{"id":147250,"date":"2021-07-19T11:59:02","date_gmt":"2021-07-19T03:59:02","guid":{"rendered":"https:\/\/www.fbe.hku.hk\/?p=147250&post_type=thought-leadership&preview_id=147250"},"modified":"2021-11-30T14:59:30","modified_gmt":"2021-11-30T06:59:30","slug":"serious-business-why-changes-in-the-perception-of-ethical-leadership-are-important-to-companies","status":"publish","type":"thought-leadership","link":"https:\/\/www.hkubs.hku.hk\/tc\/research\/thought-leadership\/research-impacts\/serious-business-why-changes-in-the-perception-of-ethical-leadership-are-important-to-companies\/","title":{"rendered":"Serious Business: Why changes in the perception of ethical leadership are important to companies"},"content":{"rendered":"

\"Ethical<\/em><\/p>\n

These days, the word \u201cethics\u201d is never far from news headlines. Ethics in politics, ethics in banking, technology, elections, artificial intelligence, COVID-19 vaccinations\u2026it\u2019s a long list. Ethics is an emotional and emotive topic. Naturally, people feel just as strongly about ethics in the workplace as they do in their personal lives: working under managers with \u201cgood\u201d or \u201cbad\u201d ethics can also provoke an emotional response. Three HKU Business School researchers from the Management and Strategy Area, Professor Thomas Ng, Dr Dennis Hsu and Ms Chang Su, recently explored this topic in detail.<\/em><\/p>\n

 <\/p>\n

A battle between pride and contempt<\/strong><\/p>\n

The three researchers theorised that fluctuations in how employees perceive changes in their managers\u2019 ethics can \u201csignal important changes in the nature of the employment relationship\u201d \u2013 specifically that these perceptual changes can affect their pride in or contempt for their company. \u201cPride\u201d and \u201ccontempt\u201d are strong words, but relevant when measuring ethical leadership.<\/p>\n

At its driest definition, ethical leadership is \u201cthe demonstration of normatively appropriate conduct and the promotion of such conduct among employees.\u201d One could also define it as \u201cputting people who will model \u2018good\u2019 conduct in their actions and workplace relationships into leadership positions.\u201d Ethical leaders do not just demonstrate this conduct, they use rewards and punishments to strengthen employees\u2019 moral compasses, act as role models, and generally try to steer workers away from \u201cunethical and counterproductive behaviour.\u201d<\/p>\n

Yet these definitions and labels neglect an important point \u2013 human beings are changeable, mutable creatures. Over time, leaders can shift their leadership techniques in response to changes in circumstances, training, personal experiences, and variations in workplace goals. Similarly, how employees perceive their leaders can also change \u2013 varying with their opinions on a leader\u2019s performance and with their own personal circumstances.<\/p>\n

What these HKU researchers wanted to discover is how<\/u> these perceptual changes affect employees\u2019 relationship with their places of work; specifically, whether the changes increase or decrease pride or contempt in the organization and how this further affects turnover and something called \u201cemployee voice.\u201d<\/p>\n

 <\/p>\n

Giving a voice to emotions <\/strong><\/p>\n

Essentially, employee voice is \u201cthe opportunity to express ideas, concerns and perspectives with authenticity and without fear of social or workplace consequences.\u201d Their study divides this into functional voice \u2013 which consists of constructive and supportive expressions that \u201chelp an organization to improve, innovate and thrive;\u201d and dysfunctional voice, which is defensive and destructive and \u201ccan damage morale and stifle adaptability.\u201d<\/p>\n

\"Employees<\/p>\n

Speaking up at work, even for positive reasons, is often seen as a risk. \u201cTo engage in voice, employees need a strong push,\u201d as the authors say. By linking pride and contempt to voice, the study aimed to test the effects of these emotions on employee behaviour \u2013 i.e. do they continue to speak up, or change the way they speak up? They also included turnover as the ultimate measurement of pride and contempt \u2013 i.e. do people want to keep working at their job or quit?<\/p>\n

If it sounds complicated, it\u2019s because it is. Effectively measuring emotions is tricky, as you are dealing with a spinning mass of ever-changing data points. Yet emotions are vital to determining perceptions of leaders and organizations.<\/p>\n

 <\/p>\n

Social exchange theory: part of the picture<\/strong><\/p>\n

To begin the experiment, the researchers looked to social exchange theory, which proposes that reciprocity is at the core of all relationships and the mutual exchange of valuable resources eventually produces \u201ca stable, trusting and satisfying social exchange characterized by strong emotional investments from both partners.\u201d At work, leaders and supervisors are seen as symbols of the organization; thus, employee relationships with these leaders are proxies for their relationships with the entire company. To oversimplify, a good relationship with your boss = a good relationship with the company, while a bad relationship with your boss = maybe it\u2019s time to look for a new job.<\/p>\n

They also decided to explore consistency, checking to see whether employees who witnessed consistent levels of ethical leadership (whether high or low) had different levels of pride and contempt to those who witnessed changes in ethical leadership. Again, over-simplistically, if you have an unethical boss but then they improve, your perception of them will improve.<\/p>\n

But nothing in academia is so simple. In fact, the authors developed no less than eight hypotheses (with further sub-hypotheses) to be tested in two studies. These hypotheses proposed specific changes to pride and contempt under different conditions of ethical leadership and proposed certain effects of pride and contempt on voice and turnover. For example, H1 stated \u201cWhen current EL (ethical leadership) is held constant, greater changes in EL perceptions are related to greater same-direction changes in pride over time;\u201d while H5 proposed that \u201cemployees who experience greater increases (decreases) in pride are less (more) likely to leave the organization than those who experience weaker increases (decreases).\u201d<\/p>\n

 <\/p>\n

Two studies are better than one<\/strong><\/p>\n

These questions were explored first in a 900-participant vignette experiment that used hypothetical work scenarios to examine the various emotional effects of changes in ethical leadership. This experiment was extended in a second study, lasting 14 months, that tested the effects of changes in ethical leadership perceptions in a field setting.<\/p>\n

Study 1 was a \u201c3×3 factorial design,\u201d which matched three baseline ethical leadership levels with three change conditions. The vignettes centred on a mythical manager named John who has different approaches to ethics at work \u2013 in the low baseline, John frequently tolerates violations of ethical standards and has a \u201cget it done by any means necessary\u201d attitude. The medium baseline sees John make ethical compromises and weighs up the costs and benefits before solving problems, while the high baseline imagines a saintly John doing the right thing and putting ethics first, always.<\/p>\n

The participants were first randomly assigned into the baseline categories and asked about their levels of pride, contempt and voice intentions (would they use a functional or dysfunctional voice?) if they were to work in John\u2019s organization. Then, they were put into one of three change conditions \u2013 which imagined John four months later, either improving his ethical stance, staying the same, or getting worse \u2013 and asked to report their levels again. All these scores were duly measured and tabulated, and after analysis, provided significant insights into which hypotheses might be supported.<\/p>\n

But, given the limitations of these fictional scenarios and questions about intentions rather than actions, the researchers needed to dive deeper and obtain more robust data. Study 2 involved 470 workers \u2013 university alumni, actually \u2013 in various industries who completed recurrent questionnaires measuring their perceptions of ethical leadership, emotions and voice over eight months, and measured turnover six months after that. After artfully using several statistical techniques to analyse the raw data, the researchers had their answers.<\/p>\n

Their first five hypotheses were supported \u2013 changes in ethical leadership perceptions positively predicted changes in pride, while changes in pride predicted changes in functional voice, and changes in pride negatively predicted turnover. They also determined that both consistency and change were important to employees\u2019 perceptions of ethical leadership; interestingly though, they found that changes in contempt did not predict turnover.<\/p>\n

 <\/p>\n

Ethics matter, now more than ever<\/strong><\/p>\n

So, after hundreds of surveys, gigabytes of analysis and years of work \u2013 what does all this research mean? And what lessons does it hold for employers and employees?<\/p>\n

First, the researchers have moved the field of leadership studies forwards. Taking a dynamic view of ethical leadership and incorporating an employee\u2019s emotional attachment to a company into research are new ideas \u2013 in the past, academics took a much more static approach.<\/p>\n

The disproving of one hypothesis also led to an interesting observation: \u201cincreases in pride predicted turnover, but not increases in contempt.\u201d This suggests that for employees, \u201c\u2018staying put\u2019 is easier than leaving.\u201d Positive feelings may help reinforce employees\u2019 status quo by \u201cgiving them a reason to stay,\u201d whereas leaving a job may require additional push factors \u2013 providing another potential direction for future research.<\/p>\n

As for the real-world implications\u2026well, their conclusion that \u201cthe consistent display of a high level of ethical leadership is especially valued\u201d should not surprise anyone. However, the observation that \u201ca manager who initially displays a high level of ethical leadership [but who] may not be able to maintain it over time might impact employees\u201d should raise a few eyebrows.<\/p>\n

These deductions indicate that businesses need to be alert to changes in their leaders\u2019 morals, understand how employees perceive these changes, and appreciate how all this affects a company. As the authors say, \u201cOnce ethical leadership starts to decline from a high level, employees may become increasingly sensitive to any further declines\u2026which signals an increasingly unfavourable future with the organization.\u201d Similarly, \u201cchanges in ethical leadership that are witnessed by employees can\u2026bring about significant changes in employees\u2019 feelings [and] lighten a previously dark career future.\u201d<\/p>\n

As for concrete steps, the authors suggest assessing employees\u2019 perceptions from time to time through open communication, surveys or focus groups, so companies can rapidly formulate strategic responses that promote growth and repair declines in ethical leadership.<\/p>\n

Towards the end of their paper, the researchers note that \u201cin a corporate world plagued by ethical scandals, managers are strongly and regularly encouraged to display a high level of ethical leadership.\u201d This somewhat understates the importance of such behaviour: without ethics, an organization may well become unmoored from its workforce and drift, rudderless, into blackness. Ethics is, truly, serious business.<\/p>\n

 <\/p>\n

About this Research<\/strong><\/span><\/p>\n

Ng, T. W., Wang, M., Hsu, D. Y., & Su, C. (2021). Changes in perceptions of ethical leadership: Effects on associative and dissociative outcomes.\u00a0<\/span>Journal of Applied Psychology<\/i>,\u00a0<\/span>106<\/i>(1), 92.<\/span><\/p>\n

Read the original article<\/a><\/p>\n

 <\/p>\n

Sources<\/strong><\/p>\n

Bazerman, M. (Sept.-Oct. 2020), A New Model for Ethical Leadership<\/em>, Harvard Business Review. https:\/\/hbr.org\/2020\/09\/a-new-model-for-ethical-leadership<\/a><\/span><\/p>\n

The Chartered Institute of Personnel and Development (2021). Employee Voice Factsheet. London, England, https:\/\/www.cipd.co.uk\/knowledge\/fundamentals\/relations\/communication\/voice-factsheet<\/a><\/span><\/p>\n

Eisenberger, R., Stinglhamber, F., Vandenberghe, C., Sucharski, I. L., & Rhoades, L. (2002). Perceived supervisor support: Contributions to perceived organizational support and employee retention. Journal of Applied Psychology, 87, <\/em>565\u2013573. http:\/\/dx.doi.org\/10.1037\/0021-9010 .87.3.565<\/a><\/span><\/p>\n

Foa, E. B., & Foa, U. G. (1976). Resource theory of social exchange. In J. W. Thibout, J. T. Spence, & R. C. Carson (Eds.), Contemporary topics in social psychology <\/em>(pp. 99\u2013131). Morristown, NJ: General Learning Press.<\/p>\n

Mayer, D. M., Kuenzi, M., Greenbaum, R. L., Bardes, M., & Salvador, R. (2009). How long does ethical leadership flow? Test of a trickle-down model. Organizational Behavior and Human Decision Processes, 108, <\/em>1\u201313. http:\/\/dx.doi.org\/10.1016\/j.obhdp.2008.04.002<\/a><\/span><\/p>\n

Sigurjonsson, T. O., Arnardottir, A. A., Vaiman, V., & Rikhardsson, P. (2015). Managers\u2019 view on ethics education in business schools: An empirical study. Journal of Business Ethics, 130, <\/em>1\u201313. http:\/\/dx.doi.org\/ 10.1007\/s10551-014-2202-z<\/p>\n

University of Saint Mary (2021). What Is Ethical Leadership?,<\/em> https:\/\/online.stmary.edu\/mba\/resources\/what-is-ethical-leadership<\/a><\/span><\/p>\n

Weiss, H. M., & Cropanzano, R. (1996). Affective events theory: A theoretical discussion of the structure, causes, and consequences of affective experiences at work. Research in Organizational Behavior, 18, <\/em>1\u201374.<\/p>\n

Western Governors University (2020), What is ethical leadership?<\/em>, https:\/\/www.wgu.edu\/blog\/what-is-ethical-leadership2001.html#close<\/a><\/span><\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"tags":[],"class_list":["post-147250","thought-leadership","type-thought-leadership","status-publish","hentry","leadership-topic-categories-research-impacts-tc","research-impact-topic-categories-management-and-strategy-tc"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/thought-leadership\/147250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/thought-leadership"}],"about":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/types\/thought-leadership"}],"version-history":[{"count":8,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/thought-leadership\/147250\/revisions"}],"predecessor-version":[{"id":158436,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/thought-leadership\/147250\/revisions\/158436"}],"wp:attachment":[{"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/media?parent=147250"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hkubs.hku.hk\/tc\/wp-json\/wp\/v2\/tags?post=147250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}