest a strong positive effect of moral awareness on moral judgment, which in turn was found to have a positive impact on moral intention. These results were substantiated when taking several individual and contextual control variables into account, such as gender, age, religiosity, work satisfaction, and a de facto ethical climate. Implications for theory, practice, and supply management are discussed.     

Ethical leadership and follower organizational deviance: The moderating role of follower moral attentiveness

The literature on ethical leadership has focused primarily on the way ethical leaders influence follower moral judgment and behavior. It has overlooked that follower responses to ethical leaders may differ depending on the attention they pay to the moral aspects of leadership. In the present research, we introduce moral attentiveness as an important moderator for the relationship between ethical leadership and unethical employee behavior. In a multisource field study (N = 90), we confirm our hypothesis that morally attentive followers respond with more deviance to unethical leaders. An experimental study (N = 96) replicates the finding. Our paper extends the current leader-focused literature by examining how follower moral attentiveness determines the response of followers to ethical or unethical leadership.     

Discerning Possibilities for Action: A Typology of Approaches to Moral Imagination

The existing literature on moral imagination proposes that actors can best respond to ethical dilemmas by tailoring their actions to the practical demands of the situation. It has done little to develop this insight, however. To address this gap, I used institutional theory to identify six ideal type approaches to moral imagination. I proposed that in addressing ethical dilemmas, the morally imaginative actor takes account of two situational factors: first, the social construction of the unmet ethical claim or obligation which constitutes the ethical dilemma, and in particular whether or not it is broadly perceived to be legitimate; and second, its own degree of power. The framework presented represents the first attempt to systematically enumerate approaches to moral imagination and identify their boundary conditions.     

Institutional theory-based research on corporate social responsibility: Bringing values back in

Research applying institutional theory to corporate social responsibility (CSR) has experienced remarkable momentum. Institutional theory-based CSR research illustrates the role of values in guiding both agentic choices for CSR and the influence of institutional structures on CSR agency. Although values have been explored in this literature, systematic studies of values that seek to gain insights into the mutual relationship between agentic choices and structures are lacking. Such insights are crucial for exploring whether and how CSR is enabled or constrained. We thus ask two interrelated questions: (1) What is the role of values in institutional theory-based CSR research? (2) How and along which avenues should future institutional theory-based CSR research that focuses on values be mobilised? Based on our analysis of this line of literature from 1989 until 2021, first, we take stock of established institutional theory perspectives on CSR and disentangle what role values have played in this literature. Second, we outline how to mobilise values in future institutional CSR research based on four promising but under-investigated areas. From our literature analysis, two central functions emerge (which we label ‘bridging’ and ‘referencing’) that values can perform in the institutional analysis of CSR. Based on these two functions, our values-focused framework will help scholars examine the moral foundations that inform business–society interactions as well as understand how companies can responsibly manage those interactions with societal stakeholders.     

Ethics,character, and authentic transformational leadership behavior

The morality of transformational leadership has been sharply questioned, particularly by libertarians, “grass roots” theorists, and organizational development consultants. This paper argues that to be truly transformational, leadership must be grounded in moral foundations. The four components of authentic transformational leadership (idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration) are contrasted with their counterfeits in dissembling pseudo-transformational leadership on the basis of (1) the moral character of the leaders and their concerns for self and others; (2) the ethical values embedded in the leaders' vision, articulation, and program, which followers can embrace or reject; and (3) the morality of the processes of social ethical choices and action in which the leaders and followers engage and collectively pursue.The literature on transformational leadership is linked to the long-standing literature on virtue and moral character, as exemplified by Socratic and Confucian typologies. It is related as well to the major themes of the modern Western ethical agenda: liberty, utility, and distributive justice Deception, sophistry, and pretense are examined alongside issues of transcendence, agency, trust, striving for congruence in values, cooperative action, power, persuasion, and corporate governance to establish the strategic and moral foundations of authentic transformational leadership.     

Ethical leadership: Mapping the terrain for concept cleanup and a future research agenda

Ethical leadership has attracted massive attention in the twenty-first century. Yet despite this vast literature, knowledge of ethical leadership suffers from two critical limitations: First, existing conceptualizations conflate ethical leader behaviors with followers' evaluations of leaders' characteristics, values, traits, and followers' cognitions. Second, we know little to nothing regarding the causes and consequences of ethical leadership behaviors as most of the evidence not only confounds concepts, but also precludes causal inferences due to design problems. Thus, we first present a review of the definitions of ethical leadership that alarmingly reveals a hodgepodge of follower evaluations of leader behaviors, traits, and values. We then address this concept confusion by drawing upon signaling theory in presenting a new conceptualization of ethical leadership behavior (ELB) defined as signaling behavior by the leader (individual) targeted at stakeholders (e.g., an individual follower, group of followers, or clients) comprising the enactment of prosocial values combined with expressions of moral emotions. As such, enacting prosocial values and expressing moral emotions are each necessary for ethical leadership. Next, we review the nomological network of ELB at the individual, dyad, and group levels. We conclude with a discussion of future research directions in testing new theoretical models, including a set of theoretical and methodological recommendations.     

Leadership and the three faces of integrity

Recent scholarship in business and leadership strongly suggests that integrity is not fundamentally a moral concept. This paper presents an account of leadership integrity that defends its ethical meaning while identifying important cognitive structures that clarify the confusion surrounding integrity attributions. The paper begins with a brief review of historical, philosophical, and business discussions of integrity. Using the insights from these discussions, I argue that integrity is fundamentally, but not exclusively, a moral concept that supports the ethical claims of leadership theories. I then review current leadership theories and derive a definition of integrity as a moral concept. Using this definition, I explain how a leader's integrity is founded on identity-conferring commitments to values and then describe three types of leadership integrity to better understand these constructs. I conclude with a few research questions that seek to advance leadership integrity research with the goal of advancing our understanding of ethical leadership.     

Trust,confidence, familiarity,and support for land-based recirculating aquaculture facilities

Surveys in three U.S. localities (n = 523) with proposed or existing land-based aquaculture facilities probed trust's relationship with perceived net benefits and public intentions to cooperate with siting of this novel technology. The trust, confidence, and cooperation (TCC) model posits that shared values shape willingness to be vulnerable to others (trust), while past performance shapes certainty that others will behave as expected (confidence). Trust affects confidence given moral outweighs performance information, possibly varying by familiarity. Other research suggests that trust shapes benefit and risk perceptions, which drive cooperation (defined here by potentially observable behavior: voting on siting, trying to influence government decisions directly or through citizen groups, and buying or eating facility fish). Confirmatory factor analyses suggested that a two-factor model fit the trust/confidence measures better than a one-factor model or a two-factor model without inter-factor correlation, indicating (despite a strong association of trust and confidence) that they are empirically distinct. Path analyses suggested that trust had stronger direct effects on cooperation than did confidence, reflecting the TCC notion that moral information underlying trust judgments is more influential, and stronger indirect effects through benefit-risk judgments. Model fit was better than if the benefit-risk mediator was omitted. Trust in government had a small direct effect on cooperation and confidence, but a large effect on trust in the corporation, and model fit was much worse if any of these paths was omitted. Low familiarity with the project lowered both model fit and trust–confidence association. We discuss implications for risk analysis theory and practice.     

Psychic distance and ownership in acquisitions: Direction matters

Recent research has begun to explore the impact of country-of-origin and direction on internationalization decisions in response to controversy over the use of symmetrical and absolute values of distance. In this paper we contribute to this stream of research by studying the moderating influence of direction on the distance–ownership relationship as it relates to cross-border acquisitions. We ground our arguments in transaction cost economics and supplement this lens using institutional theory to contextualize the home-host country relationship through moderating effects. Through our study of 25,440 full and partial acquisitions (9577 MNEs, 25 countries, 15 years), we demonstrate that the distance–ownership relationship is moderated by direction. We further find that acquisition ownership decisions made by emerging country MNEs differ significantly from those made by developed country MNEs. Our findings demonstrate that future research on the impact of distance should consider the differences between MNEs from emerging versus developed economies, in addition to host country characteristics.     

Moral Utility Theory: Understanding the motivation to behave (un)ethically

Moral Utility Theory provides an integrative framework for understanding the motivational basis of ethical decision making by modeling it as a process of subjective expected utility (SEU) maximization. The SEUs of ethical and unethical behavioral options are proposed to be assessed intuitively during goal pursuit, with unethical conduct emerging when the expected benefits of moral transgressions outweigh the expected costs. A key insight of the model is that any factors that increase the value of a goal—including incentives, framings, and mindsets—can motivate misbehavior by increasing the SEU of unethical conduct. Although Moral Utility Theory emphasizes the automatic and habitual nature of most SEU appraisals, it also describes a mechanism for initiating the deliberative moral reasoning process: the experience of moral uncertainty. Moral uncertainty is proposed to occur when the SEUs of ethical and unethical behaviors are similar in magnitude, thereby activating the behavioral inhibition system and motivating the allocation of attentional resources toward the decision process. This framework bridges the gap between affective and cognitive perspectives on ethical decision making by identifying automatic evaluations as a central driver of moral decisions while also specifying when and how moral reasoning processes are initiated. By combining dual-process models of morality with well-validated principles from the science of motivation, Moral Utility Theory provides theoretical parsimony and formal modeling potential to the study of ethical decision making. The framework also suggests practical strategies—from employee selection and training to goal setting and compensation systems—for encouraging ethical behavior in organizations.     

Some Implications for Management Development of Research into Managers' Moral Dilemmas

In this paper, we present two cases of moral dilemmas as told by the managers who had faced them. We analyse the cases, drawing on frameworks developed by Toffler (1986), Kohlberg (1981) and Maclagan (1990). We also comment on the broader findings of the research from which the cases were taken. These analyses and findings and those of other researchers (e.g. Waters et al., 1986) suggest a number of requisite ‘moral attributes’ for managers and have, we argue, significant implications for the curriculum for ethical education and development for managers and intending managers. One is that case material needs to reflect more strongly the actual experiences of practising managers; another is that there is scope for wider use of experiential methods on management ethics courses. We conclude with a call for a multifaceted approach to ethical education as a lifespan process entailing the development of personal and interpersonal skills and qualities, and self-knowledge as well as cognitive skills. While we acknowledge that ethical education needs to take account of learners' differing levels of prior experience, stages of moral development and levels of learning maturity, our over-riding concern is that learners are prepared for and helped to live through the very ‘real’ dilemmas that they are likely to experience in managerial work.     

The Conflict between U.S. Patent Protection and Technological Innovation: Analysis and Problem Solving by Means of the Integrated Causal Model for Innovated Ethic

Criticisms of patent laws for technological innovations in the United States reveal a multifaceted milieu of problems centered around the protection of short‐term economic gain and individual property rights. In this article, we consider this a conflict between current patent laws and the innovation capabilities of organizations. We propose a solution that enables the company to assure its long‐term survival in the face of these restrictions. This presumes that the firm will at least maintain its innovation capacities while preserving the company's ethical values and those of its social environment. We offer a theoretical model that is designed to help managers and policymakers reorient their governance strategies for managing the innovation process, using the “ethics of responsibility,” which establishes the link to individual moral values at the beginning of a governance process as well as the consequences of a decision. Our integrated causal model of ethical innovation for patents is presented and implications for global organizations and possible solutions for patent law process failure are offered.     

Shaping emotional reactions to ethical behaviors: Proactive personality as a substitute for ethical leadership

Due to ethical lapses of leaders, interest in ethical leadership has grown, raising important questions about the responsibility of leaders in ensuring moral and ethical conduct. However, research on ethical leadership has failed to examine the active role that followers' attributes play in enhancing or minimizing the influence of ethical leadership in organizational outcomes. We applied the substitutes for leadership approach (Kerr & Jermier, 1978) to ethical leadership and predicted that proactive personality acts as substitute in the relationship between ethical leadership, workplace emotions and organizational citizenship behaviors (OCBs). Data from two distinct samples offered strong support for the hypotheses. Specifically, we found that ethical leadership was significantly and negatively related to negative workplace emotions when subordinate proactive personality was low, but not when it was high, with consequences for OCBs. These findings suggest that proactive personality constitutes an important moderator on the impact of low ethical leadership on workplace emotions, with consequences for OCBs.     

Understanding Organizational Safety Using Value-Focused Thinking

Decision analysis is recognized as the right way to make risk management decisions, using probabilistic techniques to assess the accident risk. It is also accepted that the decisions that individuals in the organization make affect the likelihood of an accident and thus managerial and organizational factors should be included in the risk modeling process. However, decision analytic techniques have not been used to understand the decisions that are made by these individuals. The initial domain for this research is marine transportation. We use the framework of value-focused thinking in order to understand safety decisions made within our research partner organization, a major domestic oil tanker operator. We describe the results of interviews held with managers and employees from this organization. Through these interviews, we sought to understand the values these experts apply in their roles within the organization and the objectives they seek to achieve to contribute to its overall safety performance. The end result is a framework that not only portrays the fundamental objectives of safe operations for various roles in the organization, but also interconnects these different decision contexts. We believe that this approach is fundamentally different from those used in previous work and that this is an interesting application of value-focused thinking.     

Deciding what's right: The role of external sanctions and embarrassment in shaping moral judgments in the workplace

We assert that previous research has overlooked the pervasive ambiguity in ethical situations in organizations, as well as how people pierce through this ambiguity to realize new distinctions between right and wrong. Focusing on well-intentioned individuals who unknowingly transgress, we present a theory of how they come to recalibrate their moral judgments. We begin by discussing the composition and nature of a moral judgment. Building on this discussion, we then consider how external sanctions can be used to shift moral judgments. Finally, we posit that internal emotional responses to sanctions (namely embarrassment) will facilitate this shift by triggering a sense of moral deficiency. More specifically, we assert that embarrassment will focus the transgressor's attention on what went wrong. This reflection provides an opportunity for the recalibration of the initial moral judgment. We conclude with a discussion of the implications of our theory.     

Virtues-centered moral identity: An identity-based explanation of the functioning of virtuous leadership

In accounting for the nature and positive functioning of virtuous leadership, recent efforts (e.g., Wang & Hackett, 2016) have relied solely on attribution and modeling, concepts tied to social-cognitive theories. This approach does not account for important processes associated with virtuous leadership, such as the crucial role ascribed to the self-cultivation of virtues. To remedy this, we apply the concept of moral identity i.e., one's sense of self as moral, taken from identity-based theories of leadership, to develop a new construct, virtues-centered moral identity. As part of the process, we explain the uniqueness of our approach relative to existing views of moral identity that emphasize moral values and moral goals, rather than moral virtues. In comparison to often unsuccessful externally-based attempts to promote ethical behavior, including regulations, codes of conduct, and audits, our emphasis on virtues-centered moral identity highlights the importance of fostering moral character in leaders (and ultimately followers as well) as the most promising way to promote ethical (moral) choices.     

Is HRD in need of an ethics of care?

Human Resource Development (HRD) operates within competitive global environments and the changing expectations of societal moral values, which can be in conflict with organizational values, performance, and profit. These are underpinned by the unquestioning acceptance and ‘orthodoxy’ of free‐market economics, legalism, and codes of conduct that result in a lack of ethical analysis within HRD practice. In response to the forgoing, it will be argued that the ethics of care that espouses the values of human relationships, empathy, dignity, and respect is a legitimate approach to free-market lead ethical rule-based rationality that is often presented as the de facto position for HRD professional practice. It presents the ethical debates in which HRD operates within, before arguing for the ethics of care. Three case examples from practice are offered illustrating how HRD practice might respond through the lens of an ethics of care. Reflections and implications for HRD in the form of objections and responses are considered. It concludes that HRD professionals are faced with many difficulties when making decisions, and that the ethics of care offer is an alternative perspective for HRD practitioners.     

The negative impact of chameleon-inducing personalities on employees' ethical work intentions: The mediating role of Machiavellianism

Self-interested moves, such as manipulation and deception in interpersonal relationships with parties inside and outside the workplace, constitute a serious concern for management. Machiavellianism is often directly blamed for such ethical failures, but more generic individual differences, such as those linked to the use of chameleon-like approaches to match an immediate cultural or social environment (i.e., external locus of control, relativistic beliefs), may have indirect influences. Because these chameleon-inducing personalities may foster self-interested decisions, by prompting the abandonment of strict moral codes, this study investigates Machiavellianism as a potential mechanism by which these personalities relate negatively to ethical work intentions. The results, obtained with a sample of 436 banking employees from Spain, reveal that external locus of control and relativistic beliefs relate positively to Machiavellianism, and that Machiavellianism mediates the negative influence of chameleon-inducing personalities on ethical work intentions. The study thus provides novel information for managers interested in reducing employees’ Machiavellian tendencies and offers appropriate strategies for deterring their unethical work behaviors.