Week 2

My Boss is Morally Disengaged: The Role of Ethical Leadership in Explaining the Interactive Effect of Supervisor and Employee Moral Disengagement on Employee Behaviors

Julena M. Bonner • Rebecca L. Greenbaum •

David M. Mayer

Received: 27 November 2013 / Accepted: 5 September 2014 / Published online: 17 September 2014

� Springer Science+Business Media Dordrecht 2014

Abstract The popular press is often fraught with high-

profile illustrations of leader unethical conduct within

corporations. Leader unethical conduct is undesirable for

many reasons, but in terms of managing subordinates, it is

particularly problematic because leaders directly influ-

ence the ethics of their followers. Yet, we know relatively

little about why leaders fail to apply ethical leadership

practices. We argue that some leaders cognitively remove

the personal sanctions associated with misconduct, which

provides them with the ‘‘freedom’’ to ignore ethical

shortcomings. Drawing on moral disengagement theory

(Bandura 1986, 1999), we examine the relationship

between supervisor moral disengagement and employee

perceptions of ethical leadership. We then examine the

moderating role of employee moral disengagement, such

that the negative relationship between supervisor moral

disengagement and employee perceptions of ethical

leadership is stronger when employee moral disengage-

ment is low versus high. Finally, we examine ethical

leadership as a conditional mediator (based on employee

moral disengagement) that explains that relationship

between supervisor moral disengagement and employee

job performance and organizational citizenship behavior

(OCB). Results from a multi-source field survey provide

general support for our theoretical model.

Keywords Ethical leadership � Moral disengagement � Performance � Organizational citizenship behavior (OCB)

The business section of the newspaper regularly provides

examples of unethical leadership in organizations. In

addition to the high-profile corruption displayed by

leaders such as Ken Lay (Enron) and Dennis Kozlowski

(Tyco), there is also a considerable amount of unethical

and abusive behavior demonstrated by less well-known

and less powerful leaders within organizations (Tepper

2007). The behavioral ethics literature suggests that

leaders influence the ethics of their employees (Brown

and Treviño 2006; Brown et al. 2005; Schminke et al.

2005). Given the strong influence leaders can have on

employees and other organizational stakeholders, it is

important to understand why some leaders engage in

egregious conduct.

Fortunately, the social psychology literature has a

growing body of research on moral disengagement that

may be useful in understanding why some leaders engage

in misconduct (Bandura 1986, 1991, 1999; Detert et al.

2008; Moore et al. 2012). Theoretical work on moral dis-

engagement suggests that people are usually capable of

regulating their ethical behavior; yet, the self-regulation

process fails when people morally disengage from their

actions. Individuals are able to behave unethically without

feeling guilty because they cognitively remove the personal

sanctions that are normally associated with ‘‘bad’’

behavior.

Leaders within organizations have considerable leverage

to influence their followers’ perceptions of ethical stan-

dards and subsequent behaviors. Leader moral disengage-

ment, in particular, may play an important role in

influencing followers. In this study, we seek to further

explore the ‘‘moral’’ effect that leaders have on followers

by specifically examining perceptions of ethical leadership

as a mediator of the interactive relationship between

supervisor moral disengagement and employee moral

J. M. Bonner (&) � R. L. Greenbaum Oklahoma State University, Stillwater, OK, USA

e-mail: [email protected]

D. M. Mayer

University of Michigan, Ann Arbor, USA

123

J Bus Ethics (2016) 137:731–742

DOI 10.1007/s10551-014-2366-6

disengagement onto employee behaviors (e.g., job perfor-

mance, organizational citizenship behavior (OCB)). 1

The primary purpose of this research is to understand

why leaders may fail to be perceived as ethical leaders and

the effects of such perceptions on employees’ conduct.

Although the extant literature demonstrates that percep-

tions of ethical leadership are related to important

employee and organizational outcomes (Avey et al. 2011;

Avey et al. 2012; De Hoogh and Den Hartog 2008; Hansen

et al. 2012; Kacmar et al. 2012; Mayer et al. 2013; Piccolo

et al. 2010; Rubin et al. 2010; Toor and Ofori 2009;

Walumbwa et al. 2011; Walumbwa et al. 2012), our

knowledge of why leaders may be perceived as higher or

lower in ethical leadership remains limited.

We argue that supervisor moral disengagement may

serve as an important predictor of followers’ perceptions of

ethical leadership. Additionally, in order to more fully

understand the impact of supervisor moral disengagement,

we examine the moderating role of employee moral dis-

engagement. We argue that employees who are lower

(versus higher) in moral disengagement are less likely to

perceive their morally disengaged supervisors as being

ethical leaders (see Fig. 1). Furthermore, both supervisor

and employee moral disengagement need to be low in order

for perceptions of ethical leadership to explain important

employee outcomes (e.g., job performance and OCB).

Practically, we find our research important for identifying

contextual factors that influence employee perceptions of

ethical leadership and subsequent employee behaviors.

More specifically, organizations may gain a better under-

standing of ethics-related conditions and processes that

subsequently influence employee job performance and

OCB.

Our research has a number of intended contributions.

First, we extend ethical leadership theory by identifying

understudied antecedents of employees’ perceptions of

ethical leadership, namely the interactive effect of

supervisor and employee moral disengagement. Second, we

highlight the importance of both leader and employee

characteristics in understanding perceptions of ethical

leadership. To date, moral disengagement theory has been

primarily studied within the social psychology literature (for

an exception, see Moore et al. 2012). We offer a third con-

tribution by applying moral disengagement theory (Bandura

1986, 1999) to the behavioral ethics and organizational

behavior literatures—a valuable theory that can provide

important insights regarding organizational (un)ethical

behavior. We test our moderated-mediation model using

multi-source data from a variety of organizations.

Conceptual Model and Hypotheses Development

Moral Disengagement Theory

According to moral disengagement theory (Bandura 1986,

1991, 1999), people have set moral standards, which, if

violated, will lead to personal discomfort and/or self-con-

demnation. However, people can avoid discomfort and

self-condemnation by disassociating from the negative

consequences of their behaviors. Moral disengagement

theory provides a framework for understanding the pro-

cesses by which people can comfortably rationalize their

unethical and unjust behaviors. In general, people refrain

from acting in ways that violate personal moral standards

because of the discomfort it typically causes (Bandura et al.

1996). When people’s moral standards are different than

their behaviors, they experience psychological discomfort

that is captured by cognitive dissonance (Festinger 1957).

The experience of cognitive dissonance normally results in

the use of dissonance-reduction strategies (Elliot and De-

vine 1994). Moral disengagement can be used as a disso-

nance-reduction strategy by rationalizing unethical or

unjust behaviors.

Bandura (1986, 1991, 1999) identified eight mecha-

nisms that embody moral disengagement: moral justifica-

tion, euphemistic labeling, advantageous comparison,

displacement of responsibility, diffusion of responsibility,

distorting consequences, dehumanization, and attribution

of blame. These mechanisms can be categorized into three

groups: (1) relabeling unethical or unjust behavior, (2)

distancing and distorting the harmful effects of unethical or

unjust behavior, and (3) reducing identification with vic-

tims (Bandura et al. 1996; Detert et al. 2008).

Relabeling unethical or unjust behavior includes moral

justification, euphemistic labeling, and advantageous

comparison. These three mechanisms allow one to reframe

the unethical behavior by making it appear morally

acceptable. Moral justification occurs when individuals

convince themselves that the unethical behavior actually

1 The behavioral ethics literature uses the terms ‘‘moral’’ and

‘‘ethical’’ interchangeably (Tenbrunsel and Smith–Crowe 2008;

Treviño et al. 2006), just as we do throughout our manuscript.

Employee Moral Disengagement

OCBO OCBI

Supervisor Moral Disengagement

Perceptions of Ethical Leadership

Performance

Note. OCBO = Organizational citizenship behavior-organization, OCBI = Organizational citizenship behavior-individual

Fig. 1 Theoretical Model

732 J. M. Bonner et al.

123

serves as a means to a moral end (Aquino et al. 2007). For

instance, one might selectively withhold negative infor-

mation about a company’s product or service in order to

protect the company’s public image (Moore 2008). Addi-

tionally, euphemistic labeling exists when people use

neutral language, rather than morally charged language, to

make the act seem less harmful. A boss may ask a subor-

dinate to ‘‘just sign my name’’ on a document rather than

‘‘just forge my name.’’ By using softer, less ‘‘morally

heavy’’ language, the boss and subordinate feel more at

ease with the request. Advantageous comparison occurs

when an unethical act is compared with an even more

harmful act, thereby making the less unethical act appear

relatively minor and acceptable. Taking a ream of copy

paper from the office is trifling when compared to

embezzling money from the organization. In sum, the

‘‘relabeling’’ moral disengagement mechanisms reduce the

moral implications of the unethical acts (Bandura 1986),

thus making individuals feel more comfortable engaging in

such behaviors.

The second group of moral disengagement mechanisms

allows people to distance themselves from, and distort, the

harmful effects of unethical or unjust behaviors. First, dis-

placement of responsibility occurs when people believe that

someone else is responsible for the harmful consequences

(Bandura 1986, 1999). The Milgram (1974) experiments

demonstrate obedience to authority, such that study partic-

ipants were willing to administer harmful shocks to another

person simply based on an authority figure’s instructions.

Study participants most likely attributed the harmful con-

sequences to the authority figure’s request rather than their

own behavior. In organizational settings, unquestioning

obedience to authority has also been linked to unethical

behavior and failure to report unethical conduct (Treviño

et al. 1999). Second, diffusion of responsibility exists when

people believe the harm associated with an unethical act is

attributed to many people; thus, keeping any one person

from feeling personally responsible. Bandura (1986) noted

that ‘‘Where everyone is responsible no one is really

responsible’’ (p. 380). Third, people distort the conse-

quences of their unethical behavior by ignoring or mini-

mizing the expectant harm and instead emphasizing the

benefits of the behavior (Bandura 1986). Overall, these

moral disengagement mechanisms serve to minimize one’s

own role related to unethical behavior.

The final group of moral disengagement mechanisms

allows people to reduce their identification with victims of

unethical acts. Dehumanization occurs when people ignore

the victims’ human characteristics, making victims seem

unworthy of basic human considerations (Moore et al.

2012). Indeed, Bandura et al. (1975) found that people are

more likely to punish ‘‘dehumanized’’ victims rather than

‘‘humanized’’ victims. Finally, attribution of blame occurs

when people directly blame the victim. For example,

stating that victims ‘‘deserve what they get’’ or ‘‘it’s their

own fault,’’ makes it seem more acceptable to harm the

victims (Treviño and Nelson 2011). Hence, these moral

disengagement mechanisms reduce a perpetrator’s dis-

comfort in administering unethical behavior because the

victim appears more deserving of the potential harm.

Extant behavioral ethics literature clearly demonstrates

a connection between moral disengagement and unethical

behavior (Bandura et al. 1996; Beu and Buckley 2004;

Detert et al. 2008; Moore 2008; Moore et al. 2012; Shu

et al. 2011). Shu et al. (2011) demonstrate that unethical

behavior can also trigger moral disengagement, such that

‘‘…bad behavior motivates moral leniency and leads to the strategic forgetting of moral rules’’ (p. 344). Hence, the

back-and-forth interplay between moral disengagement and

unethical behavior can lead to a downward spiraling effect

whereby moral disengagement produces higher levels of

unethical behavior and vice versa (Bandura 1986; Shu et al.

2011). Thus, a morally disengaged leader is less likely to

proactively demonstrate ethical behavior to his/her fol-

lowers, which is a key component of ethical leadership.

Importantly, moral disengagement can also be examined

as an individual difference variable, as in a personality trait

rather than a state (Aquino et al. 2007; Paciello et al. 2008).

For the purposes of our research, we examine both super-

visor and employee moral disengagement as individual

traits. Bandura’s work argues for a trait approach to moral

disengagement, and research has shown that individuals

vary in their propensity to morally disengage (Bandura

et al. 1996; Moore et al. 2012). Accordingly, we find the

examination of moral disengagement as a trait appropriate

for explaining our theoretical model. As such, we do not

hypothesize a direct relationship between supervisor and

employee moral disengagement, whereby the employee

models the leader’s moral disengagement. Rather, our

examination of moral disengagement as a trait provides

insights regarding the interactive effect of supervisor and

employee moral disengagement onto employee perceptions

of ethical leadership and subsequent employee outcomes.

Ethical Leadership

Ethical leadership, as defined by Brown et al. (2005,

p. 120), is ‘‘the demonstration of normatively appropriate

conduct through personal actions and interpersonal rela-

tionships, and the promotion of such conduct to followers

through two-way communication, reinforcement, and

decision-making.’’ According to the Executive Ethical

Leadership Reputation Matrix (Treviño et al. 2000; Tre-

viño and Nelson 2011), there are two components of ethical

leadership—the moral manager and moral person. The

moral person component of ethical leadership illustrates

Supervisor Moral Disengagement 733

123

how the leader is likely to behave, whereas the moral

manager component encompasses the leader’s transactional

efforts to strongly convey expectations of ethical conduct

among subordinates (Treviño and Nelson 2011). A moral

manager highlights the importance of ethics by communi-

cating strong ethical messages and by rewarding and

punishing subordinate’s behavior in accordance with ethi-

cal standards (Brown et al. 2005).

For an employee to perceive ethical leadership, leaders

are expected to conduct their personal lives in an ethical

manner, to be trustworthy, and to treat employees fairly (i.e.,

moral person). The ethical leader as a ‘‘moral manager’’ also

reinforces ethical conduct by making decisions with ethics

in mind and considering not just end results, but the way

results are achieved. In an effort to directly influence sub-

ordinates’ ethical behavior, supervisors also set an example

of how to behave ethically, emphasize moral outcomes, and

communicate important ethical standards (Bandura 1977;

Brown et al. 2005; Gini 1997; May et al. 2003). Furthermore,

social learning theory predicts that people learn what is

expected of them by observing the behaviors of influential

others, such as leaders (Bandura 1977).

Morally disengaged supervisors are likely to provide

role-modeling cues that support loose standards and

unethical behavior because they do not see these practices

as being particularly wrong. Therefore, a morally disen-

gaged supervisor would not be perceived as an ethical

leader because the supervisor’s language and actions would

not be consistent with ethical leadership practices. The

morally disengaged supervisor is protected from the emo-

tional discomfort and self-condemnation that accompanies

ethical failures. Accordingly, these supervisors are unlikely

to see the direct benefit of engaging in ethical leadership

practices. Morally disengaged supervisors do not actively

think of the destruction that could occur in the absence of

ethical leadership; thus, they are unlikely to take proactive

steps to promote ethics by rewarding and punishing

behavior according to ethical standards, discussing busi-

ness ethics with employees, and making decisions with

ethics in mind (Brown et al. 2005; Treviño and Nelson

2011). In this vein, we predict

Hypothesis 1 Supervisor moral disengagement will be

negatively related to perceptions of ethical leadership

Employee Moral Disengagement

Past research suggests that individual differences can

influence how people interpret and respond to others’

immoral tendencies (e.g., Greenbaum et al. 2013; Skarlicki

and Rupp 2010). Employee moral disengagement, in par-

ticular, may serve as a condition that influences the

strength of the relationship between supervisor moral

disengagement and perceptions of ethical leadership.

Aquino et al. (2007) used a powerful example to illustrate

individual differences in moral disengagement: ‘‘During

the infamous My Lai massacre in Vietnam, two American

helicopter crewmen refused to join their fellow soldiers in

the killing of unarmed civilians. Instead, they attempted to

airlift victims of the slaughter to safety’’ (p. 386). The

moral disengagement literature specifically investigates the

likelihood of war activating moral disengagement; how-

ever, these soldiers did not morally disengage in spite of

their leaders, peers, and circumstances. Thus, employees

who are low in moral disengagement are less likely to

perceive a morally disengaged supervisor as being high in

ethical leadership.

The individual low in moral disengagement is more

likely to experience psychological discomfort, or disso-

nance, when observing the unethical behavior of others

(Bandura 1999). Employees who are low in moral disen-

gagement still pay attention to the ethicality of business

behavior. They are more likely to feel guilty about, and to

impose sanctions on, their own and others’ unethical

behaviors (Bandura 1986, 1991, 1999). Unlike those high

in moral disengagement, these individuals still believe that

unethical behavior is wrong. Employees low in moral

disengagement have not morally ‘‘checked out;’’ thus, they

are more conscious of the immoral acts of others. Hence,

the employee low in moral disengagement is more attentive

to a supervisor’s moral disengagement. These employees

are more likely to notice when the morally disengaged

supervisor justifies unethical conduct, attributes blame to

the victim of unethical conduct, and minimizes the harm

associated with unethical behavior. In addition to noticing

the supervisor’s morally disengaged actions, the employee

low in moral disengagement is more likely to perceive such

a supervisor as being low in ethical leadership. The

employee has not morally disengaged and thus is more

likely to conclude that the morally disengaged supervisor

does not demonstrate normatively appropriate conduct to

followers, as would occur if the supervisor was ethical.

Conversely, when both the supervisor and employee are

low in moral disengagement, meaning that neither party

has morally disengaged, the employee is likely to perceive

the supervisor as being highly ethical. Both the supervisor

and employee have congruent expectations in terms of

keeping morality in check. Accordingly, the employee low

in moral disengagement will be more likely to perceive the

supervisor low in moral disengagement as being someone

who embodies ethical leadership practices.

The employee high in moral disengagement is less likely

to perceive the supervisor, whether he or she is morally

disengaged or not, as being high in ethical leadership. The

employee high in moral disengagement has removed per-

sonal sanctions that normally serve to regulate ethical

734 J. M. Bonner et al.

123

behavior and feels less guilty when exposed to unethical

behaviors (Bandura 1999). In turn, employees high in

moral disengagement are less inclined to notice and care

about the supervisor’s morally disengaged actions. Morally

disengaged employees are also less likely to believe that

the morally disengaged supervisor’s behavior is wrong,

even when compared to a supervisor low in moral disen-

gagement. Overall, these employees are less concerned

with the supervisor’s level of moral disengagement.

In a related vein, the employee high in moral disen-

gagement may not appreciate the ethics message conveyed

by the supervisor low in moral disengagement. In fact, the

employee high in moral disengagement may view the

supervisor low in moral disengagement as being morally

superior or judgmental (Greenbaum et al. in press). The

employee may perceive the supervisor as being a goody-

good and may therefore discount or ignore the supervisor’s

ethical conduct. Therefore, to the employee high in moral

disengagement, the supervisor’s moral disengagement may

have little influence on perceptions of ethical leadership.

We specifically predict that employee moral disengage-

ment will affect whether employees view the morally dis-

engaged supervisor as being higher or lower on ethical

leadership. We hypothesize

Hypothesis 2 Employee moral disengagement will mod-

erate the negative relationship between supervisor moral

disengagement and perceptions of ethical leadership such

that the relationship will be more strongly negative when

employee moral disengagement is low as opposed to high.

Ethical Leadership and Employee Behaviors

The benefits of ethical leadership have been examined in

past research (Ahmed and Muchiri in press; Brown et al.

2005; Brown and Treviño 2006; Kalshoven and Boon

2012; Mayer et al. 2009; Walumbwa et al. 2012). Ethical

leaders provide role-modeling cues suggesting that proso-

cial behaviors, such as organizational citizenship behaviors

(OCB: extra-role behaviors, outside the scope of one’s

formal role requirements) directed at others and the orga-

nization, are appropriate and encouraged. Brown and Tre-

viño (2006) describe an ethical leader as one who exhibits

traits such as honesty and trustworthiness. Additionally,

fairness has been specifically identified as an important

component of ethical leadership (De Hoogh and Den

Hartog 2008). Social learning theory (Bandura 1977) posits

that people learn by observing the behavior of respectable

others. As such, ethical leaders are likely to signal to

employees, through role modeling, that similar moral

behaviors are desirable. Therefore, employees will notice

that ethical leaders tend to treat the organization with

respect, honesty, and fairness. Subsequently, employees,

too, will find it appropriate to engage in citizenship

behaviors directed at the organization (OCBO) and other

people (OCBI). Organ’s (1988, 1990) original OCB

dimensions included altruism, courtesy, conscientiousness,

civic virtue, sportsmanship, peacekeeping, and cheerlead-

ing. These dimensions have an inherently moral quality

emphasizing respect, kindness, and fairness. Hence,

employees are expected to role model their ethical leader’s

behavior by demonstrating moral behavior in the form of

OCBs directed at the organization (OCBO) and the indi-

vidual (OCBI).

It should be noted that our theoretical model examines both

OCBO and OCBI to illustrate that ethical leadership may

influence followers to display positive behaviors toward both

the organization and other people. Although some leaders

may be good citizens toward other employees (high OCBI),

but may not be very good citizens toward the organization

(low OCBO), we expect ethical leaders, in particular, to

strongly support, via extra role behavior, both the organiza-

tion and individuals. Thus, the ethical leader’s OCBOs and

OCBIs should signal to followers that such behaviors are

expected and appreciated within the organization.

Similarly, ethical leadership is expected to have a

positive relationship with employee job performance (De

Hoogh and Den Hartog 2008; Piccolo et al. 2010; Wal-

umbwa et al. 2011; Walumbwa et al. 2012). Social

exchange theory (Blau 1964) explains that people often

feel the desire to reciprocate others’ favorable behavior

with similarly favorable behavior toward that person. The

supportive nature of ethical leaders may encourage fol-

lowers to reciprocate with behaviors that are beneficial to

the organization and supervisor, perhaps by increasing job

performance. Indeed, Piccolo et al. (2010) demonstrated

that ethical leaders encourage effort on the part of

employees, which leads to higher task performance. Wal-

umbwa et al. (2012) also found that ethical leaders, as fair

leaders, inspire followers to reciprocate the leader’s

behavior thereby increasing in-role performance. There-

fore, we propose that ethical leadership is positively related

to employee performance.

Hypothesis 3 Ethical leadership is positively related to

employee (a) OCBO, (b) OCBI, and (c) performance.

Moderated Mediation

The previous theoretical relationships presented suggest

that perceptions of ethical leadership may serve as a con-

ditional mechanism through which supervisor moral dis-

engagement is related to OCBO, OCBI, and performance.

Low employee moral disengagement strengthens the neg-

ative relationship between supervisor moral disengagement

and perceptions of ethical leadership. Yet, high employee

Supervisor Moral Disengagement 735

123

moral disengagement may lead the employee to discount or

ignore the supervisor’s level of moral disengagement and

its effect on the leader’s ethical conduct, making it so the

employee has weaker perceptions of ethical leadership.

Hence, a pattern of moderated mediation may exist

whereby employee moral disengagement affects the

strength of the indirect effect of supervisor moral disen-

gagement on employee (a) OCBO, (b) OCBI, and (c) job

performance, through perceptions of ethical leadership. We

specifically predict that because employees low in moral

disengagement are only likely to perceive high ethical

leadership when the leader is also low in moral disen-

gagement, these combined conditions (low supervisor and

low employee moral disengagement) must be met for an

employee’s perception of ethical leadership to explain

employees’ higher levels of OCBO, OCBI, and perfor-

mance. In other words, we expect the indirect effect to be

stronger under the condition of low employee moral dis-

engagement. Thus, to complete our theoretical model, we

predict moderated mediation as follows.

Hypothesis 4 Ethical leadership mediates the relation-

ship between the interactive effect of supervisor moral

disengagement and employee moral disengagement onto

employee (a) OCBO, (b) OCBI, and (c) performance, such

that the indirect effect is stronger when employee moral

disengagement is low versus high.

Method

Sample and Procedure

To test our theoretical model, we collected multi-source

field data from employee-supervisor dyads in a variety of

organizations including manufacturing, architecture, con-

struction, marketing, hospitality, education, finance, tech-

nology, and transportation. Business students from a

Midwestern university were given extra credit to recruit a

working adult (working 20 or more hours per week) to

participate in our study. Working professionals filled out a

survey and had a supervisor fill out another survey. This

data collection approach has been successfully used in past

research (Grant and Mayer 2009; Mawritz et al. 2012;

Mayer et al. 2012; Morgeson and Humphrey 2006).

Students recruited 466 working adults to participate. We

received responses from 202 focal employees, for a response

rate of 43 %, and 192 responses from supervisors, for a

response rate of 42 %. The final sample contained 172

matched dyads with complete information. The age of the

focal employees ranged from 18 to 64 years with an average

of 30 years (SD = 11.84) and an average organizational

tenure of 5.50 years (SD = 7.31). Focal employees were

49 % male and 79 % Caucasian, 8 % African American,

3 % Asian American, 4 % Native American, 2 % Hispanic,

and 4 % other. Over half of the employees were employed

full-time, 55.9 %, and 16.3 % reported working in a

supervisory capacity. The supervisor participants were

59.3 % male and 85 % Caucasian, 6 % African American,

1 % Asian American, 2 % Native American, 2 % Hispanic,

and 3 % other. The age of supervisors ranged from 20 to

73 years with an average of 42 years (SD = 11.43) and an

average organizational tenure of 11.66 years (SD = 9.13).

Measures

The focal employee survey contained measures of his/her

moral disengagement, supervisory ethical leadership, and

demographics. The supervisor survey contained measures

of his/her moral disengagement and rating of the focal

employee’s OCB and job performance. Unless otherwise

noted, all scales were rated using a 7-point Likert-type

scale (1 = strongly disagree to 7 = strongly agree).

Moral Disengagement

Both supervisors and employees rated their own level of moral

disengagement using the measure created by Moore et al.

(2012). Sample items include ‘‘Taking something without the

owner’s permission at work is ok as long as you’re just bor-

rowing it,’’ and ‘‘People shouldn’t be held accountable for

doing questionable things at work when they were just doing

what an authority figure told them to do’’ (a = 88; a = .93).

Ethical Leadership

Employees reported their perceptions of ethical leadership

using Brown et al. (2005) measure. Sample items include

‘‘My supervisor defines success not just by results but also the

way the results are obtained,’’ and ‘‘My supervisor asks ‘what

is the right thing to do?’ when making decisions’’ (a = 95).

Organizational Citizenship Behavior

We used Lee and Allen’s (2002) measure of OCBO and

OCBI, both of which are eight-item measures. Sample items

include ‘‘Thisemployeeattendsfunctionsthatare not required

but that help the organizational image’’ (OCBO), and ‘‘This

employee willingly gives his/her time to help others who have

work-related problems’’ (OCBI) (a = .93; a = .92).

Performance

Supervisors rated the focal employees’ job performance

using a six-item measure (Alper et al. 2000). Sample items

include ‘‘This employee meets or exceeds his/her

736 J. M. Bonner et al.

123

productivity requirements,’’ and ‘‘This employee is con-

cerned about the quality of his/her work’’ (a = .95).

Results

The means, standard deviations, reliabilities, and intercorre-

lations among the study variables are provided in Table 1.

To test the complete moderated-mediation model, we

used a method outlined by Preacher et al. (2007). Using a

moderated-mediation macro created by Preacher et al., we

ran the full model in SPSS and obtained mediator variable

and dependent variable models. In the mediator variable

model, the mediator (perceptions of ethical leadership) was

regressed onto the independent variable (supervisor moral

disengagement), moderator (employee moral

Table 1 Descriptive statistics, Reliability estimates, and Study variable intercorrelations

Variables Mean SD 1 2 3 4 5 6

1. Supervisor moral disengagement 1.82 1.03 .88

2. Employee moral disengagement 2.22 1.31 .34 **

.93

3. Perceptions of ethical leadership 5.50 1.13 -.20 **

-.29 **

.95

4. OCBO 5.57 1.10 -.22 **

-.24 **

.40 **

.93

5. OCBI 5.76 1.01 -.19 *

-.21 **

.32 **

.65 **

.92

6. Performance 6.12 1.15 -.23 **

-.21 **

.36 **

.65 **

.66 **

.95

N = 172. Cronbach’s alphas are shown in the diagonal

OCBO Organizational citizenship behavior-organization, OCBI Organizational citizenship behavior-individual

* Correlation is significant at p \ 0.05 level (2-tailed) ** Correlation is significant at p \ 0.01 level (2-tailed)

Table 2 Regression results for organizational citizenship behaviors

Mediator variable model Ethical leadership

B SE t

Constant 6.86 0.31 21.85

SMD -0.46 0.16 -2.97**

EMD -0.46 0.11 -4.03**

SMD 9 EMD 0.11 0.04 2.59*

Dependent variable model OCBO OCBI

B SE t B SE t

Constant 4.33 0.58 7.43** 4.75 0.56 8.54**

Perceptions of ethical Leadership 0.33 0.07 4.52** 0.25 0.07 3.56**

Supervisor moral disengagement -0.21 0.15 -1.36 -0.10 0.14 -0.71

Employee moral disengagement -0.14 0.11 -1.26 -0.07 0.11 -0.69

SMD 9 EMD 0.03 0.04 0.63 -0.00 0.04 -0.01

Conditional indirect effect

at M ± 1 SD

Indirect effect SE Z Indirect effect SE Z

Employee moral disengagement

-1 SD (0.92) -0.12 0.05 -2.40* -0.09 0.04 -2.20*

M (2.23) -0.07 0.03 -2.05* -0.05 0.03 -1.91

?1 SD (3.53) -0.02 0.03 -0.75 -0.02 0.02 -0.73

. N = 172

Unstandardized regression coefficients are reported

SMD Supervisor moral disengagement, EMD Employee moral disengagement, OCBO Organizational citizenship behavior-organization, OCBI

Organizational citizenship behavior-individual

* p B .05 level (2-tailed), ** p B .01 level (2-tailed)

Supervisor Moral Disengagement 737

123

disengagement), and the interaction of the independent

variable and the moderator (supervisor and employee

moral disengagement). In the dependent variable models,

the dependent variables (employee OCBO, employee

OCBI, and employee performance) were regressed onto the

independent variable (supervisor moral disengagement),

mediator (perceptions of ethical leadership), moderator

(employee moral disengagement), and the interaction of

the independent variable and the moderator (supervisor and

employee moral disengagement). We ran the dependent

variable model three separate times, once for OCBO,

OCBI, and job performance. The results of these analyses

are reported in Tables 2 and 3.

In support of Hypothesis 1, supervisor moral disen-

gagement is negatively related to employees’ perceptions

of ethical leadership (B = -0.46, p B .01). Hypothesis 2

predicted that employee moral disengagement will mod-

erate the relationship between supervisor moral disen-

gagement and perceptions of ethical leadership such that

the relationship is stronger when employee moral disen-

gagement is low versus high. We found support for

Hypothesis 2 (B = 0.11, p B .05).

In addition, we conducted a simple slope analysis and

found that the slope of perceptions of ethical leadership on

supervisor moral disengagement with low employee moral

disengagement (B = -0.36, t = -2.87, p B .01) was

negative and statistically significant (see Fig. 2). However,

the slope of perceptions of ethical leadership onto super-

visor moral disengagement with high employee moral

disengagement (B = -0.07, t = -0.77, ns) was not sta-

tistically significant. The plotted interaction thus confirms

our prediction that the relationship between supervisor

moral disengagement and perceptions of ethical leadership

has a stronger negative relationship when employee moral

disengagement is low versus high, lending support to

Hypothesis 2.

Hypothesis 3 predicted that perceptions of ethical

leadership will be positively related to employee

(a) OCBO, (b) OCBI, and (c) performance. We found

support that perceptions of ethical leadership positively

relate to employee OCBO (B = 0.33, p B .01) and OCBI

(B = 0.25, p B .01). In addition, we also found support for

the positive relationship between perceptions of ethical

leadership and employee performance (B = 0.31, p B .01).

These results provide support for Hypothesis 3.

Hypothesis 4 predicted that perceptions of ethical

leadership will mediate the interactive effect of supervisor

moral disengagement and employee moral disengagement

onto employee (a) OCBO, (b) OCBI, and (c) performance,

such that perceptions of ethical leadership serve as a

stronger indirect effect when employee moral disengage-

ment is low versus high. We tested this hypothesis by

Table 3 Regression Results for employee performance

Mediator variable model Ethical leadership

B SE T

Constant 6.86 0.31 21.85**

SMD -0.46 0.16 -2.97**

EMD -0.46 0.11 -4.03**

SMD 9 EMD 0.11 0.04 2.59*

Dependent variable model Performance

B SE T

Constant 4.98 0.62 8.06**

Perceptions of ethical Leadership 0.31 0.08 4.01**

Supervisor moral disengagement -0.24 0.16 -1.47

Employee moral disengagement -0.11 0.12 -0.94

SMD 9 EMD 0.02 0.04 0.54

Conditional indirect

effect at M ± 1 SD

Indirect effect SE Z

Employee moral disengagement

-1 SD (0.92) -0.11 0.05 -2.30*

M (2.23) -0.07 0.03 -1.98

?1 SD (3.53) -0.02 0.03 -0.74

N = 172

Unstandardized regression coefficients are reported

SMD Supervisor moral disengagement, EMD Employee moral

disengagement

* p B .05 level (2-tailed), ** p B .01 level (2-tailed)

4

4.5

5

5.5

6

6.5

Low SMD High SMD

P er

ce p

ti on

s of

E th

ic al

L ea

d er

sh ip

Low EMD

High EMD

Note. SMD = Supervisor moral disengagement, EMD = Employee moral disengagement

Fig. 2 Relationship between Supervisor Moral Disengagement and Ethical Leadership as Moderated by Employee Moral Disengagement

738 J. M. Bonner et al.

123

examining the conditional indirect effect of supervisor

moral disengagement onto OCBO, OCBI, and performance

through perceptions of ethical leadership at three levels of

employee moral disengagement (see Tables 2, 3). The

conditional indirect effects reveal that perceptions of eth-

ical leadership only serve as a statistically significant

mediator when employee moral disengagement is low (i.e.,

one standard deviation below the mean), and the indirect

effect becomes progressively weaker and in most cases

non-significant at higher levels of employee moral disen-

gagement (i.e., one standard deviation above the mean).

This provides support for Hypothesis 4.

Discussion

Theoretical Implications

The unfortunately frequent nature of organizational

unethical conduct makes it important to understand why

supervisors and employees may engage in such conduct.

Ethical leadership can be beneficial to organizations by

reducing unethical behavior (Brown and Treviño 2006;

Brown et al. 2005). Thus, an important reason for our

research was to investigate factors that influence ethical

leadership. We specifically set out to further understand

why supervisors may not be perceived as ethical leaders

and the subsequent effects on employees. Our theoretical

model and results provide evidence of the important role of

supervisor moral disengagement in predicting perceptions

of ethical leadership. We demonstrate that supervisors who

are high in moral disengagement do not fit the profile of

ethical leaders.

Interestingly, we also contribute to the literature by

demonstrating that an employee’s level of moral disen-

gagement influences his/her evaluation of the morally

disengaged supervisor as an ethical leader. To our knowl-

edge, we are one of the first to demonstrate that employees

low in moral disengagement are likely to view their mor-

ally disengaged supervisors more harshly by providing

lower ratings of ethical leadership. Conversely, employees

high in moral disengagement express less variability in

their reactions to a supervisor’s level of moral disengage-

ment, perhaps because they care less about a leader’s moral

disengagement and its effect on the leader’s subsequent

behaviors.

Our research provides evidence of the potentially dys-

functional nature of not only supervisor moral disengage-

ment but also employee moral disengagement. An

examination of the plotted interaction between supervisor

and employee moral disengagement on ethical leadership

demonstrates that employees high in moral disengagement

do not view their supervisors differently in terms of ethical

leadership, regardless of the supervisor’s level of moral

disengagement. It could be that morally disengaged

employees are not influenced by leaders who actually try to

consider the ethicality of their actions. Perhaps morally

disengaged employees are cynical about all leaders, leav-

ing them to view multiple types of supervisors as lower in

ethical leadership.

Importantly, our moderated-mediation model demon-

strates that perceptions of ethical leadership explain the

relationship between supervisor moral disengagement and

employee outcomes only when employee moral disen-

gagement is low (versus high). Indeed an examination of

our plotted interaction reveals that employees are more

likely to perceive their leaders as ethical when the super-

visor and employee are both low in moral disengagement.

This implies that perceptions of ethical leadership explain

high levels of employee (a) OCBO, (b) OCBI, and

(c) performance only when both supervisor and employee

moral disengagement are low. Conversely, the explanatory

role of perceptions of ethical leadership becomes weaker

and not statistically significant when the employee’s level

of moral disengagement becomes higher. The positive

influence of perceptions of ethical leadership on important

employee outcomes may be dependent on the condition

that supervisors and employees, alike, still experience

discomfort and condemnation in response to ethical chal-

lenges. Morally ‘‘engaged’’ supervisors and employees

have not removed necessary sanctions associated with their

own and others’ unethical conduct, making them more

likely to perhaps walk the talk. Employees low in moral

disengagement will pick up on their supervisor’s authen-

ticity and ethicality and will therefore perceive high ethical

leadership, resulting in the role modeling and reciprocation

of desirable outcomes.

Based on our moderated-mediation results, it seems that

perceptions of ethical leadership may fully mediate the

antecedent-to-outcome relationship shown in our theoreti-

cal model, as contingent on employee moral disengage-

ment. Such a fully mediated effect implies that supervisor

moral disengagement affects important employee behav-

iors (viz., OCB, performance) only when moral disen-

gagement generates perceptions regarding the leader’s

ethical ‘‘actions.’’ Ethical leadership, as a more visible

demonstration of leadership practices, may serve as a

behavioral indicator, or a representation of role modeling

that emanates from the leader’s moral disengagement (or

lack thereof). This implies that a leader’s moral personality

(whether ethical or unethical) needs to translate into spe-

cific ethical leadership practices before those practices

generate favorable or unfavorable employee outcomes.

Mayer et al. (2012) drew similar conclusions based on their

findings that ethical leadership explained the relationship

between leader moral identity and employee relationship

Supervisor Moral Disengagement 739

123

conflict and unethical behavior; a leader’s personality

needs to produce specific leader behaviors to spawn a role-

modeling effect that produces similar employee behaviors.

Practical Implications

Practically, organizations may want to consider that a

mismatch between supervisor and employee moral disen-

gagement could produce unfavorable organizational out-

comes, such as reduced job performance and OCB.

Employees who are low in moral disengagement still pay

attention to the ethicality of their own and others’ behav-

iors. They are more likely to feel guilty about, and to

impose sanctions on, their own unethical behaviors, as well

as those of their supervisors. In turn, the employee may

deem a morally disengaged supervisor as a low ethical

leader and thus may be less inclined to produce high job

performance and OCB. Furthermore, the mismatch

between low employee moral disengagement and high

supervisor moral disengagement may prove to be particu-

larly problematic, as it may also lead to bad feelings

between the employee and supervisor. The dissonance

created by this mismatch may influence negative feelings

between the ‘‘morally engaged’’ employee and the ‘‘mor-

ally disengaged’’ supervisor, thereby disturbing more than

just OCB and performance.

Our research is also practically important because it lends

credence to the need for ethics training in business schools,

as well as in all levels of the organization. Business students

and organizational employees can be trained to recognize

moral disengagement. Many people may be unaware of the

multiple ways of morally disengaging, such as blindly

obeying authority figures, using euphemistic language,

moral justification, advantageous comparison, diffusion of

responsibility, distorting consequences, dehumanization,

and attribution of blame (Bandura 1986, 1991). As

employees learn to recognize such mechanisms, they may be

better equipped to preserve their moral standards and to

avoid the slippery slope of moral disengagement. This is

especially important because to realize the full benefits of

ethical leadership, both supervisors and employees need to

remain morally ‘‘engaged’’ rather than ‘‘disengaged.’’

Limitations and Future Directions

Our research is not without limitations. First, our data are

cross sectional; therefore, we cannot draw causal conclusions.

However, our theoretical arguments lend support to the pro-

posed direction of our theoretical model. Additionally, com-

mon method variance could be a concern (Campbell and

Fiske 1959) because employee moral disengagement and

perceptions of ethical leadership were rated by the same

source at the same point in time. Yet, Chan (2009) argues it is

inaccurate to assume that all self-report data are plagued by

common method variance. In fact, extant research has found

trivial effects, or no effects, of common method variance in

self-report data (Chan 2009). We should also note that com-

mon method variance is less of a concern when statistically

significant interactions are present (Evans 1985). Importantly,

a strength of our research is that we do account for common

method variance by having supervisors and employees rate

their own moral disengagement. We also had the supervisor

rate the focal employees’ OCBs and job performance. Such

multi-source data are desirable for limiting same-source bias

concerns (Podsakoff et al. 2003).

Future research should investigate other conditions that

discourage ethical leadership. A bottom-line mentality

exists when people, or organizations, consider bottom-line

outcomes to be more important than anything else,

including upholding ethical standards (Greenbaum et al.

2012). It could be that supervisors who operate in bottom-

line mentality climates are less likely to demonstrate eth-

ical leadership. In such climates, leaders may not be

rewarded for having high ethical standards. Furthermore,

employees who work in very stressful environments may

not have the cognitive and emotional resources to effec-

tively communicate ethical leadership. Emotional exhaus-

tion occurs when employees no longer have the requisite

resources to perform well on the job (Hobfoll 1989).

Hence, emotionally exhausted supervisors may not have

the needed psychological resources to attend to the

demanding nature of being an ethical leader.

Future research would also benefit from examining

contexts that render ethical leadership ineffective in pro-

ducing desirable employee outcomes. Perhaps an ethical

leader, who is also a perfectionist, creates standards that are

simply too high for some employees. Employees may find

the demanding and meticulous nature of such a leader to be

too much, which could reduce employee motivation on the

job. An employee who is under a lot of stress may also

view an ethical leader’s standards as being an additional

source of unwanted tension. These employees may prefer a

leader with looser standards because a less ethical leader

might be okay with cutting corners to make the job easier.

Additionally, the tension caused by a mismatch between

employee and supervisor moral disengagement may affect

more than performance. Relational and task conflict may

increase due to such an effect. Furthermore, a mismatch

between employee-supervisor moral disengagement could

lower the psychological safety of the work group, thereby

undermining other important team outcomes. Future

research would benefit from investigating other outcomes

that occur because of the mismatch between employee-

supervisor moral disengagement.

740 J. M. Bonner et al.

123

Conclusion

Given the significance of (a) promoting ethical leadership

and (b) maintaining high employee organizational citi-

zenship behaviors and job performance, it is important to

understand predictors and moderators of such behaviors.

Our findings illustrate problems associated with high

supervisor moral disengagement, as it is negatively related

to perceptions of ethical leadership, especially when

employee moral disengagement is low. In order for orga-

nizations to reap the benefits of ethical leadership by

having high employee job performance and OCB, it

appears that low supervisor and employee moral disen-

gagement may be necessary. Morally ‘‘engaged’’ supervi-

sors and employees still recognize the danger of unethical

behavior and thus are more likely to display, and care

about, ethical leadership.

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