Leading by example: Testing a moderated mediation model of ethical leadership, value congruence, and followers' openness to ethical influence

• Author: Armin Pircher Verdorfer,Claudia Peus
• Date: 01 April 2020
• Published date: 01 April 2020
• DOI: http://doi.org/10.1111/beer.12255

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  Business Ethics: A Eur Rev. 2020;29:314–332.wileyonlinelibrary.com/journal/beer

1 | INTRODUCTION

Failures in ethic al leadership have consiste ntly been identified as an

important a ccount of corporate sc andals and misbeh avior in orga-

nizations (Knights & O'Leary, 2005). Accordingly, ethical leadership

is no longer seen as a n aive claim of some ideali sts or a “Sunday

school” subje ct reserved for t heologians and phil osophers, but ha s

gained widesp read public interest and als o become a major topic in

organization al behavior resear ch (Den Hartog, 2015). O ne of the

most influent ial conceptualizations of et hical leadership has de fined

it as “the demon stration of normat ively appropriate co nduct (…)

and the promoti on of such conduct to foll owers” (Brown, Trevino,

& Harrison, 20 05, p. 120). An impor tant tenet of this app roach is

that ethical le adership represents a c omposite of being a moral per-

son and being a mor al manager1  (Trevino, L aura, & Brown, 20 00).

While being a mor al person refers to visible tr aits and behaviors of

leaders that a re normatively approp riate, being a moral manage r de-

scribes lead ers' proactive ef forts to urge foll owers into an ethical

direction. B y drawing on social le arning theory (B andura, 1986), it

is thought that et hical leaders el icit ethical value s, attitudes, a nd

behaviors amo ng followers by modeling ethic al behavior (i.e., being

a moral perso n) and proactively p ushing ethical st andards through

Received: 15 Aug ust 2018 

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  Revised: 26 Octob er 2019 

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  Accepted: 29 Octo ber 2019

DOI: 10 .1111/bee r.12255

ORIGINAL ARTICLE

Leading by example: Testing a moderated mediation model of

ethical leadership, value congruence, and followers' openness

to ethical influence

Armin Pircher Verdorfer1 | Claudia Peus2

This is an open ac cess article und er the terms of the Crea tive Commons Attr ibution License, w hich permits use , distribution an d reproduction i n any medium,

provided the o riginal work is prop erly cited.

© 2019 The Authors . Business Ethics: A E uropean Review publ ished by John Wiley & So ns Ltd

1Amsterdam B usiness School, U niversity of

Amsterdam, Amsterdam, The Netherlands

2TUM School of Ma nagement, Technica l

University of Munich, München, Germany

Correspondence

Armin Pircher Verdorfer, Amsterdam

Business Sch ool, Universit y of Amsterdam,

Plantage Mui dergracht 12, 1018 TV

Amsterdam, The Netherlands.

Email: a.pircherverdorfer@uva.nl

Abstract

In this study, we investigate a key que stion of ethical leader ship theory: Are e thical

leaders able to gai n followers' openness to thei r ethical influence? When des crib-

ing ethical leade rship, we distinguish bet ween leaders’ moral p erson behavior (i.e.,

behaviors that are no rmatively appropriate) and m oral management (i.e., using p osi-

tion power to reinforce ethic al standards). We then draw on me chanisms of social

learning and socia l exchange and test a moderate d mediation model. It is pred icted

that the effec t of leaders' moral pers on behavior on followers’ open ness to ethi-

cal influence is media ted by leader-follower ethical val ue congruence. Moreover, we

examine whether m oral management amplifi es the effects of mo ral person behav-

ior. For hypothesis testing, ex isting measures from th e literature are integrated to

operationalize four underlying normative reference points of leaders' moral person

behavior: humane, justice, responsibility/sustainability, and moderation orientation.

After establ ishing the psychometric propert ies of this integrative measure, the main

hypotheses are tes ted in two separate studies . While results showed a positive ef fect

of leaders' moral pe rson behavior on followers' ope nness to ethical influence thr ough

ethical value congr uence, the moderating effe ct of moral management was, contra ry

to our expectat ion, negative. With this, our s tudy contributes to a better u nderstand-

ing of the mechanisms of eth ical leadership.

    

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PIRCHER VERDOR FER anD PEUS

the use of positio n power (i.e., being a moral manager). S o far, ethi-

cal leaders hip research in this traditio n has resulted in an extensive

body of literatu re, demonstrati ng a wide array of benef icial effects

on followers' work-relat ed attitudes and behavi ors (Ko, Ma, Bartnik,

Haney, & Kang, 2018; Ng & Feldm an, 2015).

Despite its pr ominence in the liter ature, there are sti ll several

open questio ns about how and when et hical leadersh ip works and

how and when it might n ot work or work less well. F irst, the quest ion

what we mean when we s ay “ethical lead ership works” offers room

for further s crutiny. Since leadership i s by definition about infl uence

(Northous e, 2013), the sine qua non of ethi cal leadership i s ethical

influence. Thu s, the best test for e thical leaders hip is: To what de-

gree is the leade r able to gain followers' volunta ry openness to his/

her ethical inf luence? To what degree is he/she seen as an e thical

example and to wh at degree do followers volun tary seek and accept

his/her leader ship when it comes to ethic al issues? These questio ns,

however, have received surp risingly little attention in t he pertinent

literature. Fur thermore, the b ulk of empirical rese arch in the field

of ethical lead ership has, so far, merge d the moral perso n and the

moral manager d imension into a composite sco re. While this reflect s

the common notio n of ethical leadership as a one -dimensional con-

struct, there is emerging evidence that the two facets represent

related, yet dist inct concepts an d that the interplay bet ween them

may be more complex . For instance, Rowold, B orgmann, and Heinit z

(2009) as well as Páe z and Salgado (2016) used Brown et al .'s (2005)

seminal ethic al leadership sca le and found that the mor al person and

the moral mana gement items loaded o n distinct fact ors, showing

differential relationships with related constructs (e.g., transforma-

tional leader ship) and outcome variable s (e.g., job satisfacti on, OCB,

workplace deviance, and perceived leader performance). Against

this backgro und, the questio n arises as to how these t wo dimen-

sions interac t when it comes to gainin g followers' voluntar y open-

ness to leader s' ethical influence. Related to t his, further scrutiny is

also warrante d regarding the range of behav iors that we consider as

normatively ap propriate and through w hich ethical leader s, as moral

persons, may le ad by moral example. B rown et al. (2005) have ope ra-

tionalized this p art exclusively aroun d trustworthin ess and concerns

of care and fairn ess. While other re searchers have refi ned and ex-

tended this view by i ncluding additional dimens ions, such as power

sharing and conc ern for sustainabilit y (Kalshoven, Den Har tog, & De

Hoogh, 2011), there is st ill a dearth of empirical re search about the

effective ness of such an integrated pe rspective on being a m oral ex-

emplar in gaining followers' openness to ethical influence.

With these gaps and questions in mind, our main goal in the pres-

ent research was to empirically examine the extent to which ethical

leaders promote followers' openness to their ethical influence. To

specify the content of leader behaviors that are normatively appropri-

ate (i.e., moral person behaviors), we use the framework of Eisenbeiss

(2012) which introduced four essential normative reference points of

ethical leader behaviors (i.e., humane, fairness, moderation, and sus-

tainability and responsibility orientation). On this basis, our theoretical

model posits that leaders who show such normatively appropriate be-

haviors represent significant moral exemplars who are able to transmit

ethical values to followers through role modeling and social exchange.

This is expected to foster ethical value congruence between leaders

and followers, which in turn is seen as an essential enabler of follow-

ers' openness to the ethical influence of their leaders.

A second goal of our s tudy was to shed light on t he interplay

of moral perso n behaviors and mor al management. Spe cifically, by

relating the t wo dimensions to different m echanisms of social learn -

ing, we propose t hat the indirect effec t of leaders' moral per son be-

haviors on followe rs via ethical value cong ruence is amplified by th e

degree to which leaders show moral management.

Taken together, our research has a n umber of intended cont ri-

butions. Fir st, we respond to the r ecent call for more th oroughly

investigating the effects of ethical leadership “on more theoretical-

ly-specific ou tcomes” (Lemoine, Hartne ll, & Leroy, 2019, p. 155). B y

focusing on followe rs' openness to the i nfluence of ethical l eaders

we examine a key criter ion of effective ethical le adership and thus,

contribute to the v alidity of the ethic al leadership const ruct. Related

to this, our work al so echoes the call of B rown and Mitchell (2010)

emphasizing eth ical value congruence of le aders and their follower s

as a potentially cr itical explanatory var iable for the effective ness of

ethical lead ers. Second, by drawin g on Eisenbeiss' (2012) integrat ive

work on the norma tive foundations of ethic al leadership, we seek to

substantiate a m ore comprehensive p erspective on wh at it means

to be a moral pers on in terms of ethical ly desirable lead ership be-

haviors. Third , we contribute to the et hical leadershi p literature by

investigating m oral management as a potential m ultiplier of leaders'

moral perso n behaviors. A clearer under standing of this interplay is

not only impor tant for the prac tical concerns of se lecting for and

developing ethical leadership; such information will also provide a

deeper theoretical perspective on how ethical leadership works.

2 | THEORY AND HYPOTHESIS

DEVELOPMENT

In what follows, we f irst specify the no rmative underpinning of e thi-

cal leaders hip and then provide a theore tical rationale for the st udy

hypotheses.

2.1 | The nor mative foundations of

ethical leadership

Brown and colleagues (2005) have operazionalized ethically desirable

behaviors of leaders exclusively around the notion of being trustwor-

thy, fair, and considerate. Other researchers have refined and extended

this view by including power sharing, altruism, and concern for sus-

tainability as additional dimensions of ethical leadership (Kalshoven,

Hartog, & Hoogh, 2011). A highly useful contribution to integrating and

clarifying these perspectives has been provided by Eisenbeiss (2012).

In an attempt to determine the normative underpinning of ethical lead-

ership, she systematically analyzed predominant Western and Eastern

moral philosophies as well as ethics principles of the world religions,