Unethical Pro-Organizational Behavior. The Role of Loyalty in Ethical Leadership

Bachelor Thesis, 2016

42 Pages, Grade: 1,7





3.1 The conceptualisation of a moral identity
3.2 The process of moralization

4.1 The Sanctity/Degradation moral foundation
4.2 The Loyalty/Betrayal moral foundation
4.3 The role of loyalty
4.3.1 Loyalty in leadership
4.3.2 Loyalty in organizations
4.3.3 Loyalty in teams
4.4 Pro-organizational behaviour

5.1. Definition of unethical pro-organizational behaviour
5.2. Antecedents of unethical pro-organizational behaviour
5.2.1 Organization
5.2.2 Leader
5.2.3 Team

6.1 Consequences for an organization
6.2 Consequences for a leader
6.3 Consequences for a team




List of figures

Figure 1: The process of moralization, referring to Fehr, Yam and Dang (2015)

Figure 2: Original Experiment "The Collaborative Roots of Corruption", Weisel & Shalvi (2015)

Figure 3: Control Treatments "Collaborative Roots of Corruption", Weisel & Shalvi (2015)

1. Introduction

Leaders act as mediators between an organization and its employees. They are agents of the organization and have a role model function for their followers. Since leaders play a significant role in motivating ethical behaviour of their subordinates, most scholars have focused on the consequences of leader behaviour on their followers. However, it is more complex and therefore ethical behaviour should be determined in a first step.

Imagine a situation in which someone detects a colleague hiding information about the environmental pollution of a new production process. Is it ethically right to collaborate and be loyal to the colleagues and protect the entire organization? Or is it ethically right to tell the truth to supervisors or the public to protect the environment and a larger society? What about a situation in which someone observes a co-worker manipulating sales numbers that are necessary to achieve group targets? Is it ethically right to collaborate and maintain silence? Or is it ethically right to tell the truth even though group objectives cannot be achieved by being honest? What, if jobs are related to achievement of objects and are possibly cut in case of not obtaining these targets? Imagine a situation in which someone withholds relevant information about a customer to other members of the organization who do not work on the same team. Is it ethically right to deprive these information in order to give an edge to the in-group? Or is it ethically right to share those details across all colleagues who hold a stake in order to improve the overall performance?

What is perceived as ethically right, wrong or desirable differs across cultures, organizations, individuals and situations. In contrast to the leader perspective of previous scholars and considering those differences Fehr, Yam and Dang took a follower-centric perspective on ethical leadership. Within their novel conceptualization of ethical leader perception moralized leader behaviour can entail value consistent behaviour (Fehr, et al., 2015), depending on what is morally relevant to an individual and the organizational culture. If ethical leader behaviour is subject to moral values of an individual or of the organization, it depends on either the organization and the leader’s behaviour or the moral identity of a follower and the leader’s behaviour, if this behaviour is perceived as ethically right or desirable (Fehr, et al., 2015).

Loyalty is one of the foundations which determine the perception of ethical behaviour. Loyalty to an in-group is highly important for humans, since individuals fundamentally strive to belong to social groups. Within an organization loyalty entails several benefits. These gains have effects on an individual level, for a work- group and the entire organization and will be discussed in this paper. Referring to Fehr and colleagues a loyal work-environment, created by the organization and its members, can entail pro-organizational behaviour. In other words, it could consequent behaviour that aims to benefit a larger group within the organization rather than the self (Fehr, et al., 2015). However, recent research found empirical evidence for behaviour that aims to benefit an organization but exceeds ethical norms and limitations (Umphress & Bingham, 2011). This behaviour is defined as “unethical pro-organizational behaviour”. Previous scandals (e.g. whistle blowing in the automobile industry in Germany) have highlighted the role of ethical leadership once again. Especially when the organization and its leader stress the role of loyalty, there might be a leeway for unethical conduct in the name of the company.

Due to the importance of loyalty and its several positive effects, the critical role of loyalty in ethical leadership and its influences on unethical pro-organizational behaviour will be investigated in this paper. Does a work environment that is characterized by loyalty through the organization and/or the leaders’ actions encourage unethical pro-organizational behaviour?

In this paper the role of the organization, the leader and the team will be taken into account when determining possible antecedents of unethical pro-organizational behaviour. Furthermore a recent empirical study about the origin of corruptive behaviour in teams (Weisel & Shalvi, 2015) will be considered. The findings of this study provide relevant information about corruptive behaviour of individuals in case of collaboration, which is common in a business context and therefore relevant for this paper.

Drawing from the possible antecedents of unethical pro-organizational behaviour, consequences for the organization, the leader and individuals who are collaborating will be derived. Furthermore practical implications for ethical leadership will be stated.

2. Ethical leadership in literature

Leaders are often expected to be exemplary in moral behaviour (Bass, 2008). They can raise moral consciousness of their followers (Bass & Steidlmeier, 1999; Zhu, et al., 2011) and inspire them to behave ethically by enacting reward and punishment systems (Treviño, et al., 2000). Ethical leadership can reduce misconduct and deviant behaviour (Mayer, et al., 2010; Stouten, et al., 2010; Mayer, et al., 2009). Empirical studies of Brown & Mitchell (2010) and Brown & Treviño (2006) have connected ethical leadership positively to pro-social behaviour of followers, whistle-blowing and other desirable outcomes. Furthermore, ethical leaders can raise employees’ confidence levels, self-efficiency, the leader-follower relationship quality (LMX), and followers’ organizational identification (Walumba, et al., 2011). As a result, they can have positive influence on followers’ job performance by increasing their task significance (Piccolo, et al., 2010).

Due to the effects of ethical behaviour and its increasing importance in organizations and the public, scholars have shifted from ethical behaviour as a component of wider leadership styles towards an ethical leadership style on itself (Fehr, et al., 2015). Therefore, Brown, Treviño and Harrison conceptualised ethical leadership as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making” (Brown, et al., 2005, p. 120). With regard to the latter an ethical leader is both a moral person and a moral manager, who should be an ethical example to subordinates, treats people fairly and manages morality actively.

Later Brown and Treviño proposed a limited range of general characteristics that are linked to ethical leadership (e.g. honesty, trustworthiness, and fairness) (Brown & Treviño, 2006). However, scholars claimed a lack of reasoning why some characteristics are considered as relevant for ethical leader perception and others being not relevant (e.g. loyalty to the in-group) (Fehr, et al., 2015). In contrast to ethical leadership being based on demonstration and promotion of a narrow set of ethically relevant characteristics, Epitropaki et al. described leadership as a social construct. In this construct individuals have different ideas about the characteristics most indicative of a leader (Epitropaki, et al., 2013; Fehr, et al., 2015). It depends on the followers’ personality (Keller, 1999), upbringings (Ayman-Nolley & Ayman, 2005) and cultural environment (House, et al., 2004) what leadership should include (Epitropaki & Martin, 2004) and which attributes followers prefer to see in their leaders (Fiedler, 1967). Referring to Keller, followers appear to leaders who are similar to themselves (Keller, 1999) and prototypical for the group (Van Knippenberg, 2011; Fehr, et al., 2015). Considering these variables, Fehr, Yam and Dang took a follower-centric perspective in ethical leadership perception and defined ethical leadership in a broader way as “the demonstration and promotion of behaviour that is positively moralized” (Fehr, et al., 2015, p. 184). Within this new definition of ethical leadership, it depends on the individual’s morality, organizational culture, given place and point of time, whether a leader’s behaviour is moralized by the follower and entails value consistent behaviour or not.

3. Morality and the construction of ethical leader perception

3.1 The conceptualisation of a moral identity

The moral identity of an individual and the organizations values determine the perception of others’ ethical conduct, for example what a follower perceives as ethical leader behaviour (Fehr, et al., 2015). To clarify the basis of morality and its influences on an individual’s behaviour, different approaches of a moral identity will be considered at first.

One approach of a moral identity is based on the social identity theory, in which one’s moral identity derives from the perceived membership to different relevant social groups (Turner & Oakes, 1986). This approach conceptualizes a moral identity as a construct of personal and social identities for self-definition. Hereby the personal identity focuses on personal features (e.g. idiosyncratic characteristics) whereas the social identities refer to memberships to social groups (e.g. political tendency, membership to organizations, gender, age, status) (Ashforth & Mael, 1989; Tajfel & Turner, 1979). Those social identities build an individual’s cognitive representation about the self in a social domain and guide processing of relevant information about the self in social situations (Markus, 1977) and influence an individuals morality additionally.

The second approach is a social-cognitive perspective of a moral identity. Drawing from this perspective, individuals have moral identities which are defined as self- schema that surround moral features, for instance honesty, care, or compassion (Mayer, et al., 2012; Aquino & Reed, 2002). It depends on the individual to which degree the moral identity is central to the overall self-definition and what is morally relevant to the context. If an individual’s moral identity has a high self-importance, this moral knowledge structure is central to the overall self-conception. As a result, the moral identity is easier available for processing information and regulating behaviour. It influences moral behaviour as a self-regulatory mechanism that is based on an individuals’ internalised definition of right and wrong (Aquino & Reed, 2002). In other words, individuals behave more ethical when their moral identity is central to self-conception. Aquino and Reed state that one’s moral identity consists of internalization and symbolization which is in line with an earlier theory of Erikson about the distinction of those two components (Erikson, 1964). According to Aquino and Reed (2002) internalization refers to the relevance of personal characteristics for self-definition. Individuals who score high in internalization of their moral identity are likely to avoid immoral behaviour since it would challenge their self-concept. Hereby an individual’s motivation to behave morally right arises from a basic desire for self-consistency (Blasi, 2004; Blasi, 1983). Symbolisation refers to the degree to which individuals express their morality to others through behaviour. It aims to be perceived as a moral person. Individuals who score high symbolisation are more likely to engage in sabotage in case of employees’ mistreatment by costumers (Skarlicki, et al., 2008). They express their loyalty to the organization by protection against customers. Skarlicki et al. proposed furthermore that a high level of internalisation oppress sabotage as a response due to its immorality and individuals’ desire to act in self-consistent ways.

Theorists concur that individuals differ in their degree of moral identity within their self-conception (e.g. Aquino & Reed, 2002; Blasi, 1984), which entails different engagement in moral conduct for maintaining self-consistency (Blasi, 1984). With regard to the latter an individual’s moral identity has great influence on moral behaviour (Hart & Ford, 1998), because individuals aim to behave in value- consistent ways. However, one’s moral identity is adjustable within the context.

Hence, it depends on the person, time, situation, and environment what is morally right or desirable in the distinct context.

Besides this personal differences in the construction of morality ( e.g.Lewis & Bates, 2011) scholars determined general differences in the construction of morality across cultural backgrounds (Schwartz, et al., 2012), socioeconomic backgrounds (Haidt, et al., 1993) and political orientations (Iyer, et al., 2012) additionally. Referring to the Modular Theory of Morality there are six moral foundations defined to date, which describe “intuitive ethics” across those differences (Haidt, 2012; Haidt, et al., 1993). These moral foundations are identified as the Care/Harm, Fairness/Cheating, Loyalty/Betrayal, Sanctity/Degradation, Authority/Subversion, and the Liberty/Oppression foundation. Each foundation includes an array of interrelated components, covering a constellation of values (Graham, et al., 2009; Knafo, et al., 2011), intuitions (Weaver, et al., 2014) and social practices (Graham, et al., 2013).

Building on the individual differences of one’s morality individuals differ in their endorsement of these moral foundations (Graham, et al., 2013) and its relevance for self-conception.

3.2 The process of moralization

Is a moral foundation relevant to an individual or an organization and a leader’s behaviour is consistent with this foundation a follower is likely to moralize the leader’s behaviour. As a result moralization is likely to motivate value-consistent behaviour, if the follower strives to maintain moral self-regard or a reputation as a moral person (Fehr, et al., 2015) (Figure 1).

Moralization describes the process through which an observer gives a leader’s actions moral relevance (Rozin, 1999; Rozin, et al., 1997). Since an individual’s attentions and actions are guided by values (Verplanken & Holland, 2002; Schwartz, 1992) moralization can entail followers’ value-consistent behaviour, if a leader’s behaviour is assessed as morally right or desirable. This value-consistent behaviour reflects a certain set of moral values (Maio, et al., 2009) and can be motivated via a self-focused, other-focused or an interactive pathway (Fehr, et al., 2015).

illustration not visible in this excerpt

Figure 1: The process of moralization, referring to Fehr, Yam and Dang (2015)

Moralization of leader’s behaviour via the self-focused pathway aims to maintain moral self-regard as a part of an individual’s moral identity. Individuals act in line with their moral standards and try to offset if they fall short of these norms (Miller & Effron, 2010). Moral self-regard is situational malleable (Monin, et al., 2009) and can vary in time. With reference to the value activation theory an individual’s moral behaviour standards can be strengthened or weakened by the context (Torelli & Kaikati, 2009). This cognitive activation of moral values can be influenced and motivated by symbols (e.g. Justice/ a scale for fairness) or a leader’s behaviour for instance. However, behaviour is likely to be value-consistent, if moral standards are internalized and already cognitively activated in this context (Higgins, 1996; Kruglanski, 1996).

The other-focused pathway aims to maintain a moral reputation to others. Due to the social learning theory individuals can adapt moral standards of a leader or an organization, by observing and figuring out how to maintain a moral reputation within the organization (Schaubroeck, et al., 2012). For example, whistle-blowing is supported by organizational norms and a leader’s behaviour is consistent with these fairness norms. A follower who scores high in symbolization is likely to behave value consistent by ranking fairness higher than loyalty, since those individuals show their morality through actions. Hence the follower is perceived as a moral person by others.

Depending on leader’s behaviour, the followers’ endorsement of each moral foundation, and the organizational environment, this value consistent behaviour is likely to benefit a wider or narrower group. In their conceptualization of ethical leader perception, Fehr, Yam and Dang differentiate between pro-social behaviour (directed to someone, independent of who the other person might be), pro- organizational behaviour (to benefit an in-group), pro-leader behaviour (to benefit the leader) and pro-individual behaviour (to benefit the self) (Fehr, et al., 2015).

Due to the topic of this paper pro-organizational behaviour will be focussed from now on. For the sake of completeness, both moral foundations that are likely to motivate pro-organizational behaviour will be considered.

However, loyalty has a great general meaning for all individuals, since individuals evolutionary strive to belong to social groups. Consequentially this moral foundation has a great importance for employees on different organizational levels as well. Is a loyal environment once created, it might provide a scope for unethical conduct if loyalty has a greater relevance than other moral foundations, for instance the Fairness/Cheating moral foundation. Therefore the Loyalty/Betrayal foundation will be centred in this paper.

4 Pro-organizational behaviour as a result of moralized leader behaviour

Referring to Fehr and colleagues’ pro-organizational behaviour is a consequence of moralized leader behaviour that is consistent with the Sanctity/Degradation or Loyalty/Betrayal moral foundation. If one of those foundations is relevant to a follower’s moral identity and a leader’s behaviour is consistent with it, a follower is likely to moralize this behaviour in order to maintain moral self-regard. If a leader’s behaviour is in line with the ethical norms of the organization, a follower is likely to maintain a positive moral reputation.

4.1 The Sanctity/Degradation moral foundation

The Sanctity/Degradation foundation is based on supporting physical and spiritual purity and closely connected with a feeling of disgust (Rozin, et al., 1999). It represents an ethic of divinity (Shweder, et al., 1987). Referring to Fehr and colleagues, leaders should epitomise values like purity, temperance, and cleanliness and avoid managing “dirty work”, for instance working with dirty objects (e.g. animal waste), or “engaging in certain sexual practices” like prostitution (Fehr, et al., 2015). If leader’s behaviour is consistent with the Sanctity/ Degradation moral foundation, it is likely to be moralized if either the follower or the organizational culture supports this foundation. Koleva et al. suggest that the Sanctity/Degradation foundation is closely connected with religiosity (Koleva, et al., 2012), which makes it important for religious organizations.


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Unethical Pro-Organizational Behavior. The Role of Loyalty in Ethical Leadership
University of Cologne
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Business Ethics, Ethic, Pro-organizational behavior, Unethical behavior, Pro-organizational unethical behavior, leadership, loyalty, Wirtschaftsethik, Ethik, Führungskräfte, Verhalten
Quote paper
Ilka Büker (Author), 2016, Unethical Pro-Organizational Behavior. The Role of Loyalty in Ethical Leadership, Munich, GRIN Verlag, https://www.grin.com/document/337490


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