Paper

My Boss is Morally Disengaged: The Role of Ethical Leadership in Explaining the Interactive Effect of Supervisor and Employee Moral Disengagement on Employee Behaviors Author(s): Julena M. Bonner, Rebecca L. Greenbaum and David M. Mayer Source: Journal of Business Ethics, Vol. 137, No. 4, Special Issue on Context Influences on Workplace Ethics and Justice (September 2016), pp. 731-742 Published by: Springer Stable URL: https://www.jstor.org/stable/24755804 Accessed: 20-04-2020 00:26 UTC

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J Bus Ethics (2016) 137:731-742 J H J CrossMark DOI 10.1007/s 10551 -014-2366-6

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)

J. M. Bonner (E3) • R. L. Greenbaum Oklahoma State University, Stillwater, OK, USA e-mail: [email protected]

D. M. Mayer University of Michigan, Ann Arbor, USA

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 Trevino 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

Springer

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732 J. M. Bonner et al.

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

Fig. 1 Theoretical Model

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

1 The behavioral ethics literature uses the terms "moral" and "ethical" interchangeably (Tenbrunsel and Smith-Crowe 2008; Trevino et al. 2006), just as we do throughout our manuscript.

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

<0 Springer

Fig. 1 Theoretical Model

1 The behavioral ethics literature uses the terms "moral" and "ethical" interchangeably (Tenbrunsel and Smith-Crowe 2008; Trevino et al. 2006), just as we do throughout our manuscript.

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Supervisor Moral Disengagement 733

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 (Trevino

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 (Trevino 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 (Trevino et al. 2000; Tre vino and Nelson 2011), there are two components of ethical

leadership—the moral manager and moral person. The moral person component of ethical leadership illustrates

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734 J. M. Bonner et al.

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 (Trevino 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 destraction 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; Trevino 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

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Supervisor Moral Disengagement 735

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 Trevino 2006; Ralshoven 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 vino (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

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736 J. M. Bonner et al.

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 "This employee attends functions that are 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

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Supervisor Moral Disengagement 737

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

Variables Mean SD 1 2 3 4 5 6

1. Supervisor moral disengagement

2. Employee moral disengagement

3. Perceptions of ethical leadership

4. OCBO

5. OCBI

6. Performance

1.82 1.03 .88

2.22 1.31 .34"

5.50 1.13 -.20"

5.57 1.10 -.22" 5.76 1.01 -.19*

6.12 1.15 -.23"

.93

-.29" .95 -.24" .40" .93 -.21" .32" .65" -.21" .36" .65"

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)

.92

.66" .95

Variables Mean SD 1 2 3 4 5 6

1. Supervisor moral disengagement

2. Employee moral disengagement

3. Perceptions of ethical leadership

4. OCBO

5. OCBI

6. Performance

1.82 1.03 .88

2.22 1.31 .34"

5.50 1.13 -.20"

5.57 1.10 -.22" 5.76 1.01 -.19*

6.12 1.15 -.23"

.93

-.29" .95 -.24" .40" .93 -.21" .32" .65" -.21" .36" .65"

.92

.66" .95

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 x 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 x EMD 0.03 0.04 0.63 -0.00 0.04 -0.01

Conditional indirect effect Indirect effect SE Z Indirect effect SE Z at M ± 1 SD

Employee moral disengagement

-1 SD( 0.92) -0.12

M (2.23) -0.07

+1 SD (3.53) -0.02

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

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.

Springer

0.05

0.03

0.03

-2.40*

-2.05*

-0.75

-0.09

-0.05

-0.02

0.04

0.03

0.02

-2.20*

-1.91

-0.73

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

Mediator variable model Ethical leadership

SE

Constant

SMD

EMD

SMD x EMD

Dependent variable model OCBO

6.86

-0.46

-0.46

0.11

0.31

0.16

0.11

0.04

OCBI

SE SE

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 x EMD 0.03 0.04 0.63 -0.00 0.04 -0.01

Conditional indirect effect Indirect effect SE Z Indirect effect SE Z at M ± 1 SD

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

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738 J. M. Bonner et al.

Table 3 Regression Results for employee performance 6.5

Mediator variable model Ethical leadership

B SE

Constant

SMD

EMD

SMD x EMD

6.86

-0.46

-0.46

0.11

0.31

0.16

0.11

0.04

21.85**

-2.97**

-4.03**

2.59*

Dependent variable model Performance

SE

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 x EMD 0.02 0.04 0.54

Conditional indirect

effect at M ± 1 SD

Indirect effect SE

Employee moral disengagement

— 1 SD (0.92) -0.11

M (2.23) -0.07

+ 1 SD (3.53) -0.02

0.05

0.03

0.03

-2.30*

-1.98

-0.74

N= 172

Unstandardized regression coefficients are reported

SMD Supervisor moral disengagement, EMD Employee moral disengagement

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

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 < .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 < .05).

V 73 CQ

J

« 5.5

M

4.5 Low EMD

High EMD

Low SMD High SMD

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

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 < .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 < .01) and OCBI (B = 0.25, p < .01). In addition, we also found support for the positive relationship between perceptions of ethical leadership and employee performance (B = 0.31,/} < .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

Springer

Table 3 Regression Results for employee performance

Mediator variable model Ethical leadership

B SE T

Constant 6.86 0.31

SMD -0.46 0.16

EMD -0.46 0.11

SMD x EMD 0.11 0.04

Dependent variable model Performance

B SE

Constant

Perceptions of ethical Leadership

Supervisor moral disengagement

Employee moral disengagement SMD x EMD

Conditional indirect

effect at M ± 1 5/3

Employee moral disengagement

-15/3(0.92) -0.11

M (2.23) -0.07

+ 1 5/3 (3.53) -0.02

4.98 0.62 8.06**

0.31 0.08 4.01**

-0.24 0.16 -1.47

-0.11 0.12 -0.94

0.02 0.04 0.54

0.05 -2.30*

0.03 -1.98

0.03 -0.74

Indirect effect SE Z

6.5

5.5

4.5 Low EMD

High EMD

Low SMD High SMD

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

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Supervisor Moral Disengagement 739

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 Trevino 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

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740 J. M. Bonner et al.

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.

•£) Springer

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Supervisor Moral Disengagement 741

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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