The Influence of Ethical Leadership on Moral

The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.

By

Shazia Rehman CIIT/FA12-PMS-007/ISB PhD Thesis In Management Sciences

COMSATS Institute of Information Technology Islamabad - Pakistan

Spring, 2016

COMSATS Institute of Information Technology

The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.

A Thesis Presented to

COMSATS Institute of Information Technology, Islamabad In partial fulfillment of the requirement for the degree of

PhD (Management Sciences) By

Shazia Rehman CIIT/FA12-PMS-007/ISB

Spring, 2016

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The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees. A Post Graduate Thesis submitted to the Department of Management Sciences as partial fulfillment of the requirement for the award of Degree of Ph.D. in Management Sciences.

Name

Registration Number

Shazia Rehman

CIIT/FA12/PMS-007/ISB

Supervisor

Dr Uzma Javed Assistant Professor, Department of Management Sciences COMSATS Institute of Information Technology (CIIT) Islamabad Campus

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Certificate of Approval This is to certify that the research work presented in this thesis, entitled “The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.” was conducted by Shazia Rehman (PhD Scholar), under the supervision of Dr. Uzma Javed. No part of this thesis has been submitted anywhere else for any other degree. This thesis is submitted to the Department of Management Sciences, COMSATS Institute of Information Technology Islamabad Campus, in the partial fulfillment of the requirement for the degree of Doctor of Philosophy in the field of Management Sciences.

Student Name: Shazia Rehman

Signature: ____________________

Examination Committee:

Dr. Hafiz Mushtaq Ahmad (Associate Professor, Bahria University Islamabad) …………………………………. ………………………………….

Dr. Masood ul Hasan (Professor, Bahauddin Zakariya University, Multan) ………………………………………. ……………………………………….

Dr. Uzma Javed Supervsior Department of Management Sciences CIIT, Islamabad

Dr. Muhammad Tahir HoD, Department of Management Sciences CIIT, Islamabad

Dr. Farzand Ali Jan Chairperson, Management Sciences, CIIT

Prof. Dr. Khalid Riaz Dean Business Administration, CIIT

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Author’s Declaration I Shazia Rehman, CIIT/FA12- PMS- 007/ISB, hereby state that my PhD thesis titled “The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.” is my own work and has not been submitted previously by me for taking any degree from this University i.e. COMSATS Institute of Information Technology or anywhere else in the country/world. At any time if my statement is found to be incorrect even after I graduate the University has the right to withdraw my PhD degree.

Date:

Signature of the Student

Shazia Rehman CIIT/FA12- PMS- 007/ISB

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Plagiarism Undertaking I solemnly declare that research work presented in the thesis titled “The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.” is solely my research work with no significant contribution from any other person. Small contribution/help wherever taken has been duly acknowledged and that complete thesis has been written by me. I understand the zero tolerance policy of HEC and COMSATS Institute of Information Technology towards plagiarism. Therefore, I as an author of the above titled thesis declare that no portion of my thesis has been plagiarized and any material used as reference is properly referred/cited. I undertake if I am found guilty of any formal plagiarism in the above titled thesis even after award of PhD Degree, the University reserves the right to withdraw/revoke my PhD degree and that HEC and the University has the right to publish my name on the HEC/university website on which names of students are placed who submitted plagiarized thesis.

Date: __________________________ Shazia Rehman CIIT/FA12- PMS- 007/ISB

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Certificate It is certified that Shazia Rehman, CIIT/FA12- PMS- 007/ISB has carried out all the work related to this thesis under my supervision at the Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad campus and the work fulfills the requirement for award of PhD degree.

Date: Supervisor:

__________________ Dr Uzma Javed Assistant Professor

Head of Department:

______________________ Dr. Muhammad Tahir, Assistant Professor Management Sciences

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DEDICATION Dedicated to Rashid For giving me wings to fly…

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ACKNOWLEDGEMENTS First of all, I would like to acknowledge the support of my supervisor Dr. Uzma Javed throughout my thesis. Her feedbacks structured the thesis into a coherent document. Without her guidance, it would have been difficult to complete this study in time. Next, I want to acknowledge people in my field without whom I would have never been able to make it this far. I am indebted to Dr. Joanne B. Ciulla (University of Richmond, USA) who provided unconditional support, friendship, and put my research in perspective. Then I want to say thanks to Dr. Fiery Cushman (Harvard University, USA) who was the first one to give me feedback on my research idea and identified both the promises and problems of the study. Next, I want to acknowledge the support of Dr. Donelson R. Forsyth (University of Richmond, USA) who gave me a detailed feedback on my research methods and helped me develop my methods with more precision and care. Dr. David C. Bauman (Regis University, USA) has provided me with prompt feedbacks during the whole process of research. I am grateful to him for always finding time to talk to me. I also want to acknowledge the guidance Dr. Paul Price (California State University, USA) has given me about research methods. I also want to say thanks to Dr. Karen Paul (Florida State University, USA) for giving me feedback on the revised ethical leadership scale. Next, I want to say thanks to Society for Business Ethics, USA for recognizing and appreciating the potential of my research and providing me with the opportunity to present my work to the leading theorists and researchers in the field. Then, I want to acknowledge the guidance of Dr. Khlaid Riaz (COMSATS) and Dr. Inayat Khan (National Agricultural Research Center) during PhD program. Dr. Inayat provided me with his valuable suggestions on my research methods. In addition, I want to say thanks to Dr. Usman Ayub (COMSATS) who discussed in detail my research model and identified problematic issues. I also want to say thanks to Office of Research and Innovation (ORIC), COMSATS for granting me funds to carry out the empirical part of the research. I want to acknowledge the help provided to me in the process by Mr. Anwar Zaidi and Mr. Raja Asif of ORIC, in particular. Most importantly, I want to acknowledge the support of my husband Rashid Manzoor, who took all the burdens and problems on himself and allowed me time and freedom to ix

work on my research. I am eternally indebted to him. I also want to say thanks to my son Aeraj Rashid, who kept smile on my face in the most disappointing and discouraging times. Then, I want to acknowledge the constant sharing and encouragement of all my friends and colleagues (Quratulain Amber, Dr. Mohammadi Sabra, Sundas Khalid, Dr. Eleftheria Egel, Abid Saeed, Wali-ur-Rehman, Numair Ahmed, Dr. Keith Diener, Muhammad Ibrahim Khan, Mudassir Abbassi and Dr. Muhammad Aftab). Without all of you, it would have been very lonely. Last but not the least, I also want to acknowledge the support and unconditional love of my sisters Kiran Rehman, Sadaf Rehman, Nadia Rehman and Shagufta Rehman, with whom I share a special bond of friendship and love. Life has no meaning without all of you.

Shazia Rehman CIIT/ FA12-PMS-007/ISB

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ABSTRACT The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees. Promotion and inculcation of ethical decision making in the organization remains a prime concern in the fields of behavioral ethics and leadership. During the last decade, ethical leadership in the organization has been re-conceptualized in an effort to further this cause. Though, avid attention has been paid to ethical leadership style but the problems in the construct at the theoretical level has not been seen clearly, and due to this how it affects morality of employees in the organization was not studied closely. This research identified important theoretical and conceptual issues with ethical leadership construct and how it influences the moral judgment and moral identity-based moral motivation of followers in the organization. This study examined the specific ethical leadership construct, which is composed of two components: the moral person and the moral manager. Studying the construct as a whole and in parts, it was proposed that the moral person component leads employees to construct their personal moral judgment at higher levels of cognitive moral development model (CMD) while the moral manager component, and ethical leader leads employees to construct their moral judgment at low levels of CMD. In addition to explaining leader influences on employee’s CMD, it was also proposed that these components influence follower moral identity-based motivation. It was proposed that the moral person component crowds in moral identity (internalization) based moral motivation, while ethical leader and the moral manager component crowds in moral identity (symbolization) based moral motivation. Using quasi- experimental research design in educational institution setting

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(n = 176), it was partially supported that moral person component affects employees’ moral development positively at principled and conventional levels, as compared to moral managers and ethical leader who led employees to construct their morality at preconventional level. It was also supported that moral person crowds in moral motivation of employees, who are high on internalization dimension of moral identity in the absence

of rewards, while ethical leader and moral manager crowds in moral

motivation of employees who are high on symbolization dimension of moral identity, in the presence of rewards. The key implication of the study is that ethical leaders through moral management may affect both moral development and moral identity based moral motivation of employees negatively. Next, further implications of the findings and future research directions are discussed.

Key Words: Ethical Leadership, Moral Judgment, Moral Motivation, Moral Identity.

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TABLE OF CONTENTS 1. Introduction ............................................................................................... 1 1.1

Background of the Study ........................................................................ 4

1.1.1

Ethical Leadership and Ethical Decision Making in the Organization ………………………………………………………………………4

1.2

Theoretical Formulations ....................................................................... 7

1.3

Research Questions .............................................................................. 11

1.4

Research Objectives ............................................................................. 12

1.5

Research Context: Academic Institutions in Pakistan ........................... 12

1.6

Significance of the Study ..................................................................... 13

1.7

Organization of the Dissertation ........................................................... 14

2. Literature Review .................................................................................... 15 2.1

Leadership and Business Ethics ........................................................... 16

2.1.1

Transforming Leadership ............................................................... 17

2.1.2

Transformational Leadership ......................................................... 18

2.1.3

Charismatic Leadership ................................................................. 19

2.1.4

Authentic Leadership ..................................................................... 21

2.1.5

Servant Leadership ........................................................................ 22

2.1.6

Spiritual Leadership....................................................................... 23

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2.1.7

Responsible Leadership ................................................................. 25

2.1.8

Ethical Leadership ......................................................................... 26

2.1.8.1 The Transformational and Transactional Side of Ethical Leadership …………………………………………………………………...28 2.1.8.2 Outcomes of Ethical Leadership in the Organization ................. 29 2.1.8.3 Overlapping Theories with Ethical Leadership ........................... 29 2.1.8.4 Measurement of Ethical Leadership .......................................... 32 2.1.8.5 Strengths of Ethical Leadership Scale......................................... 32 2.1.8.6 Limitation of Ethical Leadership Scale ....................................... 33 2.2

Social Learning Theory-The Foundation of Ethical Leadership ............ 34

2.2.1

The External Reinforcement .......................................................... 37

2.2.2

The Role of Role Modeling in Learning ........................................ 39

2.2.3

Regulatory Processes of Behavior.................................................. 43

2.2.4

Self-Reinforcement........................................................................ 46

2.3

Leadership and Leadership Ethics ........................................................ 47

2.3.1

The Debate on Ethics and Effectiveness ........................................ 48

2.3.2

The Ethical Value of Externally Reinforced Behavior ................... 50

2.4

Conclusion .................................................................................... 55

3. Literature Review .................................................................................... 56

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3.1

Moral Judgment ................................................................................... 57

3.1.1

Understanding Kohlberg – Cognitive Moral Development Theory 60

3.1.2

Philosophical Influences on Kohlberg’s Theory............................. 64

3.1.3

Rest’s Neo-Kohlbergian Theory .................................................... 69

3.1.3.1 The Personal Interest Schema ..................................................... 69 3.1.3.2 The Maintaining Norms Schema ................................................ 70 3.1.3.3 The Post-Conventional Schema .................................................. 71 3.1.4

The Influences on Moral Reasoning in the Organization................ 72

3.1.5

Measurement of Moral Reasoning ................................................. 75

3.1.6

Criticism on Cognitive Moral Development .................................. 77

3.2

Moral Identity ...................................................................................... 81

3.2.1

The Different Perceptions of Moral Identity .................................. 82

3.2.1.1 The Character Perspective .......................................................... 82 3.2.1.2 Strengths of Character Perspective ............................................. 85 3.2.1.3 Limitations of Character Perspective .......................................... 86 3.2.2.1 The Social Cognitive Perspective ............................................... 86 3.2.2.2 Strengths of Social Cognitive Perspective .................................. 89 3.2.2.3 Limitations of Social Cognitive Perspective ............................... 90 3.2.3.1 The Social Identity Perspective .................................................. 90 xv

3.2.3.2 Strengths of Social Identity Perspective...................................... 91 3.2.3.3 Limitations of Social Identity Perspective .................................. 92 3.2.2

Moral Identity in the Organizational Context ................................. 92

3.2.3

Measurement of Moral Identity ..................................................... 93

3.2.3.1 Internalization and Symbolization: The Two Faces of Moral Identity …………………………………………………………………...93 3.2.3.2 Strength of Moral Identity Scale ................................................. 95 3.2.3.3 Limitations of Moral Identity Scale ............................................ 95 3.3

Moral Motivation ................................................................................. 96

3.3.1

Motivational Crowding Theory: Paying the Price .......................... 97

3.3.2

The Ways of Intrinsic Motivation ................................................ 102

3.4

Conclusion ......................................................................................... 106

4. Theoretical Framework ......................................................................... 108 4.1

Identified Gaps in the Literature ......................................................... 109

4.2

The Distal and Proximate Ethical leadership………….……………113

4.2.1

Problematic Issues in Ethical Leadership Construct ...................... 116

4.3

Ethical Leadership and Moral Judgment ............................................ 124

4.4

Ethical Leadership and Moral Motivation .......................................... 131

4.5

Conclusion ......................................................................................... 139

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5. Methodology ........................................................................................... 142 5.1

Ontology and Epistemology of Research............................................ 144

5.2

Population .......................................................................................... 145

5.2.1

Sample ........................................................................................ 146

5.2.2

Pilot Test ..................................................................................... 146

5.3

Experimental Design .......................................................................... 147

5.3.1

Pretesting Phase........................................................................... 148

5.3.2

Experiment .................................................................................. 149

5.3.3

Post-testing Phase ........................................................................ 150

5.4

Measures ............................................................................................ 151

5.4.1

Ethical Leadership Scale .............................................................. 151

5.4.1.1 Instrument Reliability & Validity ............................................. 152 5.4.2

Defining Issues Test .................................................................... 152

5.4.2.1 Instrument Reliability & Validity ............................................. 154 5.4.3

Self-Importance of Moral Identity Scale ...................................... 154

5.4.3.1 Instrument Reliability & Validity ............................................. 155 5.4.4

Balanced Inventory of Desirable Responding Scale ..................... 155

5.4.4.1 Instrument Reliability & Validity ............................................. 156 5.4.5

Moral Motivation ........................................................................ 156 xvii

5.4.6

Demographics ............................................................................. 156

5.4.7

Scenarios for Experimental Manipulation .................................... 157

5.5

Revision of Ethical Leadership Scale ................................................. 157

5.5.1

Qualitative Content Validation .................................................... 158

5.5.2

Establishment of Content Validity of the New Items ................... 158

5.5.3

Initial Draft of the Revised Scale ................................................. 159

5.5.4

Establishment of the Jury of Experts............................................ 159

5.5.5

Qualitative Review ...................................................................... 160

5.6

Conclusion ......................................................................................... 162

6. Results . ………………………………………………………………….. 163 6.1

Principal Component Analysis of Revised Ethical Leadership Scale .. 164

6.2

Descriptive Statistics .......................................................................... 167

6.2.1

Missing Value Analysis ............................................................... 167

6.2.2

Demography ................................................................................ 167

6.2.3

Normality .................................................................................... 168

6.2.4

Homoscedasticity ........................................................................ 170

6.2.5

Outliers........................................................................................ 170

6.2.6

Multicollinearity .......................................................................... 171

6.3

Reliability & Validity ......................................................................... 171 xviii

6.3.1

Reliability .................................................................................... 171

6.3.2

Validity ....................................................................................... 172

6.4

Manipulation Check ........................................................................... 177

6.5

Hypotheses Tests ............................................................................... 181

6.5.1

Moral Judgment Hypotheses (1, 1a & 1b) .................................... 181

6.5.1.1 Leadership Condition & P-level Moral Reasoning.................... 181 6.5.1.2 Leadership Condition & Stage23 Moral Reasoning .................. 183 6.5.1.3 Leadership Condition & Stage4 Moral Reasoning .................... 186 6.5.2

Moral Motivation Hypotheses (2, 2a, 2b, 2c, 2d, 2e, 2f, 2g & 2h) 187

6.5.3

The Effect of Demographic Variables on Moral Motivation and Moral

Judgment .................................................................................................. 196 6.5.4 6.6

The Effect of Covariates on Moral Motivation ............................ 198

Conclusion ......................................................................................... 200

7. Discussion and Conclusion .................................................................... 201 7.1

The Focus of the Study ...................................................................... 202

7.2

Discussion of Findings ....................................................................... 203

7.3

The Strengths of Study ....................................................................... 207

7.4

Theoretical Contributions ................................................................... 209

7.5

Practical Implications ......................................................................... 212

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7.6

Limitations and Future Recommendations ......................................... 214

7.7

Conclusion ......................................................................................... 217

References .................................................................................................. 219 Appendices ................................................................................................. 264

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LIST OF FIGURES Figure 1: Ethical Leadership Components: Moral Person & Moral Manager ......... 117 Figure 2:Research Model: The Effect of Ethical Leadership on Moral Judgment and Moral Identity based Moral Motivation in Organization ........................................ 141 Figure 3: Flow Chart of Data Collection Process ................................................... 150 Figure 4: Scree Plot (Revised ELS)........................................................................ 165 Figure 5: Principled Level Percentages of Participants in Four Conditions ............. 182 Figure 6: Stage23 Percentages of Participants in Four Conditions .......................... 184 Figure 7: Stage4 Percentages of Participants in Four Conditions ............................ 186 Figure 8: Moral Internalization and Moral Motivation ........................................... 194 Figure 9: Moral Symbolization & Moral Motivation .............................................. 195

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LIST OF TABLES Table 1: Summary of Normative Theories Covered in the Literature Review ........... 33 Table 2: Summary of Leader's Decisions in Four Conditions used as Experimental Manipulation ......................................................................................................... 149 Table 3: Adaptations to Ethical Leadership Scale................................................... 158 Table 4: Experts' Agreement on Added Items ........................................................ 161 Table 5: Final Items Added to Revised Ethical Leadership Scale ........................... 162 Table 6: KMO and Bartlett's Test (Revised ELS) ................................................... 164 Table 7: Rotated Factor Pattern (Revised ELS) ...................................................... 166 Table 8: Demographic Profile of Participants......................................................... 168 Table 9: Descriptive and Normality Statistics of Study Variables........................... 169 Table 10: Levene's Test of Equality of Error Variances.......................................... 170 Table 11: Covariance among Exogenous Variables ................................................ 173 Table 12: Correlations Among Study Variables ..................................................... 174 Table 13: Reliability and Validity of Study Variables ............................................ 175 Table 14: Kruskal Wallis Test to establish Equal Variance of Continuous Demographic Variables ............................................................................................................... 177 Table 15: ANOVA test to Compare Participants on Perception of Immediate Supervisor & Covariates.......................................................................................................... 178 Table 16: Mixed Between Within Subjects ANOVA Results for Leadership Conditions & Moral Judgment ................................................................................................. 184

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Table 17: Mean Moral Judgment Scores of Participants using Relevant Story (LSD Post hoc) ....................................................................................................................... 186 Table 18: Tests of Between-Subjects Effects/ Homogeneity of Regression Slopes . 188 Table 19: MANOVA Tests for Moral Identity Based Moral Motivation ............... 189 Table 20: Univariate Results of Independent Variables on Dependent Variables of Moral Motivation .................................................................................................. 190 Table 21: Multiple Comparisons of Leadership Conditions-Post Hoc Test (Tuckey HSD) ..................................................................................................................... 191 Table 22: Effect of Demographic Variables on Dependent Variables of Moral Motivation ............................................................................................................. 196 Table 23: MANCOVA Test to Adjust for the Effect of Covariates on Dependent Variables of Moral Motivation............................................................................... 198 Table 24: Univariate Results after Adjustment for the Effects of Covariates on Dependent Variables of Moral Motivation ............................................................. 199 Table 25: Summary of Findings ............................................................................ 206

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LIST OF ABBREVIATIONS CMD – Cognitive Moral Development SLT – Social Learning Theory EL – Ethical Leadership ELS – Ethical Leadership Scale MID – Moral Identity MID_SYM- Moral Identity (Symbolization) MID_INT – Moral Identity (Internalization) SDE – Self Deception Enhancement IM – Impression Management REL – Ethical Leadership (Supervisor) FEL – Ethical Leadership (Stories) MJI – Moral Judgment Interview DIT – Defining Issues Test

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Chapter 1 Introduction

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Ethics in business can be understood through dimensions of both personal integrity and social responsibility, where former focuses on personal decision-making and the latter focuses on the responsibility of organization towards society. But, in the end, it is an individual who makes decisions that reflect his/her personal integrity and influence the social responsibility of the organization (cf. Hartman, DesJardins, & MacDonald, 2014). The importance of macro level organizational issues like; leadership, code of ethics and organizational culture and their influences on the micro level organizational factors, particularly on the decision making and behavior of organizational members, has been recognized (Jones & Ryan, 1998). It is also being recognized that the environment in which organizations are operating is becoming more complex and global in nature, which consequentially poses novel and difficult ethical challenges to the members of the organization (e.g., Donaldson, 2003; George, 2010; Hannah, UhlBien, Avolio, & Cavarretta, 2009). Since long, the organizational life is rife with the cases of corruption, misuse of resources, and abuse of authority, of nepotism and of criminal negligence. But, now the moral problems have been multiplied due to the advanced technology, cross-national workforce and the laxity of legal framework both at national and international levels that makes it easier to take advantage of the vulnerable stakeholders. Today, business organizations are operating in complex global environment. The echo of organizational ethical misbehavior reaches far and wide. Ethical actions and behaviors of people in the organization can either build or destroy it. There are recent examples of organizational moral failure (e.g., Volkswagen scandal), where unethical behavior incurred great costs, both in terms of fortune and goodwill. As individuals make organizational decisions, then this inquiry takes us to the examination of ethical decision making of people, in the organization. Organizational leaders provide guidance and are in authoritative positions to command compliance and outline expectations for employees. It is being acknowledged that situational factors, particularly leadership influences behaviors of employees in the organization, and leaders through their own behaviors facilitate learning (Mayer, Aquino, Greenbaum, & Kuenzi, 2012; Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). Leaders also create the system of control that constantly signals and reminds employees about the rewards of conformity and punishments attached to violations of 2

organizational norms. Leaders have indirect control over the outcomes that influences employee well-being through their control of work strategies, goals, performance and behavioral appraisals, promotion, bonuses and other resources (Brown & Mitchell, 2010). It is inevitable for employees then to look towards their leaders in times of ethical problems (Trevino, 1986). Additionally, it has been found that employees act on the values of their leaders (Schminke, Wells, Peyreffite, & Sebora, 2002). Leaders drive organizations towards their goals. The responsibilities that are attached to leadership are increasing with time and includes not just financial but environmental and societal (Dickson, Smith, Grojean, & Ehrhart, 2001). These are the reasons why ethical leadership is being forwarded as one such leadership style, which meets the moral challenges and responsibilities of the organization (Brown, Treviño, & Harrison 2005; Kanungo & Mendonca, 2001). The research on ethical leadership has produced positive results, with outcomes like employees’ attitude and behaviors, perceived leader effectiveness, commitment with job, organizational citizenship behavior, group learning, satisfaction with leader and trust (Brown et al., 2005; De Hoogh & Den Hartog, 2008; De Hoogh & Den Hartog, 2009; Kalshoven, 2010; Kalshoven, Den Hartog, & De Hoogh, 2011b; Mayer et al., 2012; Mayer et al., 2009; Piccolo, Greenbaum, Hartog, & Folger, 2010; Walumbwa, Hartnell, & Misati, 2017). At this point, it is rather more important to explore the relationship between ethical leadership and ethical decision-making process in the organization. It is important to understand clearly the ethical leadership style and the effects it can lead to in the organization. Many a times a theory spreads like a wild fire without clarifying the underlying relationships with other variables. This study aims to clarify the construct of ethical leadership and to study its effects on employees’ morality. It is of high importance to bring forth both the prospects and problems of practicing ethical leadership in todays’ complex organizations. Doing so will lead to better leadership outcomes in terms of employees’ morality, and will build the ethical organizations. Thus, ethical leadership is the principal interest of this study, which serves as vantage point to examine individual morality of organizational members. The current chapter provides a brief overview of the study undertaken. Next section (1.1) looks into the background of the study. Under this section, it is discussed how

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ethical leadership may influence the ethical decision-making in the organization. Later, section (1.2) explains conceptual framework of the study, section (1.3) defines research objectives and section (1.4) presents research questions. Then the next section (1.5) discusses the research context, and the significance of the study is highlighted in section (1.6). The last section (1.7) provides the structure of the thesis.

1.1

Background of the Study

The organizational context is a learning environment where employees come to understand the norms of behaviors. Researchers (e.g., Brown & Treviño, 2006, 2013; Brown et al., 2005) argued that leaders should be the one who provides guidelines and set the tone of organizational morality. A variety of leadership styles like authentic, spiritual, transformational, servant is being theorized, and all of these leadership theories discuss ethics to some extent. Recently ethical leadership style has been forwarded to counter organizations’ declining morality. According to these researchers (cf. Brown et al., 2005; Treviño, Brown, & Hartman, 2003; Treviño, Hartman, & Brown, 2000), an ethical leader is both morally inspiring and at the same time, proactively seeks to control others’ morality. The two components of ethical leaders, thus follow two different paths to achieve ethical goals in the organization.

1.1.1 Ethical Leadership and Ethical Decision Making in the Organization Ethical leadership is “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). It is divided into two components: one is moral person and the other is moral manager. Moral person is about honesty, trustworthiness, fairness, principled decision making, care and concern about employees and society at larger level (Brown & Treviño, 2006). These leaders are approachable. They listen to employees’ problems and concerns (Brown & Mitchell, 2010) and are committed to personal morality. On the other hand, moral manager is about intentionally influencing employees' behavior through intentional and visible role modeling of ethical actions, and by employing organizational reward and punishment to make individuals

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accountable for their actions (Brown & Treviño, 2006). Hence, the perception of ethical leadership depends on the strength of both components (Treviño et al., 2003; Treviño et al., 2000). In the last decade, the field of leadership and especially ethical leadership has attracted much attention. Though the construct of transformational (Bass & Riggio, 2006), authentic (Luthans & Avolio, 2003) and spiritual (Fry, 2003) leadership also encompasses ethical characteristics but review by Brown and Treviño (2006) on ethical leadership established the distinction of ethical leadership in comparison with authentic, spiritual and transformational leadership, and supported it on the basis of “moral manager” component, which is maintained as one of the core aspects of ethical leadership. Authentic, spiritual, transformational, and ethical leadership are motivated altruistically, which reflects their genuine care and concern for people. All of these leaders are high integrity individuals who make ethical decisions and are perceived as role models for others (Brown & Treviño, 2006). These are the kind of leaders, followers would want to identify themselves with, idealize their values and vision, and have a desire to become like them. Except ethical leadership, none of the mentioned leadership style uses moral management, which works toward influencing followers by putting ethical standards at the heart of communication, and by rewarding and punishing ethical and unethical action (Brown & Treviño, 2006). The ‘transactional’ dimension of ethical leadership is the key difference between ethical leadership and other related constructs (Brown & Treviño, 2006). Therefore, ethical leadership clearly relates to but different from the other leadership theories. Brown and Treviño (2006) also proposed various relationships, including the positive influence of ethical leadership on employees’ moral reasoning. They proposed that leaders who are at high levels of moral reasoning would be recognized as ethical leaders, where higher levels of moral reasoning are synonymous with principled decision making, respect of other’s rights and fairness. The higher levels of moral reasoning thus make employees recognize ethical leaders. It is then proposed that these ethical leaders can influence the moral judgment of employees, leading to more ethical decision making (Brown & Treviño, 2006). It is being found (cf. Dukerich, Nichols, Elm, & Vollrath, 1990) that leader’s moral reasoning levels influences the moral

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reasoning levels of employees. Thus, ethical leaders are supposed to influence moral judgment of employees. It has been found that ethical leaders motivate their followers to value the goals and interests of group, over the individual goals (Bass & Steidlmeier, 1999; Gini, 1997; Kanungo & Mendonca, 1996). Ethical leadership engages both intellectual and emotional commitment on both sides of leader and follower (Zaleznik, 1990) and makes both of them “reciprocally co-responsible in the pursuit of a common enterprise” (Gini, 1997, p. 326). Social learning theory (Bandura, 1971a), which serves as a foundation of ethical leadership, asserts that power and status increases the probability to be looked at as the model. In the case of ethical leadership, the leader models normatively appropriate conduct. Thus, the possession of power and status in the organizations makes ethical leaders stand in the limelight from where they can be perceived as the model of ethical leadership. Social learning theory states that the role modeling process lets the other individual learn desirable and expected behavior, by observing the behaviors of role models (Bandura, 1971a). Individuals look for credible and attractive role models to converge their attention and observation, which then leads to emulation (Brown et al., 2005). In organizations, supervisors are both proximate and are in an authoritative position, which by default elevates them as ‘legitimate model’ for normative behavior (Mayer et al., 2012). More so, another important factor other than direct observation is the supervisor’s authority to reward and punish employees, and both can be used to modify employee behavior (Mayer et al., 2012). So, it can be expected that ethical leaders will influence moral judgment (which is based on moral reasoning) of employees. Research has also found that ethical leadership promotes the social exchange in the organization, which goes beyond economic exchange and promotes the relationship based on trust and reciprocity (Blau, 1964; Homans, 1961). Also, ethical leadership can motivate employees towards moral action, where moral motivation is sourced by moral identity (a kind of self-regulatory mechanism). It is important to emphasize here that this study takes the rational decision making approach. The traditional models of ethical decision making are predicated on the reason, cognition and deliberation, which is anchored in Kantian philosophy (1785/2012) (Tenbrunsel & Smith‐Crowe, 2008). The rational decision making

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paradigm encompasses not only ethical decision making, but decision making in general (Tenbrunsel & Smith‐Crowe, 2008). Also, moral behavior has been explored through the framework of intuition (Haidt, 2001). The cognitive approach follows the Rest (1986) four stage model of moral decision making. This model explicates that moral decision making begins with the awareness that a moral issue exists, it then leads towards the moral judgment, which leads to intentions to act in a moral way and consequentially to moral behavior. On the other hand, the research on moral judgment found the moderate link between moral judgment and moral action and there was a quest to find a variable that explains moral motivation, until moral identity was found and put forward as the fountainhead of moral motivation (Blasi, 1984; Damon, 1984; Damon & Hart, 1992). The dependent variables in the current study are moral judgment and moral motivation.

1.2

Theoretical Formulations

In his cognitive moral development theory, Kohlberg (1969a) provided one possible answer about how individuals come to reason in the face of moral dilemmas (Trevino, Weaver, & Reynolds, 2006). According to Kohlberg, at initial stages a child starts weighing the rules of good and bad in terms of punishment and reward or the physical authority one has over him/her. Each level has two stages and as individual’s moves up the ladder, the reasoning takes shape, and an individual start constructing his/her morality at higher levels where she/he starts identifying her/himself with groups: like family, organization, nation, etc. At the highest level, the moral reasoning of individuals becomes aligned with the universal principles of justice, human rights and human dignity (Kohlberg, 1976a). Research on moral judgment has found that the morality of the most individuals are developed at conventional levels, where morality is defined by group norms, laws, rules and expectations of significant others (Rest, Bebeau, & Thoma, 1999). Decades of research in moral psychology points towards the importance of cognitive moral development. Before Kohlberg’s research (1969), ethical behavior was perceived as the product of social norms and rules. Kohlberg (1969a) concluded that individuals have cognitive capacity that enables them to reason through moral issues

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and dilemmas, and after decades of experiments and studies, Kohlberg delineated cognitive moral development (CMD) construct, which focuses on the reasoning structures that people employ to weigh an action’s rightness in ethical terms, and on the development of these structures, through time and experiences of life (Jordan, Brown, Treviño, & Finkelstein, 2013). Kohlberg (1981b) explained that there are more than a few elements which contribute towards moral behavior, and the most important among them, is moral judgment, the determination of what is right and wrong. Later, Rest (1997, 1999) developed moral development schemas, based on Kohlberg’s moral reasoning stages. Mostly, research on the moral judgment has been measured through stages of moral development (e.g., Abdolmohammadi & Sultan, 2002; Bernardi et al., 2004; Goolsby & Hunt, 1992; Green & Weber, 1997; Greenberg, 2002; Kohlberg, 1984a) and CMD remains the most prevalent idea to study moral judgment in moral psychology (Hannah & Avolio, 2010). Multiple antecedents of moral behaviors are also being proposed over time, including moral reasoning (Kohlberg, 1969a), moral maturity (Walker & Pitts, 1998b), moral commitment (Colby & Damon, 1992), moral personality (Walker & Frimer, 2007), and moral characteristics (Blasi, 2005). Though the association of these characteristics with moral behavior is being repeatedly found to varying degrees, but none of these variables are able to fully account for the situational variability in moral behavior (Hardy & Carlo, 2005; Shao, Aquino, & Freeman, 2008). Many researchers (cf. Aquino & Freeman, 2009; Aquino & Reed II, 2002; Lapsley, 1996; Lapsley & Narvaez, 2004; Shao et al., 2008; Weaver, 2006) look towards social cognitive theory as a framework to overcome the situational limitation. This claim is sustained by demonstrating the usefulness of the moral identity conceptualizations rooted in social cognitive theory, as a predictor of moral outcomes (Aquino & Reed II, 2002; Aquino, Reed II, Thau, & Freeman, 2007; Detert, Treviño, & Sweitzer, 2008; Reed, Aquino, & Levy, 2007b; Reed II & Aquino, 2003; Reynolds & Ceranic, 2007). Also, it is being recognized that moral identity is an important variable in the context of business (Brown & Mitchell, 2010). Both the components of symbolization and internalization are important to the business ethics and explains how moral identity plays its role in the organization (Brown & Mitchell, 2010).

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Social cognitive theory explains that moral identity of a person is kept in memory as a complicated knowledge structure, which consists of moral goals, values, traits, and behavioral characters (Aquino & Freeman, 2009; Aquino, Reed, Stewart, & Shapiro, 2005b; Aquino & Reed II, 2002; Lapsley & Narvaez, 2004). Social cognitive theory sees self-concept as a network of multiple identity schemas from which a small number of identities, can be held at a particular time in consciousness (Carver & Scheier, 1998; Markus & Kunda, 1986; Minsky, 1988; Skitka, 2003), and how an identity influences behavior is defined by its accessibility in a particular situation. The perception of self as moral will only motivate when moral identity remains active in a working selfconcept (Skitka, 2003). Thus, moral identity is defined as cognitive structures or schema an individual hold about his/her moral traits and remains a powerful way to moral motivation due to the demands of self-consistency (Blasi, 1980, 1993, 2004c). Hence, a person who defines oneself through moral traits and characteristics will be motivated to behave morally, to keep the self and its realizations intact (Aquino, Freeman, Reed II, Lim, & Felps, 2009). While moral motivation is the “degree of commitment to taking the moral course of action, valuing moral values over other values, and taking personal responsibility for moral outcomes” (Narvaez, Bebeau, Thoma, & Rest, 1999, p. 101). Moral behaviors can be understood as “actions that demonstrate social responsiveness to the needs and interests of others” (Aquino et al., 2009, p. 124). This perspective of moral behavior is explained as defining factor of morality both by philosophers (e.g., Kant, 1959/1785; Singer, 2011) & psychologists (e.g., Eisenberg, 2000; Gilligan, 1982). It has been found that reinforcement has a very important role to play in effectiveness of modeling, as employees closely observe those who are in control of important resources and of rewards and punishments. Employees learn which behaviors will be punished and rewarded, which consequentially modifies their behaviors (Brown & Treviño, 2006). Ethical leaders also frequently communicate about ethics and emphasize the importance of ethical values. They work towards setting and following high and clear standards. They also employ rewards and punishments to shape followers’ ethical action. Reward system is one of the most important components of the ethical culture that maintains and strengthens ethical or unethical behavior in organizations (Trevino, Gibson, Weaver, & Toffler, 1999). Research consistently found 9

that influence of organizational rewards and punishments on ethical conduct of employees (Ashkanasy, Windsor, & Treviño, 2006; Hegarty & Sims, 1978; Tenbrunsel, 1998; Trevino, 1986; Trevino & Youngblood, 1990). Various studies found that rewarding unethical behavior increases that behavior (Ashkanasy et al., 2006; Hegarty & Sims, 1978; Tenbrunsel, 1998; Trevino & Youngblood, 1990). On the other hand, this relationship is marked by complexity, providing rewards or incentives for desired behavior may not increase this behavior, and the presence of such incentives may have a problematic relationship with the intrinsic value of such behavior (Trevino & Youngblood, 1990). “In social learning theory, reinforcement is considered facilitative rather than necessary condition because there are factors other than response consequences that can influence what people will attend to” (Bandura, 1971b, p. 10). When observer’s attention to modeled activities can be enhanced or increased through physical means, adding positive incentives does not add towards observational learning (Bandura, Crusec, & Menlove, 1966). More so, monetary rewards lead to dual effects: the standard direct price effect, which increases the effectiveness of desired behavior, and an indirect psychological effect. Sometimes, psychological effects work opposite to the price effect and may crowd out the desired behavior (Gneezy, Meier, & Rey-Biel, 2011). It is assumed that monetary incentives provided for the tasks changes individual’s perception about the behavior. The presence of incentives bring change in perception, which can lead to undesired effects on behavior. On the other side, incentives may have the favorable effects in the short run, but intrinsic motivation suffers in the long run. Also, on the removal of these incentives people become less willing to pursue the desired behavior (Gneezy et al., 2011). Then, another question of distinctiveness of leadership from ethics arises, particularly in the field of leadership ethics. There is a question that why entering the world of descriptive and behavioral ethics makes leader value neutral. It is also interesting to note that the local norms of behavior become the guide of leader’s morality. Contrary to the assumptions of behavioral ethics, leadership ethics emphasizes that no matter how important it is to describe the process of ethical decision making, the term ‘ethical’ remains prescriptive (Tenbrunsel & Smith‐Crowe, 2008). Rest (1986), Jones (1991) and Trevino et al. (2006) attempts to provide definition of ‘ethical’ remains

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inconclusive, emphasizing the consensus but brushing aside the one meaning of ‘ethical’ and though it remains “as understandable as it is unacceptable” (Tenbrunsel & Smith‐Crowe, 2008, p. 550). Ghoshal (2005) made it clear that field of management cannot be without human condition of having intentions and to make choices. Thus, value judgment cannot be separated from it (Ghoshal, 2005). Field of business ethics can turn to moral philosophy and theology for this purpose (Tenbrunsel & Smith‐ Crowe, 2008). This research looks towards the field of leadership ethics to emphasize the dichotomy of ethical leadership, which sets leader apart from ethics, and can lead to unpredictable outcomes. This research then focuses on these outcomes. This study serves an important purpose to bifurcate ethical leadership style and to bring out both its positive and negative effects to the forefront. Without doing so, ethical leadership will suffer from negligence, and the theory development particularly in the field of leadership and business ethics will suffer. This study also aims to build a finer ethical leadership scale to represent ethical leadership construct to measure its effects on employees’ moral judgment and moral motivation in a more accurate manner. Here, moral judgment is studied through moral reasoning and as higher levels of moral reasoning increases both the quality and occurrence of ethical decision-making; it becomes worthwhile to study the relationship between ethical leadership and subordinates’ moral reasoning. In addition to moral judgment, which has dominated the field of ethical decision-making, moral identity has emerged as a significant variable that leads to moral decision making. Hence the study of ethical leaders, how they are perceived by employees and the relationship between ethical leaders, moral reasoning, moral identity based moral motivation of subordinates can add towards our understanding of morality in the organization.

1.3

Research Questions

The research examines the following questions: 1. Does ethical leadership influence moral reasoning of employees? 2. Does ethical leadership influence the moral identity based moral motivation of employees?

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1.4

Research Objectives

This research has four major objectives. First, to use the constructs of ethical leadership and moral judgment, to hypothesize the relationships between ethical leadership and moral reasoning. Second, to use the constructs of ethical leadership, moral identity and moral motivation to hypothesize the relationship between ethical leadership and moral identity based moral motivation. Third, to examine the degree to which our theoretical relationships are supported by empirical evidence. Finally, to highlight the conflicts of the construct of ethical leadership, which is unquestioningly assumed as unproblematic.

1.5

Research Context: Academic Institutions in Pakistan

Education aims at growth or development, both in terms of intellect and morals. Both moral and psychological principles can support the school in the most important construction of all that is building a great and free character (Dewey, 1960, 1964). To ensure this, it is imperative to provide the knowledge of the direction and connections of the psychological development. Education is about facilitating and supplying those conditions, which enables the psychological functions to be developed to its fullest and to be freest (Dewey, 1964). UNESCO recently published the ‘Education for All Global Monitoring Report 2013/14’ and this report makes one realize that the aims and goals of the last century are not being realized in the 21st century. Particularly Pakistan is left behind in achievement of goals of universal education. This report is a revelation, which presents a dire situation, not just in our government schools but also in private schools. The quality of education, and the support and training provided to the teachers, remains absent or are in early stages. At the same time, gender-based discrimination and the trend of private tutoring continue to plague the relationship of child with education and school (EFA Global Monitoring Report, 2013-14). Few studies were conducted to study business ethics in Pakistan, which study the effects of gender, age, ethical training and education on moral development and the findings of these studies corresponds with Kohlberg’s CMD (Begum & Mujtaba, 2014; Mujtaba, Sikander, Akhtar, & Afza, 2012). In addition, the attitude of business

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schoolteachers towards teaching business ethics was also found to be positive (Ali, Grigore, & Ahmad, 2012). Also, the attitude of university students in Pakistan both males and females towards business ethics was also found to be positive (Khan, Gul, & Salam, 2015). It was also found that school leadership in Pakistan is effective but can build on more training (Niqab, Sharma, Kannan, & Ahmed, 2015). However, still there is a lot to be desired and in the context of educational institutions, there is an imminent need to study school leadership at close quarters. Doing so will give us an insight into the mechanism of the most important building block of our society. As moral judgment and moral motivation play important roles in building one’s moral character, then how the leadership provided in schools affects teachers, becomes an important context to study these relationships. How and if through a particular leadership style, the moral reasoning and moral motivation of teachers are supported, especially when teachers’ moral judgment has great influence on students’ character building in schools. For this reason, this research aims to study how ethical leadership style if practiced by school management will affect the moral judgment and moral motivation of teachers. By doing so, this research adds towards the understanding of ethical decision making in the organizations.

1.6

Significance of the Study

The significance of this research is manifold. Theoretically, the research answers important questions raised in the field of behavioral ethics by studying the influence of ethical leadership on ethical decision making in the organization. More so, it invites inquiry into the influence mechanism of ethical leadership through which it affects the moral reasoning and moral identity based moral motivation of employees, and highlights the possible contradictions among these relationships. Second, the research adds to the field of leadership ethics by pointing out the possible conflict in the construct of ethical leadership. The empirical significance of the study lies in the use of experimental design, as an answer to the call to study ethical decision making (Brown & Treviño, 2006). This methodological advancement may lead further to experimental research in the field of

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leadership and behavioral ethics. Including this, the study in this particular research context is also another contribution, which enables the close observation of modifications in employees’ attitudes and behavior, in the education sector. Hence, this study provides a better understanding of the attitudes and motivations of schoolteachers in Pakistan.

1.7

Organization of the Dissertation

This research is based on seven chapters. The current Chapter One of Introduction is already discussed. Chapter Two and Chapter Three lays the foundation of the theoretical framework and provides review of the relevant theories and constructs. Chapter Four outlines the relationships, presents hypotheses and explains the theoretical framework of the study, supported by theoretical and empirical work in the fields of behavioral ethics, moral psychology, and leadership ethics. Chapter Five provides details of the research methodology, which includes research design, sample, data collection procedure and measures used for the operationalization of the relevant constructs. Chapter Six analyzes data, tests hypotheses and presents results of the study. Chapter Seven discusses the results, and concludes the study with its limitation and strengths, while pointing towards future research directions.

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Chapter 2 Literature Review

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The literature review of this study is based on two chapters. In the first chapter, leadership theories are looked at and ethical leadership is discussed. In the second chapter, moral judgment and moral motivation are being focused. At the start of this chapter, the study throws light on few prominent leadership theories in business ethics. It then discusses ethical leadership through the lens of social science and later from leadership ethics perspective. This chapter is the stepping stone of the thesis, which initiates a dialogue between the different perspectives on leadership. “You must realise, I suppose,' I went on, ' that there must be as many types of individual as of society? Societies aren't made of sticks and stones, but of men whose individual characters, by turning the scale one way or another, determine the direction of the whole” (Plato, Republic).

2.1

Leadership and Business Ethics

Business ethics is defined as “a specialized study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations, and behavior” (Velasquez, 2006, p. 12). How then moral right and wrong is connoted through leadership, when achieving the organizational goals remains one of the main concerns of business ethics and leadership studies. Leaders have been recognized to have considerable influence on followers. For this reason, leadership influences in organization attracted attention of many scholars and researchers, particularly when the concern is ethical decision making of employees or followers. This focus has also resulted in transforming, transformational, charismatic, servant, spiritual, ethical, and authentic leadership (cf. Bass, 1991; Brown et al., 2005; Burns, 1978; Cameron, Dutton, & Quinn, 2003; Fry, 2003; Greenleaf, 1977; House, 1977; Luthans & Avolio, 2003). As this study views leadership from the perspective of business ethics, this discussion encompasses those leadership theories, which are based on value based leadership styles and are inspiring and ethical in nature. A few among these theories also overlaps with ethical leadership construct, which is one of the main variables under study. In this section, each theory is discussed briefly, in order to build the discussion of ethical leadership.

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2.1.1 Transforming Leadership The term transforming leadership was introduced by Burns (1978) (later transformed into transformational leadership by Bass (1985)). Burns (1978) conceptualizations of transforming leaders include the appeal to the moral values of followers to provide them with an awareness about ethical issues and to help them see beyond their self-interests. According to Burns (1978) leadership is a relation between follower and leader, which is morally uplifting for both. He sees leadership as a catalyst of change and which shares the common goals, values and purpose with followers. Transforming leader empowers people, who then work for their own betterment and improve their lives (Ciulla, 2014a). Transforming leaders value freedom, equality and community (Burns, 1978). Transforming theory is prescriptive in nature and emphasizes the values of morally good leadership (Burns, 2003). Transforming theory has built on the need theory of Maslow (1943), work on value development by Rokeach (1973), and moral development theories by Kohlberg (1969b), Piaget (1932a), Erikson (1964) and Adler (1927). Transforming leadership theory argues that leader ought to be at higher levels of moral development as compared to their followers. Leader should use the conflict in the value system of individuals and should elevate their consciousness in the process (Burns, 1978). Transforming leaders hold strong moral values and lift others towards their values by inducing conflict, which helps them towards reformation of their values, and goals or wants (Burns, 1978). “Leadership begat leadership and hardly recognized its offspring” (Burns, 1978, p. 424). There are two questions, which shape the transforming leadership theory. The first is about the morality of the means and the morality of ends, and the other is about the leader’s private and public morality (Ciulla, 2014a). Burns (1998) distinguishes between transactional and transforming leaders. Transactional values deal with the values of means called ‘modal values’ like, responsibility, fairness, honesty and promise keeping (Burns, 1998). Transactional values help both leaders and followers achieve their goals by supporting lower level wants and needs, which then lead towards high level wants (Burns, 1998). On the other hand, the concern of transforming leaders are values like liberty, justice and equality. Transforming leaders transform their

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followers into leaders by taking them to various stages of moral development and moving them towards higher needs (Burns, 1998). What is significant about transforming theory is that it promotes the idea that leader should develop his/her followers and grow them as leaders. It also espouses that followers may also influence and develop their leader’s morality (Ciulla, 2014a). However, there is also a concern that such leaders only establish the moral authority of leaders and not of followers (Ford & Harding, 2015).

2.1.2 Transformational Leadership There has been extensive research in the last thirty years focusing on transformational and transactional leadership theories (Kalshoven, 2010). Bass’s theory of transformational leadership has led the empirical research in business ethics (Bass & Stogdill, 1990). Transformational leadership is exercised when leader increases and promotes the followers’ or employees’ interest. He/she makes employees understand and accept group goals and purposes, and emphasizes the value of achieving group goals by putting aside one’s self-interest. There are certain ways that transformational leaders employ to get to these outcomes: charisma, inspiration, taking care of employees’ emotional need and intellectual stimulation. Charisma remains central to transformational leadership (Bass, 1991). Thus, Bass (1985) operationalized transformational leadership in four dimensions of charisma, inspirational motivation, intellectual stimulation, and individualized consideration. Charisma and inspirational motivation are believed to be a necessary element of transformational leadership and forms ‘charismatic aspect’ (Bass, 1985). Transformational leadership can be contrasted with transactional leadership in terms of the difference of leadership style (Kalshoven, 2010). It is argued that transformational leadership entails a process of ethical influence but the same is not true for transactional leadership (Kanungo & Mendonca, 1996). Transactional leadership achieves performance outcomes through recognition, rewards and advancement of employees, who work according to leader’s performance plans and punishing those who do not meet these standards (Bass, 1991). Transformational leadership, on the other hand is about employing idealized influence (charisma), intellectual stimulation, individual

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consideration, and inspirational motivation to lead followers towards performance goals (Bass, 1991). Transformational leaders are perceived as effective leaders in comparison with transactional leaders (Bass, 1991). Ciulla (1995) identified that having values of transformational leadership is not same as acting upon them and remains problematic and charisma can be a quality of both moral or evil transformational leaders. Later, Bass and Steidlmeier (1999) differentiated between authentic transformational leaders (ethical, genuine, use of power to attain moral and social goals or end-values) and pseudo-transformational leaders (selfinterested, use power to coerce, lacks morality). The authors based their distinction of authentic transformational leaders on the moral values of the leader (e.g., honesty, fairness), social motivation of leader and avoidance of manipulation through coercion and control. Contrarily, pseudo transformational leaders are selfish and are motivated politically (Brown & Treviño, 2006). Bass and Steidlmeier (1999) also outlined and asserted the moral qualities transformational leaders must have. It has also been identified that transformational leadership theory builds on transforming theory, but it does not reflect Burn’s concerns of development of followers through conflict and dialogue about the values, nor does it consider normative values (end and modal values) (Ciulla, 2014a). Also transformational leadership theory is being criticized as it has assumption that being altruistic makes a leader morally successful (cf. Price, 2003). Recently, it was echoed that transformational leaders are only concerned with group outcomes and not individual outcomes (Li, Mitchell, & Boyle, 2016). While, Alvesson and Kärreman (2016) criticized transformational leadership as the work of organizational ideology.

2.1.3 Charismatic Leadership Charisma is being used in few leadership theories and has evolved since (Avolio & Yammarino, 2013; Bass, 1985; Bennis & Nanus, 1985; Berlew, 1974; Etzioni, 1961; House, 1977; Milosevic & Bass, 2014; Parry & Kempster, 2013). Charismatic leadership is defined as having ethical connotations, “ followers with a clear sense of purpose that is energizing, is a role model of ethical conduct and builds identification with the leader and his or her articulated vision” (Avolio, Bass, & Jung, 1999, p. 444).

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The word “Charisma” is Greek, which means gift (Shamir, House, & Arthur, 1993). It is used in Christian Bible to explain prophecy, ruling, wisdom, teaching and healing as a charismatic gift (Shamir et al., 1993). Later charisma is used to elevate the religious organization such as the church and church members were assigned roles depending on their particular gift and not by the rules created by men (Shamir et al., 1993). This understanding of charisma is used by Max Weber to form a foundation of legitimacy (Conger & Kanungo, 1987). He merged it with the concept of an authority that is derived not from rules, traditions and positions, but through a “devotion to the specific and exceptional sanctity, heroism, or exemplary character of an individual person, and of the normative patterns or order revealed or ordained by him” (Eisenstadt, 1968, p. 68). Weber also attached radical and non-normative attributes to charismatic authority while stating; “its attitude is revolutionary and transvalues everything; it makes a sovereign break with all traditional and rational norms” (Eisenstadt, 1968, p. 24). But Weber also conceptualized charisma with general qualities, “[they] comprise especially magical abilities, revelations of heroism, power of the mind and speech” (Etzioni, 1961, p. 12). This leads to the celebration of charismatic leaders in management (Howell & Avolio, 1992). “By turning around ailing corporations, revitalizing aging bureaucracies, or launching new enterprises, these leaders are viewed as the magic elixir to cure organizational woes and change the course of organizational events” (Howell & Avolio, 1992, p. 43). Though charismatic leaders are effective, but they may be unethical. Therefore, there is a distinction between ethical charismatic leader and unethical charismatic leader (Howell & Avolio, 1992), where the former uses charisma for social good and the latter for the personal gains (Howell, 1988). Howell and Avolio (1992) distinguished between personalized and socialized charismatic leadership, and use of power remains the sole distinction between personalized (low concern for moral use of power, self-aggrandizing, non-egalitarian and exploitative)

and socialized (moral

exercise of power, collectively oriented, egalitarian and non-exploitative) charismatic leaders (House & Howell, 1992; Howell, 1988; Howell & Shamir, 2005). The differentiation between subtypes of transformational and charismatic leadership is based on social and self-oriented use of power, which relates power to the morality of

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the means and the morality of the ends (Kalshoven, 2010). Still, Antonakis, Bastardoz, Jacquart, & Shamir (2016) thought of charisma as misunderstood phenomenon in social research and Raelin (2015) argued for the myths attached to charismatic leadership.

2.1.4 Authentic Leadership “Individuals who are deeply aware of how they think and behave and are perceived by others as being aware of their own and other’s values/ moral perspective, knowledge, and strengths, aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient, and high on moral character” are authentic leaders (Avolio, Luthans, & Walumbwa, 2004, p. 4). Luthans and Avolio (2003) for example, describe authentic leaders as moral, true to themselves, irrepressible, and optimist. Authentic leadership theory branched out of authentic transformational leadership, management literature and positive psychology (Gardner, Cogliser, Davis, & Dickens, 2011). ‘Authentic’ is derived from a Greek word, ‘authento’, “ to have full power” (Trilling, 1972). Authentic leadership theory has been defined in a number of ways (Gardner et al., 2011). One definition is “a process that draws from both positive psychological capacities and a highly developed organizational context, which result in both greater self-awareness and self-regulated positive behaviors on the part of leaders and associates, fostering positive self-development” (Luthans & Avolio, 2003). This definition also evolved, including moral elements like promotion of positive ethical climate and positive psychological capacities, which will lead to greater insight into self, balanced information processing, internalized moral orientation, transparency in relations, and through which a leader can facilitate the positive self-development of employees. (Walumbwa, Avolio, Gardner, Wernsing, & Peterson, 2008). Luthans and Avolio (2003, p. 4) identified authentic leadership as encompassing, which “could incorporate charismatic, transformational, integrity and/ or ethical leadership”, arguing at the same time the distinction of each construct. The core values of authentic leadership are self-awareness, openness and consistency. Authentic leaders are motivated by positive end values, are considerate of others and have positive attributes like hope, resilience and optimism (Brown & Treviño, 2006). Also, authentic leaders have sound judgment and can see through ethically ambiguous situations, reflect on

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from various perspectives and come to decisions, which are based on their moral values (Brown & Treviño, 2006). Literature review by Kernis and Goldman (2006) revealed that there are four main themes of authentic leadership, “Authentic functioning of people involves (1) self-understanding (2) Openness to objectively recognize their ontological realities ( e.g., evaluating their desirable and undesirable self-aspects) (3) actions, and (4) orientation towards interpersonal relationships” (p. 284). These four main themes also reflect four basic components of authentic leadership which are awareness, unbiased processing, behavior and relational orientation (Kernis, 2003; Kernis & Goldman, 2006). The focus of authentic leadership is leader’s self-knowledge and transparency, which makes leader an effective and ethical leader (Ciulla, 2014a). True authentic leaders lead while being true to their core values, beliefs, strengths and weaknesses (Gardner et al., 2011). But, this focus also reveals that authentic leaders are more concerned with their own selves (Berkovich, 2014) and that authentic leaders may not necessarily be perceived as moral by followers (Sendjaya, Pekerti, Härtel, Hirst, & Butarbutar, 2016).

2.1.5 Servant Leadership Greenleaf (2002) in his book, ‘Servant Leader: A Journey into the Legitimate Power and Greatness’ sketched his idea of leaders. According to him, servant leader seeks to serve their followers. People choose to come with their freewill to this leader, as they trust him/her. Also, similar to transforming leader, the servant leader develops his/her followers (Greenleaf, 2002). Greenleaf (1977, 2002) espoused that servant leadership starts and ends with serving people and attract followership in the process based on trust. Servant leadership is moral and inspirational, and Graham (1991) argued that his model goes further than transformational leadership by not only influencing the followers’ intellectual and skill development, but also their moral development. The foci of servant leadership are similar to moving management theory, which views organizational members as “pro-organizational, self-actualizing and trustworthy” (Van Dierendonck, 2011, p. 2) and pays attention to the personal growth of followers or employees (Van Dierendonck, 2011). Greenleaf’s (1977) servant leadership, then becomes relevant to our times, combining transformational leadership with social

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responsibility (Graham, 1991) and in contrast to other leadership theories, it prioritizes the follower’s needs (Patterson, 2003). Servant leadership shifts the focus of influence from leadership to the notion of service in the relationship of leader and follower (Van Dierendonck, 2011). Robert Greenleaf (1904-1990) first gave the idea of servant leadership, in his book ‘The Servant as Leader’ in 1970. Later, he stated that: “The Servant-Leader is servant first. . . . It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. . . . The best test, and difficult to administer is this: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, and more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit, or at least not further be harmed?” (1977, p. 7). In comparison to other leadership styles that works for organizational development and well-being, servant leadership remained focused on serving followers (Greenleaf, 1977), as also suggested by Stone, Russell, and Patterson (2004). Servant leader plays the role of steward, which unite the organization through trust (Reinke, 2004). Servant leaders do not follow self-interest and are motivated by the need to serve (Luthans & Avolio, 2003). Greenleaf (2002) identified the need to serve as the foundation of good leadership, and attached this need to commitment towards employees’ growth individually, continuation of the organization and understanding of the responsibility towards community (Reinke, 2004). Having said that, it is important to recognize that servant leadership care for the ones served and deny oneself in that pursuit (VanMeter, Chonko, Grisaffe, & Goad, 2016).

2.1.6 Spiritual Leadership Spiritual leadership is forwarded as a new solution towards organizational development and transformation, empowered with intrinsic motivation (Fry, 2005; Fry & Whittington, 2005a, 2005b). Spiritual leadership is defined as “ the values, attitudes, and behaviors that are necessary to intrinsically motivate one’s self and others so that they have a sense of spiritual survival through calling and membership” (Fry, 2003, p. 711), and “is inclusive of the religious and ethics and values-based approaches to

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leadership” (Fry, 2003, p. 693). It is also being described as “occurring when a person in a leadership position embodies spiritual values such as integrity, honesty, and humility, creating the self as an example of someone who can be trusted, relied upon, and admired. Spiritual leadership is also demonstrated through behavior, whether individual reflective practice or is the ethical, compassionate, and respectful treatment of others” (Reave, 2005, p. 663). The leader should provide satisfaction for the spiritual needs of followers through universally accepted spiritual values of “humility, charity and veracity” (Fry, 2003, p. 696). The measurement of spiritual leadership (Fry, Vitucci, & Cedillo, 2005) is based on three dimensions: (a) vision (organizations’ vision and identity) (b) hope/faith (that vision is or will be realized) (c) altruistic love (as a result of caring work environment); and develops through spiritual practice, which is essential for inspiration and insight; and have positive influences on (1) faith or hope in an overarching vision of, to be of service to important stakeholders and (2) worth of altruistic love (Fry, 2008). The goal of spiritual leadership is to save both followers’ and leaders’ spiritually at the same time leading them to organizational commitment and productivity (Fry, 2003). It can be achieved by creating or transforming a vision so that organizational members can unite through a ‘sense of calling’ and recognize that their life is meaningful and contributing. It also involves developing a culture that is rooted in altruistic love, where leaders and followers sincerely appreciates and care for each other and oneself, resulting in a sense of membership and understanding. This should lead to spiritual well-being of both leaders and followers, creation of a vision, inculcation of hope/faith, development of altruistic love, nurturing intrinsic motivation, value correspondence, empowerment of teams and high levels of productivity and organizational commitment (Fry & Cohen, 2009). Spiritual leadership has evolved and was further built on the theories of positive human health, moral and psychological well-being, and satisfaction with life, which are based on workplace spirituality, virtue ethics, and leadership (Fry & Cohen, 2009). Still, there is a need to look closely at the link between spiritualism and religion, which leads to several questions. Either faith can serve as fountainhead of spiritualism or it may stifle the growth of the same. Beliefs that solidifies in one’s mind can also lead to conflict and the ignorance in the organization. Here, the question that

24

what kind of faith leader (Krishnakumar, Houghton, Neck, & Ellison, 2015) is promoting becomes very important to answer.

2.1.7 Responsible Leadership The cases of irresponsible leadership worldwide, sparked enthusiasm in responsibility that comes with being a leader (Pless & Maak, 2011). Sachs (2011, p. 3) stated, “A society of markets, laws, and elections is not enough if the rich and powerful fail to behave with respect, honesty, and compassion toward the rest of society and toward the world….Without restoring an ethos of social responsibility, there can be no meaningful and sustained economic recovery”. Waldman and Galvin (2008) investigated leadership theories and came to an understanding that responsibility is not part of the prominent leadership theories (e.g., transformational, charismatic, authentic, participative, servant, shared, spiritual or ethical). They argued “that it is actually this element that is at the heart of what effective leadership is all about. In a nutshell, to not be responsible is not to be effective as a leader” (Waldman & Galvin, 2008, p. 327). Maak and Pless (2006, p. 103) defined responsible leadership as “a relational and ethical phenomenon, which occurs in social processes of interaction with those who affect or are affected by leadership and have a stake in the purpose and vision of the leadership relationship”. This definition points toward the shift from leaders – subordinate relationship to leaderstakeholder relationship (Pless & Maak, 2011). Responsible leader looks for the meaning of responsibility in leadership and focuses on “matters of responsibility, including accountability, appropriate moral decisionmaking, and trust” (Pless & Maak, 2011, p. 4). Also, accountability of actions, answerability for decisions, being reliable & trustworthy are “inherently relational concepts” (Pless & Maak, 2011). Responsible leaders are considerate and understand “for what” and “to whom” of the responsibility attached with leadership. It looks for the clarification of, towards whom leader is responsible and how to respond to their concerns and needs (Pless & Maak, 2011, p. 5). Responsible leadership is thus “value based and through ethical principles driven relationship between leaders and stakeholder who are connected through a shared sense of meaning and purpose through which they raise one another to higher levels of motivation and commitment to

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achieving sustainable values creation and social change” (Pless, 2007, p. 438). Responsible leaders combine the effectiveness and corporate responsibility by active citizenry and promotion of the same, both in, and outside of the organization (Pless, 2007). They focus on long term relationship with stakeholders and achievement of mutually agreed goals, keeping close the vision of business to achieve greater good (Maak, 2007). Therefore, like transforming leadership, responsible leadership is also prescriptive in nature. Recently, it was argued that responsible leaders are more focused on macro level issues (Waldman & Balven, 2014) and whether they work towards followers’ development (Voegtlin, Patzer, & Scherer, 2012).

2.1.8 Ethical Leadership The development of ethical leadership as a construct started with qualitative, interview based approach undertook by Trevino & colleagues (Treviño et al., 2003; Trevino, Hartman, & Brown, 2000b) who asked corporate executives to outline the characteristics of executive level ethical leadership, which they have experienced and are aware of. These executives pointed out the qualities like demonstration of care, trustworthiness, honesty & fairness and being an example of ethical behavior, which includes explicit demonstration of ethical conduct, making fair and principled decisions, communication of ethics to followers, rewarding positive ethical behaviors and disciplining the unethical behavior (Jordan et al., 2013). Later, when the construct was formalized by Brown et al. (2005), ethical leadership was defined as “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” (p. 120). Researchers supported ethical leadership as a distinct leadership style (e.g., Brown et al., 2005; Trevino et al., 2000b; Trevino & Weaver, 2003; Weaver, Treviño, & Agle, 2005), and though ethical leadership shows relevance with transformational, transactional and authentic leadership but is distinguishable (cf.Brown et al., 2005; Kalshoven, Den Hartog, & De Hoogh, 2011a; Walumbwa et al., 2008). Kanungo and Mendonca (2001) argued that ethical leaders are altruistic and do not focus on selfinterests. Ethical leadership from a perspective of social influence is defined as “the

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process of influencing in a social responsible way the activities of an organized group toward goal achievement” (De Hoogh & Den Hartog, 2009). Up till now the ethical leader behaviors are recognized as honesty, fairness, sharing responsibilities, trustworthy, clarification of expectations about performance, discussing business ethics, concern about immediate and broader environment (e.g., Brown et al., 2005; De Hoogh & Den Hartog, 2008; De Hoogh & Den Hartog, 2009; Treviño et al., 2003). Researchers are building and extending the behavioral aspect of ethical leadership by Brown and colleagues (e.g., De Hoogh & Den Hartog, 2008; Resick, Hanges, Dickson, & Mitchelson, 2006). Ethical leadership not only recognizes the traits of ethical leaders, but also involves social learning theory (cf. Bandura, 1971b), which explains that people learn from role models who are perceived as attractive, and from the reward and punishment as a result of modeled actions. Ethical leadership transacts through

reward, punishment,

communication, and inspires the followers to act in ethical ways, through role modeling ethical behavior and decision making (Mayer et al., 2009). Social learning theory suggests that the presence of role models in the work environment leads to the imitation of their behavior. Also, by observing the kinds of rewards and punishments meted out for the particular behavior, employees learn to align their behavior accordingly (Mayer et al., 2009). Jordan et al. (2013) found out that ethical leadership becomes highly salient when the leader is at higher levels of Cognitive Moral Development (CMD) than their follower’s CMD. The explanation of this finding implicates social learning theory, which explains that the advance ethical reasoning of leaders than their followers’ project them as attractive ethical role models, who attract followers’ attention through ethically meaningful communication and behavior (Jordan et al., 2013). The perception of ethical leaders is anchored to the care, honesty and principles, which builds and enhances the capacity of individuals to make fair and ethical decisions (Jordan et al., 2013). More so, ethical leaders communicate clearly about ethical issues and walk the talk through consistent ethical behavior and management of others’ ethical conduct (Brown & Treviño, 2006). The likelihood of imitation lies with the qualities that model possesses for example, competence, likability and having higher status or social power (Brewer & Wann, 1998; Brody & Stoneman, 1985).

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2.1.8.1 The Transformational and Transactional Side of Ethical Leadership When ethical leadership was conceptualized (Brown et al., 2005), it was formulated on the basis of three core ideas: to stand as an ethical example, to use interpersonal justice and to involve oneself in the moral management of others. Ethical leadership is then divided into two components, the moral person and the moral manager (Mayer et al., 2012). Moral person component of ethical leadership points towards the trustworthiness and fairness of the ethical leader. Whereas moral manager component demonstrates the leader’s encouragement for normative behavior and the discouragement of ethically inappropriate behavior of their subordinates (Brown et al., 2005). This learning is imparted first by making ethical expectations clear and then through transactional exchange of reward and punishment, for ethically appropriate and inappropriate conduct, respectively (Brown & Treviño, 2006). It is assumed that this social learning process should enhance the fairness perceptions in the organization (Brown et al., 2005). Ethical leaders are seen as honest, caring and principled individuals, making fair and balanced decisions, which shows the moral person component in ethical leaders, and it also corresponds to transformational leadership. They are also seen as actively engaged in explicit communication regarding ethical problems, and demonstrate their moral consistency through ethical actions and through reinforcement of followers’ ethical behavior (Brown & Treviño, 2006). Based on moral management, this component reflects the transactional aspect of ethical leaders. Jordan et al. (2013) asserted followers build the perceptions of ethical leaders, which is based on the attractiveness of the models as theorized in social learning theory (Bandura, 1971b; Bandura, 1986; Bandura & McClelland, 1977). Bandura and McClelland (1977) explained that models should be attractive, trustworthy and command attention from the people in one’s environment. Ethical leaders then serve as attractive role models, because they conduct their actions in normatively appropriate manner, and control and reinforce ethical conduct through performance management system (Jordan et al., 2013).

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2.1.8.2 Outcomes of Ethical Leadership in the Organization There has been a positive relationship between ethical leadership and followers’ outcomes. For example, Brown et al. (2005) found that the relationships between ethical leadership and follower’s job dedication and commitment,

perceived leader

effectiveness and follower’s willingness to report and highlight problematic issues to management are positive. De Hoogh and Den Hartog (2009) found a positive relationship between ethical leadership and normative and affective commitment, and also with trust in colleagues and management. The outcomes of ethical leadership also include increased work effort, the perception of a leader’s effectiveness, and reporting problems to supervisors. Ethical leadership is also found to be associated with increased citizenship behaviors and reduced organizational deviance (Mayer et al., 2009). Additionally, it is found that perception of ethical leadership led to increased employee voicing of concerns through its influence on increased psychological safety (Walumbwa & Schaubroeck, 2009). It has also been found that ethical leaders create justice climate, which leads to peer justice (Walumbwa, Hartnell, & Misati, 2015) and employees’ justice perception (Xu, Loi, & Ngo, 2016). Ethical leaders also positively influence employees job related attitudes and behaviors, like person-organization fit, turnover intentions, and organizational identification (DeConinck, 2015). Ethical leaders also lessen job stress and increase customer value orientation (Schwepker Jr, Ingram, Johnston, & Johnston, 2016).It has also been found that followers’ moral emotions and mindfulness moderates the positive influence of ethical leaders on extra effort on job and helpful behaviors (Eisenbeiss & Knippenberg, 2015). Also, during conflicts, ethical leaders positively affect the conflict resolution behaviors (Babalola, Stouten, Euwema, & Ovadje, 2016). Top managers ethical leadership was also found to have positive effects on ethical climate in the organization (Shin, Sung, Choi, & Kim, 2015).

Thus, ethical leadership perceptions relate to many important employee

outcomes. 2.1.8.3 Overlapping Theories with Ethical Leadership The components of ethical leadership and its building blocks are “about being an ethical example, treat people fairly and actively managing morality” (Mayer et al., 2012, p.

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157). There is an overlap between transformational and ethical leadership on the dimension of personal characteristics or attributes (Brown & Treviño, 2006). Both ethical and transformational leaders show care towards others, are consistent with actions based on their moral principles, forethought and reflect on ethical results of their decisions, and are role models for others, in terms of moral conduct (Brown & Treviño, 2006). Ethical leadership is significantly correlated with ‘idealized influence’ component of transformational leadership (Brown et al., 2005). In a recent metaanalysis, it was found that transformational and ethical leadership are highly correlated (Hoch, Bommer, Dulebohn, & Wu (2016). The ethical example characteristic of ethical leadership has both theoretic and operative overlap with idealized influence, and fair treatment aspect of ethical leadership (like listening to employees, to be fair and balanced, keeping in mind the best interest of employees) shows overlap with interactional justice (Mayer et al., 2012). The definitions of these constructs show both similarities and differences. Idealized influence seems to be closely related to ethical leadership and how leader’s admirable behavior leads followers to identify with the leader (House, 1977). The ‘moral person’ component includes the idealized influence building block (Mayer et al., 2012). Ethical leadership construct does not encompass intellectual and visionary stimulation, aspects that relate to transformational and charismatic leadership (Brown & Treviño, 2006). Being fair in ethical leadership overlaps with interactional justice, which is about the perception of interpersonal treatment received procedurally (Bies & Moag, 1986). Interactional justice is made up of interpersonal justice, which points towards the respectful and socially sensitive treatment of employees by authorities, and third parties who are in control for the execution of the procedure and in the determination of the outcomes of these procedures; and informational justice, which shows the perception of why particular procedures are used and why the distribution of outcomes follows a certain way (Colquitt, 2001; Greenberg, 1993). These definitions highlight the similarities and dissimilarities between ethical leadership, idealized influence and interactional justice (Mayer et al., 2012). Ethical and authentic leadership also corresponds with each other, where the focus is on individual characteristics. Both leaders are socially motivated and show concern for

30

others (Brown & Treviño, 2006). Both remain true to their moral principles and think about the impact of their ethical decision-making. Yet, authentic leadership is distinct from ethical leadership. Being authentic and self-aware remain distinctive to authentic leadership (Brown & Treviño, 2006). Also, being true to oneself is not part of ethical leadership, rather ethical leaders are committed to care and concern for followers (Brown & Treviño, 2006). The focus of spiritual leadership is integrity, altruism and considerate leadership style, which is in accord with the previous concept of the ethical component of leadership, and also with transformational and authentic leadership theory (Brown & Treviño, 2006). However, being visionary in spiritual leadership is different from ethical leadership, but similar to transformational leadership. In addition to this, the motivation of spiritual leaders is a kind of calling, like service to humanity or God (Brown & Treviño, 2006). This calling may be an antecedent of ethical leadership, but ethical leaders are pragmatic and strive to proactively control ethical behavior of their followers by using transactional leadership style (Brown & Treviño, 2006). Thus, the similarities among these constructs are altruistic motivation, integrity, ethical decision making and role modeling (Brown & Treviño, 2006). The distinctiveness of ethical leadership is based on ‘moral manager’ component (Brown et al., 2005; Trevino, Hartman, & Brown, 2000a), which is a ‘transactional’ aspect of ethical leadership. The ‘moral manager’ component is defined by the transactional labor of leaders to affect positively the behavior of their subordinates and to control their unethical behavior. These transactional behaviors may include disciplining or punishing employees for the violation of ethical behavior and define success not by ends, but by means and rewarding accordingly (Mayer et al., 2012). Hence, moral manager component of ethical leadership is different from the transformational leadership style and is aligned with transactional leadership style (Brown & Treviño, 2006). This is because ethical leaders proactively influence ethical behavior of followers while setting the bar for ethical behaviors, communicate ethical values, use rewards and discipline to keep follower’s accountable for their action (Brown & Treviño, 2006). Also, the other aspect of spiritual and transformational leadership (i.e., self-awareness, being visionary, being religious) is not related to ethical

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leadership (Brown & Treviño, 2006). Hence, ethical leadership is unique from other leadership theories. The moral manager component is not part of any other leadership construct and remains a component that is exclusive to ethical leadership construct (Mayer et al., 2012). See Table 1 for the summary of leadership theories covered here. 2.1.8.4 Measurement of Ethical Leadership The definition of ethical leadership is said to be reflected in the ethical leadership scale. The first component of this definition “demonstration of normatively appropriate relationships…”, points out that perceived ethical leaders are seen as engaged in “normatively appropriate actions” (e.g. honesty, trustworthiness, fairness and care), which elevates them to be legitimate and credible role model (Brown et al., 2005). The next part of the definition, “… promotion of such conduct to followers through twoway communication…” emphasize on the leaders’ behavior of explicitly and proactively engaging followers in ethics talk, at the same time giving voice to followers, promoting procedural and interpersonal justice (Bass & Steidlmeier, 1999; Howell & Avolio, 1992). The “…reinforcement…” component suggests that ethical leaders set standards of ethical practices, rewarding ethical behavior and disciplining unethical conduct (Gini & Green, 2014; Treviño et al., 2003), which not only results in direct but also vicarious learning. The last element of the definition is about “decision making”, which emphasizes on the considerations, ethical leaders give to their decisions and their consequences, and a strive towards principled and fair actions, which are observed and imitated by others (Bass & Avolio, 2000; Burns, 1978; Howell & Avolio, 1992). The instrument developed for the measurement of ethical leadership, ‘Ethical Leadership Scale’ (ELS) is said to be in agreement with the theory of ethical leadership construct (Brown et al., 2005). 2.1.8.5 Strengths of Ethical Leadership Scale “The instrument demonstrates high reliability, stable (uni-) dimensionality, and predictable relationships with variables in the nomological network of ethical leadership” (Brown et al., 2005, p. 130). The advantage of ethical leadership is its shortness as it contains only ten items, due to which it can be conducted to a larger number of participants (Brown et al., 2005). 32

2.1.8.6 Limitation of Ethical Leadership Scale Ciulla (2014a) criticized that ELS only scales the attribution of others about ethical leadership. She argued that being ethical and being perceived as ethical are two different things. The items on ELS are about management qualities and subjective judgments and perceptions of ethical leadership. Harms (October, 2012) revealed through his statistical analysis, which compared the data from transformational, authentic, and ethical leadership that these findings are highly correlated. He noted that all these constructs measure leader’s effectiveness and not ethics and these measures are measures of the likability of leaders. To reiterate, being likable and ethical may be but not necessarily the same thing.

Table 1: Summary of Normative Theories Covered in the Literature Review

Main Developments in Leadership Theory Transforming Leadership

Gaps in Theorizing

Theorists

Burns (1998)

• •

Transformational Leadership

Bass (1991)

• •

Charismatic Leadership

Weber (1947) Howell and Avolio (1992)

•

•

Elevation of leader as moral authority (Ford & Harding, 2015). Ignore followers as moral persons (Ford & Harding, 2015).

Direction to Future Research

•

•

Role of followers in developing leader particularly from moral point of view (Ciulla, 2014). Followership theory (Uhl-Bien, Riggio, Lowe, & Carsten, 2014)

Valuing group goals over individual goals (Li et al., 2016). Transformational leaders success and the role of organizational ideology (Alvesson & Kärreman, 2016).

•

The role of leader in the development of followers as transformational leadership is not explicitly committed to it.

Ill understanding of charisma (Antonakis, Bastardoz, Jacquart, & Shamir, 2016) Not focused on moral content of leadership

•

Use of power by charismatic leader. Organizational turn around real or myth (Raelin, 2015).

33

•

Authentic Leadership

Luthans and Avolio (2003)

•

Focused on self and not on followers (Berkovich, 2014).

•

Followers' perception of authentic leader as moral or amoral (Sendjaya, Pekerti, Härtel, Hirst, & Butarbutar, 2016)

Servant Leadership

Greenleaf (1977)

•

Focused on followers and not on leader (VanMeter, Chonko, Grisaffe, & Goad, 2016). Human limitations and expectations of servant leadership

•

Relationship between servant leader and followers' perception of true leader.

Brings faith and religion into leadership (Krishnakumar, Houghton, Neck, & Ellison, 2015).

•

Can be used to project certain kind of faith and hope (Krishnakumar et al., 2015). The role of religion in spiritual leadership

•

Spiritual Leadership

Fry (2003)

•

•

Responsible Leadership

Maak and Pless (2006)

•

Deals with macro level issues and may ignore micro level organizational issues (Waldman & Balven, 2014).

•

Whether responsible leader work towards follower development (Voegtlin, Patzer, & Scherer, 2012)

Ethical Leadership

Treviño et al. (2003) Brown et al. (2005)

•

Use of moral management to meet organizational moral standards. The thinning boundaries between ethical leadership and transformational leadership (Hoch, Bommer, Dulebohn, & Wu, 2016)

•

Moral management can influence negatively the moral motivation and moral development of followers (research objective of our study). New theory of ethical leadership (Fehr, Yam, & Dang, 2015)

•

•

2.2

Social Learning Theory-The Foundation of Ethical Leadership

According to Bandura (1976) “most of the behaviors that people display are learned either deliberately or inadvertently through the influence of example” (p. 5). Social learning theory states that role modeling process facilitates learning of desirable and expected behavior, through observation of role model’s behaviors (Bandura, 1971b). 34

Individuals emulate the behaviors of trustworthy and attractive role models (Brown et al., 2005). In organizations, supervisors are both proximate and in an authoritative position, which by default elevates them as ‘legitimate model’ for normative behavior (Mayer et al., 2012). More so, another important factor is the supervisor’s authority to reward and punish employees, and both of the mentioned factors can be used to modify employee behavior (Mayer et al., 2012). As ethical leadership is grounded in the theory of social learning and as it sees behavior an effect of its consequences, it is important to discuss social learning theory in detail here. Both the external and internal reinforcement phenomena are discussed as explained by Albert Bandura (1971b). The study of human behavior focuses on the stimulus events that induces the desired behavior and on the reinforcers that change and shape it (Bandura, 1971b). These findings led many psychologists to the staunch belief in the power of external environment and the proponents of radical behaviorism formed this extreme view that behavior is the effect of the environmental causes (Bandura, 1971b). Many researchers have found empirical evidence of how behavior can be introduced, made to disappear and restored through external reinforcers. In any particular social situation, individuals take behavioral clues from others. The origin of social learning theory is rooted in the work of Rotter (1960). Later Bandura (1968, 1977) developed this theory. Since, its inception, social learning theory stands distinct from other behavioral theories, as it took account of behavioral, cognitive and environmental influences. Social Psychology acknowledges the pivotal role of situational factors in influencing behavior (Cervone & Shoda, 1999; Mischel, 2013; Ross & Nisbett, 1991) and empirical evidence of the determinacy of situational factors in the case of moral conduct has been found by many (for e.g., Aquino, 1998; Batson, Kobrynowicz, Dinnerstein, Kampf, & Wilson, 1997; Darley & Batson, 1973; Detert et al., 2008; Mazar, Amir, & Ariely, 2008). This also led to the development of extreme view where the moral outcome becomes a function of the situation (Doris, 1998; Harman, 2003), neglecting the findings of those empirical studies which highlights the individual characteristics in determining the moral behavior (e.g., Midlarsky, Fagin Jones, & Corley, 2005; Walker & Frimer, 2007). For this reason, researchers were asked to study the role of both personal and situational characteristics on moral behavior (e.g., Walker & Frimer, 2007). 35

Social learning theory (SLT) also emphasizes the role of vicarious, symbolic and selfregulatory processes. These processes provide us with the insight of human behavior, within the framework of SLT (Bandura, 1971b). Though behaviorism faced criticism that it ignores the cognitive functioning of the humans, diminishing man to an organism, which is at the mercy of the environment he/she found him/herself in. SLT doesn’t stand at the extremes and believes that man’s behavior is shaped by both external factors and his cognitive abilities and capabilities, and sees behavior as a continuous reciprocal process between behavior and its controlling factors (Bandura, 1971b). Bandura (1977, pp. 11-12) stated, “In social learning view, people are neither driven by inner forces nor buffeted by environmental stimuli. Rather psychological functioning is explained in terms of a continuous reciprocal interaction of personal and environmental determinants”. SLT also points toward how the individual interacts with the environment, which in return affects individual behavior. Thus, this theory emphasizes that behavior is the result of both individual and environment and not of any single factor (O'Fallon, 2007). The focus of traditional theories of learning understands behavior as the result of directly experienced response. For instance, Operant theory takes only the consequences of behavior into account. The theory states that behavior is totally dependent on its consequences, an individual learns and repeat what is rewarded and unlearns and abstains from what is punished (e.g., Manz & Sims, 1981). Operant conditioning present useful, but incomplete understanding of learning and behavior modification (O'Fallon, 2007). In SLT, learning that results from direct experience can be learned vicariously by observing others. By observing others, it becomes possible to acquire a range of behaviors through example, without going through the trial and error process (Bandura, 1971b). The emphasis on both environment and individual factors makes SLT distinct from other behavioral theories. Bandura (1977) distinguished SLT from operant theory and explained three major processes of vicarious learning, cognitive processes and self-control. Vicarious learning remains an important factor of behavior modification (Gioia & Manz, 1985). Then, there is another factor of man’s cognitive capacity, which not only determines present responses but future behavior as well. In cognition, external factors can be represented symbolically, which can be later used as a guide for an action; problems can be resolved symbolically and possible consequences of certain actions can be 36

foreseen. “These superior mental processes allows the behavior to be both insightful and foresightful” (Bandura, 1971b, p. 3). What else distinguishes man is his/her selfregulation capacity. Through the management of the stimulus determinants of particular activities and by deciding and choosing the consequences of their own behavior, individuals to an extent are able to control their own behavior. The role of cognition and self-regulation takes on increasing importance when causal relations and sequences are involved (Bandura, 1971b).

2.2.1 The External Reinforcement The system of social learning posits that new forms and patterns of behaviors can be acquired through direct experience or observation of other’s behavior (Bandura, 1971b). The most elementary form of learning through direct experience is mainly grounded in the practices of reward and punishment. People learn about successful and unsuccessful behavior through their interaction with different situations. This process of differential reinforcement leads to the selection of effective behaviors and elimination of unsuccessful ones. At an elementary stage of learning from direct experiences, behavior is shaped, maintained or eliminated through reward and punishment that follows it. Reinforcement has informative function as with different actions people receive different consequences, this difference in consequences serves as information, which leads to the development of thoughts and hypotheses about the successful behavior. Bandura explained that these hypotheses then serves as guidelines for future behavior “In social learning theory, reinforcement primarily serves informative and incentive functions, although it also has response strengthening capabilities” (Bandura, 1971b, p. 2). Anticipation capacity of a human makes the reinforcing conditions take on the motivational value as well. Mostly the immediacy of external reinforcement remains ineffective because the previous experience proved to be a learning resource and already acquired, are seen in the light of foreseen consequences. By representing actual consequences symbolically, future results may become current motivators with the power to influence behavior as much as the actual consequence. The role of cognition and emergence of awareness results in increment, decrement or no effect on

37

performance, which is largely dependent on the reward value of a particular consequence. Bandura describes that individuals with an awareness of the appropriate response in a particular situation, and who values the outcome of the desired action will change their behavior accordingly. Contrary to this, those people who are aware of the outcome of a particular action, but disregard the reinforcement remains unaffected or even react in an opposite way (Bandura, 1971b). So, reinforcement remains a powerful tool for the maintenance of behavior that has been previously learned, but comparatively it is an inefficient way of creating new behavior. According to Bandura, shaping behavior through rewarding and punishing can take painfully long and laborious process if it becomes the only mechanism to shape behavior, therefore role models become a much better and an efficient way of teaching desired behavior. SLT proposed that vicarious and observational learning will lead to imitation of modeled behaviors and thus to learning (O'Fallon, 2007). Though direct reinforcement help individuals to determine which behaviors will be beneficial, but Wood and Bandura (1989, p. 362) said that “the process of human development would be greatly retarded, not to mention exceedingly tedious, costly and hazardous”, if direct reinforcement remains the only route towards human learning. The seminal work on social learning and imitation, by Miller and Dollard (1941) advanced the idea that learning through modeling can only happen if observers are motivated to act, they have a role model to follow, they should act according to the example and the imitative behavior should be reinforced positively. Observational response learning is focused on how individuals organize behavioral element in order to form new patterns of behavior as exemplified by role models (Bandura, 1971b). But as Miller and Dollard (1941) assume that an individual display learnt behavior before actually learning it, and rather presents a matching of previously learnt behavior than the formation of new behavioral patterns (Bandura, 1971b). On the other hand, Skinner (1953) who theorized operant conditioning and learning, is of the view that when appropriately acted out, desired behavior is positively reinforced or undesired is punished or not rewarded than other’s behavior become cues for the valued behavior and elicit matching responses (Bandura, 1971b). As Miller and Dollard (1941) theory,

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Skinner (1953) also explained that an already learnt behavior can be evoked by the actions of others and by rewards that are attached to it. But it does not explain that how a new behavioral pattern is acquired through observation to start with. Here, then comes the role of symbolic processes; when one is exposed to modeled behavior, these processes occur before the behavior is acted out and reinforced (Bandura, 1971b).

2.2.2 The Role of Role Modeling in Learning Modeling is a way of teaching the social values, behaviors and attitudes (Weaver et al., 2005). Bandura (1977) discussed that “by observing a model of the desired behavior, an individual form an idea of how response components must be combined and sequenced to produce the new behavior. In other words, people guide their actions by prior notions rather than by relying on outcomes to tell them what they must do” (p. 35). Most importantly, individuals internalized learned behavior, both intentionally and unintentionally, through the influential example (Bandura, 1976). Successful modeling enables an individual to reproduce the behavior exemplified by the model (Bandura, 1977; Davis & Luthans, 1980). It is assumed in social learning theory that modeling in principle leads to learning through the informative function it provides, which in turn makes observer acquire symbolic representation of modeled activities, instead of associating oneself with the pattern of stimulus-response (Bandura, 1971b). In a more detailed view of the learning process, which leads to imitation, the success of modeling process depends on the four sub-processes, that adds to the achievement and memorization of observational learning (Davis & Luthans, 1980). Here, the process of learning through modeling is governed by four interrelated sub-processes grouped as attentional processes. The attentional processes highlight the importance of model’s attractiveness to observer for the purpose of emulation. The first process is ‘attentional’. At this step, individuals converge their attention on a model and decides about the observation of behavior. Individuals can only learn from other individuals through attention and accurate perception of the particular model behavior (O'Fallon, 2007). Bandura (1977, 1986) outlined specific factors which influence the ‘attentional process’: (1) Repeated Observations (e.g., individuals with whom a person daily interacts) (2) Interpersonal qualities of the model (e.g. people with attractive qualities are selected while others are rejected) (3) Intrinsically worthy form of modeling (4) the

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kind of modeled behavior (e.g., importance and intricacy). The ‘associational preferences’ play an important role and brings attention to the fact that regular association has a delimiting effect on the behavior of an individual (Bandura, 1971b). The second is ‘retention process’, which focuses on the long term retention of activities which are modeled at one or other time and which explains the retention and memorization of modeled behavior. This occurs when, behavior is stored in memory, in the form of imagery (like mental images, pictures) or verbal codes. These images form a cognitive map, and provides a cognitive map of behavior in similar or related situations (Black & Mendenhall, 1990). The individuals who are better at the subprocess of retention, learn and memorize particular modeled behavior, better than others who are not as capable. More so, rehearsals (both mental and physical) reduces the chances of forgetting the modeled behavior (Bandura, 1977). The third is motoric reproduction processes, which is connected to the development of required sub-skills to reproduce behavior and which must be initially developed through modeling and practice. This process is about how retained symbolic images or words are translated into action. This comes into action when individuals go through a conception matching process, where the potential enacted behavior is matched with their cognitive map (Carroll & Bandura, 1987). When there is a discrepancy, individuals modify the behavior, for a close match. Individuals, in order to remain true to their cognitive map go through the process of self- observation as well as selfcorrection. This becomes only possible when individuals are mentally or physically able to carry out this action (O'Fallon, 2007). Inhibition of modeled behavior occurs when the behavior is not rehearsed, the model and observer are physically different, there is no accurate observation of modeled behavior and when the behavior is not properly retained (Black & Mendenhall, 1990). The last one is the ‘reinforcement and motivational processes’, which focuses on the role of positive reinforcement in the form of incentive that transform previously unexpressed behaviors into action. The influence of reinforcement not just regulates the matching of behaviors, but these can also impact the observational learning by regulating what people give their attention to and how efficient they are in coding and rehearsing what they have observed (Bandura, 1971b). The final process,

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‘motivational’ is attached with the consequences of behavior. This process highlights that only those behaviors are learned or imitated which are rewarded. If the behavior is answered with punishment or negative outcome then this behavior has less chances to be learnt (O'Fallon, 2007). On the other hand, individual’s self-evaluation of a particular behavior keeps check on the process. Despite of reward or punishment, individuals will choose self-satisfying behavior and will reject behavior that are disliked personally (Bandura, 1977). It implies “that people learn to modify their behavior when their own self-created consequences or standards are not fulfilled. The selfreinforcement consequences are particularly important to virtually all sustained goaloriented behavior and explains how their behavior persists despite the lack of immediately compelling external support” (Davis & Luthans, 1980, p. 286). This point leads to the conclusion that not only environment is the main factor, but individuals themselves play a key role in the process. But, generally modeling influences thus occurs when the attractive and prominent model exemplifies the desired behavior, provides instructions on how others can follow the footsteps, is physically present to evoke the behavior when it occurs, administers and controls behavior with powerful rewards (Bandura, 1971b). Thus modeling influences can fail to produce the desired response if observers don’t notice the desired behavior, if behavior is not completely coded for memory representation, if retention is not strengthened, if motor ability to perform an action is inadequate or if the behavior is not reinforced through rewards (Bandura, 1971b). The knowledge that modeled behavior leads to valued rewards or avoidance of punishment can positively reflect on observational learning by increasing the attention towards modeled behaviors. Anticipated reinforcement also leads to better retention of observed behavior as it motivates people to code and rehearse modeled responses of high value (Bandura, 1971b). Here, observational learning can occur by observing the modeled behavior and with the association of cognitive activities without the presence of extrinsic rewards, but it also clarifies that the mere presence of models will not lead to observational learning (Bandura, 1971b). Also, for this learning to occur, model’s credibility (Weiss, 1977, 1978), accurate display of the behavior, willingness to facilitate the process (e.g., Bandura, 1969, 1977; Gioia & Manz, 1985) perceived similarity with the model (Goldstein & Sorcher, 1974), the power model has (Zimbardo & Leippe, 1991), his/her 41

mastery (Bandura, 1969; Bandura, 1971b; Mahoney, 1974) or the social acceptance and display of the same behavior (Kazdin, 1976), strongly influences observational learning. SLT also assumes that behavior is not only regulated by extrinsic actual consequences, but also through vicarious reinforcement and self-reinforcement (Bandura, 1971b). Many researchers have studied the phenomenon of how response-generative rules are transmitted through modeling. It has been found that modeling influences can successfully modify moral judgmental orientations (Bandura & McDonald, 1963; Cowan, Langer, Heavenrich, & Nathanson, 1969). Researchers also looked into the influence of modeling on cognitive functioning of the type explained by Piaget and his followers (Rosenthal & Zimmerman, 1970; Sullivan, 1967). “Paradoxical as it may seem, innovative patterns can emerge solely through modeling” (Bandura, 1971b, p. 11). The success of influence that modeling casts may also lead observers to become sources of the desired behavior for others and this also takes evolutionary pattern where the behavior exhibited by successive observers may have little resemblance to the original model (Bandura, 1971b). “A second major function of modeling influences is to strengthen or to weaken inhibitions of responses that observers have previously learned” (Bandura, 1971a). Modeling influences lead individuals to perform the same activity in varying degree, which he/she previously afraid of (Bandura, 1971b). Actions of others provide social clues on how to behave in a particular situation, but this response facilitation is different from observational learning because here model’s action, neither lead to learning or dis-inhibition because behavior already exists (Bandura, 1971b). Bandura concluded that modeling influences can “serve as teachers, as inhibitors, as disinhibitors, as response elicitors, as stimulus enhancers, and as emotion arousers” (Bandura, 1971b, p. 11). Learning that translates into permanent behavioral change (Kazdin, 1975), occurs through modeling. Observation of particular individuals and the consequences it leads to, fosters imitations of that behavior (O'Fallon, 2007). According to Baer, Peterson, and Sherman (1971), “any behavior may be called imitative if it temporally follows behavior demonstrated by someone else, called a model, and if its topography

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is functionally controlled by the topography of the model’s behavior” (pp. 128-129). Successful models, thus lead to emulation.

2.2.3 Regulatory Processes of Behavior Bandura stated that all knowledge and skills, which can be learned through direct experience, can be learned through observation (Bandura, 1986). Cognitive processes define the ability of an individual, of the observation and perception of other’s behavior, the attachment of valence to certain behaviors, and the remembrance and use of such behaviors in particular or similar situations (Bandura, 1977). SLT also explains the regulatory processes that regulates and maintains human behavior. These three regulatory processes are stimulus, cognitive and reinforcement control. Stimulus control enables a person to function effectively through anticipation of possible consequences of various events and of different courses of action which regulates the behavior (Bandura, 1971b). “Without a capacity for anticipatory or foresightful behavior, man would be forced to act blindly in ways that might eventually prove to be highly unproductive, if not perilous” (Bandura, 1971b, p. 12). How much influence does modeling exert on individuals differ to a varying degree. Not all models will bring about the behavioral modification they exemplify themselves. Thus, the “characteristics of the models, the attributes of the observer, and the response consequences associated with matching behavior” (Bandura, 1971b, p. 18), becomes the determinants to predict the degree of modeling influence. Model’s characteristics include high status, prestige and power because the behavior of a model has more functional value as he/she reached high status. Also, when people are uncertain about the modeled behavior they trust model characteristics and status symbols (Bandura, 1971b). Social behavior is also maintained through verbal cues and endorsements. We shape others behavior by suggesting, requesting, commanding and writing those directions, but if verbal cues are ignored and not given heed to, then they lose their directive function (Bandura, 1971b). The reinforcement control plays an important role in keeping the successful and eliminating the unsuccessful behavior. If an individual act on the anticipated consequences, which are provided by the environment and doesn’t get anything out of it, then he/she will surely be discouraged to match the desired behavior. SLT recognizes

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the role of extrinsic feedback, but it encompasses other kinds of reinforcement control; direct, vicarious, and self-monitored (Bandura, 1971b). Reinforcement control thus is much more complex than it appears. If people cannot counter this kind of control, then any behavioral outcome becomes possible by arranging the valued consequences. But in social interactions people mutually decide what they want and thus exercise power over each other. These power differences shape the reinforcement system. Bandura concluded that the potential power of external reinforcement is countered by reciprocal control and through the influence of other kinds of reinforcement systems. There are a variety of symbolic reinforcers, apart from social responses that serves as reinforcement. Money remains the trustworthy reinforcer of behavior because of the exchange value it has. Also, through recurrent rewarding the exceptional performance marks the qualitative difference in performance a source of reinforcement. When the personal satisfaction is derived from the success that has merit, then the knowledge of a job well done serves as a reinforcer. But these reinforcements take the route of selfreinforcement. That’s why, exceeding one’s personal standards of valued performance leads to positive self-evaluation and inadequate ones leads to self-dissatisfaction (Bandura, 1971b). “The highest level of autonomy is achieved when individuals regulate their own behavior by self-evaluative and other self-produced consequences” (Bandura, 1971b, p. 24). Behavior becomes less responsive to external reinforcement (monetary & social rewards) when its consequences have an intrinsic relationship with behavior or is self-administered. Bandura commented to the surprise of the critics of behavioral approach that the route to self-reinforcement is mapped through the terrain of the social learning framework. Vicarious reinforcement is said to be the change in observer’s behavior from observing the consequences that other’s responses lead to. Vicarious punishment is reflected when punishing consequences of other’s behavior diminish people’s tendency to act in the same or related ways. The influencing power of direct and vicarious reinforcements are ‘reversed’ as compared to their motivational effects which shows the long term maintenance of the desired behavior (Bandura, 1971b). Acquisition of reward by others motivates towards the desired behavior for a short term but it will not lead to the sustained behavior in the long run. Additionally, other people’s outcomes can continue

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to influence the effectiveness of direct reinforcement by showing a way to benchmark the reinforcement on the basis of equity, fairness and benefit (Bandura, 1971b). In reality, both kinds of reinforcement are intertwined, which signifies the importance of their combined effect than the individual effect created by them. SLT assumes that there are various ways through which observed reward and punishment influences action. Vicarious reinforcement serves as informative function, incentive motivational effects, and brings about the change in the valuation of the reinforcing social agents. Bandura summarized that informative function provides people with the knowledge of appropriate responses and its consequences, thus successful actions will be learned and those which are punished or ignored will be discarded. Elevated social status is also conferred to the people whose actions are appreciated and rewarded (Bandura, Ross, & Ross, 1963; Hastorf, 1965) and similarly social devaluation occur for the model who receives the punishment. Also, how others react to reward and punishment shows the observers how to react to particular consequences (Bandura, 1971b). Then, the role of vicarious learning is also important where an individual learns from expectation and the norms of appropriate behavior, indirectly by observing others (Bandura, 1971b). It is then possible that a group member learns socially both in direct and indirect ways in a group. Supervisors when display moral excellence, communicate ethical expectations and goals explicitly; and reward and punish in order to encourage ethical decision-making, influences group norms of desired and acceptable behavior. Subordinates in such settings are less likely to engage in unethical behavior (Mayer et al., 2012). Ethical leaders, along with their displaying normatively appropriate behavior also engages in two way communication letting the concerns and opinions flow in both directions (Brown et al., 2005). More so, ethical leaders show care and socially responsible behavior by making employee see that their interests remain on the priority and are considered by leaders (Brown et al., 2005). Social learning principle highlights that ethical leader’s behavior will influence employees and ‘trickle down’ further (Mayer et al., 2009), letting the observant to behave in the same manner towards other employees (Mayer et al., 2012). Brown and Treviño (2013) also found out that ethical leaders at workplace serve as the most influential role models that breeds the leadership further.

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2.2.4 Self-Reinforcement Sadly, the idea that behavior is regulated by its consequences meant that our actions are the effect of situational causes. But in real, most of the times, our actions are “selfregulated by self- produced consequences” (Bandura, 1971b, p. 28). In almost all areas of our life, we set performance standards, and measure our behavior through these standards and respond to ourselves in critical or appreciative ways. And due to this enhanced representational and self-reactive capacities, we are not as dependent upon the immediate external consequences of our behavior (Bandura, 1971b). When individuals are able to develop self-monitoring reinforcement system, an action leads to two consequences; one is external outcome and the other is self-evaluative reaction. Both of these sets of consequences can work together in a variety of ways (Bandura, 1971b). Self-control is also acquired through the consequences of behavior. It is explained that individual behavior is not only influenced by external consequences, but also by selfevaluative consequences (O'Fallon, 2007). “The notion that behavior is controlled by its consequences is unfortunately interpreted by most people to mean that actions are at the mercy of situational influences. In fact, behaviors can and is, extensively self- regulated by selfproduced consequences for one’s actions ….Because of their great representational and self-reactive capacities, humans are less dependent upon immediate external support for their behavior. The inclusion of the selfreinforcement phenomenon in learning theory thus greatly increases the explanatory power of reinforcement principles as applied to human functioning” (Bandura, 1976, p. 28). “Under the conditions where self-evaluative consequences outweigh the force of rewards for accommodating behavior, external influences prove relatively ineffective. On the other hand, when external inducements whether rewarding or coercion, prevails over self-reinforcing influences, individuals exhibit cheerless compliance” (Bandura, 1971b, p. 28). Though humans are able to justify disliked actions to save their selfrespect (Bandura, 1971b). But there arises a conflict between external and selfproduced consequences when people receive punishing consequences, particularly when people receive punishing reinforcement for the action that they highly value. Here, the relative power of self-approved and external negative consequences will

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decide the maintenance or elimination of behavior (Bandura, 1971b). Another situation arises where the external rewards for desired activities are few or absent and individuals sustains their behavior extensively by self-encouragement (Bandura, 1971b). Thus, the influence of external rewards increases manifold when it is aligned with self-produced consequences (Bandura, 1971b). Self-esteem here shows the gap that exists between the action and standards of performance. Falling short of standards reflects negatively on self-esteem and results in low self-esteem while meeting and exceeding standards reflect positively, elevating the self-esteem (Bandura, 1971b). Self-reinforcement is also reflected by self-concept. Self-concept usually signifies a person’s tendency to regard different aspects of his behavior positively or negatively. He pointed out the question though it lacked empirical evidence at that time, it is highly plausible that increment in desired way is due to the covert self-reward. The function of self-reinforcement complicates the explanation of behavior changes accompanying external reward and punishment. Bandura concluded that it may not be anything external to the self which are used in experiments as reinforcer rather these are represented as cues that satisfies or criticizes performer’s self. By understanding social learning theory, the principles of ethical leadership theory are better understood and the complication that underlies the phenomenon of external reinforcement, through rewards and punishments is highlighted. In the next section, ethical leadership is seen through the lens of leadership ethics.

2.3

Leadership and Leadership Ethics

“Leadership ethics is the study of ethical problems and challenges that are distinctive to and inherent in the processes, practices, and outcomes of leading and following. In short, it examines the successes, failures, and struggles of the imperfect human beings who lead, aspire to lead, or follow” (Ciulla, Uhl-Biel, & Werhane, 2013). ‘The Moral dimension of leadership’ (Gardner, 1993) in leadership literature emphasizes that morality is one of the dimensions of leadership, and it is seen as holistic. Sergiovanni (1992) argued that “rich leadership practice cannot be developed if one set of values or

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one basis of authority is simply substituted for another. What we need is an expanded theoretical and operational foundation for leadership practice that will give balance to a full range of values and bases of authority” (p. xiii). The goal of both teaching and research in fields like business ethics and leadership should not be only to make people more ethical in organization, but to make us reconceptualize how we look at the theory and practice of leadership and business (Ciulla, 2014b). The leadership paradigm has been dominated by social-sciences and due to this dominance, it was not able to have a dialogue with the field of humanities (e.g., Philosophy, History, Literature, Arts), which can greatly enhance our understanding and approach towards the subject of leadership and ethics (Ciulla, 2014b; von Wright, 2004). ‘Leadership Ethics’ provides a platform where both humanities and social science can meet and have a dialogue and this will result in better understanding of leadership, its functions and its outreach. This new focus broadens the scope of leadership research from the narrower context to universal (Ciulla, 2014b). Leadership ethics also highlighted the debate about ethics and effectiveness, discussed in the next section.

2.3.1 The Debate on Ethics and Effectiveness There is a debate of ethics and effectiveness of leadership in moral philosophy and the descriptive research has not been able to understand the person, who is a leader (von Wright, 2004). So the question ‘What is the relationship between ethics and effectiveness?’ should be understood and answered first (Ciulla, 2011). This question has its roots in the ancient Greek’s idea of ‘arete’ or virtue as an excellence, which includes both moral and technical excellence (Barnes, 1984). And by taking ethics to build a leadership theory or idea, we are also calling on effectiveness. It is said that a person’s excellence at work cannot be parted from the moral excellence of his character (Hartman, 2013). Thus, the leader who is effective, has to be ethical. Leaders in organizations play the role of communicator and role model (Gini & Green, 2014). Though employees are reflective about the morality of their organization, but at the same time are influenced by modeling and standards of their organization. Most of our lives are spent at workplace and what we learn there, influences our moral 48

development and the way we come to choose and practice ethics (Gini & Green, 2014). One of the problems with leadership is also that the real leadership is taken as good leadership. This leads to misunderstanding about leadership, and the lines between reality and ideas become blurred, leading to disillusionment as witnessed in leadership research (Meindl, Ehrlich, & Dukerich, 1985). The attributes of leader influences followers, which carves their perceptions about leaders and their responses. This relation between behavior and perception is the test of ethics of the leader’s actions, along with other characteristics perceived by followers, and their response to the other characteristics as well (Lord & Maher, 1990). Ethical leadership theory along with authentic and transformational theory measures leader’s effectiveness (Harms, 2012) and not ethics. The good thing about the humanities approach to leadership is that it focuses on both effectiveness and ethics of a leader. So, what leaders do, why and how they do it, cannot be separated with the final outcome of leadership (Ciulla, 2013). Ethical ideas are instilled in leadership as only good leadership is seen as true leadership. The theories of transforming, transformational, ethical, spiritual, servant, authentic, and responsible leadership, all carried a normative point (Ciulla, 2013). Leaders are demanded to have higher moral standards, but it also suggests that others are accepted to live by lower moral standards. One of the most crucial questions for the development of leadership, political and organizational theory is “what can we do to keep leaders from the moral failures that stem from being in a leadership role?” (Ciulla, 2013, p. 247). Most of the leadership theories had already elevated leaders to a saintly status, who cannot go wrong (Ciulla, 2013). While Plato (1971) in his work, Statesman, stated that leaders are not shepherds and hence there is not much difference between them and their followers. Ciulla (1995) argued that a good leader is an ethical and effective leader. Ethics and effectiveness questions can also be seen through deontological and teleological perspectives. Deontological theories focus on intent (moral or not), on the other hand, teleological theories on results, of an action (greater good or not) (Ciulla, 2013). ‘Good leadership’ has to be seen through the lens of both deontology and teleology, where a leader must be ethical and effective and also should fulfill his or her duty, considering

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the greatest good for all (Ciulla, 2013). In modernity, there is a divide between the inner person and outer person, between a person and his/her actions, between what we are and how we are seen, between who we are and what we achieve. Ancient Greek theory of virtue is not dichotomous and according to virtue theories, a person is reflected in his/her actions (Ciulla). The Greek’s notion of virtue ‘arete’, which means excellence do not draw lines between personal ethics and professional competence (Ciulla). Aristotle said, “… every excellence brings to good the thing to which it is the excellence and makes the work of that thing be done well… Therefore, if this is true in every case, the excellence of man also will be the state which makes man good and which makes him do his work well” (1984, p. 1747). Virtues plays a very important role in leadership development and can only be developed through practice. Aristotle explained that virtues (good habits) are learned from society and our leaders. But in order to develop virtue, a person has to be fully conscious of the moral rightness of an action (Ciulla, 2013). Excellence exists with its function. Likewise, anything which performs its function well, said to have excellence; reason is the function that human should perform well, because reasons guide you towards how and when to practice a virtue. If an individual reason well, then he/she understand how to practice his moral and occupational virtues. A leader who is morally excellent must also be a competent leader as he or she will, also perform his/her duties in the right way (Ciulla). “Virtue ethics do not differentiate between the morality of the leader and the morality of his/her leadership” (Ciulla, 2013, p. 260).

2.3.2 The Ethical Value of Externally Reinforced Behavior Aristotle stated in ‘Nichomachean Ethics’ that only reading about virtue will not make one learn it, but the learning will come, through the observation of the conduct of the moral person (Ostwald, 1962). This ‘role modeling’ process has few steps 1. Observation of the actions of significant others 2. The observed behavior has been repeated enough times to be endorsed by peers and in-group 3. These actions are then reinforced by others, and acquired as one’s habits or characteristics (Gini & Green, 2014). This is also how behaviorist approached the learning process (Gini & Green,

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2014). With these three steps according to Skinner (1971), through role-modeling and reinforcement, the desired behavior is learned. From psychological perspective, the value of reinforced behavior or the intention or interest of an agent, are not important to consider. The psychological perspective, which emphasizes role modeling that leads to desired behavior is not being able to meet the basic requirements of ethical enterprise, both at descriptive and normative level. The fourth step in this process should be about reflection, conscious choice and intent, and evaluation by the agent as ethics is about “an inside out proposition” that is based on freewill (Covey, 1990, p. 42). Individuals at pre-autonomous levels, takes morality as a set of cultural standards, imposed upon by society externally to develop habits (Dewey, 1960). But in real, argued Dewey (1960), morality begins when we ourselves freely decide about right and wrong, or accept, reject or modify these rules. It is maintained that the uncritical acceptance of cultural rules has been rejected by each and every serious system of ethics. Even, when cultural conventions, law and public opinions are morally right in their stance, taking them uncritically and accepting them without reflection, does not complete an ethical action. According to Dewey, morality is chiefly a ‘reflective conduct’ and that lines are very clearly drawn between customary and reflective morality, where the former is about standards and rules, and habit formation, and the latter is about reason, freewill and choice (Dewey, 1960). This is a distinction, which shifts the origin of morality. Hence, ethics is based on two parts, where only right actions are not enough (Dewey, 1960). Leaders who understand the moral potential of their followers and who expect from their followers, will make it easier for the followers to believe in their abilities and capacities (Gardner, 2013). If individuals are not encouraged to use their own initiative and decision, if they are not expected to exercise their own freewill, then they will not take the responsibility of their action (Gardner, 2013). With freewill also comes the importance of self-knowledge and self-control. These two remain extremely important factors of development of leaders. The wisdom of past (e.g., Lao Tzu, Confucius, & Buddha) stresses on self-control, self-knowledge and good habits. Confucius (1963, p. 38) highlighted the essentiality of duty and self-control. He stated “if a man (the ruler) can for one day master himself and return to propriety, all under heaven will return to

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humanity. To practice humanity depends on oneself”. He further added, “if a ruler sets himself right, he will be followed without his command. If does not set himself right, even his commands will not be obeyed”. “It is true in business, it is true in government and nonprofit institutions, it is true in the nation as a whole. It is now widely though by no means universally recognized that the only way to awaken our organizations and our society is to instill in individuals at all levels a sense of initiative and responsibility” (Gardner, 2013, p. 278). Bryson (1952) said that there is a democratic way of doing everything, and this is what maintains and develops the intrinsic motivation and power of men and women. Leadership is not only about getting desired results, but also to present followers with choice among alternatives. Thus, leadership accepts conflict, debate and competition, but the raw power never allows it (Burns, 1978). ‘Good behavior’ is what intentionally respects the rights of others, and at the same time ‘bad behavior’ through intention and negligence cause harm and override others rights (Rawls, 1985). Either is about protecting one’s rights and needs, which is both at competition and collaboration with the other rights and needs (Gini & Green, 2014). “Leadership mobilizes” while “naked power” coerces (Burns, 1978, p. 439). Senge (1990) saw leader as a teacher. The job of a leader is to provide followers with information, knowledge, insights and new perspectives on reality. Leadership is not merely about telling people how to attain their vision, but it is about inculcation of learning, providing choices and formation of consensus (Senge, 1990). “Effective leadership recognizes that to build and achieve community, followers must become reciprocally co-responsible in the pursuit of a common enterprise” (Gini & Green, 2014, p. 45). “Responsive and responsible leadership requires, as a minimum, that democratic mechanisms be put in place that recognize the right of followers to have adequate knowledge of alternative options, goals and programs, as well as the capacity to choose among them” (Gini & Green, 2014, p. 46). The leader should employ engagement and not just the direction. Leaders should become models and mentors and not coercers (Gini & Green, 2014). Leadership is a moral process, which involves followers based on shared values, goals and motives that reflects the ‘true’ needs (e.g. psychological,

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physical, economic, safety, economic, spiritual, sexual or aesthetic) of both leaders and followers (Burns, 2013). The legitimacy of both transformational leadership and to some extent transactional leadership is based on providing full opportunity to followers to understand, perceive, weigh and experience the alternative before they can arrive at a decision, “a conscious choice among real alternatives” (Burns, 2013, p. 112). “The ultimate test of moral leadership is its capacity to transcend the claims of the multiplicity of everyday wants and needs and expectations, to respond to the higher levels of moral development, and to relate leadership behavior – its roles, choices, styles, commitments – to a set of reasoned, relatively explicit, conscious values” (Burns, 2013, p. 121). On the other hand, according to Price (2008), one of the central covenants of Kantian ethics is the development of other people, mainly their rationality and autonomous agency. “Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end” (Kant, 1964, p. 96). Morality prohibits undermining the rational faculties of agents, as this negation leads to a viewpoint where people are looked at, as instruments or things, and which undermines the value of their rationality. On the contrary, there is a view that “the notion of consent is critical to any discussion of the issue of using people. When followers are given the opportunity to engage their own reasons and to make choices to do what leaders ask them to do, they are being treated not as mere means but at the same time as an end” (Price, 2008, p. 30). Creating consent emphasizes the fact that followers are valued as a rational being and their own goals are being respected. Followers are not merely means in order to achieve leader’s goals (Price, 2008). Development of the followers’ autonomy requires that leaders should help followers to work towards their ends. Rational pursuit of ends can occur, when followers are autonomous and the development of autonomy is about “exercise of choice making capacities” (Price, 2008, p. 34). Leaders must create an environment of choice, so that followers develop their rational capacity by exercising their talents and skills (Price, 2008). The second version of the Categorical Imperative is that leaders should

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understand the value of other individuals and thus value followers (Price, 2008). According to Kant, actions only have moral worth if there is a sense of duty behind them, and not as a result of the consequences, for an agent or anyone else (Kant, 1964, p. 66). This dilemma of seeing employees as rational beings or valuing them as moral beings is what divides the moral psychology and philosophy. Coady (1996) reflected on this problem, by stating that: “The most important virtues of the professional - genuine concern for the client, sensitivity to the client’s point of view balanced by a concern for social justice – cannot be brought about by legislation or even by pseudo-legislation through codes of ethics. As many philosophers have pointed out, when one is forced to be good the ethical aspect of one’s actions is diminished. What is needed in the professions is a commitment to ethical action and a willingness to continue to participate in moral deliberation” (p. 49). These two debates relate to this research inquiry and on which this study has built the theoretical framework. In addition, there are few other recent debates related to ethical leaders and that our study can contribute towards. There has been a recent debate about the role of educational leaders as ethical leaders in diverse societies and in a society with diverse mix of people (Shapiro & Stefkovich, 2016). Shapiro and Stefkovich (2016) emphasize the ethic of care for building a tolerant society, and propagates it as a paradigm to exercise ethical leadership. Furthermore, from this perspective, educational institutions at all levels of society are seen as harbinger of change. The ethical code and behavior of school leaders serve as guide to an emerging society (Shapiro & Stefkovich, 2016). In addition, while studying impression management, Leary and Kowalski (1990) pointed out leaders as a potential motivation for impression management, particularly leading to self-promotion behavior of employees. Bolino, Long, and Turnley (2016) also mentioned this dimension of leader follower relationship. Other studies also have found out the positive relationship between ethical leadership and organization citizenship behavior (El Khouly, Mohammad, & El Hady, 2015) and supervisor integrity and impression management behavior (Kacmar & Tucker, 2016). This debate can further shape our views about ethical leaders and their influences in the organization.

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2.4

Conclusion

This chapter provided a review of various leadership theories that have normative appeal. The reason for providing a detailed account was to understand the concepts of ethical leadership, the similarities it shares with other theories and to mark its distinctions in comparison to others. So far, ethical leaders are recognized as someone who act according to normatively appropriate standards of conduct and promote the same to followers through two-way communication, reinforcement and decisionmaking (Brown et al., 2005). The chapter also looked into the mechanism of how ethical leadership works on the foundation of social learning theory and highlighted the problems with this approach. By reviewing this account, this study seeks the answer of the questions that does moral management undermines the development of rational faculties, and does ethical leadership theory is flawed by drawing lines between ethics and effectiveness of a leader. However, before moving on to the conceptual framework chapter, the dependent variables of the study are discussed in the next chapter of literature review.

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Chapter 3 Literature Review

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Ethical leadership and other leadership theories were discussed in the previous chapter. This chapter is based on the discussion on moral judgment, moral identity, and moral motivation variables. In the first section, moral judgment (3.1), and in the second section (3.2), moral identity theories are discussed. In the third section (3.3), moral motivation and motivational crowding theory are discussed. According to Rawls’s (1971), “It is morality’s special province… to provide guidelines for determining how the benefits and burdens of cooperative living are to be distributed…” (as cited in Rest, 1986, pp. 1-2).

3.1

Moral Judgment

“Behavioral ethics is primarily concerned with explaining individual behavior that occurs in the context of larger social prescriptions” (Tenbrunsel & Smith‐Crowe, 2008, p. 548) and is rather descriptive in nature than normative ethics, which evaluate actions from the moral point of view and is prescriptive in nature (Bazerman & Gino, 2012). Business ethics remains focused on the evaluation of actions of employees, managers and organizations from moral perspective, and encompasses both approaches towards morality (Ferrell, Fraedrich, & Ferrell, 2011). This focus of business ethics also points towards the role of cognitive moral development and to the process of deliberation (Bazerman & Gino, 2012) that results in moral action. Moral judgment is the decision about ‘what is right (ethical) and what is wrong (unethical)’ (Tenbrunsel & Smith‐Crowe, 2008), and predicates on moral reasoning for decision-making. Hunt and Vitell (1986) also stressed the role of moral reasoning, which leads to moral judgment. Organization has the influencing power to modify employee attitudes and actions by propagating particular norms, and by minimizing external influences it can operate as ‘moral microcosm’ (Brief, Buttram, & Dukerich, 2001). Work environment has found to be associated with moral judgment (Trevino et al., 2006). For example, it is found that accounting students and practitioners are at low stages of moral reasoning as compared to their counterparts in other professions and other types of schools (Lampe & Finn, 1992).

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One of the most important theories of moral development and its measurement was forwarded by Kohlberg (1958). Kohlberg (1982) pointed out that his theory of cognitive moral development (CMD) is deontological, in contrast to teleological. A deontological moral system has a presupposition that there are some absolute truths, which exists and moral decision is evaluated through these standards. On the other hand, teleological ethical system judges moral decisions on a presupposition that results are the standards of moral judgments and decisions (Aron, 1977). Before Lawrence Kohlberg’s research, ethical behavior was perceived as the product of social norms and rules. Kohlberg (1969a) concluded that individuals have cognitive capacity that enables them to reason through moral issues and dilemmas, and after years of experiments and studies, Kohlberg delineated cognitive moral development construct, which focuses on the reasoning structures, which people employ to weigh an action’s rightness in ethical terms and how these structures develop through time and experiences of life (Jordan et al., 2013). Kohlberg (1981b) explained that there are more than a few elements, which contributes towards moral behavior, and the most important among these is moral judgment, the determination of what is right and wrong. Most research on the moral judgment has been measured through stages of moral development (e.g., Abdolmohammadi & Sultan, 2002; Bernardi et al., 2004; Goolsby & Hunt, 1992; Green & Weber, 1997; Greenberg, 2002; Kohlberg, 1984a). Kohlberg was a developmental psychologist and his theory puts together moral decisions, which are based upon rules, with decisions based upon principles (Sabin, 2006). Ethics encompasses both ‘values’ and ‘rules’ (Singer, 1994, p. 11); where values presents different choices, within the boundaries of morality (Sabin, 2006) and rules are either complied with or not. An example of a rule is “Don’t kill people”. An example of a value is ‘justice’. Kohlberg (1981a) stated: “To be honest [is a rule and] means ‘Don’t cheat, don’t steal, don’t lie….’ But justice is not a rule…. It is a moral principle. By a moral principle, I mean a mode

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of choosing that is universal…that we want all people to adopt in all situations…. There are exceptions to rules, but no exceptions to principles.” (p. 39) Kohlberg (1981b) developed Jean Piaget’s four stages of cognitive development. Piaget (1965) along with his colleagues took two methods of inquiry towards moral development: First, observation of children playing games like marbles, and, second, interview of children while using short hypothetical scenarios, which covered the moral issues of lying, responsibility, obedience and punishment. Piaget concluded that small children see morality as obedience to adults while the older kids see it as cooperation with their peers. Piaget (1932b) found that most of the children show understanding towards both orientations, he termed these orientations as phases, which “broadly speaking, follow one another without, however, constituting definite stages” (p. 195). He explained that young children’s view of morality as obedience is formed because (a) they think about the physical consequences, and see things in egocentric ways (b) their social world is dominated by authoritative adults. On the other hand, older children recognize morality as cooperation among equals as they are cognitively equipped to understand others’ perception and knows how reciprocity works as their social interaction with peers are based on egalitarian basis of equality (cf. Carpendale, 2000; Youniss & Damon, 1992). Piaget (1932b) also believed that both moral judgment and moral behavior can influence each other, though “it may be that what the child thinks about morality has no precise connection with what he does and feels in his concrete experience” (p. 113). Kohlberg further elaborated that an individual’s sophistication of moral reasoning, is one of the antecedents of the moral action that he/she will take. He proposed a structure of moral development, which has three levels and each level is composed of two stages, which results in six stages in total. The basic tenet of cognitive moral development model is that those who reached advanced stages will take superior moral decisions, in comparison with those at lower levels (Gibbs, Basinger, & Fuller, 1992; Rest & Narvaez, 1994). The theory of cognitive moral development by Kohlberg has been studied extensively in the organizational literature (e.g., see Trevino, 1992b; for review Trevino et al., 2006). More worth focusing is the finding that higher levels of moral reasoning are more

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consistent with ethical decision making (e.g., Greenberg, 2002; Trevino & Youngblood, 1990; Weber, 1990). It also bolsters theoretical claim that higher CMD should be associated with frequent moral behavior and this claim explains itself through cognitive consistency (a need to be consistent with thoughts and action) (Ashkanasy et al., 2006). Especially in the organizational context, CMD remains relevant and important, and many previous studies also identified that link (see Trevino, 1992b for a review). 3.1.1 Understanding Kohlberg – Cognitive Moral Development Theory The first moral philosopher who worked from a scientific perspective was Jean Piaget, when he (1965) interviewed children about justice, he concluded that these responses can be divided into four categories. “Behavior that goes against commands received from the adult…Behavior that goes against the rules of the game….Behavior that goes against equality…. Acts of injustice connected with adult society (economic or political injustice)” (pp. 313-314). He saw these categories as progressive, which starts from infancy and goes towards adolescence. At stage four, children go forward from the simplistic concepts of equality of outcome towards the concepts of equity, “in the domain of distributive justice, it means no longer thinking of a law as identical for all but taking account of the personal circumstances of each [individual]” (p. 317). “The motto ‘Do as you would be done by,’ thus comes to replace the conception of crude equality. The child sets forgiveness above revenge, not out of weakness, but because ‘there is no end’ to revenge…” (Piaget, 1965, p. 323). Piaget’s phenomenal work on the psychological, social and physical development factors of children, paves the way for other developmental theories, like Kohlberg’s. Piaget’s theory is about children’s linear progress along four stages of maturity. The progress at stage 1 and stage 2 happens in early childhood, till age 7 or 8, after which a child progresses to Stage 3, Stage 4 starts at adolescence. Starting with his doctoral dissertation, Kohlberg (1958) substituted Piaget’s scenarios with nine hypothetical dilemmas. Then, Kohlberg sampled 84 boys, read the dilemmas to them, asked them questions about the action they chose and delved into the reason these boys used as justification for their decisions. On the basis of this probe, Kohlberg mapped the

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system of moral reasoning that was the backend process of the boys’ judgment. Kohlberg & colleagues, then kept following 58 boys among the original sample and re-interviewed them after particular intervals of years, for more than two decades (Colby & Kohlberg, 1987, pp. 79-82). There were two main conclusions of Kohlberg’s longitudinal study (Colby & Kohlberg, 1987). First, contrary to Piaget’s conclusion about children viewing different moral problems in different ways, Kohlberg found that moral reasons taken by participants were consistence, across different moral issues. Second, Kohlberg identified five qualitatively distinctive and hierarchical stages of moral development as compared to two overlapping moral phases of Piaget (Krebs & Denton, 2005). Kohlberg (1969a) presented the concept of cognitive moral development, a construct which represents cognitive structures and criteria that an individual reasons with when faced with ethical issues (Jordan et al., 2013). Kohlberg contextualized his theories in different ways. For example, Kohlberg (1973) took the concept of personal rights to explain his moral development stages. Later, Kohlberg (1981a) defined his moral theory through reasons a person attaches with the respect of human rights. According to CMD theory, moral reasoning develops through three stages, from pre-conventional to conventional to postconventional. According to, Boyd and Kohlberg (1973) there are three levels of moral development and each is divided into two stages. “Stages of moral reasoning is a filter through which…. Situational forces are perceived, interpreted, and acted upon” (Kohlberg, 1984a, p. 564). Pre-conventional level: This is the first level of moral development. At this level, a child starts weighing the rules of good and bad in terms of punishment and reward or the physical authority one has over him/her. It has two stages. Stage 1: The punishment and obedience orientation: At this stage, there is a little understanding of others need. Physical consequences of an act determine its goodness and badness with no meaning or value attached to the consequences. A child submits his/her will to the power out of authority of the person, who gives reward or punishment. When children are small, there is no value for others rights. Very young children come to understand that power defines all relationships, the one who is stronger controls the weaker. As children grow up to be 61

toddlers, they learn to manipulate. Stage 2: The instrumental-relativist orientation: At this stage, right action becomes one that acts as an instrument in satisfying one’s need and sometimes the other needs too. Relations are based on elements of fairness and reciprocity regardless of justice, gratefulness and loyalty. Relations are seen with the view of the marketplace, where every deal should have a fair price. Here, other people become the means to achieve one’s personal gains. It is not necessary that toddlers comprehend their parents needs and desires, but what he/she knows is that, particular actions lead to particular reactions from parents (Kohlberg, 1981a). Conventional Level: At this level, the individual seeks affiliations and defines oneself with the identity of a group, like family, friends, nation, etc. Not only an individual try to meet the expectations of these groups, but also tries to maintain the social order and feels loyalty towards the group without any thought to the evident consequences. There are two stages of this level. Stage 3: The interpersonal concordance or “good boy-nice girl” orientation: Individuals at this stage try to be nice and good because it has its rewards in terms of social acceptance. The individual identity group towards which an individual feels loyalty sets the norm for the individual and approval of them serves as a major reward. For the first time, behavior is judged by intention at this stage. At this stage, social relations become very important. Human rights then become important for the maintenance of close and cherished relationships. Hurting others at this stage becomes synonymous with pain, embarrassment and loneliness. Most adults progressed till stage 3 or stage 4 (Kohlberg, 1981a). Stage 4: The “law and order” orientation: Individual starts abiding by the rule and starts living his/her life according to them. Doing one’s duty becomes important and following law and submission to authority defines the right actions, but at stage 4, people’s moral consideration encompasses society. At this stage, “life is conceived as scared in terms of its place in a categorical moral or religious order of rights and duties” (Kohlberg, 1981a, pp. 19-20). Kohlberg’s stage 4 has provisions for any social system, whether it is based on government, law and religion. Individuals at this stage submit their will to the established system.

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Post-conventional, autonomous, or principled level: The individual at this level tries to reason and define morality in terms of their rationality and universal appeal. For the first time an individual breaks free of the norms and traditions of the identity group and starts rationalizing his/her own moral values based on principles. It has two stages: Stage 5: The social contract, legalistic orientation: The meaning of right action is derived from the individual right, which is critically examined and agreed upon. Knowing the personalization of the morality, an effort to reach the consensus on moral objectivity through procedural justice is approached. Right of individual takes precedence and personal opinions and values are valued apart from the constitution. Legal point of view is accepted, but with the possibility of changing laws when it does not coincide with the idea of social utility. Contracts and free agreements are obligatory on other activities of life. At stage 5 “life is valued both in terms of its relation to community, welfare and in terms of life being a universal human right”. Stage 5 calls in the social contract theories and utilitarianism. Stage 6: The universal-ethical principle orientation: At this stage, right action is decided solely on the logical and rational superiority. The maxims of universality and consistency are at the heart of ethical and moral values of an individual. These are abstract rules, which provide light in times of moral dilemmas. Justice, equality of human rights and individual dignity are highly valued at this stage. At stage 6, “human life is sacred- a universal human value of respect for the individual” (Kohlberg, 1981a, pp. 1920). Initially, it was found out that listening to the moral judgments of adults made slight changes in moral development (Turiel, 1966), which fortified Kohlberg’s expectation that to develop reasoning capacity, it is imperative that children (participants) become more active (Kohlberg, 1971b). Kohlberg then supported group discussion where students get a chance to actively discuss moral issues (Blatt & Kohlberg, 1975) and where their views can be challenged leading to stimulation of better arguments and reasoning (Kohlberg, 1975). Cognitive moral development, at best, can be achieved through active participation. Kohlberg-Blatt method takes the inspiration from Piaget’s equilibration model (where a child assumes one position, becomes confused with the new information and reason

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through both, towards more advance positions to reduce confusion), which is similar to the dialectic process of Socratic teaching (Kohlberg, 1971b). One of the interesting findings of the Blatt’s group discussion was that most ‘interested’ students achieved the moral milestones faster and show the greatest amount of change (Kohlberg, 1971b). This finding is also aligned with the Piagetian theory, which espouses that the development of children is not shaped through external reinforcements (reward and discipline) but because they themselves become curious and eager to learn. They examine information that does not match with their existing cognitive structures, and which motivates them towards revision of these cognitive structures (Kohlberg, 1971b). It is important to note that Piaget identified that moral development cannot be achieved through external reinforcement. It has to be the product of an individual’s own reasoning. The ‘how’ of moral development then becomes a central question in the moral development research.

3.1.2 Philosophical Influences on Kohlberg’s Theory Kohlberg’s (1981a) scientific approach towards moral development was grounded in the work of Piaget. Nevertheless, his theory also builds on the philosophical thoughts of Socrates, Plato, Aristotle, Kant, Rawls, and Dewey. This lead to the sharpened focus on the concept of justice. Kohlberg (1984c) stated that moral philosophical theories are customarily typified in moral categories, which includes “modal” categories (e.g., rights, duties, responsibilities) and “element” categories (e.g., welfare, liberty, equality, reciprocity, rules and social order). There are four groups in which moral theories are categorized, which are called “moral orientations”. These moral orientations explain four kinds of decision-making strategies, where each orientation is focused on one of the four universal elements in any social event or situation. These orientations and elements are: “Normative Order: Orientation to prescribed rules and roles of the social or moral order. The basic considerations in decision-making center on the element of rules. Utility Consequences: Orientation to the good or bad welfare consequences of action in the situation for others and/ or the self. Justice or fairness: Orientation to relations of liberty, equality, reciprocity, and contract between persons. Ideal-self: Orientation to an image of actor as a good self, or as someone with conscience, and to the self’s

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motives or virtue (relatively independent of approval from others)” (Kohlberg, 1984c, p. 254). The distinctiveness of morality has been emphasized through all four orientations. Kant, Durkheim, Piaget focused on the concept of rule and respect for them. On the other hand, Mill and Dewey took the welfare and utility consequences in considerations. Bradley, Royce, and Baldwin were focused on idealized moral self (Kohlberg, 1984c). Kohlberg (1984c) identified his concept of morality with that of Rawls, which is based on justice. An individual may employ all or any of these moral orientations. “I cannot define moral virtue at the individual level, [so] I have tried it at the social level and found it to be justice…” (p. 39). Kantian philosophy was also one of the major influences on Kohlberg’s work. Ferre (1951) stated that moral philosophy can be divided into two eras of before and after Kant. Kant’s system of ethics (1994) was the epitome of the rationalist school. His work presupposes human rationality, goodness and impartiality. The dominant philosophy of western liberalism before Kant’s moral philosophy was natural law theory. What differed Kant from the natural law theory was his belief that people are innately good, and independently seek and reach the truth (Schneewind, 1992). Kant built on Rousseau’s theory by arguing that the foundation of the social contract is universal principles of justice and not the opinion of the majority. Rousseau’s social contract theory suggests that people with their free will surrender a part of freedom to become part of a society, which leads to justice through unanimous agreement obligations (Schneewind, 1992). According to Kant (1994), “Categorical Imperatives” must become the foundation of universal ethical laws. Categorical imperatives are the obligations; which rational people want to apply universally. “Act only according to that maxim by which you can at the same time will that it should become a universal law,” (Kant, 1994, p. 274). Kant stated that it leads people, who want to commit suicide, steal, or lie, to consider the consequences, if whole society will come to act the same way. Kant (1994) also argued for a “practical imperative” in conjunction with the categorical imperative. “Act so that you treat humanity whether in your own person or in that of another, always as an end and never as a means

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only” (1994, p. 279). This idea is same as Golden Rule (Kohlberg, 1982). Both Kant and Kohlberg shared the same principled belief that humans are innately worthy. In Kantian ethics, one’s rational morality is the basis of moral actions, which disregards external rewards or punishments for moral actions (Schneewind, 1992). For Kant, a moral act that is motivated by external rewards loses its moral worth, as it is motivated selfishly. This view of Kant was criticized by Ferre (1951), who argued that the contribution of the fields of behavioral and social psychology, was ignored by moral philosophers and ethicists. Singer (1994) noted, “Kant’s assertion that the moral law is a law of reason was based on his own peculiar metaphysics. He saw human nature as eternally divided. On one side is our natural or physical self, trapped in the world of desires. On the other is our intellectual or spiritual self, which partakes of the world of reason from which the moral law derives” (p. 8). Kohlberg (1973) saw Rawls theory as more advanced than that of Kant and other social contract theories. Rawls’s (1957) concern was justice at societal level. This macro concern solidified Kohlberg’s position that identified justice as the most important and distinctive characteristic of a moral system. Rawls (1957) theory of justice is based on the supposition that all members of a society are entitled to the greatest freedom until it did not interfere with other’s freedom, and the limitations on freedom must be justified on the utilitarian ground that is the achievement of greater common good. Here, justice is seen from the lens of legality. “Justice is the elimination of arbitrary distinctions and the establishment… of a proper balance between competing claims” (p. 653). Rawls (1971) saw individual freedom in subservience of a society. As a supporter of 20th century liberalism, Rawls (1957) saw equality and freedom, from the economic perspective. He viewed society as a collection of many rent-seeking groups. Each working towards their own benefit, which will result in a moral socialized system, where equality has an artificial status. Early work of Kohlberg reflects or shows the influence of Rawls & Kant (Kohlberg & Power, 1981). However, Kohlberg (1981a) concluded that empirical studies rarely identified thinkers who are at stage 6. Stage 1 to Stage 5 was derived from the analysis of

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interviews conducted by Kohlberg. But stage 6, remained a theoretical stage that represents liberal philosophy. Reversibility is thus the key distinction between stage 5 and stage 6 as according to Kohlberg stage 5 thinking does not take reversibility into account and theories that represents stage 5 (e.g., social contract theories) falls short of the idea of justice. Like, in capitalism, Adam Smith (2003/1776) establishes property rights as a universal principle. Smith advocated that property rights are not dependent on social contract. Thus, Smith’s theory falls short of Stage 6 standards of reversibility. There are common rights of all people, both at stage 5 and 6, within a society and every member is seen as the defender of the rights of all others. But what distinguishes stage 5 from stage 6 is that at stage 5, those rights are established which are part of the social contract, while on the other hand, at stage 6 rights are universally established and does not depend on social acknowledgement (Kohlberg, 1973). Kohlberg (1973) identified his work on moral reasoning with Rawls’s (1971) model of justice, supporting it as the excellence of moral reasoning. Along with this agreement, he also put forward a caution that Rawls social model is not the only way to organize a society, as principles can be applied differently. But, he identified Rawls theory of justice with the moral system of stage 6. Rawls (1971) provided the most important rationales for political theory of modern Liberalism. His system evaluates social system through ‘veil of ignorance’ and from a view of ‘original problem’. His theory questions evaluators to see themselves in the place of original position, which is a state of premorality. These evaluators have a particular amount of knowledge about social systems, but a ‘veil of ignorance’ delimits this knowledge. This ‘veil of ignorance’ hides whether the evaluators will be born rich or poor, healthy or sick, male or female, etc. Evaluators do have a knowledge of range of incomes in these societies, but didn’t know the percentiles of the income distribution. It is from this vantage point of the original position, individuals choose a society to be born in. Rawls (1971) argued that evaluators through this case, choose a society that safeguards justice for the weakest in the society, as they assume that they have a fair chance to be born in the worst circumstances. For this reason, a socialized nation is preferred over a merit-oriented society. Kohlberg (1973) identified that Rawls’s ideas of the original position and the veil of ignorance can be applied to both macro and

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micro level morality. For him, these ideas can be employed to solve real life ethical problems as well as social problems. According to Kohlberg (1973), reversibility is the central idea of stage 6 reasoning. Reversibility assumes that the evaluator will make the same decision, if he/she would have made at the original position, which is a state where one knows the circumstances but do not know which social status a person will take. For example, in Heinz dilemma, an evaluator knows that he or she can become Heinz, the wife, or the druggist, but what position he/she will take in real would not be known (Colby, Kohlberg, Gibbs, & Liberman, 1983). At this original status, where there is a veil of ignorance, moral decision-making will take place, as evaluators will choose the option that puts the least advantaged member in the best position. This reflects Rawls (1971) theory of justice. Rawls’s theory was also criticized as it provides certain knowledge while disregarding other knowledge, to the decision maker. Kohlberg (1973) supported Rawls by stating that veil of ignorance requires that certain probabilities must remain unknown. He argued that selective information stops self-interest to influence decision-making. It is that barrier that makes it possible to morally judge this problem (Kohlberg, 1973). Kohlberg (1984c) also grouped the normative and utilitarian orientations as Type A, at each stage, and justice and ideal-self orientation as Type B, on the basis of longitudinal study. He found that the judgments arrived at by Type A are more descriptive and predictive, while the judgment of Type B are more prescriptive and internalized as of what should be. Thus, a Type B orientation assumes knowledge of rules and a judgment about how fair these rules are. These two types are recognized as two sub stages. Also, the B sub stage is also recognized as being more mature and sophisticated than sub stage A, as whenever individuals move from one sub stage to another, it will always be from A to B (Kohlberg, 1984c). In short, Kohlberg grounded his moral developmental model in both philosophical and psychological theories. He stated: “The construct validity of a moral development measure has a philosophical or ethical dimension as well as a psychological dimension that is, the requirement that a higher be a philosophically more adequate way of reasoning about moral 68

dilemmas than a lower stage. This is a judgment about ways of thinking, not a grading of the moral worth of the individual” (Kohlberg, 1984c, p. 263).

3.1.3 Rest’s Neo-Kohlbergian Theory Rest et. al. (1999; 2000) developed further Kohlberg’s CMD theory and called his model, ‘neo-Kohlbergian’ model. Neo-Kohlbergian model schematizes Kohlberg’s stages. Kohlberg’s model was about the hierarchical development of individuals, where an individual is placed at a particular moral development level. Development is clear, as individuals move from one stage to another. Rest’s model is also based on progression and hierarchical in nature, and is grounded in developmental psychology. But unlike Kohlberg, Rest’s model advances gradually across the development stages. Rest, Narvaez, Bebeau, et al. (1999) defined Defining Issues Test schemas (DIT) as more concrete than Kohlberg’s stages. In neo-Kohlbergian model, the schemas are labelled as: (a) Personal Interest (labeled S23), which is a stage between CMD’s stages 2 and 3; (b) Maintaining Norms (S4), which comes before stage 4; and (c) Postconventional (S56), which is a stage between stage 5 and stage 6 (Narvaez et al., 1999; Rest, 1986). Rest, Narvaez, Bebeau, et al. (1999) explained that in Neo-Kohlbergian theory development in moral judgment results from acquiring moral schema. DIT is based on presumption that individuals understand moral situations as reflected by these three schemas: Personal Interests, Maintaining Norms and Post Conventional Thinking. The development through these schemas are hierarchical. A child develops a personal interest schema in childhood, while the schema of maintaining norms and post-conventional schema, are developed at later stages of life. 3.1.3.1 The Personal Interest Schema DIT assumes that individual who take this test are at 12-year-old reading level and thus does not trace the normal development in childhood. DIT research begins with adolescence, and thus DIT lacks the greater insight into ‘personal interest’ schema. Rest, Narvaez, Bebeau, et al. (1999) defined personal interest schema as ‘pre-sociocentric’ (i.e., it does not take into account the concept of organized society); and this schema leads to

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decisions where personal consequences are prioritized. In DIT, both stage 2 & stage 3 elements represent earlier stages of moral development. 3.1.3.2 The Maintaining Norms Schema This schema is derived from stage 4 of Kohlberg’s CMD, is about (a) need for norms (b) society wide scope (c) uniform, categorical application (d) partial reciprocity; and (e) duty orientation (Rest, Narvaez, Bebeau, et al., 1999, p. 308). ‘Need for norms’ element is about having normative rules and system. It led people to work in cooperation with each other. Norms connote predictability, safety, and stability. The society wide scope element is about realizing the society wide system of cooperation, so that people can get along with others, beyond their friends and family. Formal law becomes useful here. ‘Uniform, categorical application’ element is about the application of uniform law and the protection it gives to all members of society. ‘Partial reciprocity’ element explains how laws provide the foundation for reciprocity or reversibility among participants in society. Still, maintaining norms schema focus on ‘partial reciprocity’ as under this schema, law abidance may not benefit all members equally. ‘Duty orientation’ element is about maintaining and respecting hierarchical role structures, not necessarily due to the personal qualities of authority but rather due to respect for the social system. Thus, morality of maintaining norms is about social order. This schema ties law with order, and emphasize the necessity of law, without which society will be devoid of order. This schema commits itself to conventional morality. The caveat of this orientation is “conventional mindedness” to which McClosky and Brill (1983, p. 14) pointed while stating: “Because the established standards tend to be accepted as correct standards, those who flout them are often seen as thoughtless, ignorant, or wicked. To choose to be different in one’s attitude towards venerated objects and symbols – religion, the nation, the flag, the family, the Deity - is seen as a sign of depravity. Why should one permit, much less safe-guard or encourage, recalcitrance, error, malicious scorn for objects and values that right-minded people know to correct or even sacred?”

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The danger of over commitment to this stage is a denial of human rights and civil liberties in favor of social order. 3.1.3.3 The Post-Conventional Schema The post-conventional schema views moral obligation as being grounded in shared ideals, which are reciprocal in nature, are debatable and able to stand the test of logical consistency. Through centuries, philosophers have given different ideals to organize society (e.g., utility, social contract, virtue, feminism, religious ideals). Rest et. al proposed four elements in post-conventional schema (a) primacy of moral criteria (b) appeal to an ideal (c) sharable ideals, and full reciprocity. ‘Primacy of Moral Criteria’ is based on a realization that laws, rules, codes and contracts are socially arranged phenomenon and can be arranged in various manners. Here, the post-conventionals do not commit philosopher’s “naturalistic fallacy” which is doing what ‘is’ (existing norms) as ‘ought’ (morally required). There is a clear distinction between ‘is’ and ‘ought’ at this stage. ‘Appeal to an ideal’ is post-conventional thinking about having ideals to organize society. These ideals can be represented as the greatest good. For example; protecting negative rights, safety for each member of society, the development of relationships among people on the basis of care and intimacy, fair treatment, taking care of needy, common good, actualization of self as ideal persons etc. ‘Sharable Ideals’ is about recognition and understanding of the ideals among members of a society “Sharability is tested by the ability to justify an act or practice to those whose participation is anticipated” (Rest, Narvaez, Bebeau, et al., 1999, p. 311). The justification of an act entails that the act respects others, and is not self-serving, that it builds cooperation and aims at the common good, and is in unison with agreed policy and shared principles and ideals. These justifications remained open to deliberation, evidences and logical analysis. ‘Full Reciprocity’ is based on the understanding that laws can be flawed and can be biased towards some groups of a society. Thus, “full” reciprocity is not only about uniformity while applying social norms, but the equality and unprejudiced nature of these norms so that the interests of all the groups are served. Thus, the main difference between Maintaining Norms schema and the Post-conventional schema is that the former builds consensus through justification of established norms and institutionalized 71

authorities, while the latter builds consensus through appealing to shared ideals and logical soundness. At the same time, this ‘behind the scenes’ function of Rest moral schemas is in significant contrast with Kohlberg progressive and clearly marked moral development. Rest’s theory shares the same philosophical foundation with Kohlberg’s theory. For Rest (1986) the idea of “fairness” is part of the inherent mental structure, though how the fairness is defined is dependent on the individual’s level of CMD (p. 10). He also added that both personal and situational characteristics play influential roles in moral development. “The people who develop in moral judgment are those who love to learn, who seek new challenges, who enjoy intellectually stimulating environments, who are reflective, who make plans and sets goals, who take risks, who see themselves in the larger social contexts of history and institutions and broad cultural trends , who take responsibility for themselves and their environs” (Rest, 1986, p. 177).

3.1.4 The Influences on Moral Reasoning in the Organization Kohlberg’s scale deals with moral reasoning rather than moral action. Kohlberg thought that through challenging the children or people, towards higher levels of moral reasoning, kindles a struggle that leads them towards formulation of better moral reasoning. He primarily used the technique of cognitive conflict. More so, he pointed out that at higher levels of moral development people assumes roles and their capacity of role-taking increases (Kohlberg, 1984b). Kohlberg (1981b) thought that higher levels of moral reasoning are better as compared to lower levels as more developed individuals will take the principles of fairness, justice, and human rights under considerations while taking decisions of moral nature. On the other hand, those at pre-conventional levels are concerned with reward achievement and punishment avoidance and those at the conventional levels are focused on the maintenance of interpersonal relationships (Jordan et al., 2013). Post-conventional will prioritize social justice, individual right and well-being of others at the costs of one’s personal network, or the personal benefits that can be gained (Jordan et al., 2013).

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Kohlberg explained that the reasoning at more advance levels than one’s own remain inaccessible for individuals at a particular level, but Schminke, Ambrose, and Neubaum (2005) found that individuals idealize and are attentive to higher levels of ethical thoughts, even when they lack the cognitive capability to reason at higher levels of themselves. PostKohlbergian research points out that individual at higher levels of development can encompass these boundaries and can speak the same moral language as less developed individuals, while presenting the more advance reasoning at the same time (Krebs & Denton, 2005). This becomes pertinent to our understanding of ethical leadership and highlights the use of ethical language that transcends ethical boundaries. Kohlberg proposed that as an individual progresses to higher stages, moral behavior becomes more aligned with moral thinking (Kohlberg, 1975), because each higher level or stage inherently has more stability and generalizability (Blasi, 1980). Brown and Herrnstein (1975) & Blasi (1980) found partial support for this hypothesis. Interestingly and understandably, most adults remain at conventional levels, where what is right and wrong is strongly influenced by what significant others see as wrong and right and is in accord with the rules and laws (Kohlberg, 1981b; Rest, 1986; Trevino, 1992b; Trevino et al., 2006). These findings implied that most adults are influenced by external factors and organization can use rewards systems, climate, culture, leadership, norms, peer behavior to mold employees’ attitude and ultimately action (Trevino et al., 2006). It is found that adults who progressed till ‘conventional level’ of CMD, were either influenced by the norms and expectations of peers and significant relations (stage 3) or dominated by rules, policies and law (stage 4) (Trevino & Weaver, 2003). Stage 6 remains the theoretical postulations where the evidence of someone reaching that stage is very rare (Trevino et al., 2006). Kohlberg assumed that highest level of moral development comes at stage 6. At stage 6, “the worth of the individual human being is central where the principles of justice and love are normative for all human relationships…. Stage 6 people answer in moral words such as duty and morally right and use them in a way implying universality, ideals and impersonality” (Kohlberg, 1981a, p. 22). Individuals at stage 6 broaden the level of

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universality from current society (stage 5- universality) across time and place. At stage 6, individuals are committed to the application of moral principles, universally. Several empirical studies found a negative relationship between CMD and unethical choices and positive between CMD and ethical choices inclusive of work place behavior (See Blasi, 1980; for review seeTrevino, 1992b; and Trevino et al., 2006). Cognitive moral development has decades of testing and development before becoming a part of organizational literature (e.g., Trevino, 1986). As CMD emphasizes the reasoning processes of an individual, especially the justification one chooses to explain one’s position when faced with ethical dilemmas that

prompts behavior for the sake of cognitive

consistency, which implies that someone who is at higher levels of CMD will avoid behaving or acting at lower levels because of the cognitive dissonance it results in (KishGephart, Harrison, & Treviño, 2010). The cognitive moral development of the individual is hierarchical in nature and though it is considered to stabilize, but even after individuals reach adulthood, their CMD can be advanced through training and opportunities aimed at practice of moral reasoning (Trevino, 1992b). CMD theory remained relevant to the study of cross-cultural study of business ethics and types of moral reasoning are found to be universal with similar age and education trends (Gielen, 1994; Moon, 1986; Snarey, 1985). Ford and Richardson (1994) also noted that managers are frequently faced with moral dilemmas where conflicting moral claims are at loggerheads with each other, in the organization. More troubling is the finding that public accounting firms’ managers and partners are at lower levels of formal reasoning than employees at lower levels of organization (Ponemon, 1990, 1992; Shaub, 1989). This also points towards the ambiguity of the reason that whether morally advanced individuals pulled themselves out of such environment or is it the work environment that manifest itself in the moral reasoning of these individuals (Trevino & Weaver, 2003). Another study by Elm and Nichols (1993) on general managers found the same results, pointing out the potential disconnect between age and education; and the hierarchical development of moral reasoning. These findings are troubling and ask for the study of particular job characteristics and organizational context that can influence moral reasoning (Trevino et al., 2006). 74

Also, ethical culture of the organization provides employees with a guideline about which behaviors are acceptable and unacceptable through leader role modeling, reward systems and informal norms that reduces the unethical behaviors in the workplace (Trevino, 1990). Ethical climate is created and maintained through initiatives taken by supervisors. They provide their action or inaction as an example to subordinate that conveys the acceptable values and steps that can be employed when faced with ethical dilemmas (Wimbush & Shepard, 1994). Recently, it was also found that the managers who are high on CMD are less prone to be controlled by the recommendations of agency theory (Martynov & Logachev, 2016). Thus, in organizations, the responsibility to shape subordinates’ behavior lies with the supervisor so that behavior becomes aligned with organizational values and objectives (Wimbush, 1999). This must lead to the establishment of performance requirements and behavioral standards for the subordinates (Brown & Treviño, 2006; Trevino et al., 2000b). This also helps in the evaluation of both.

3.1.5 Measurement of Moral Reasoning Kohlberg also refined his moral dilemmas, questions to be asked, and scoring criteria and methods over a period of time. This led to the publication of Standard Moral Judgment Interview, which is a structured interview in the form of a questionnaire and along with this he also published a 900-pages scoring manual (Colby & Kohlberg, 1987). These guidelines were focused at the identification of participants at the highest stage of moral development. Moral judgment is derived out of score matching with “interview judgments” with “criteria judgments” in the scoring manual. Criteria judgments are categorized on the moral norms of the interviewees, the reasons taken to justify these norms, and the moral development structure it reflects (Krebs & Denton, 2005). In 1970’s, Defining Issues Test (DIT) was established as an alternative of the moral judgment interview. Though Kohlberg remained skeptic of the validity of DIT, particularly how it ranks and rates data on moral judgment and emphasized that his method of scoring interviews is “relatively error-free” and “theoretically the most valid method of scoring” (Kohlberg, 1976b, p. 47). Rest, Narvaez, Bebeau, et al. (1999) pointed towards the

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problems of the data collection through interviews. He identified that interviewee takes the role the interviewer is interested in. For Kohlberg, Boyd, and Levine (1990) it’s the role of philosopher, for Gilligan (1982) it’s the role of feminist, for Youniss and Yates (1999) this role is of an intuitive decision maker. This limitation was also highlighted by other researchers (e.g., Nisbett & Wilson, 1977; Uleman & Bargh, 1989). Rest developed Defining Issues Test (DIT) as an alternative to the moral judgment interview (MJI). DIT is a paper and pencil test, which presents six moral dilemmas. Respondents first read each dilemma and twelve reasons for choosing their action. The rationales represent the six moral development stages. Respondents then rate these rationales in order of their importance. The top four statements are recognized as a result of this rating. “The DIT is based on the premise that people at different points of development interpret moral dilemmas differently, and have different intuitions about what is right and fair in a situation….These [intuitions] are not necessarily apparent to a subject as articulative rule systems or verbalize philosophies –rather, they may work ‘behind the scenes’ and may seem to a subject as just commonsensical and intuitively obvious” (Rest, 1986, p. 196). MJI scores interviews according to the stage, they can clearly articulate, through the reasons an interviewee takes to explain the actions to be taken. MJI evaluates the moral system an interviewee depends on for the chosen actions. DIT, on the other hand, asks respondents to choose among moral action, without explaining the moral status of an action (Narvaez et al., 1999). Rest, Narvaez, Bebeau, et al. (1999) explained that DIT works by activating moral schemas. The moral dilemmas and DIT statements stimulate the preferred moral schemas. Thus, the items that match one’s moral reasoning are given high rating and ranking. Whereas those items that does not make sense receives low rating. The items on DIT are part of the moral reasoning, a kind of question to avoid supporting explicitly any particular reason. Also, respondents score high on DIT and even reaches stage 6, which remains a theoretical stage on CMD. Rest (1986) explained that “since subjects usually find recognition tasks (like the DIT) easier than production tasks (like the Kohlberg task), it is not too surprising that the DIT credits subjects with more advanced thinking than does the Kohlberg test” (Rest, 1986, p. 197).

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DIT has advantages over moral judgment interview, which includes increased reliability, reduced costs, and administration of DIT to many participants at the same time (Rest, Narvaez, Thoma, & Bebeau, 1999). MJI demands greater resources, as each participant has to be interviewed individually and it needs significant time to carry out. It takes around 45 minutes to complete the interview and interpretation also takes additional time (Colby et al., 1983; Kohlberg, 1981a). Along with this, the conduct of interview and scoring requires trained researchers or helpers. Though the structure of these interviews ensures inter-rater reliability, the chances of human err is possible during evaluations. DIT, in comparison, is scored objectively and DIT can be evaluated by the Center for the Study of Ethical Development, which publishes DIT (Rest, Narvaez, Thoma, et al., 1999). Rest (1979) developed Defining Issues Test as a substitute for MJI, as MJI demands significant resources. Initially DIT was seen as being equal to MJI as a measure of moral development, but later Rest and his colleagues, through the refinement of DIT and its theoretical approach, placed DIT to be in the advance position than MJI (Bebeau, Rest, & Narvaez, 1999; Narvaez et al., 1999; Rest, Narvaez, Thoma, et al., 1999; Rest et al., 2000). DIT thus is also more efficient and offers savings on time and money (Rest, Narvaez, Thoma, et al., 1999).

3.1.6 Criticism on Cognitive Moral Development Philosophers and Psychologist also criticized Kohlberg’s theory (Trevino et al., 2006). Former due to its leanings towards justice based philosophical theories (e.g., Hare, 1952; Kant, 1959; Rawls, 1971), latter due to its rigid stage progression (Siegler, 1997) and primary data source (Shweder, Mahapatra, & Miller, 1987); which were verbal self-report that became the basis of Kohlberg’s analysis. Kohlberg’s moral development model was also criticized by Gilligan (1993) who challenged the CMD in interpretive terms while Bennett (1995) challenged it on philosophical terms. Flanagan and Jackson (1987) questioned the narrow perspective of basing theory on a single idea of justice. Other (e.g., Miller & D.M., 1992; Snarey, 1985) labelled Kohlberg’s work as focused only on liberal, western ideas of individuality and justice. Baumrind (1978) and Damon (1977) criticized

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that Kohlberg’s moral dilemmas have failed to circumvent the variety of the moral problems of everyday living. Haan (1978) criticized Kohlberg for ignoring the interpersonal side of morality, while Krebs, Vermeulen, Carpendale, and Denton (2014) criticized that Kohlberg’s dilemmas calls on the hypothetical judgments about imaginary actors, which is in sharp contrast to real judgments with actual outcomes for self. Joy (1986) also criticized that the idea of justice, which Kohlberg supports is limited. He said that though Kohlberg’s work builds on Piaget’s, but it doesn’t reflect the same breadth. Joy argued that Kohlberg was moved “by his own political biases into obvious distortions of ‘what is moral’” (1986, p. 406). It is important to mention that Kohlberg’s later work acknowledge the role of social morals in influencing moral principles, though it remained focused on individual autonomy (Kohlberg & Power, 1981). Reed (1997) criticized that Kohlberg was not consistent through time. He explained that Kohlberg’s theory was founded by rationality and self-created ethics. But, his later pedagogic strategy of ‘Just Community’ is based on social and democratic ethics, including social norms, which pressurizes to adhere to principled moral reasoning. Though Kohlberg (1981a) advocated the supportive function of just communities but for others as well as Reed, the distinction remained theoretical. Baier (1973) stated that the difference between stage 5 and stage 6 is not adequate. Kohlberg (1982) also acknowledged that he had faced great difficulty in separating stage 5 and stage 6. Henson (1973) criticized Kantian assertion of stage 6, where the obligation is superior than charity and is not defined adequately. Clouse (1985) also criticized Kohlberg’s theory, by arguing that stage 4 thinker can keep social harmony and keep check on the social upheavals of Liberals. These criticisms elicited response from Rest and colleagues who then presented alternatives to Kohlberg’s developmental theory along with alternative measurement approaches. The conceptualizations of Rest, Bebeau, and Thoma (1999) points towards gradual shift between development schemas. They also put forward the claim that Kohlberg’s theory is about ‘macro-morality’ (at societal level) than ‘micromorality’ (daily relationships) (Trevino et al., 2006). Rest, Bebeau, and Thoma (1999) identified that moral judgment is just one factor that counts towards the multiple sequential

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factors of psychological process of morality. But Rest, Bebeau, and Thoma (1999) defensively arguing for CMD, stated “Nonetheless, the special function of the construct of moral judgment is to provide conceptual guidance for action choice in situations in which moral claims conflict” (p. 10). The loudest voice against Kohlberg was of Gilligan. She pointed towards the bias in Kohlberg’s theory and claimed that it is against the ethics of care, which she forwarded as women’s preferred ethical system (Gilligan, 1982, 1993; Gilligan & Attanucci, 1994). Rest (1986) said that “although the care orientation is said to be an alternative and parallel path of moral development, there is not one longitudinal study or any cross-sectional data to support that claim” (p. 117). According to Rest (1986), “[Gilligan] did not actually do a systematic review of the moral judgment literature on sex differences before making the bold statement that justice-oriented scoring systems downgrade women….systematic reviews are now available….and the results are unambiguous: it is a myth that males score higher on Kohlberg’s test than females” (p. 112). Researchers who used DIT were failed to replicate Gilligan’s claim (e.g., Aronovitz, 1984; Denny, 1988; Taylor, 1992; Wahrman, 1980; Watt, Frausin, Dixon, & Nimmo, 2000; Wright, 2001). Contrarily, empirical research successively found that adult females are either subsequently similar or slightly higher in cognitive moral development than males (Derry, 1987for reviews; Derry, 1989; Ford & Richardson, 1994; Rest, 1986; Walker, 1984). Review by Ambrose and Schminke (1999) on gender differences in ethics, came to conclusion that research regarding gender differences in ethics will bear no result (Ashkanasy et al., 2006). It is found that gender has no difference in dealing with ethical dilemmas (Kish-Gephart et al., 2010) as claimed by Gilligan (1977) nor that social expectation guides certain gender-specific responses (e.g., Eagly, 1987), in the workplace context. But, still Gilligan’s work remained important to the subject of moral development. Kohlberg (1982) saw Gilligan’s work as a useful hypothesis, when it was developed. He acknowledged that Gilligan’s work led him to refine his interpretations of the interview.

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Though CMD theory also attracted criticism and revisions (e.g., Gibbs, Basinger, Grime, & Snarey, 2007; Gilligan, 1982; Krebs & Denton, 2005), some of the criticism did not find empirical support. On the contrary, no pattern has evolved that supports the claim that older individuals can better deal with ethical issues (Tenbrunsel & Smith‐Crowe, 2008). Additionally, the findings also negate the notion that educated individuals are both equipped to deal with ethical issues and does not require any further assistance (Trevino & Brown, 2004). This could be explained by a more serious criticism, which has been forwarded by Krebs and Denton (2005, p. 663) who argued and found that “moral development is defined more by an expansion in the range of structures of moral reasoning available to people than by the last structure they acquire”. Krebs and Denton (1997) argued that the prediction of moral behavior from the moral reasoning is not possible as Kohlberg explained that people at different stages can choose same action or people at the same stage, can choose different actions. “Kohlberg model encourages us to view people as possessing general structures of moral judgment through which they process virtually all moral information. We view people as possessing many structures of moral judgment that are activated by different social stimuli and influenced by different goals” (Krebs & Denton, 2005, p. 644). Schlenker (1980) concluded that people respond to their audience, which are present, to whom they are accountable, and this also includes the audience personal to themselves. Impression management helps to create a public image for these audiences, for the validation and affirmation of oneself. These audiences are important in moral decision making. Krebs and Denton (2005) stated that: “Kohlberg and his colleagues have done a great job of mapping changes in people’s ability to explicate ideal conceptions of morality, but the evidence suggests that these conceptions play a relatively insignificant role in determining the moral judgment and moral behaviors people emit in their everyday lives. In real life, people make moral decisions about themselves and others that matter; the consequences are real. To account for the ways in which people make such decisions, we need an approach that views them as products of social processes and cognitive and affective mechanisms that enable people to achieve their goals and foster their interests in cooperative ways.” (p. 647)

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Colby and Kohlberg (1987) came to the conclusion that CMD model is about the development of moral competence, and that people do not perform according to their competence level in different circumstances. To conclude, though the orientations of moral reasoning come under criticism, but moral judgment remains an important antecedent of the moral action. In the next section, moral identity becomes the topic of discussion.

3.2

Moral Identity

How people come to behave in a prosocial manner remains an ongoing debate in moral psychology (Aquino & Reed II, 2002). More so, the importance of ethical decision making in the organization led many scholars to study the psychological mechanism that underlies moral motivation, especially in the context of the organization (see Trevino et al., 2006 for review). For these reasons, there has been a quest for other influences besides moral reasoning (cf. Haidt, 2001). For decades, Kohlberg (1969a) cognitive moral development model, which was further developed by Rest & his colleagues (Rest, Narvaez, Bebeau, et al., 1999), remained the dominant theory in the field of ethical decision making. But empirically it failed to explain completely moral actions and only moderate relationships were found (Shao et al., 2008), which led to the understanding of other mechanisms, which must explain moral behavior (e.g., Bergman, 2004; Blasi, 1983; Hoffman, 2000; Walker, 2004). Social cognitive theory is recognized as a framework that transcends the situational limitation (Aquino & Freeman, 2009; Aquino & Reed II, 2002; Lapsley, 1996; Lapsley & Narvaez, 2004; Shao et al., 2008; Weaver, 2006). Contemporary research shows the predictability of social-cognitive conception of the centrality of moral identity for the moral action (Aquino & Reed II, 2002; Aquino et al., 2007; Detert et al., 2008; Reed, Aquino, & Levy, 2007a; Reed II & Aquino, 2003; Reynolds & Ceranic, 2007). Moral identity is being realized as one of the antecedents of moral motivation and behavior (Aquino, Freeman, Reed II, Lim, & Felps, 2008) and advocated as a source of moral agency in the organization (e.g., Weaver, 2006). Kohlberg also outlined numerous mechanism other than moral reasoning like ego controls (Kohlberg & Candee, 1984) but the key difference between the

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two models is that Kohlberg’s model focuses on moral reasoning while the emphasis of socio-cognitive model is on self-regulatory mechanisms. Both the factors are important as when self-regulatory mechanisms are absent, the higher moral reasoning ability has less effect on behavior (Aquino & Reed II, 2002).

3.2.1 The Different Perceptions of Moral Identity Though the consensus on the definition of moral identity is yet to be achieved, the literature points towards two main perspectives: the character perspective and the social cognitive perspective (Shao et al., 2008) (for an exception, see Moshman, 2004). Additionally, this study also identified social identity perspective of moral identity, which has been employed by a few researchers. These are discussed as follows: 3.2.1.1 The Character Perspective It was Augusto Blasi (1983, 1984, 2005) who first presented perhaps the most developed, moral identity theory. The ‘Self-Concept Model’ of Blasi was aimed at delineating the limits of cognitive development theory, particularly when it comes to the extraordinary moral behavior of moral exemplars, like the demonstration of a sustained commitment to act in accordance with his or her moral beliefs (Blasi, 1983, 1984). The self-model is based on three components. First, the decision of people is not only about ‘rightness’ or ‘morality’ of an action in any particular situation but it’s also about ‘judgment of responsibility’, which means that people must decide when they are also responsible to act according to their judgments (Blasi, 1984). Second, the standards for making moral judgments, comes from the moral identity of a person, shown through the differences among individuals, in the degree to which they see being moral as central to their self-concept (Blasi, 1995). Thus, for a moral person, the moral values and ideals remain more central to his or her sense of self as compared to the one whose moral identity is not centralized (Shao et al., 2008). Third, is the tendency of humans to struggle to be self-consistent. This tendency leads to the motivational impulse towards moral action, so the person who defines

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him/herself as moral will be obligated to act in the ways which are consistent with his/her moral self-concept (Blasi, 1984). These basic components of ‘Self-concept’ theory are weaved in the conceptualizations of other theories as well, to explicate the relationship between moral identity and moral behavior (e.g., Colby & Damon, 1992; Colby & Damon, 1993; Damon, 1984; Damon & Hart, 1992; Hart, Yates, Fegley, & Wilson, 1999). Damon (1984) theorized that the integration of self occurs as the individuals develop through childhood to adolescence. Likewise, Colby and Damon (1992, 1993) stated the moral identity reflects a higher degree of integration of self and morality, for individuals who remained committed over a long time to moral ideals as reflected in their behavior (i.e., moral exemplars). Blasi (2005) developed his idea further and proposed an augmented model of moral character that shows the importance of three virtues, for an individual to develop moral identity: integrity, will power and moral desire. While will power and integrity are not directly involved with morality (i.e. these are morally neutral), rather they represent the motivational undercurrents of moral identity (Shao et al., 2008). “Will power is defined as the capacity for self-control” and is necessary to overcome temptations and guide behavior, according to one’s moral aspirations (Shao et al., 2008, p. 515). “Integrity is defined as an individual’s concern for unity of his or her sense of self’” and it leads individuals towards behavior, which are in consistence with their moral identity (Shao et al., 2008, p. 515). Lastly, moral desire is the predominant quality of moral character. Blasi (2005) states that moral desires show the intensity of one’s yearning for first-order moral goals, like kindness, compassion, fairness and honesty. Moreover, the intensity of moral desires of individuals tunes the degree of conviction in the pursuance of moral outcome in comparison with other non-moral goals (e.g., power, creativity, politeness & pleasure) (Shao et al., 2008). In addition, Blasi (2005) saw moral desires as an outcome of volition, which is the conscious contemplation on the desire to act according to one’s moral self. Also, one’s identity is deeply rooted in his/her core and puts a demand on an individual for being true to oneself in action and it also explains how one understands and relates to reality

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(Erikson, 1964). Hart, Atkins, and Ford (1998, p. 515) defined moral identity as “commitment to one’s sense of self to lines of action that promote or protect the welfare of others” which also resounds the Erickson’s definition. The developmental models of selfidentity suggests that identity is made up of the few elements of ideal self and take the ideal principles as a guide for action (Blasi, 1984; Blasi, Noam, & Wren, 1993). Blasi (1984) grounded his self-concept model with various assumptions. First, he asserts that the content of moral identity differs from one person (for e.g., compassionate, kind) to other (for e.g., fair, just and principled). Blasi (1984) also analyzed that there are several distinct characteristics that makes up one’s unique moral identity, but there are certain common moral identities of most of the people. Secondly, Blasi (1984) asserted that to be a moral person is not necessarily part of one’s broader entire self-definition; leading to understanding that being moral is a continuum on which people’s self-concept is pegged. This specific assertion is in unison with Erikson (1964) idea of identity being at the very core of one’s self, but assumes that a particular identity is not about exclusion or inclusion of moral self-concept but rather the self-importance of moral identity shifts on the continuum (Hart et al., 1998) and consequentially the motivational strength it has (Aquino & Reed II, 2002). Blasi (1984) clarified that when strong moral identity is present then the moral behavior does not rely on the ability to understand and act out the complex moral judgments and moral argumentation as antecedents. This also asks for the study of the interactive relationship between moral judgment and moral identity. The centrality of moral identity is also maintained through the basic need to remain consistent (Aquino et al., 2009). Moral Identity has a motivational force and according to consistency principle, identity demands an individual to remain true to him or herself (Erikson, 1994). On the other hand, a person who doesn’t perceive moral identity as central to his/her self-conception has no such obligation to act and therefore is expected to be less motivated to act morally (Aquino et al., 2009). The obligation to act morally relates to moral identity via the need to be consistent (Blasi, 1980, 2004b; Blasi et al., 1993) as it keeps one from self-condemnation (Aquino et al., 2009). Moral Identity serves as the selfregulatory mechanism that defines the parameters for individual moral behavior and

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motivates towards it (Blasi, 1984; Damon & Hart, 1992; Erikson, 1994). Each identity has values and goals, which become accessible in certain circumstances (Aquino et al., 2009). Thus, it will be worthwhile to study the situational factors that effects moral identity. The essentiality and the antecedence of moral identity to execute the moral conduct is also being asserted by Damon and Hart (1992, p. 455): “there are both theoretical and empirical reasons to believe that the centrality of morality to self may be the single most powerful determinant of concordance between moral judgment and conduct….People whose self-concept is organized around their moral beliefs are highly likely to translate those beliefs into action consistently throughout their lives.” Blasi’s (2005) recent writings emphasize that individuals must nurture their capacity to self-control and strive towards the complete sense of self. Only after individuals meet these two conditions then the possession of moral identity (i.e. the centrality of first-order moral virtues to the self) and strong moral desires (i.e. preference of moral actions above all) can be defined as having moral character (Shao et al., 2008). 3.2.1.2 Strengths of Character Perspective The character perspective that Blasi (1984, 2005) presented has many recognized strengths. Hardy and Carlo (2005) summarized the work of Blasi by pointing out that Blasi put self in the center of moral functioning, identified the motivational value of moral identity, and pointed towards the individual differences in having moral desires rather than moral capacities (i.e. moral reasoning), which explains the differences in moral action. In addition, Blasi explained that the desire to be consistent with self is the link between moral identity and moral action. These qualities of character perspective places the morality within an individual as part of one’s self and proposes the unification of moral goals and ideals with moral identity which can lead towards moral action and which implies that Blasi (1984, 2004a) see moral identity as a stable characteristic of self. Hence, it explains the adherence of moral exemplars to the moral principles and their commitment to moral causes across various situations.

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3.2.1.3 Limitations of Character Perspective Despite its strengths, the character perspective also has limitations (Shao et al., 2008). First, it is not able to explain more automatic and intuitive moral actions, and remain representative of moral behaviors, which are the result of a deliberative process (Shao et al., 2008). Thus, Blasi’s (1983, 1993, 1999, 2004d, 2005) insistence that moral behavior reflects volition which involves both moral desires and contemplations delimits the study of ‘everyday morality’ which is intuitive, automatic, and tacit, and based on moral heuristics rather than conscious reasoning (Lapsley & Narvaez, 2004, 2005; Narvaez, 2008). The character perspective also ignores the dynamism of personal identities (Markus & Kunda, 1986). Thus, this perspective applies to selected individuals whose moral identity remains central to their selves and does not explain the situational variability of moral identity, particularly in relation to other competing personal identities (Aquino et al., 2008). Hart (2005) argued that Blasi’s idea of moral identity oversimplifies the complexity inherent in moral functioning. To account for these limitations, few researchers took the social cognitive perspective to conceptualize moral identity (Shao et al., 2008). 3.2.2.1 The Social Cognitive Perspective Aquino and Reed II (2002, p. 1423) stated that “moral identity has been described as one kind of self-regulatory mechanism that motivates moral action”. Moral identity is conceptualized as structured cognitive representation, or schemata, of moral characteristics, aims, values and behavioral scripts, in social cognitive perspective. This perspective of moral identity takes support from theoretical tools of social reasoning, identity, memory and information processing, which explains its role in the process of ethical decision-making (Bandura, 2001). One of these mechanisms is the accessibility of knowledge (Shao et al., 2008); the degree to which the accessibility of a particular schema, increases, the stronger the influence it casts on the behavior (Higgins, 1996b). The centrality of moral identity within self-concept thus depends on the accessibility of this

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given knowledge structure (cf. Aquino & Reed II, 2002; Lapsley & Lasky, 2001; Lasky & Lapsley, 2001; Narvaez, Lapsley, Hagele, & Lasky, 2006) and this availability become useful for the social information processing. As it happens, moral identity exerts a powerful control over moral action (Aquino & Reed II, 2002; Lapsley, 1996; Lapsley, 1998; Lapsley & Narvaez, 2004, 2005; Lasky & Lapsley, 2001). On the contrary, if moral identity remains inaccessible then its significance as a potential regulator of moral behavior decreases (Shao et al., 2008). Social cognitive perspective expounds that a person’s moral identity is part of the memory and stored as intricate knowledge structures, consisting of moral values, goals, traits and behavioral characteristics (Aquino & Freeman, 2009; Aquino & Reed II, 2002; Lapsley & Narvaez, 2004). These knowledge structures are constructed upon learning which comes with life experiences. For this reason, each one has a different relation to his/her moral selfschema. Similarly, the priority of moral self-schema to one’s overall self-conception also varies from one individual to another (Aquino & Reed II, 2002; Blasi, 1980, 2004b; Lapsley, 1996; Lapsley & Narvaez, 2004; Narvaez et al., 2006). A person who has greater centrality of moral self-schema within self-concept must perceive being moral as selfdefining in comparison with other identities within self-concept (Blasi, 2004b). This centrality of moral identity then use controls to shape the cognition and behavior of an individual (Aquino et al., 2009). Likewise, high moral identity also translates in more and frequent accessibility of moral self-schema than other self-schemas (cf. Higgins, 1989). The greater the moral identity centrality, the higher will be the activation potential (see Higgins, 1996a), enabled with influencing information processing and moral behavior (Aquino et al., 2009). Also, when definition of moral identity (cf. Aquino & Reed, 2002) implies that it is strongly related to an individual’s self-concept, then it connotes relative stability and doesn’t pronounce moral identity a personality characteristics because situational and contextual factors influence moral identity (Aquino & Reed II, 2002). Also, moral identity can become more or less central to the self-concept over time because of socio-emotional maturity and experiences of life (Hart et al., 1998). However, it is assumed that when more self87

importance is attached to moral traits that defines one’s moral identity the more probable it becomes that it will be evoked in multiple different situations (Aquino & Reed II, 2002). Social cognitive theory sees self-concept as a system of identity schemas and proposes that people manages between many self-identities and only a few of these are kept in consciousness at any particular time (Carver & Scheier, 1998; Markus & Kunda, 1986; Minsky, 1988; Skitka, 2003). Social cognitive theory is predicated on the principle that the influence of a particular identity, which is part of working self-concept, is a function of its accessibility in a particular situation (Aquino et al., 2009). Thus, perceiving and defining oneself as moral person, leads to moral motivation, only when moral identity is accessible within a working self-concept (Skitka, 2003). More so, activation potential is the extent to which a knowledge structure becomes accessible for processing and acting on information (Higgins & Brendl, 1995). The activation of moral or any other self-schema depends on various factors, from regular priming to innate personality orientations, to repetitive acts of self-definition (Higgins, 1989). After the activation of moral self-schema, the potential of moral self-schema to influence behavior increases. Aquino and Reed II (2002) defined moral identity while building on social cognitive perspective as a self-schema, which is structured around a set of related moral characteristics. Aquino and Reed II (2002) showed that these associations are about a particular mental image of a moral person and how he/she feels, thinks and do (Kihlstrom & Klein, 1994a). Taking clue from Erikson’s (1964) assertion, which purports that a genuinely experienced identity is anchored in the depths of one’s being and implicates the trueness of one’s action, which should be aligned with one’s self. Aquino and Reed II (2002) postulated that moral identity has two aspects, one of which is private and other is public (e.g., Hart et al., 1998) and explained that the moral self’s cognitive representation, which is part of memory is represented symbolically to others through the actions undertaken by a person in the world (Shao et al., 2008). Thus, the private aspect of morality is termed as internalization and public aspect is termed as symbolization (Shao et al., 2008).

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The social cognitive conceptualization of moral identity shares the similarity with the work of authors whose theoretical conceptualizations are also based on social cognitive perspective (e.g., Lapsley & Narvaez, 2004). This conceptualization also has two assumptions in common with character perspective (Shao et al., 2008). One is that the level of importance of moral identity differs in the overall conception among individuals (Blasi, 1983; Damon, 1984) and the other is that the motivational value of moral identity has its own source in the human desire to remain consistent with one’s self (Blasi, 1983, 2004d; Festinger, 1957). Hence, within the framework of social cognition, the self-importance of moral identity or the relatively stable relation between one’s sense of self and the projected representation of his/her moral character in mind, added to the desire to be self-consistent, relates moral identity to moral action (Shao et al., 2008). Regardless of these similarities, social cognitive perspective of moral identity (e.g., Aquino & Reed II, 2002; Lapsley & Narvaez, 2004; Lasky & Lapsley, 2001) and character perspective of moral identity are distinct from each other. Social cognitive perspective emphasizes the situational influences on social information processing (Bargh, Bond, Lombardi, & Tota, 1986) through activation or deactivation of knowledge schemas, inclusive of moral self-concept (Shao et al., 2008). To summarize, social cognitive perspective acknowledges the multiplicity of conception among the identities of a person, and the availability of any of these identities in the working self-concept, at any particular time (Markus & Kunda, 1986). Additionally, the regulation that comes from the moral identity may increase or decrease depending on this accessibility for the evaluation and reaction to information in any particular situation (Carver & Scheier, 1998; Skitka, 2003). 3.2.2.2 Strengths of Social Cognitive Perspective The social cognitive perspective (Aquino et al., 2008; Aquino & Reed II, 2002; Lapsley & Narvaez, 2004) explicates the function to assess moral identity and its role in regulating the automatic, intuitive and more tacit behaviors which represents everyday morality (Lapsley & Narvaez, 2004). Thus, the social cognitive perspective identifies ‘when’ and in ‘which situation’ any particular identity becomes part of working self-concept (Aquino et

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al., 2008). Thus, social cognitive perspective provides explanations for “situational variability” and “intra-individual stability” of moral action (Shao et al., 2008, p. 518). 3.2.2.3 Limitations of Social Cognitive Perspective The major limitation of social-cognitive perspective is that it puts moral identity with the various other identities, which can influence ethical action (Shao et al., 2008). Thus, the uniqueness of moral self is not recognized in social cognitive perspective in contrast with the character perspective (Shao et al., 2008). Additionally, this perspective fails to explain the consistent moral behavior of moral exemplars, which are understood better from the character perspective of moral identity (Shao et al., 2008). 3.2.3.1 The Social Identity Perspective Social identity perspective has identified as another theoretical perspective, which can explain moral identity. Some researchers established that moral identity looks towards the self-concept (Blasi, 1984) and social-identity theories (Tajfel, 1959; Tajfel & Turner, 1979; Turner & Oakes, 1986) for theoretical underpinnings (Aquino & Reed II, 2002). Moral identity is defined “as a self-concept organized around a set of moral traits” (Aquino & Reed II, 2002, p. 1424). Although, moral identity is grounded in a characteristic based conceptualization but it is also assumed that a moral identity of a person may have a social referent in the membership group, an abstract ideal, a known particular individual, an unknown individual or any other socially constructed referents (Aquino & Reed II, 2002). There is a capacity in ourselves to relate to and identify with others on multiple variables like shared characteristics, common ancestry & familial bonds, or same interests (Aquino & Reed II, 2002). Overall, how one identifies with others can have roots in ethnicity, religion, politics and vocation (Deaux, Reid, Mizrahi, & Ethier, 1995). On the whole many social identities form a social self-schema, which is organized around unique knowledge structures in memory that relates social identity and the self (Markus, 1977). “The social self-schema organizes one’s social identities and directs attention to new self-relevant information” (Aquino & Reed II, 2002, p. 1424). Self-relevant information can be

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processed differently depending on one’s general ability and is found to have existed; for example, the characteristic of gender (Skitka & Maslach, 1996), mathematical aptitude (Lips, 1995), and other kinds of personality characteristics (Fekken & Holden, 1992). Aquino and Reed II (2002) suggested that individual self-concept (which may be organized around moral traits), is one of the social identities that may become part of an individual’s social self-schema. The social cognitive process shapes identity (e.g., Bandura, 1986) and identity theory inspects how identity took shape through social interactions and in comparisons and references to other people (Tajfel, 1959, 1974; Tajfel & Turner, 1979; Turner & Oakes, 1986). Desired self-concepts are externalized and reinforced through social psychological factors like behavioral modeling (Bandura, 1986) and through implicit and explicit expectations of others (Stryker, 2002). ‘Institutional Logics’ (Friedland, 1991) such as linguistics used, social network location and ‘positional identities’ that are attached to a particular status (Oakes, Townley, & Cooper, 1998) also play it’s part in shaping an identity. 3.2.3.2 Strengths of Social Identity Perspective The strengths of social identity perspective of moral identity are quite a few. First, group identity provides a base to develop an individual’s moral identity, as groups already has norms of behavior and standards to follow, and these standards serves as a guide to map one’s identity accordingly. Second, the moral expectation of other members of a group has motivational value and by fulfilling these expectations, the social identity of an individual is strengthened. It also enables a group to take collective moral action against collective disadvantage (Drury & Reicher, 2009; Ellemers, 1993; Klandermans, 1984; Mummendey, Kessler, Klink, & Mielke, 1999). Third, as members of a group shows associational identities, marked by similarities, the predictability of group member’s moral behavior increases.

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3.2.3.3 Limitations of Social Identity Perspective On the other hand, there are certain limitations with this perspective of moral identity. First, the social categorization particularly with respect to moral identity can limit one’s moral outlook. Categorization is important to make sense amid the complexities of human world where our knowledge about other human and the world itself is always limited (Jenkins, 2008). An individual may come to understand and support ones’ moral characteristics as superior than other groups. Jenkins (2008) describes that ‘Collective identification’, builds a powerful image of people who share similarities, but at the same time these similarities imply differentiation from others or out-groups. Second, as identity is shaped by references and comparisons, the identity of an individual remains tied to certain moral aspects. This may put limits on ones’ moral development. Thus, social identity may delimit the development of moral identity as group members hinge their moral identity on stereotypical moral characteristics.

3.2.2 Moral Identity in the Organizational Context The influence of situational factors on behavior is one of the basic assumption of social psychology (Cervone & Shoda, 1999; Mischel, 1968; Ross & Nisbett, 1991) and multiple empirical research has found this relationship (Aquino et al., 2007). Another assumption is that individuals maintain multiple identities from which only working self-concept can be kept in consciousness at a particular time (Markus & Kunda, 1986; Minsky, 1988). This point towards the situational factors that play important role in evoking moral identity (Skitka, 2003). The identity of an individual is a self-conception or a self-definition (Erikson, 1994) and how the concept of moral identity is related to leadership and especially business ethics, should be explored. As the research is meager in this area, there are many avenues that could be explored in an organizational context. Future research should be focused on how moral identity and the perception of leaders (ethical, ethically neutral or unethical) are related (Brown & Mitchell, 2010). As symbolization can lead to strong reactions, it would be helpful to study the effect of such tendencies on how the employee perceives leader’s morality (Brown & Mitchell, 2010). Like, the possibility of

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leader having a strong moral identity, while being perceived as unethical (cf. Robinson & O'Leary-Kelly, 1998). The dimension of internalization, which is found to be more consistent with ethical behavior should be explored in an organizational context. Mitchell (2008) found that the influence of unethical leadership (as perceived by employees) on employee deviance is weakened when employees are high on internalization dimension.

3.2.3 Measurement of Moral Identity There are different approaches to measure moral identity and each has its strength and limitation. This research incorporates the direct approach towards the measurement of moral identity. It asks respondents to rate their own selves in association with and to the degree of which moral characteristics are important to them. The most rigorous measurement scale is the ten-item scale by Aquino and Reed II (2002) which measures two components of moral identity named as internalization and symbolization. 3.2.3.1 Internalization and Symbolization: The Two Faces of Moral Identity Aquino and Reed II (2002) developed an instrument which is grounded in trait-based conception and measures two aspects of moral identity as explained by Erikson (1964). Identity defining the core of one’s being and how it is reflected in one’s action. While “Internalization reflects the degree to which a set of moral traits is central to the selfconcept, whereas symbolization reflects the degree to which these traits are expressed publicly through a person’s action in the world” (Reynolds & Ceranic, 2007, p. 1611). The symbolization dimension relates to the definition of symbolization by Laughlin (1970, p. 414) who described it as a process “through which an external object becomes the disguised outward representation for another internal & hidden object, idea, person, or complex”. The moral identity scale developed by Aquino and Reed II (2002, p. 1272) “had a stable factor structure, was internally consistent; possessed nomological validity and predicted variety of morally relevant outcomes” inclusive of the appearance of a self-concept, based on moral traits (cf. Hart & Fegley, 1995), volunteering (self-reported) and observed donation of food to needy (Reed II & Aquino, 2003).

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Moral identity is composed of two factors: internalization and symbolization. Predictive quality of both of these dimensions encompasses the behaviors like self-reported volunteering and willingness to minimize harm (Aquino & Reed II, 2002; Reed II & Aquino, 2003). However, Aquino and Reed II (2002, p. 1425) clarified that “moral identity does not supplant the cognitive-developmental model or the idea of moral reasoning as a predictor of moral action. Rather it complements this approach”. Contrary to this private aspect of moral identity (internalization), the public aspect (symbolization) is the degree to which people’s moral identity is culminated in their action in the world (Winterich, Aquino, Mittal, & Swartz, 2013). Person high on symbolization will convey message to others about his/her commitments to specific moral ideals and goals. Person low on this aspect will be less interested to engage in public displays of such behavior. Also, in the moral identity model (Aquino & Reed II, 2002), the correspondence of both dimensions is not necessary, although at least some positive relationship must exist. Recognition makes the prosocial behavior visible (Fisher & Ackerman, 1998) and is viewed as symbolic (Grant, 2012; Mickel & Barron, 2008). Winterich et al. (2013) proposed that the symbolic aspect of being recognized is related to the symbolization aspect of moral identity (Aquino & Reed II, 2002). It has also been shown through past studies that while internalization dimension is a stable predictor of pro-social behavior, the symbolization dimension is less stable predictor (Aquino et al., 2009; Shao et al., 2008). Also, the internalization of moral identity remains neutral to any particular ethical system (Aquino & Reed II, 2002), unlike structures of moral reasoning (Kohlberg, 1984b). But it can be safely proposed that moral identity internalization leads to moral motivation to act in a prosocial manner as compared to the one who remains low on this facet of moral identity (Winterich et al., 2013). Additionally, what it means to be a moral person, do have some universal traits and indicative of pro-sociability. For example; being caring, helpful, compassionate and kind (Aquino & Reed II, 2002; Walker & Frimer, 2007; Walker & Pitts, 1998b). Thus, some kind of prescriptive element plays a defining role in characterizing a moral person. And though the particular conduct of ethical codes may differ across cultures; temperament, and socialization but it is argued (e.g., De Waal, 2010; Hauser, 2006; Pinker & Morey, 2011)

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that the pro - sociality of human is due to the evolved characteristics of morality hard wired to the human mind. According to moral identity theorists, this prescription is felt strongly by individuals who has highly self- relevant moral identity (Blasi, 1984; Colby & Damon, 1992; Lapsley & Narvaez, 2004; Reed II & Aquino, 2003). 3.2.3.2 Strength of Moral Identity Scale The basic strength of the direct approach to measure moral identity is that it measures the absolute levels of self-importance that people attached to their moral selves (Shao et al., 2008). As a result, the direct measurement has more predictive value as compared to the relative and latent measures, in the case, where the situational influences on the regulatory capacity of moral identity are focused (Shao et al., 2008). It also avoids the ambiguity of alternative identities by clearly identifying moral traits (Shao et al., 2008). This problem persists in the other relative measurement of moral identity. 3.2.3.3 Limitations of Moral Identity Scale Direct measurement of moral identity remains unable to identify moral exemplars and thus, not well-suited for this purpose (Shao et al., 2008). As it is easy to imagine that people will rate themselves high on these attributes rather than low, and there are many individuals who perceive moral identity to be important to their being but many will not be able to deliver the moral excellence particularly as measured by the latent approach to moral identity (Shao et al., 2008). Also, the direct approach is prone to induce social- desirability bias (Shao et al., 2008). But, the body of empirical work which has employed direct measurement found that the problem of such biases is not very serious in nature (e.g., Aquino & Reed II, 2002; Aquino et al., 2007; Moberg & Caldwell, 2007; Olsen, Eid, & Johnsen, 2006; Reed II & Aquino, 2003; Reynolds & Ceranic, 2007; Sage, Kavussanu, & Duda, 2006).

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3.3

Moral Motivation

Motivation is the force that compels action (Thorkildsen, 2013). Many models of motivation suggest that action is part of motivation rather than being independent (Atkinson & Raynor, 1974; Lewin, 1926; Weiner, 1972). Motivation is a source through which “individuals formulate beliefs and goals, embrace desires, generate attributions to explain their experiences, and direct their energies as they act” (Thorkildsen, 2013, p. 1). Relationship of moral judgment and moral action remain the subject of Plato and Aristotle, who pointed towards “akrasia” or weakness of will or “thought action problem” (Bergman, 2004, p. 30 ). It is suggested that moral decision making in real life situations is a difficult one and there are various pressures on one’s self which can lead to various kinds of decisions, as mostly the other goals remain in conflict with the moral ones (Rest & Narvez, 1994). The choice of a moral decision is thus contingent on many factors, including moral reasoning, emotional elicitation in morally charged situations, obligatory nature of moral decisions (Rest, 1986; Rest, 1983) and the defensive mechanism which can devalue the moral goals (e.g., Bandura, 2002). There is also another perspective which points towards the sociobiological, personality and social cognitive origins of moral motivation (Thoma & Bebeau, 2013). Conclusively, Rest argued that “one must have some cognitive apparatus to recognize the moral goal and then some affective processes to emphasize the value of pursuing moral goals” (Thoma & Bebeau, 2013, p. 53). Moral motivation thus is defined as a person’s “degree of commitment to taking the moral course of action, valuing moral values over other values, and taking personal responsibility for moral outcomes” (Rest, Bebeau, & Thoma, 1999, p.101 ). Rest hypothesized that it is the struggle within one’s self over the question of the pursuance of moral value, arrived at through deliberations, or other values (Bebeau & Thoma, 2013). Recent theories in the field of moral development which explained how moral identity is formed (Bergman, 2004) provide useful information in explaining moral motivation to the research in behavioral ethics and applied social sciences (e.g., Aquino & Reed II, 2002; Reynolds & Ceranic, 2007; Weaver et al., 2005). The research on moral identity does not aim to understand the

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moral beliefs of a person, but how a person relates to these beliefs and that which results in an understanding of one’s self (Damon, 1984). Here the ‘why’ of moral motivation is tied to one’s identity, that’s why failure to act morally gives rise to cognitive dissonance and also leads to emotional discomfort (Blasi, 1999, 2004b; Festinger, 1957). Failure to act in an ethical way is taken as a betrayal to oneself and the power of this moral motivation is derived from the degree of integration of morality with self (Bergman, 2004). Moral motivation (i.e., a sense of felt obligation to act Eisenberg, 1986, p. 206) is found to mediate the relationship between moral attitudes and judgment, and behavior (Eisenberg, 1986). But also moral behavior and moral motivation are not always connected to moral reasoning (Bergman, 2004; Blasi, 1980, 1999, 2004b, 2005) and the moral identity of an individual has informative value at this point (cf. Bandura, 2002; Weaver, 2006; Weaver & Agle, 2002). How then this moral motivation, which is primarily intrinsic in nature, interacts with external rewards in an organization. To understand this phenomenon, the theory of motivation crowding is useful and is discussed in the next section.

3.3.1 Motivational Crowding Theory: Paying the Price “It seems that bigots were eager to rid their town of a Jewish man who had opened a tailor shop on main street, so they sent a group of rowdies to harass the tailor. Each day, the ruffians would show up to jeer. The situation was grim, but the tailor was ingenious. One day when the hoodlums arrived, he gave each of them a dime for their efforts. Delighted they shouted their insults and moved on. The next day they returned to shout, expecting their dime. But the tailor said he could only afford a nickel and proceeded to hand a nickel to each of them. Well, they were a bit disappointed, but a nickel after all is a nickel, so they took it, did their jeering, and left. The next day, they returned once again and the tailor said he had only a penny for them and held out his hand. Indignant, the young toughs sneered and proclaimed that they would certainly not spend their time jeering at him for a measly penny. So they didn’t. And all was well for the tailor” (Jewish fable in Deci & Flaste, 1995, p.26 ). ‘Economic Approach to human behavior’ (Becker, 1976; Frey, 1999) or ‘Economic Imperialism’ (Hirshleifer, 1985; Lazear, 2000a; Stigler, 1984) became successful because of competency with which relative price effect is applied, whose emphasis is solely on

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extrinsic motivation, but on the other hand the emphasis of psychology remains on intrinsic motivation. Previous two decades mark a paradigm shift in economic motivation research, where the question of incentives and reward schemes on the performance and motivation of individuals are addressed. Moved by self-determination theory, behavioral economics have taken birth as a new branch of economics. It challenged the fundamental ideas of relative-price effect and its basic beliefs in incentives and rewards as panacea for individual motivation and performance. It brings forward the evidences of the negative effects of “pay for performance” on individual’s intrinsic motivation, named as “crowding-out” or “overjustification” effect (Weibel, Wiemann, & Osterloh, 2014). The inspiration that cognitive evaluation and self-determination theory (SDT) gave to economics, resulted in a dramatic new theory of human motivation (Weibel et al., 2014). Bruno Frey (1992, 1997a, 1997b) concluded that in many cases ‘relative price-effect’ (i.e., the performance enhancing effect of incentives) has the negative effects on individual performance, labelled as “crowding-out” effect. At the heart of behavioral economics is the idea that human communities cannot be developed or sustained without voluntary and intrinsically motivated behavior towards social goods (Ostrom, 2000). The assumption of standard economic theory is that the prospects of higher incentives (e.g., payment, rewards) attached with performance that can be measured, always results in higher levels of performance. This effect has also been confirmed empirically especially for piece-rate wages, paid for simple tasks (Stajkovic & Luthans, 1997). One highly quoted example is the field experiment by Lazear (2000b), a personnel economist, carried out at American Company ‘Safelite Glass’, where changing fixed hourly wages to piece rate, increased productivity by 36% (incentive effect: 20%, selection effect: 16%). On the other hand, labor costs were increased by 9 % only. On the other hand, psychology literature provides multiple examples of how the rewards and incentives for a task or behavior in a short run, decrease effort and motivation. The earliest search for the reasons behind motivation focused on two areas (Gneezy et al., 2011); biological needs of survival and procreate, and extrinsic reward and punishment. In

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the early 1970’s, psychologist started challenging these assumptions. Their interest was particularly focused on intrinsic motivation and was in contrast, with the research that states that intrinsic motivation always follow the same path as extrinsic motivation (Deci, Koestner, & Ryan, 1999a). The idea that rewards especially monetary rewards crowds out extrinsic motivation has its roots in two different branches of social psychology. The seminal work of Titmuss (1970) who argued that payment for the donated blood will reduce or eliminate the willingness for blood donation because it undermines cherished social values and even without considerable empirical support, his thesis caused stir (Bohnet, Frey, & Huck, 2001). This invited the economists’ interest in the crowding out effect (Gneezy et al., 2011). At the same time a group of cognitive social psychologists (e.g., Deci, 1971, 1972; Deci, 1975; Deci & Flaste, 1995; Deci & Ryan, 1985) identified that in some conditions monetary rewards saps away intrinsic motivation. In the cases where intrinsic motivation is important and valuable, rewards can lead to negative consequences indirectly (Bohnet et al., 2001), this also resonates what Bandura (1971b) identified in his work. This effect has been termed as “The Hidden Cost of Reward” (Lepper & Greene, 1978), “Over-justification hypothesis” (Lepper, Greene, & Nisbett, 1973) or “Corruption Effect” (Deci, 1975). Contemporarily this idea has also been known as “Cognitive Evaluation Theory” (Deci et al., 1999a). A number of social scientists inclusive of economists admit the theoretical possibility that motivation is negatively affected when relationships, which are primarily defined as non-monetary changed into monetary ones (Bohnet et al., 2001). In cognitive evaluation theory (Deci, 1975; Deci, 1976, 1980) ,which is also a foundational theory of self-determination theory (Deci, Connell, & Ryan, 1989; Deci & Ryan, 1985), the unobservable cognitive processes are put forward as an explanation of crowding out. One of these cognitive processes is ‘locus of causality’ (De Charms, 1968), which provides reasons for the transformation of intrinsic motivation to extrinsic motivation, accounting for the conditions under which external rewards can lead to this transition. A person’s behavior can be explained through the locus of causality, where the person’s attribution of behavior holds internal locus of causality based on one’s own will, initiative and

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endorsement; and external locus of causality with external reinforcements and constraints (De Charms, 1968). Deci et al. (1989) clarified that internal locus of causality translates in intrinsic motivation, whereas external locus of causality is associated with extrinsic motivation. It is also proposed that external conditions can develop an internal locus of causality and thus intrinsic motivation, if the individuals learn, and become self-determined through informational feedback (Ryan, 1982). On the other hand, if incentives and rewards are looked at as controlling mechanism, then this undermines self-determination (Deci, Koestner, & Ryan, 1999b, 1999c). When individual experience “puppets on strings”, it negatively affects their intrinsic motivation (Deci, 1971), shifting their motivation from intrinsic to extrinsic. Deci (1971) mentioned that “one is said to be intrinsically motivated to perform an activity when one receives no apparent reward except the activity itself” (p. 105). Intrinsic motivation is a deep rooted concept in psychology and brought to our considerations in modern times by De Charms (1968) and Deci (1975). A general idea of this body of work is that incentives hold pieces of information relayed from principal to the agent, and this information can lead to unexpected influences on behavior. Also, when incentives for effort or a task is introduced, paying more will lead to more effort. It suggests that “for tasks if incentives are large enough, their direct price effect will be larger than the crowding-out effect in the short run” (Gneezy et al., 2011, p. 3), but there is also a possibility that when incentives are very high, it ‘chokes’ people under its pressure (Ariely, Bracha, & Meier, 2009b). If what incentives convey is a kind of ‘bad news’, agents who are receiving this incentive will shape their beliefs about the task, effort or behavior, about themselves, and their own assessment of their principals (Gneezy et al., 2011). This results in a permanent reduction in motivation, and consequentially an individual is not motivated without the provision of additional incentive, as the standard incentive effect is gone in the long run (Gneezy et al., 2011). Gneezy and Rustichini (2000a) found out that not only present, but past incentives also affect current behavior.

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There is no differentiation between the two kinds of motivation in Standard Economic Theory and motivation is looked at as the “manifestations of underlying preferences” (either for the task or the reward that comes with it) (Bohnet et al., 2001, p.591 ). Formal economic models talk about extrinsic motivation. Intrinsic motivation is excused from considerations assuming to be “an exogenously given constant” (Bohnet et al., 2001, p. 591 ). Though critics dismiss this issue by pointing towards the lack of conclusive evidence (Prendergast, 1999), proponents answered with caution to use rewards in the organization. Gibbons (1998, p. 130) in his survey “Incentives in Organizations” pointed out that “A more troubling possibility is that management practices based on economic models may dampen (or even destroy) non-economic realities such as intrinsic motivation and social relations.” Motivation Crowding theory places extrinsic and intrinsic motivation on the two poles and sees the possibility to move along that continuum in both directions, if it is towards extrinsic, then crowding out will occur as intrinsic motivation starts reducing, and if the movement is towards intrinsic motivation then crowding in will occur and intrinsic motivation will increase (Bohnet et al., 2001). Among many reasons identified, two reasons which produced such effects; a change in preference (Bohnet et al., 2001); a change in the perceived nature of the performed task, in the task environment or in the actor’s selfperception (Bohnet et al., 2001). The ‘hidden cost of reward’ is generalized in two ways (Frey, 1997b); the intervention created from outside the person under considerations i.e. both positive monetary rewards, and controls accompanied by negative punishments may influence intrinsic motivation (Frey, 1997b). The conflicting effects of external intervention on behaviors were analyzed by Chang and Lai (1999) & Bénabou and Tirole (2000). Field experiment by Gneezy and Rustichini (2000b) found out that only the groups which receives a significant amount of money work as well as the groups that were working without any monetary rewards (Both the groups were on the task of collection of donation for charity from private household). It points towards the different responses the work environment perception can lead to. The crowding

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out effect can also be referred to the two psychological processes; impaired Selfdetermination (Bohnet et al., 2001) and impaired Self-Esteem (Bohnet et al., 2001). The meta-analytical study on ‘hidden cost’ phenomenon by Deci et al. (1999a), in the field of social psychology, after analyzing 128 well-controlled experiments came to the result that the effects of extrinsic rewards on intrinsic motivation are consistent and evident. Intrinsic motivation is negatively influenced by tangible rewards (Deci et al., 1999a). Deci et al. (1999a) provided the overview that rewards have the ability to control people’s behavior and this may be the most significant reason of loyalty and advocacy shown to it, at all levels of society, but consequently it also produces a negative effect that undermines individual self-regulation “as a consequence of rewards, people take less responsibility for motivating themselves” (Bohnet et al., 2001, p. 598).

3.3.2 The Ways of Intrinsic Motivation Even the die-hard critics of cognitive evaluation theory realizes that under certain conditions rewards negatively influence intrinsic motivation (Bohnet et al., 2001). Adding to this, the research on the crowding out effects is increasing in number in experimental economics (Bohnet et al., 2001). Laboratory experiments (e.g., Fehr & Gächter, 2001; Zanella, 1998) found out that incentive contracts crowds out the intrinsic motivation in the form of reciprocity. Intrinsic motivation plays an important role in volunteer work and as consistent with theory, rewards reduces the amount of volunteer work (Freeman, 1996). Use of external regulations crowds out the existing intrinsically motivated behavior that regards others. The intervention to lead people to more pro-social choices backfires in common pool resource dilemma as it releases people from moral obligation to take ethical decisions (e.g., Ostmann, 1998). The popular reasons of this phenomenon points towards human motivation. Altruism (i.e., unconditional prosocial motivation) and reciprocity (i.e., conditional prosocial motivation) and which has been forwarded as ‘intrinsic motivation propensities’. Altruism is a tendency in individuals towards social goods at the personal costs (Fowler & Kam, 2007). While “strong reciprocity is understood as a tendency to reciprocate kind intentions of the interaction partner because of moral obligation. Thus,

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reciprocitists’ moral obligation is conditioned by the intentions and the behavior of others” (Weibel et al., 2014, p. 75). Number of laboratory and field experiments confirmed these effects (e.g., Ariely, Gneezy, Loewenstein, & Mazar, 2009; Frey & Goette, 1999; Heckhausen & Heckhausen, 2006; Holmås, Kjerstad, Lurås, & Straume, 2010; Jenkins Jr, Mitra, Gupta, & Shaw, 1998; Weibel, Rost, & Osterloh, 2010). There is another organizational mechanism, closely related to crowding out, which is formal control. Control can be defined as “the purposive influence on the regulation of an individual’s behavior through hierarchical authority, which leads to the attainment of institutional goals (see Fayol & Urwick, 1963; Gulati, 1998; Snell, 1992)” (Weibel et al., 2014, p. 79). Formal control is built on the assumptions of extrinsic motivation: common goals and standards are set, achievement of the standards is monitored through supervision, and rewards and punishments are dispersed according to their compliance. Though there is a debate on the effects of control, but many researchers found that in particular conditions, control influences intrinsic motivation (Weibel, 2010). Two arguments were forwarded to explain this effect. First, formal control is at odds with individual’s autonomy needs as it in externally devised influence (Argyris, 1957; Walton, 1985). Another is that it undermines social relations (Bijlsma-Frankema & Costa, 2005; Fox, 1974), it casts suspicion and doubt (Falk & Kosfeld, 2006; Kramer, 1999; McGregor, 1960; Sitkin & Stickel, 1996) and increases the hierarchical distance between the one who controls and the one who is controlled (Weibel, 2007). There are numbers of researchers who found the empirical evidence (e.g., Barkema, 1995; Falk & Kosfeld, 2006). Frey and Osterloh (2002) found that participation at work increases employees’ intrinsic motivation for work (e.g., Alm & Torgler, 2006; Benz & Frey, 2008; Feld & Frey, 2002; Tomer, 2007). In a study of distrustful public laws with tax morale, it is concluded that “the high compliance rate can only be explained either by tax payers’ commitment to the responsibilities of citizenship and respect for the law or lack of opportunity for tax evasion” (Graetz & Wilde, 1985, p. 358 ). It also leads to the understanding that the organization should either forcefully enforce the regulation or compliance with ethical standards or should show trust in the employees to do it willingly. The choice is of consequences, especially when the

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chances to get away with crimes of ethical nature are abundant in organizations. Generally it is argued that how people perceive their treatment by authorities strongly shapes their assessment of authorities and the law; and as a consequence their will to cooperate (e.g., Bardach & Kagan, 2002; Lind & Tyler, 1988; Tyler & McGraw, 1986). The presence of crowding out effect is pointed out by Trevino (2006) but is not much researched in the field of behavioral ethics. Gneezy and Rustichini (2000a) also provided another argument that changes in the social norm explain the behavioral change in the long run. The understanding of the difference between social and monetary rewards alters the individual’s belief about the other’s behavior, as people start believing that incentives should be given, as social norm approves that people do not contribute. Then, how decision situation is formed significantly influences pro-social behavior. To change the framing of interactions from no incentive to positive incentive can radically change the decision frame from social to monetary (Gneezy et al., 2011). In an experiment designed by Fehr and List (2004), it is found that individuals either perceive incentives as favorable or antagonistic, and if these are negatively perceived, incentives will negatively affect the behavior. The effectiveness of incentives used as an encouragement to public goods lies in its ability to influence the trust relationship between the involved parties (Gneezy et al., 2011). Pro-social behavior involves trust. In a relationship of principal and agents, the more trusting the principal will be, the more effort agents will exert (Ellingsen & Johannesson, 2007) but this also makes it a delicate relationship and explicit incentives give message of distrust (Gneezy et al., 2011). The experiment by Gächter, Kessler, and Königstein (2009) showed that even if the crowding out effect is not occurring in the short run, the voluntary contribution is reduced as compared to contributions in the relationship of pure trust. People do not always see rewards and incentives signaling distrust, but they usually see it as a kind of control mechanism. The form of incentive (social or monetary) can shift the framing of the situation. In addition, incentives can work better when individuals take the decision of pro-social behavior in private, but if the same decision is to be taken publicly, incentives will crowd out such behavior. Especially in organization where rewards are 104

given publicly, the effect on image identity can lead to demotivation (Gneezy et al., 2011). But still, when crowding effects are found to be an empirically significant occurrence, it does not always rides over the traditional price effect (Bohnet et al., 2001). In which conditions, crowding effects become relevant should then be pursued as it is a worthwhile endeavor to undertake (Bohnet et al., 2001). The development in the research suggests that the effects of incentives are based on their design, their form (monetary or nonmonetary), their interaction with intrinsic and social motivation and the consequences of their removal (Gneezy et al., 2011). Providing incentives thus prove beneficial in the short term, but in the long run it proves detrimental and does not lead towards desired change in the behavior (Gneezy et al., 2011). Offering incentives change agent’s perception in two ways. One is information. Providing incentives for improved academic performance in school gives signals that the particular goal is difficult, that this is an unattractive task, or that the agent is not suited for it (that is why the need for additional incentives or reward arises). On the other hand, giving out rewards also indicates the trust deficit, which is ‘bad news’ for the agent and decreases intrinsic motivation of the agent to behave in desired way (Gneezy et al., 2011). The other way for crowding out to happen is when extrinsic rewards influence negatively the other motives to act in desired ways. For example, when a greater personal benefit is attached to pro-social behavior, it affects the reputation associated with the intrinsic and extrinsic motivation of a person. It reduces the signal about pro-social priorities and preferences and strengthen the ideas about greediness of a person, which may decrease the image motivation (Gneezy et al., 2011). In these cases, providing incentives in the form of material reward of high value can create negative effects if its influence is greater on image motivation than the standard price effect. The extent of influence of this effect also depends on the extent of its being public (Gneezy et al., 2011). Deci and Flaste (1995) also pointed out that it’s not just monetary rewards that leads to crowding out effects, but even symbolic rewards can have the same effects. Though the crowding out effects can be used in a few situations to get the desirable outcome (Bohnet et al., 2001) in the organization. But on the other hand, intrinsic motivation is not negatively influenced by tangible rewards, when

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these are unexpected and are not attached to the desired task or behavior (Bohnet et al., 2001).

3.4

Conclusion

It is understood that one of the antecedents when it comes to ethical decision making, is the cognitive moral development approach which was initially theorized by Piaget (1932b), and was later developed by Kohlberg (1971a) and Rest (1979). Cognitive moral development structures moral reasoning, where higher levels predicts moral behavior (cf. Haan, Smith, & Block, 1968; Kohlberg, 1969a; Kohlberg, 1984b; Kohlberg & Hersh, 1977; Kohlberg & Kramer, 1969). However, Kohlberg never completely established a link between moral reasoning to predict moral behavior, but only to the extent of facilitation and information. Kohlberg’s CMD theory remain a theory of moral reasoning (Aquino & Reed II, 2002). Moral identity, moral motivation and motivational crowding theory are also discussed. It is understood that from the social cognitive perspective, the centrality and accessibility of a person’s moral identity, serves as motivational force towards moral action (Aquino & Freeman, 2009; Aquino, Reed, Stewart, & Shapiro, 2005a; Aquino & Reed II, 2002; Blasi, 1980, 2004b; Lapsley, 1996; Lapsley & Narvaez, 2004; Narvaez et al., 2006). It is also understood that the construct of moral identity (Aquino & Reed II, 2002) has two aspects of symbolization and internalization and that a person whose moral identity is highly central remains obliged to be in consistence with the prescribed behavior attached with moral self-schema in order to avoid self-condemnation and those with less centralized moral identity have no such obligation (Aquino et al., 2009). In addition, moral motivation is discussed which is about prioritizing moral values and showing commitment and responsibility to act according to the cherished values. Motivational crowding process is also discussed. It is found out that since Richard (1970) who proposed that providing private monetary incentives will decrease the blood donations, the empirical evidence of crowding out effects kept growing (e.g., Frey &

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Oberholzer-Gee, 1997; Gneezy & Rustichini, 2000a; Mellström & Johannesson, 2008). The explanation of this phenomenon are though not conclusive, but growing (Deci, 1975; Frey, 1997b) which emphasizes that extrinsic motivations may interact with intrinsic motivations; external incentives might corrode the trust in the relationship of principalagent (e.g., Falk & Kosfeld, 2006; Fehr & Falk, 2002; Fehr & List, 2004); or that decision framework of individuals takes a shift from social to monetary frame (e.g., Heyman & Ariely, 2004). There is also another mechanism through which external incentives can affect negatively the intrinsic motivation to prosocial behavior, is when it interacts with the image motivation and dilutes the signal value of prosocial behavior (e.g., Bénabou & Tirole, 2005). And that the relationship between moral or social motivations and crowding out effect has strong theoretical support (Beretti, Figuières, & Grolleau, 2013). The current and previous chapter of literature review provides the study firm foundation on which to build the theoretical model, and towards which this study moves in the next chapter.

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Chapter 4 Theoretical Framework

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This chapter presents the theoretical framework of the research. Theoretical framework of the research presents the reasons employed and arguments constructed to derive the hypotheses of the study. This chapter builds our theory and thus, have the utmost importance for this study. First of all, a brief recap of the gaps and issues previously identified in the literature review chapters is discussed. The focus of the first section (4.1) is these identified gaps. In section (4.2) ethical leadership and the identified problems in the construct is discussed. In later sections, two of the focuses of our research are discussed. Third section (4.3) deals with the influence of ethical leadership on moral reasoning of employees while the second objective of how ethical leadership leads to crowding in or crowding out effects of moral identity based moral motivation becomes part of the discussion in the fourth section (4.4).

4.1

Identified Gaps in the Literature

In the last chapters, ethical leadership, moral reasoning, moral identity, moral motivation and motivational crowding out theory were discussed, and it was found out that there are other antecedents of moral behavior other than moral reasoning (Shao et al., 2008). Few problems of the construct of ethical leadership were identified, like the divide of ethics and effectiveness, and external reinforcement of ethical behavior. The problems of externalization of moral motivation and negative influences on intrinsic motivation with rewards and punishments were also identified. Bandura’s (1971b) doubts over rewards and punishment and the importance of self-regulatory mechanism were also highlighted. Social learning theory asserts that reinforcement remains a powerful tool for the maintenance of behavior, but is an inefficient way of creating new ones (Bandura, 1971b). On the other hand, it was also explained that external reinforcements can fail to modify or maintain behavior, when the outcomes have an intrinsic relationship with behavior and is intrinsically self-administered (Bandura, 1971b). Also, as ethical problems are not always clean, and are muddied with various considerations, punishing an individual’s action in the face of other highly valued consideration and actions, can lead to other outcomes than desired by organization. It is also understood that self-reinforcement is based on self-concept. Bandura (1971b) posed a question about the high plausibility of the role of self-reward

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in behavior modification. The function of self-reinforcement makes the necessity and explanation of external rewards and punishments difficult. It was also understood that modeling influences can lead to modification in moral judgment (Bandura, 1971b). Then, it was highlighted that higher levels of moral reasoning are consistent with ethically sophisticated decision making (Trevino, 1992b) and individuals idealize and are attracted towards higher levels of moral thinking (Jordan et al., 2013). It was understood that Kohlberg’s work is based on Jean Piaget’s theory of human development, which rejects the idea of external reinforcement and emphasized that development is the result of individual’s own reasoning (Piaget, 1948). But Kohlberg came to the understanding that cognitive moral development can be achieved through active participation. Thus socialization became one of the tools for moral development. It was pointed out that the decision making of employees who are at low levels of Kohlberg’s moral reasoning can be shaped through external influences while those at higher levels do not take such influences into consideration (Trevino, 1986). This point towards the need to identify particular job characteristics and organizational context, which influences moral reasoning. It was learnt that both action and inaction of leaders, is an example. Supervisors may have significant control over reward and punishment, which includes pay increases, task assignment, promotion, layoffs and terminations (Wimbush, 1999). So, the wellbeing of employees, which is attached to financial rewards and benefits is dependent on supervisor’s evaluation (Wimbush, 1999). This control may increase in magnitude where employees have no other option of employment. Then, the dilemma of leadership where employee autonomy and control posed serious questions to management was also highlighted. Few questions were raised during the inquiry, like; what is the route that higher CMD leaders will take to shape employees’ morality and how will it be perceived by employees? Supervisory influence is found to be related to ethical behavior, due to trust and respect. The important question here is that, ‘is ‘control’ and ‘respect’ one and the same thing? Does control lead to respect, and should supervisors manipulate and coerce in order to have ethical outcomes? Or should the role of ethical leader be more inspiring.

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Then the relationship of ethical leadership and employee’s moral identity based moral motivation is another focus of this study. Bandura (1999) & Bandura, Barbaranelli, Caprara, and Pastorelli (1996) provides socio-cognitive model which theorizes that moral standards and self-sanctions are the significant antecedents of moral behavior. Also, as the knowledge is based on the experiences of life that varies from one person to another, the centrality of moral self-schema also differs with it, from one person to another (Aquino & Reed II, 2002; Blasi, 1980, 2004a; Lapsley, 1996; Lapsley & Narvaez, 2004; Narvaez et al., 2006). There are people who pegged their identity as moral identity and view being moral as more self-defining than other identities (Blasi, 2004a), and this moral identity become more influential is guiding one’s cognition and behavior than other facets of identity. As ‘neurons that fire together, wire together’ (Kihlstrom & Klein, 1994b; Minsky, 1988) the moral self-schema of the individual whose moral identity is highly central will have high frequency and strength of moral identity activation (cf. Higgins, 1989). Providing external rewards for intrinsically valued activity can lead to negative consequences for those relationships which are primarily defined as intrinsic (Bohnet et al., 2001; Frey, 1997b). It was learnt that all external intervention includes rewards and punishments may affect intrinsic motivation. Crowding out effect can occur due to impaired self-determination and impaired self-esteem (Bohnet et al., 2001). It was also learned that rewards regress self-regulation as individuals take less responsibility for their motivation in the presence of rewards (Frey, 1997b). Incentive provides information that the task is unattractive, the agent is not suited for the tasks and it also reflects the deficit of trust between principal and agent (Gneezy et al., 2011). It influences negatively the motivation to act in a desired way. Also, greater personal benefits attached to prosocial behavior, affect reputation and strengthen ideas about the greediness of a person (Gneezy et al., 2011). This research is then focused on the influence that supervisory ethical leadership can have in the organization. The interest is to study the effect of ethical leadership and its two components (moral person & moral manager) on moral judgment of subordinates. The division of ethical leadership into its component is necessary here, as both components exercise qualitatively different leadership styles. The component of moral

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person is more transformational in nature and the nature of moral manager component is transactional; and transformational and transactional behaviors do not show the same kind of behaviors with variance, but rather each represent a different type of leadership behavior (Yukl, 2002). And it is plausible that this distinction leads to different influences. Also, it is being found that transformational leaders reason at principled levels and it seems plausible that an ethical leader who is perceived as more transformational may be able to influence employees’ moral reasoning. The key questions of this research are; is ethical leadership qualitatively similar in both dimensions of moral person and moral manager? How does both of these dimensions’ effect employee’s moral development? Is one component better than the other in terms of influence and if so, then, do they lead to different or same influences on the subordinates? And, should organizations intrude actively to modify employee’s ethical behavior? Does it lead to ethically valued outcomes in the long run? (Stansbury & Barry, 2007) Or should organizations provide ‘aspirational ethical values’ and stop there? (Trevino et al., 2006, p. 980). Can better ethical outcomes be achieved by doing less in the organization? (Trevino et al., 2006). These are the questions that are raised by researchers recently and this is the lead this research has taken. This research is primarily concerned with moral judgment and moral motivation in the ethical decision making process, and is interested in the socialization process that takes place in the organization and how ethical leaders cast particular influences on the moral reasoning and moral identity based moral motivation of their subordinates. Brown and Treviño (2013) also found out that ethical leaders at workplace serve as the most influential role models that breeds this leadership further. Here, the question of intentional role-playing and unintentional role-playing also becomes important. It is then theorized that the influence of ethical leaders in the organization can work without intentional role-playing and what employees observe in the character, decision making and behaviors of their leaders, significantly affects their perception of leadership, which culminates into further influences. The importance of personal character of leader in the creation of ethical leadership perceptions is also found, for example, recent National Business Ethics Survey in USA found that the personal character of the leader is the most significant factor that builds the employees’ perception of ethical leadership

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(NBES, 2014). Also, Bandura (1991) discussed that incase of moral development, observation plays a very important role. As, we have discussed previously, there are two components of ethical leadership: moral person and moral manager and that supervisory ethical leadership mediates the relationship between executive ethical leadership and employees (Mayer et al., 2009). Then, for this study, supervisory ethical leaders take a central role.

4.2

The Distal and Proximate Ethical Leadership

Recently it has been found that the positive relationship between the executive ethical leadership and lower level employees’ ethical behavior is mediated by ethical supervisory leadership (Mayer et al., 2009). Supervisors are believed to serve as ethical role models due to their proximity and communication at regular and intimate levels with additional power to punish and reward the employees (Davis & Rothstein, 2006; Falkenberg & Herremans, 1995). Social learning theory (Bandura, 1971b) asserts that power and status increases the probability to be looked at as the model. In the case of ethical leadership, the model acts in normatively appropriate manner. In addition, the possession of power and status in the organization makes ethical leaders stand in the limelight from where they can be perceived as the model of ethical leadership. Chester Barnard made it a responsibility of executive to conform to the ‘complex code of morals’ at the same time working towards creating moral codes for others (Trevino et al., 2000b). Trevino et al. (2000b) emphasized that due to the fact that employees do not interact with the executive leadership, reputation becomes important. The distance between employees and executive can only be reduced through the reputation and image that is being created (Treviño et al., 2000). It is important to emphasize that supervisory ethical leadership has different mechanism and serves a different purpose in the hierarchical structure. The visible role modeling may remain relevant to executive ethical leadership, but in case of supervisory ethical leadership, observation takes the driving seat. As being moral person and having a close interaction makes it possible that ethical leaders will be noted and observed closely. In that case, the daily conduct of the supervisor without intending to, provides several clues to the subordinates. Bandura (1991) asserts that the observation of higher levels

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of moral reasoning is as effective as role playing when it comes to changes in moral judgment. The role modeling is not deliberate in itself here, but employees will identify traits, see and evaluate how supervisors behave and how his/her decision making impacts the organization. Bandura (1971b) explained that we learn from both deliberate and non-deliberate modeling. Supervisors can have considerable control over reward and punishment, including pay increases, task assignment, promotions, layoffs, and terminations. Thus supervisor controls well-being of employees where workers are strongly dependent on the financial benefits and rewards, particularly when they lack marketable skills to secure another job, cannot be transferred and when their skill is not valued and demanded in the market, supervisor’s controlling power increases manifold (Wimbush, 1999). Important here is to find out what route the higher CMD leaders will take and how will it be perceived by subordinates (Wimbush, 1999). It is also believed that in a highly controlled environment, subordinates will fulfill the orders than risking their employment (Posner & Schmidt, 1984). Thus, because of the controlling powers of supervisors and respect subordinates have for them, supervisors stand as a social model of acceptable behavior (Mischel, 1979). Subordinates consistently reveal that supervisors have a significant effect on their ethical behavior (Posner & Schmidt, 1984; Soutar, McNeil, & Molster, 1994; Zey-Ferrell & Ferrell, 1982). This study assumes that employees will learn by observing supervisory leadership because her/his actions speak thousand words and carry weight, even if supervisors are not purposefully giving moral clues to the employees. It is also worth noting that immediate supervisors are frequently judged on their ethical decision making rather than their competence (Brown & Treviño, 2006) and though employees may not show but they keep a scorecard of the morality of supervisor and build their perception of supervisor’s morality on it (Brown & Treviño, 2006). Thus, it is assumed that the moral excellence of ethical leader will be displayed through her/his actions and decision making, and the employees will recognize him/her as an ethical leader. Also, Mayer et al. (2009) recognized the two most common mechanism supervisory ethical leadership works with and which differs in mechanism with executive ethical leadership (Mayer et al., 2009). First, the interaction of employees with top

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management and immediate supervisors differ considerably. Lewin (1943) field theory explained that psychologically proximal factors are more influential in influencing behavior than less proximal factors. Empirical evidence suggests that employees interact frequently and intimately with their supervisors, in comparison to top level management and this puts supervisors in the spotlight, to monitor, reward and influence employee behavior (e.g., Becker, Billings, Eveleth, & Gilbert, 1996; Brandes, Dharwadkar, & Wheatley, 2004; Meglino, Ravlin, & Adkins, 1989). The ethics specific research suggests that if leaders strongly influence the ethical behavior of employees, it’s the behavior of their direct managers and supervisor’s which has the strongest of influences (Davis & Rothstein, 2006; Falkenberg & Herremans, 1995; Posner & Schmidt, 1992). Second, the function of a leader differs, as the hierarchical level changes (Mayer et al., 2009). For example, the top management’s focus remains on the formulation of broad policies and objectives (Barnard, 1938), planning (Page & Tornow, 1987), the development of a vision for the organization (Smidt, 1998). They also create and communicate the ethical value system of the organization and work towards developing new leaders (House & Aditya 1997, Ireland & Hitt, 1999). For this reason, supervisors remain the strongest link in the organizational chain to influence employees’ ethical behavior (Mayer, 2009). The functions, supervisors perform ranges from coordination of daily operations and day to day directing and mentoring of employees (Smidt, 1998). Supervisors also serve an important role in representing the organizational policies. Also, in ambiguous situations supervisor’s behavior serves as standard of appropriate behavior in the organization (Andrews, 1989; Posner & Schmidt, 1984). More so, supervisors are the best judge of employee behavior and are in a position to coach employees, give support and feedback, recognize, punish and reward employees’ behavior and performance (Mayer et al., 2009). It was found that intangible and informal rewards that supervisors provide (for example: personal attention and recognition) are equal or stronger in reinforcement than formal rewards (for e.g., bonuses, pay raises, promotions) (Stajkovic & Luthans, 2001).

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4.2.1 Problematic Issues in Ethical Leadership Construct The inquiry into the field of leadership is not possible without answering or understanding what leadership is, and this understanding points towards the normative direction. If there is a concept of leadership, then it cannot exist without the standards of ethics and morals. This is true for all normative theories of leadership, including ethical leadership. Ciulla (2014a) asked the question “What is the relationship between ethics and effectiveness?” While she discussed the divide that is being placed between the goodness of a person’s moral character and his/her competence in modern times, she argues that this is a false dichotomy. She traced back the question to the ancient Greeks, where arete or ‘virtue as excellence’ connotes both the excellence of technical skills and one’s morality. As she states, “the two come together if you use ethics to frame your idea of effectiveness” (Ciulla, 2014a, p. 18). We cannot separate leader’s effectiveness from his or her ethics nor can we ignore the leader’s role in creating the perception of leadership. Thus, being ethical is woven into effective leadership and ethics remains an internal function of leadership. The first issue ethical leadership theory needs to address is analyzing the content of ethical leadership construct. The descriptive approach to ethical leadership is about “how people perceive ethical leadership and investigates the antecedents, outcomes, and potential boundary conditions of those perceptions” (Brown & Mitchell, 2010, p. 584). Here a question arises: “Does leadership itself influence the perception of leadership?” If yes, then the content of leadership behavior and motivation is important to understand. Eisenbeiss (2012) pointed out that the most cited definition of ethical leadership (from Brown et al., 2005, p. 120) “the demonstration of normatively appropriate conduct – and the promotion of such conduct to followers” (e.g., used by Detert, Trevino, Burris, & Andiappan, 2007; Piccolo, Greenbaum, Den Hartog, & Folger, 2010; Walumbwa & Schaubroeck, 2009) lacks normative appeal. Treviño et al. (2000) asserted that moral person is about “Complex code of morals” and moral manager is about creating moral codes for others (cf. Barnard, 1938). Here in this study, it is argued that in living out moral values, a leader creates moral standards for others. It is worth noting that how can one provide moral code for others, when even

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moral standards and principles remained undefined in ethical leadership theory, as noted by Eisenbeiss (2012). It is also argued here that if a leader is not effective by being a moral person then it does not make sense to manage the ethics of others through rewards and punishments. And if a leader is effective by being a moral person, then what is the need of rewards and punishments tied to the moral actions of employees to drive employees’ morality? It is also asserted that “good leaders are by definition ethical The Two Pillars of Ethical Leadership Moral Person

Moral Manager

Traits

Role Modeling Through Visible Action

1. 2. 3.

Integrity Honesty Trustworthiness

Behaviors Rewards and Discipline 1. 2. 3. 4.

Do the Right Thing Concern for People Being Open Personal Morality

Decision-Making 1. 2. 3. 4.

Hold to Values Objective/Fair Concern for Society Follow Ethical Decision Rules

Communicating About Ethics and Values

Figure 1: Ethical Leadership Components: Moral Person & Moral Manager (Source: Trevino et al., 2000b, p.131)

leader” (Treviño et al., 2000, p. 129). Treviño et al. (2000) conducted interviews of executives and chief ethics officers to get the idea of what constitutes ethical leadership (which is quoted extensively in this section). Traits of Moral Person include honesty, trustworthiness and integrity. While explaining moral person, Treviño et al. (2000, p. 130) quoted from an interview “Average employee would say that the ethical leader is squeaky clean. They would think “I know that if I bring an issue to him or her that I can count on their honesty and integrity on this because I’ve seen their standards and that one, integrity, is one that’s very important to them” [Emphasis added]. It also shows that the leader who is strong on moral person component thinks of employees as intelligent and observing beings, who can judge and understand what is important for 117

leaders. Now, this observation may serve as a harbinger of moral development. Other traits include consistency, credibility, predictability, honesty, sincerity and forthrightness. These values of moral person are continually reflected in his/her behaviors. It is quoted that “I think [the ethical leader] treats everybody with dignity – meaning everybody – whether they’re at the lowest level or higher levels … everyone gets treated with dignity and respect. I’ve also found that if you treat people with dignity and respect and trust, they almost invariably will respond in that fashion. It’s like raising children. If you really don’t trust them, they don’t have much to lose by trying to get away with something. If they feel you trust them, they are going to think long and hard before they do something that will violate that trust” (Treviño et al., 2000, p. 132) [Emphasis added]. It is also quoted from an interview “Your actions speak so loudly, I can’t hear what you’re saying” (Treviño et al., 2000, p. 131). Interestingly, this point towards the unintentional role modeling and observation, which comes with being a moral person. Another Quote, “The way you act even when people aren’t looking” (p. 131). And yet another quote, “People look at you and understand over time who you are personally as a result of their observations” (Treviño et al., 2000, p. 131). These observations also point towards important conceptual gaps in ethical leadership construct regarding the impact of intentional and unintentional role modeling. One conceptual problem is proximity. If ethical leadership is at supervisory level, then it can be understood that the supervisor is in close proximity to the employees, and employees can observe the leader’s actions, behaviors and decision making. In the case of supervisory ethical leadership, there is less of a need to maintain employee morality through corrective actions as all prescribed ethical actions are already visible and manifested in the day-to-day morality of an ethical leader. It is recognized here that the function of role modeling and exemplification, which is being assigned to the moral manager component in ethical leadership construct, is closely related and part of the moral person component, when it comes to unintentional role modeling. It seems that the importance of unintentional role modeling is being ignored in ‘ethical leadership’. Being a leader puts one under scrutiny and people observe the behavior of their leader and judge him/her according to these behaviors and decision-making attitudes, but at

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the same time it does not make employees blind towards the moral weaknesses of their leader. Thus, doing the ‘right’ thing, showing concern for people, treating people ‘right’ (with dignity & respect), being open, communicative, and demonstrating morality in one’s personal life reflects moral person component. A moral person leader is also being open, approachable and a good listener. He/she encourages easy and open communication, share experiences of rights and wrongs, successes and failures. They don’ treat bad news as a problem to be punished, but a problem to be resolved. Treviño et al. (2000) emphasized that personal morality, and private conduct of the leader reflects on organization. Because a leader should have a greater standard as he/she has greater responsibility than the average person. This statement allows for a discrepancy between personal morality and public morality. Why there has to be two faces of morality? A moral person remains same be in public or private. His/her values remain the same. Decision making of a moral person is based on a solid test of ethical values and principles (Treviño et al., 2000). A question arises here that how can a solid set of ethical values and principles can be built on undefined normative standards. He/she must be objective and fair and shows concern about broader society and community. His/her ethical decision rules must also make use of ‘Golden Rule’ and pass the “New York Times Test” (Treviño et al., 2000, p. 133). Here, we should ask what is the golden rule. It also raises question that does fear of public decision making and knowledge, that people will come to know about one’s decision changes anything about the moral quality of decision, supposing that leader is an ethical leader. Moral person is being emphasized as the substance of ethical leadership. Next, it is pointed out why moral person and moral manager does not speak the same language. Moral manager is about proactive approach towards ethics and bringing it to the forefront on management’s agenda. Moral manager explicitly shares the leadership values and makes the ethical dimension of leadership explicit and significant. It is important for moral manager for being recognized as ethical. For this purpose, the visible role modeling has been emphasized. It is quoted from an interview, “Some years

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ago, I was running one of our plants. I had just taken over and they were having some financial troubles… Most of our management was flying first class… I did not want … my first act to be to tell everybody that they are not gonna fly first class anymore, so I just quit flying first class. And it wasn’t long before people noticed it and pretty soon everybody was flying coach… I never put out a directive, never said a word to anybody.. and people noticed it. They got the message… People look to the leader. If the leader cuts corners, they say its okay to cut corners around here. If the leader doesn’t cut corners, we must be expected not to do any of that around here” (Treviño et al., 2000, p. 134). In this quotation the role modeling of moral manager is emphasized, but the question is; wouldn’t moral person have done the same thing? In this example, it is clear that people look towards their leader, and observe their behavior, which led to change in behavior of employees. The question is how this role modeling is different from the moral person’s role modeling. It was also emphasized that a moral manager is a role model 24/7. How can a leader’s behavior be observed 24 hours a day, seven days a week? Does knowing that your moral actions and behaviors are being watched change anything, about who you are, what you value and how you decide, about ethical issues? And why this role modeling should be different than moral person’s role modeling, if a leader can be observed all the time? To gain reputation as an ethical person, it was made requisite that moral manager must be engaged with regular and persuasive communication with employees about ethical standards, principles and values. In addition to this, he/she must use reward system consistently to hold all employees accountable to ethical standards. Treviño et al. (2000, p. 135) said that “If people do not hear about ethics and values from the top, it is not clear to employees that ethics and values are important.” Now, how the absence of communication focused on morals implies that employees will decide everything on the bottom line. Are they not dignified individuals, whom organizations as a person should respect and trust? If so, why wouldn’t they think and understand moral values rather than sticking to financial goals. Suppose, even if an employee commits moral wrong and decides on ‘bottom line’ goals, then it does not make other employees wrongdoers. The act of one or few employees cannot strip others of their dignity and morality.

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Why is it assumed that when a leader does not communicate about ethical values, employees will not see what is a right thing to do? Does it point towards the trust, respect and dignity, leader shows towards his/her employees? Why is this assumption that ethics and values only become important to employees, when they hear about them? What about the observations and understanding that build their perception of leaders, which are based on actions? Also being good, has been taught to almost everyone, since childhood. Almost every value system in the world stresses what is good (though it may be culturally sensitive, but there are few absolutes as well: for example, honesty, kindness, justice, courage). Moral manager component shows a deep distrust and disrespect for the employees. This component implies that employees has no sense of morality and thus, they cannot follow until and unless they have been told about what ‘morality’ is and surprisingly the morality of ethical leader is vague itself and tends to follow “normatively appropriate conduct”. Moral manager component somehow assumes that norms and values, which are upheld in any particular culture, are worth following and somehow only the leaders know about these norms and where employees are assumed to be constantly searching for moral north stars, and can be easily lost, if ethical leaders do not constantly talk about these values. Rewards and discipline are presented as the ‘most powerful way’ to tell others about desirable and undesirable conduct. “That means rewarding those who accomplish their goals by behaving in ways that are consistent with stated values” (Treviño et al., 2000, p. 135). Similarly, those who break these rules should also be disciplined. For example, “If someone has taken money, and they happen to be a 25 year employee who has taken two hundred dollars over the weekend and put it back on Monday, you have to… fire that person. [ You have to make] sure everybody understand that Joe took two hundred dollars on Friday and got [fired] … [they must also] be assured that I did act responsibly and I do care about 25 year people” (p. 136). Now, how does moral sophistication, taking care of people and listening to what employees have to say, fit in here. It was also quoted from an interview, “We talk about honesty and integrity as a core value; we communicate that. But then we back it up… someone can make a mistake. They can run into the side of an airplane with a baggage cart and put a big dent in it… and we put our arm around them and restrained them… If that same person were to lie

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to us, they don’t get a second chance… when it comes to honesty, there is no second chance” (Treviño et al., 2000, p. 136). This example implies that failures can only be of technical nature, and not of ethical nature. And the most effective way to deal with it is to remove the person who did not meet ethical standards, even if for once. This example decries the moral person component and shows that there is no place of reflection, moral education and moral training of employees at the organizational level. Thus, the difference between moral person and moral manager is huge and shows the disconnect between the two components. Therefore, both moral person and moral manager are two different leadership styles, where moral person component is closer to transformational leadership and moral manager component is closer to transactional leadership, and that putting these distinct leadership styles in one construct will only weaken the construct of ethical leadership. And if this ethical leadership will be practiced then its negative effect may become visible in the organization. As it is noted that moral person component overlaps with transformational leadership construct and moral manager component is transactional in nature. Transforming leaders help the followers develop higher levels of needs and morality and transform them into leaders. Transforming leaders are nurturing and lead followers toward their development as a leader. By empowering employees, transforming leaders free them from their leaders. Bass (1985, 1999) took Burns’ idea of transforming and transactional leadership and brought the idea of transactional and transformational leadership to the study of organizational leadership. He explained that transactional leadership is about controlling employees or followers’ actions and behaviors through corrective transactions between leader and follower, in order to reduce problems. To the contrary, transformational leadership inculcates collective vision and inspire subordinates to follow the collective good and to avoid actions based solely on selfinterest. This study sees conflict in ethical leadership when both of these leadership styles (transformational & transactional) are practiced by the same person (ethical leader) in the organization. Though it is understood that all leader-subordinate relationship involves exchanges and transactions to some degree, but the major concern arises about the transactions that are based on employee moral decision making and behavior. The

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distinction between transactional and transformational leadership styles could lead us to understand that a moral person could influence decision making of employees through unintentional role modeling. On the other hand, moral manager uses organizational reward system to achieve the same end. It is noted that a moral person can significantly influence employee moral judgment and motivation without using the practices of rewards and punishments. Here, it is important to notify that the transformational and transactional leadership styles are used here to explain the difference between moral person and moral manager components. Both of these leadership styles are not part of the conceptual model, but rather explains the conflict in ethical leadership. This observation that ethical leadership builds on different leadership styles is supported by research on the perception of moral reasoning and normative leadership models. Research has found that the leaders who are at higher levels of moral reasoning are perceived as transformational by their subordinates (Brown & Treviño, 2006; Turner, Barling, Epitropaki, Butcher, & Milner, 2002). “Leaders with more complex moral reasoning will be able to draw on more sophisticated conceptualizations of interpersonal situations, are more likely to think about their problems in different ways, and are more cognizant of a larger number of behavioral options” (Turner et al., 2002, p. 305). Individuals who are at higher levels of moral reasoning, respect the rights of others and employ justice in decision-making. Related to the moral person and moral manager styles, it must be questioned that how rewarding and disciplining employees on ethical outcomes points towards ethical sophistication. Is it possible that a person who values her/his morality and thrives on the autonomy one has for choosing a moral action, who trust his/her employees, see them as dignified individuals, then try to curb the autonomy of another’s moral action, undermining the trust, dignity and respect of the same individuals? For the reason highlighted above, it is important to study both the whole construct and its parts as Ruiz, Ruiz, and Martínez (2011) did, for better understanding of the influences it brings to the organization. In the next section, it is presented how the construct of ethical leadership, both as whole and in parts will affect the moral judgment and moral motivation of employees.

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4.3

Ethical Leadership and Moral Judgment

It is found that supervisor facilitates the ethical thought processes of subordinates. Trevino (1986) presented the interactionist model which delineated that cognitions of right and wrong, interact with other individual and situational variables that leads to ethical behavior (Wimbush, 1999). The importance of cognitions on EDM processes is highlighted by Weber and Green (1991) and they employed cognitive moral development theory of Kohlberg (1969a) to make the individual cognitive development accessible. Most of all, Trevino (1986) emphasized that CMD is the prime antecedent when it comes to ethical decision making. Recently, it has been proposed that ethical leaders may influence the moral reasoning of employees (Brown & Treviño, 2006). Kohlberg (1984c) emphasized that though moral development is dependent on stimulation based on cognitive-structural terms, but it is also dependent on social stimulation, which comes from social interaction, moral decision making, moral dialogue, and moral interaction. Kohlberg’s CMD theory is predicated on the structures of moral reasoning that people employ when faced with judgments of moral nature and the development of these structures, over time and experiences of life. Thus cognitive moral development is a construct that explains this moral reasoning structure. Kohlberg (1969a) like Piaget (1932/1965) agreed that this development takes place over age as the ability to reason develops and reversals remain a rarity. But it is cautioned that though the concept of external validation leads others to imply that moral development should be in agreement with the development in years, as age connotes development, and though the measure of moral development correlates with age, this correlation is not “validating” (Kohlberg, 1984c). “The validity criterion of moral judgment development is construct validity, not prediction to an external criterion” (Kohlberg, 1984c, p. 263). Construct validity here is defined as the fit of data collected through the moral development measure to the basic components of the theoretical definition. The basic theory of cognitive moral development defines it passing through hierarchical invariant stage (Kohlberg, 1984c). Kohlberg’s theory is grounded in Jean Piaget’s theory (1932a) of human development. Both of these point towards cognitive consistency that makes reversals in reasoning unnatural and explains that individuals who are at higher levels

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of reasoning will not reason at lower levels even though they understand lower level reasons (Jordan et al., 2013). It is important to understand that the cognitive moral development construct focuses on moral reasoning, and not on behavior, and there remains a potential disconnect between them. “From the point of view of cognitivedevelopment theory, the relationship of the development of judgment to action is something to be studied and theoretically conceptualized , the issue is not one of “validating” a judgment test by a quantitative correlation with behavior” (Kohlberg, 1984c, pp. 262-263). A convincing evidence of this phenomenon is presented by Krebs and Denton (2005) (discussed subsequently). On the other hand, moral reasoning is also found to be moderately related to moral action. And this relationship encompasses all the domains of life, including organizational contexts (Blasi, 1980; Kish-Gephart et al., 2010), which explains why the Kohlberg’s approach to morality remains significant in empirical ethical decision making research in organizational context, for the last few decades (Rest, Thoma, Narvaez, & Bebeau, 1997). Moral judgment is based on CMD theory of Kohlberg and Neo-Kohlbergian theory of Rest (1997, 1999) in this research. In his cognitive moral development theory (discussed in Chapter 3), Kohlberg (1969a) provided one possible answer about how individuals come to reason in the face of moral dilemmas they come across (Trevino et al., 2006). Kohlberg stated that Piaget’s concepts of cognitive moral development is one way to look at the development of morality. Other cognitive moral development approaches, that he identified include Baldwin (1906), Bull (1969), Dewey and Tufts (1908), Harvey, Hunt, and Schroder (1961), Hobhouse (1906), Kohlberg (1969b), McDougall (1908), and Mead (1934). Later, Rest, Narvaez, Bebeau, et al. (1999) further developed Kohlberg’s theory. The most prominent feature of all these cognitivedevelopmental theories is their idea of hierarchical or sequential development of moral cognition. The other assumptions are: 1. Moral development is based on cognitive-structures. 2. Motivation for maturity is based on a ‘generalized motivation’ for selfesteem, competence, acceptance or self-actualization, and not based on biological or security needs.

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3. Major dimensions of moral development are universal in nature, as all the cultures provide opportunities for social interaction, and role taking, while social-conflict is inherent in social life. These aspects call for moral integration. 4. Moral norms and principles are built through events and experiences of social interaction and not through internalizing the rules provided by external structures, moral stages are not about internalized rules but is defined by patterns of interaction that occurs between self and others. 5. Environmental influences on moral development spanned on the cognitive and social stimulation throughout the development process and is rather general in nature. These influences are not delimited by or confined to the experiences with the early care provider (parents) or external reinforcements of punishment and reward. The assumptions of cognitive moral development theories are in sharp contrast with ‘socialization’ or ‘social learning’ theories of morality. The ‘socialization’ theories include the work of Aronfreed (1968), Bandura and Walters (1959), Berkowitz (1964), Hoffman (1970), Miller and Swanson (1960), Sears, Rau, and Alpert (1965) and Whiting and Child (1953). These theories are based on the common assumptions, which are: 1. Moral development occurs through conformity with behavioral and affective moral rules and not based on cognitive-development structures. 2. Motivation for morality throughout development lies in the fulfillment of biological needs or achievement of social rewards and avoidance of social discipline and punishment. 3. Moral development is a relative phenomenon that depends on culture. 4. Moral norms are formulated through internalization of rules or standards of culture. 5. Environmental influences on moral development normally are characterized by variations in the strengths of prohibitions, rewards,

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punishments, and modeling of conforming behavioral standards by parents and significant others with whom one socializes. Though this conflict between cognitive and socialization theories leads to the construction of new theories, like Social Cognitive theory (Bandura, 1991), Moral Identity theories (Aquino & Reed II, 2002; Blasi, 1984), and Dual Process theory (Cushman, 2013), but the role of social influence on moral reasoning has been identified and acknowledged. Later, Krebs et al. (2014), Krebs & Denton (1997, 2005) and Krebs, Denton, Vermeulen, Carpendale, and Bush (1991) argued Kohlberg’s cognitive moral development theory is about rational model of moral judgment having assumptions that people come to understand moral problems and construct moral meaning according to their current stage of moral development and for this reason moral judgment remains ‘highly homogenous’, organized hierarchically. They argued that people hold a set of stage structures inclusive of their current moral development stage and all the past stages attained. Various situations and problems invoke different structures because of different pressures on these developmental stages. Activation of structure in individuals depends on the “distribution of stages they possess, strength of pull and resistance of the dilemmas they face, and contexts in which they make moral decisions” (Krebs et al., 2014, p. 139). Kohlberg’s moral dilemmas activate the highest level of developmental structure achieved, and this is why his measure is an assessment of moral competence (Krebs et al., 2014). Also, research on cognition points towards the irrationality of human reasoning unlike what Piaget & Kohlberg theorized (see Wason & Johnson-Laird, 1972). Social cognition research found that social judgments are marred by various kinds of self-serving biases (see Nisbett & Ross, 1980; Snyder, Higgins, & Stucky, 1983). Brown and Herrnstein (1975) suggests that due to social influences on human nature, the hopes for rational thought is not that bright. There are studies which concluded that people who are developed till higher levels of development can be influenced towards aggression (Krebs & Miller, 1985), to abuse power (Zimbardo, Haney, Banks, & Jaffe, 1973), towards obedience of manipulative and destructive authorities (Milgram, 1963) and towards ignorance of victims who were in need of emergency assistance (Latane & Darley, 1970). Few researchers who looked at Colby and Kohlberg’s longitudinal data found inconsistencies between stages.

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Fischer (1983) stated: “Different dilemmas produced different modal stage assignments for many subjects and alternate forms of interview produced different stages as well…The moral judgment study, then, does not allow the conclusion that moral development demonstrates a strong form of the structural-whole hypothesis. With substantial variations in task and context, moral behavior seems instead to fit what is becoming the standard empirically based portrait of cognitive and social-cognitive development. Considerable variability in stage within an individual is the norm (Flavell, 1971; Martorano, 1977; Piaget, 1972; Rest, 1979)” (pp. 99-100). In his later work, Kohlberg acknowledged the occasional inconsistency in moral judgment. Colby and Kohlberg (1987) explained that the “stage properties” of CMD theory, along with the assumption of standard wholeness, “characterize competence though not necessarily performance in moral judgment” (p. 8). Still, cognitive moral development theory remains relevant to the study of moral reasoning and is extensively used in contemporary research (e.g., Larin & Wessel, 2015; Mayhew, Pascarella, Trolian, & Selznick, 2015; Pircher Verdorfer & Weber, 2016) . Interestingly, it is also found that people who employ deontological judgment to resolve moral issues are looked at more favorably, are more trusted and perceived as more moral in comparison to other moral judgment orientations (Everett, Pizarro, & Crockett, 2016). It is important to remind here that CMD theory is based on deontological philosophy. Kohlberg describes cognitive moral development as a hierarchy based on six stages of moral development that he groups into three levels: pre-conventional, conventional, and post-conventional. Neo-Kohlbergian schemas (cf. Narvaez et al., 1999; Rest, Narvaez, Bebeau, et al., 1999) made the research idea more accessible by delineating three schemas; post-conventional schema, maintaining norms schema and personal interest schemas. This study relied on the group levels as defined by Kohlberg and Schemas as defined by Rest. The relationship between ethical leadership and moral reasoning of employees can now be sketched. As mentioned previously that supervisory leadership mediates the relationship between executive ethical leadership and employee’s ethical behavior (Mayer et al., 2009), and they are believed to serve as role models due to their proximity and communication at regular and intimate levels along with their additional power to punish and reward the employees (Davis & Rothstein, 2006; Falkenberg &

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Herremans, 1995). When employees work closely with their supervisors, there relationship will have significant effects on subordinate moral reasoning, as subordinates closely observe and critically examine the behaviors and decisions of their supervisors. It has also been found that people judge their own merit on the basis of their competence and others on the basis of their morality (Wojciszke, 1994) and that followers’ perception of their leader are strongly dependent on integrity-related concerns (Hogan, Curphy, & Hogan, 1994). It is also found that followers exhibit sophisticated moral judgment, when their leader is on higher levels of moral reasoning (Ho & Lin, 2014). Thus, this close interaction will lead employees towards observation and reflection of the moral person component, which it is proposed will influence their moral judgment. When the discussion of ethical leadership and its components is combined with moral judgment, it can be postulated that the moral person component will influence moral judgment at higher levels. By observing the leader’s character as reflected in behaviors and decision making, an employee will come to understand the worth of such behaviors and actions and will recognize their importance when their effects are observed at both the organizational and personal level. Also, the moral person component of an ethical leader who influences employees through his or her character and behavior can be identified as transformational. Supposing that leaders are recognized as ethical leaders due to their ethical superiority, which must include sophisticated reasoning, it is proposed that moral person will influence employees to build their morality to higher levels of cognitive moral development. One clarification is needed here. When it is said that two components of ethical leadership construct could influence employees in a contradictory way, it does not mean that these contradictions occur within an individual. Rather, it is meant that ethical leaders who are perceived as more of a moral person or more of a moral manager will lead to different influences because not all ethical leaders show a similar emphasis on both aspects of ethical leadership and may differ considerably. It is then possible that ethical leaders practice ethical leadership differently. Now, if an employee perceives an ethical leader as more of a moral manager, then there is a chance that this relationship is looked at as more transactional in nature. Moral manager by providing rewards and

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by the practice of disciplining to achieve ethical goals, will lead employees to see their relationship with the manager and the organization in transactional terms, where one favor is given and the other is taken as an exchange. Additionally, it has been found that this effect has permanence beyond the removal of monetary incentives and can transpose itself into other fields which may not be targeted by external intervention (Beretti et al., 2013). Also, morality here becomes external to oneself and relieves one of the internal moral obligations, which were there in the first place (Bergman, 2002). Contrary to this view, behavioral improvements are quite possible when the external rewards are absent (Bandura, 1971b). It has also been theorized that in order to be morally responsible, we must have capacity to recognize moral and non-moral reasons and to act upon them (Fischer & Ravizza, 2000). The responsiveness to moral reasons increases one’s moral responsibility of a moral act (Fischer & Ravizza, 2000). Moral enhancement, as sought by organization asks for development or inculcation of moral capacities ( i.e. cognitive, affective and motivational) to lead towards moral decision making (Focquaert & Schermer, 2015). Harris (2011) described ethical expertise is not “being better at being good”, but rather “being better at knowing the good and understanding what is likely to conduce to the good” (Harris, 2011, p. 104) . Focquaert and Schermer (2015) argued that in order to bring about a stable change both doing good and understanding of what constitutes good i.e. methods of moral enhancements should not only focus on behavioral outcomes, but on the “process of morality itself” (p. 143). For this reason, it is important that individuals become responsible for their own moral reasons and understand these reasons to come to moral action. In the absence of such understanding, any intervention, or management becomes a kind of “behavioral control” (Focquaert & Schermer, 2015, p. 143). Thus, it is argued that when significant others act as moral managers and change the way a social or moral norm should be looked at and expect employees to respond to the organizational system of rewards and punishments, then the influence of such expectations and reinforcement on the moral reasoning of employees can be regressive, particularly when ethical decision making is aligned with higher levels of moral reasoning. As ethical leadership is distinctive because of moral management then ethical leaders who emphasize on moral management can lead to negative effects on moral reasoning. 130

Thus, it is proposed that: H1:

Ethical leadership leads employees to construct their morality at low levels

(pre-conventional level or personal interest schema) of cognitive moral development. H1a:

Moral person component leads employees to construct their morality at higher

levels (Principled level or post-conventional schema) of cognitive moral development. H1b:

Moral manager component leads employees to construct their morality at low

levels (pre-conventional level or personal interest schema) of cognitive moral development. In addition to this, there is another kind of influence that ethical leadership and its components can have on employees, which are discussed in the next section.

4.4

Ethical Leadership and Moral Motivation

Previously, we have come to an understanding of how being perceived as a moral person or as a moral manager, leads to the construction of morality of employees, individually. But there is also another influence which ethical leaders can lead to. The moral manager and moral person components may also influence the moral identity based moral motivation of employees. Aquino and Reed II (2002, p. 1423) stated that “moral identity has been described as one kind of self-regulatory mechanism that motivates moral action” (e.g., Blasi, 1984; Damon & Hart, 1992; Erikson, 1964; Hart et al., 1998). Social cognitive theory explains that moral identity is one of the schemas of the memory, and is saved as complex structures of knowledge based on moral values, aims, characteristics and behavioral features (Aquino & Freeman, 2009; Aquino et al., 2005a; Aquino & Reed II, 2002; Lapsley & Narvaez, 2004). Because these schemas are built upon knowledge that comes from experience, everyone has different schema and likewise one’s relation to moral schema also differs, consequentially affecting the centrality of moral self-schema among one’s overall self-conception (Aquino & Reed II, 2002; Blasi, 1980, 2004a; Lapsley, 1996; Lapsley & Narvaez, 2004; Narvaez et al., 2006). Individuals with centralized moral self-schema perceive being moral as self-defining in comparison with other identities (Blasi, 2004a). For this

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reason, the centrality of moral identity remains influential in directing behavior as compared to other identities (Aquino et al., 2009). More so, individuals with high moral identity centrality are able to access the moral self-schema more frequently as compared to other identities (cf. Higgins, 1989). So the greater moral identity centrality translates in higher potential to activate moral schema within one’s self-concept (see Higgins, 1996a). In addition, this centrality is also able to influence information processing and moral behavior (Aquino et al., 2009). Thus, perceiving and defining oneself as moral person will only lead to moral motivation when moral identity becomes accessible within a working self-concept (Skitka, 2003). There are two components of moral identity: internalization and symbolization (Aquino & Reed II, 2002). “Internalization reflects the degree to which a set of moral traits is central to the self-concept, whereas symbolization reflects the degree to which these traits are expressed publicly through a person’s action in the world” (Reynolds & Ceranic, 2007, p. 1611). Internalization component remains more predictable of moral behavior, as compared to symbolization (Aquino & Reed II, 2002; Reed II, Aquino, & Levy, In press; Reed II & Aquino, 2003). Situational factors can facilitate or obstruct the availability and consequentially its importance and influence on any of the identities (Ashforth & Mael, 1989), and in particular of moral identity (cf. Bandura, 2002; Weaver, 2006; Weaver & Agle, 2002). Situational factors can affect the accessibility of moral identity, especially the presence of others who corresponds with the same morally relevant identity (cf. Bird, 1996) and also the status of person having such identity in the organization (See also Reed II et al., In press). It seems plausible that leadership can facilitate the accessibility of moral identity of an individual. For example, if a leader him/herself behaves ethically, then his/her behavior becomes the source of influence, which will enable employees to access the internalization or symbolization component of moral identity in their working selfconcept. Haidt (2000) found that witnessing the morally good behavior elevates one’s sense of morality and may motivate towards moral action. It is stated that as moral identity is led by unique mental image of how a moral person thinks, feels and acts (Kihlstrom & Klein, 1994b), it can also be associated with a social referent that could range from real members of membership group to any social construction (cf. Reed,

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2002). On the other hand, when a leader use exhortation and reinforcement for the activities that have intrinsic value for the individuals, then self-regulation of an individual is undermined in the process (Bandura, 1971b). More so, it will affect the decision framework of employees, moving it from moral or social to monetary and more transactional. External rewards can change the perception of people about a specific task, implicitly promoting market-like interaction (Beretti et al., 2013). Psychological theories remained doubtful about the universal validity of the relative price-effect since long, especially where more is needed to be done at personal costs. Deci and Ryan (1985) showed that under particular conditions performance related incentives can backfire. Contrarily, Standard Economic Theory assumes that individual motivation is based on three assumptions (Frey, 1990; Kirchgässner, 1991). 1. Preferences are completely divided (i.e. needs, wants, values and utilities, which forms the basis of motivation) and limitations (i.e. external incentives and restrictions of one’s freedom to act). 2. The preferences of an individual are stable and relatively permanent (Stigler & Becker, 1977). Hence, a change in an individual’s behavior is a consequence of changes in prohibitions and limitations. 3. Individuals only have knowledge of self-serving preferences. One’s function of preferences does not include other person’s preferences. (Weibel et al., 2014) In comparison with standard economic theory, behavioral economics came up with a more refined understanding of human motivation. These are: 1. Preferences which are beneficial to self and society (Meier, 2006). 2. Diversified and heterogeneous preferences (Andreoni, 1990; Fischbacher, Gächter, & Fehr, 2001). 3. Flexible preferences, which are systematically subject to the institutional design, conditions at work, and the quality of human interaction and relations (Ostrom, 2000).

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4. Preferences, which sometimes are unknown to the individuals (Ariely, Loewenstein, & Prelec, 2006) or are incorrectly interpreted by them (Stutzer & Frey, 2006). (Weibel et al., 2014) The most common finding in behavioral economics is the greater prevalence of prosocial behavior than assumed by Standard Economics Theory (Meier, 2006), which cannot be explained through the standard economic theory. Crowding out effects have been found in various psychological and economic experiments (e.g., Bénabou & Tirole, 2006; Bolle & Otto, 2010; Bowles & Polania-Reyes, 2012 for a survey on crowding out experiments in economics; Deci et al., 1999b for a meta-study on crowding out experiments in psychology; Fabes, Fultz, Eisenberg, May-Plumlee, & Christopher, 1989; Frey & Oberholzer-Gee, 1997; Gachter, Kessler, & Konigstein, 2011; Gneezy & Rustichini, 2000a; Richard, 1970; Warneken & Tomasello, 2008). Many reasons were proposed that underlie crowding out effects. Frey (1994) argued that crowding out effects cannot be explained without the assumption of the change in basic preferences. One way to explain the prevalence of prosocial behavior is from the vantage point of intrinsic and extrinsic motivation. “Extrinsic motivation is directed by external incentives for the individual (awards or penalties), while intrinsic motivation is understood as the direct satisfaction of needs” (Weibel et al., 2014, p. 75). Intrinsic motivation can be explained as ‘hedonistic preferences’ seeking one’s own well-being or as ‘prosocial preferences’, which is directed towards the well-being of others. This preference is part of individual’s motivation and emits a ‘warm glow’(Andreoni, 1990). Here, this motivation is sourced by internalized social norms (Lindenberg, 2001). Weibel et al. (2014) highlighted that “Crowding out effect states that intrinsic motivation for an activity can be repressed by extrinsic rewards (or punishments) and by certain forms of control. The crowding in effect states that specific institutional conditions might increase intrinsic motivation for an activity (e.g., Andreoni, 1990; Frey & Osterloh, 2002)” (p. 76). From the point of view of behavioral economics, Frey and Benz (2004) concurred that financial incentives and strict disciplinary regulations crowd out intrinsic motivation, if they lead to the perception of control and do not acknowledge the voluntary contribution and engagement of individuals. Lindenberg (2006) provided another cognitive explanation. He proposed a goal-framing theory,

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which assumes that all behaviors are goal-oriented, and these goals influences the motivational orientation. At any particular time, there are multiple goals, which competes for individual’s attention. “The so called hedonic frame enables intrinsic motivation, the normative frame prosocial motivation, and the gain frame extrinsic motivation” (Weibel et al., 2014, p. 76). From this point of view, external rewards reinforce gain frame and let the normative or hedonic frame shifts in the background of an individual’s attention. Consequentially, the activity which was previously engaged in out of enjoyment and satisfaction becomes less enjoyable or satisfying after gain frame is strengthened by tangible and contingent rewards (Lindenberg, 2001). Another reason forwarded by Seabright (2004, 2009), Benabou & Tirole (2011; 2006) is that individuals perceive activities as signals and use them to promote their positive (self) image. If these activities will be paid for then they lose their perceived signaling value. Other explanations are also based on this idea that the payments are used as signals from more informed party (e.g., parent, employer, teacher), which influence the beliefs of individual (e.g., child, employees, students) about the nature of activity (Schnedler & Vanberg, 2014). For example, Benabou and Tirole (2003) proposed that the rewards or payments for an activity indicates that it is costly or dangerous to engage in. Schnedler and Vadovic (2011) proposed that rewards signals that informed party does not expect individuals to engage in the activity without rewards. van der Weele (2012) argued that payments and rewards signals that the behavior or activity is not a social norm. Bowles and Polania-Reyes (2012) stated that the experimental evidence suggests that economic incentives lead to the ‘market frame’ and builds perception of ‘market mentality’, called ‘framing’. Although the basic nature of the task is not influenced, but this framing ‘activates own pay off –maximizing modes of thoughts’. This idea differs from Frey (1994) idea of change in fundamental preference, when individuals have a ‘repertoire of preferences’. The framing view suggests that rewards influence the importance of particular preferences in particular situations. Few researchers emphasized that ‘the information aspect of extrinsic incentives’ for crowding out effects (e.g., Benabou & Tirole, 2003; Gneezy et al., 2011). Bolle and Otto (2010) highlighted the persistence of such effects. They argued that incentives and rewards put a monetary value to the activities previously having no ‘official price tag’.

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This undermines the higher symbolic value of the social good and this effect remains as price become official with external rewards. Bénabou and Tirole (2006) argued that incentives also provide information about individual’s own intentions. They explained that individuals are not sure about their performance, and hence about their ‘goodness’. That is why individuals experience a ‘warm glow’ when they observe themselves engaged in prosocial activities, because it satisfies their self-serving assumptions of inherent goodness. But, when rewards or punishments are attached to their good behavior, then there arises a possibility that their engagement is not voluntary and is rather motivated by external rewards and not by the higher morality as assumed previously. This lead individuals to disengage themselves from voluntary activities (Weibel et al., 2014). Brekke, Kverndokk, and Nyborg (2003) explained this phenomenon through moral identity; as an individual with high centrality of moral identity, one can remain at peace with one’s self only when one acts according to one’s deeply held beliefs, and providing incentives to act morally belittles the ‘identity based sense of purity of motive’ (Trevino et al., 2006, p. 963). It has been postulated that providing compensation, incentives or rewards for moral actions will have an adverse effect on ‘identity-based’ sense of pure motives. There is a need to develop ‘identitybased insight’ to understand how organizations ‘may’ or ‘may not’ reward ethical decision making and actions in organizations (Trevino et al., 2006, p. 963). Actions which are consistent with one’s identity reinforces that identity. It informs organizational context to facilitate ethical behaviors that reinforces one’s moral identity (Trevino et al., 2006). In social setting what motivates an individual’s pro-social behavior can be characterized into three broad categories: intrinsic, extrinsic, and image motivation (Ariely, Bracha, & Meier, 2009a). The individuals who are motivated intrinsically involves in an activity for their own sake, without the need of external rewards or incentives. Intrinsic motivation is about the value of giving itself, and represents the personal and private preferences or priority for the well-being of others, like pure altruism or other kinds of pro-social preferences (for surveys see Fehr, Ernst, & Schmidt, 2003; Meier, 2007). As this kind of motivation is worth increasing, organizations and government often introduce monetary incentives to reinforce intrinsically motivated behavior. On the other hand, extrinsic motivation is based on the material reward attached to the pro136

social behavior. Image motivation refers to an individual’s tendency to be motivated partly by other’s perception and reflects the desire to be liked by others and by one’s own self (Ariely, Bracha, et al., 2009a). This desire has a particular implication that sparks the motivation in public, and having particular consequences for the motivation for prosocial or moral actions in private (Ariely, Bracha, et al., 2009a). And though these three motivations can have separate effects, but these may also entangle somewhere (Ariely, Bracha, et al., 2009a). While the intrinsic and image motivation to behave morally or pro-socially can be understood through the moral identity perspective. It seems plausible that moral identity internalization is related to intrinsic motivation and moral identity symbolization with image motivation. When a moral manager rewards moral behavior, he/she will influence both kinds of motivation here as the self-concept of employees is directly at stake. It is also important to understand that image motivation is a kind of extrinsic motivation, as it does not long for the satisfaction one derives from a prosocial and moral activity. Rather, it derives the satisfaction from the respect and appreciation, which is gained through the image being created in the eyes of others, as a result of one’s participation in a prosocial or moral activity. It is important to understand that a person who is high on moral identity symbolization is an individual who through obvious and public actions wants to send a message across to all that he/she is a moral person and does good work as part of his/her identity. It is important for him/her to be recognized as such and be respected for it. So, it can be proposed that social rewards of recognition will have a positive effect on symbolization. But when the desired behavior will also be rewarded monetarily or in highly beneficial terms and when rewarding occurs publicly, then it is sending across another message of the greediness of the person. The result could be to create doubts over the purity of the individual’s moral motives who was engaged in moral action, especially when ethical goals are already set in the organization. Thus, moral management may negatively influence the moral motivation of a person who is high on the symbolization component of moral identity. Moral management may also have a negative influence on the moral motivation of a person high on internalization component of moral identity because the message an

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ethical leader is sending by meting out punishments and giving rewards based on ethical actions resonates a trust deficit between the leader and employees. The moral management points out that an agent or employee cannot be trusted for their own reasons to come to a moral decision and action. Thus, rewarding may negatively affect the moral identity internalization-based motivation by telling a person that an external reward is necessary to call an action, and that this is not an action, an employee would rather choose to do on his/her own, which undermines the intrinsic motivation of employees. This crowding out effect is most probable to occur when (i) the perception regarding external interaction is about controlling rather than supportive nature, (ii) people are highly self-determined, and (iii) the level of trust between people is high (Vollan, 2008). In addition, ethical leader will have the same kinds of effect as moral manager, on employees’ motivation as the contradiction in the leadership style will lead employees astray, sending confused signals, which will affect their moral motivation. In the light of the above discussion, moral identity can be related to the crowding out effect as moral identity is one of the major sources of moral motivation, and if moral motivation is being sourced through both intrinsic (internalization) and image motivation (symbolization), then it can be hypothesized: H2:

Ethical leader crowds out (decrease) intrinsic motivation to act morally, of the person, who is high on internalization in the absence of rewards.

H2a:

Ethical leader crowds in (increase) extrinsic motivation to act morally, of the person, who is high on symbolization component of moral identity by providing social rewards.

H2b:

Ethical leader crowds out (decrease) extrinsic motivation to act morally, of the person, who is high on symbolization component of moral identity by providing monetary rewards.

H2c:

Moral Person leader crowds in (increase) the intrinsic motivation to act morally, of the person, who is high on internalization component of moral identity in the absence of rewards.

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H2d:

Moral Person leader crowds out (decrease) the extrinsic motivation to act morally, of the person, who is high on internalization component of moral identity in the presence of monetary rewards.

H2e:

Moral Person leader crowds out (decrease) the extrinsic motivation to act morally, of the person, who is high on internalization component of moral identity in the presence of social rewards.

H2f:

Moral manager crowds out (decrease) the intrinsic motivation to act morally, of the person, who is high on symbolization component of moral identity in the absence of rewards.

H2g:

Moral manager crowds out (decrease) the extrinsic motivation to act morally, of the person, who is high on symbolization component of moral identity by providing monetary rewards.

H2h:

Moral manager crowds in (increase) the extrinsic motivation to act morally, of the person, who is high on symbolization component of moral identity by providing social rewards.

4.5

Conclusion

The theoretical framework comes down to the research model (see Fig. 2), which says that ethical leadership influences the moral judgment and moral motivation of employees in the organization. But the two components cast different shadows. The moral person component leads employees towards one direction and the moral manager component leads employees towards another direction of moral development. It is also argued that the same is the case with moral motivation. It is concluded that ethical leadership construct is flawed and there is a need to bifurcate the theory to see the strengths of the threads of the fabric of ethical leadership theory. This research identifies that these threads are not very strong. This research then sees the need to deconstruct ethical leadership (Brown et al., 2005; Treviño et al., 2003; Treviño et al., 2000), because if it is practiced in the organization, it may lead to the influences, which are not meaningful, when it comes to ethics. The theoretical framework chapter laid out

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the groundwork for the development of our research method. In this chapter, the thoughts were organized around the hypothesized relationships of this study. The identified hypotheses advance theory in the field of behavioral ethics and leadership ethics but these remain to be worked out empirically and which is attended to, in the next chapter of research methodology.

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Cognitive Moral Development Theory

Subordinate’s Moral Judgment

Social Cognitive Theory

Subordinate’s Moral Identity Ethical Leadership • •

• •

Moral Person Moral Manager

Internalization Symbolization

Social Learning Theory

Moral Behavior of Subordinate

Subordinate’s Moral Motivation

Motivational Crowding Theory

Figure 2:Research Model: The Effect of Ethical Leadership on Moral Judgment and Moral Identity based Moral Motivation in Organization

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Chapter 5 Methodology

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This chapter describes the methods that were used for the two sets of hypotheses advanced in Chapter 4. The first set of hypotheses predicts that followers led by a leader who is a moral person would make more morally mature decisions than followers who were led by a moral manager or an ethical leader. The second set of hypotheses predicts that moral motivation of followers high on internalization and symbolization components of moral identity, will be undermined by the practice of moral management when the monetary rewards are attached to ethical actions of the followers. On the other hand, moral person will lead to crowding in effects of the person high on internalization component of moral identity in the absence of such rewards. The study has used experimental design so as to get the most of the empirical yield. Donelson R. Forsyth (personal communication, January 30, 2015) has also emphasized the importance of using this method. The independent variable was ethical leadership, which had three levels: ethical leadership demonstrating strength both as a moral person and a moral manager; moral person leader and moral manager. The dependent variable was moral judgment and moral motivation. Independent variable of ethical leadership was manipulated through scenarios. Four scenarios were constructed to use in experimental manipulation as stimuli. The scenarios were built around the four moral norms (telling the truth, doing one’s duty, not stealing and keeping promises). The description of ethical leader, moral person and moral manager was slightly different from one condition to another, but overall remains consistent to the construct of ethical leadership forwarded by Brown and Trevino (Treviño et al., 2000). What differed in these scenarios was the reaction to followers’ unethical behavior and the reasons which leader has employed to explain his behavior. Thus, the reaction of ethical leader was different from moral person leader and moral manager. The indecisive leader condition was used as a control condition, to demonstrate that moral person leader condition differed significantly from indecisive condition. In this condition leaders leave the decisions to superiors. At the end of each scenario, a question was asked about the agreement with the decision of that particular leader. After that, subjects were asked to fill in the questionnaires and measurement scale of dependent variables. Section (5.1) presents the ontology and epistemology of research, section (5.2) discusses population and sample. Section (5.3) discusses the experiment and section (5.4) introduces the

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measures that were employed in the experimental design. Section (5.5) outlines the procedure that was employed to revise ethical leadership scale. Recently, Brown and Treviño (2006) made a point that organizational studies should utilize experimental designs or laboratory or field experiments in the field of behavioral ethics. Following this point, the research objectives were achieved using experimental design in a scenario study. The pilot study was conducted initially to avoid the problematic issues later at the time of data collection. The research design was primarily experimental as our main focus was to find the causal link between variables of our interest. This design was shaped by the researches of Dukerich et al. (1990), by Aquino et al. (2009), and Forsyth and Berger (1982).

5.1

Ontology and Epistemology of Research

Ontology and Epistemology are two separate ways to define one’s research philosophy. Epistemology deals with the sources , nature, and limitations of knowledge (Hallebone & Priest, 2008) and Ontology can be defined as the “the science or study of being” (Blaikie, 1993) and it focuses on the nature of reality. It can be seen as one’s belief system through which one arrives at facts. This research takes an objectivist view, which “is an ontological position that asserts that social phenomenon and their meaning have an existence that is independent of social actors” (Bryman, 2012, p. 33). The rationale of choosing this position is to understand the phenomenon as it exists. The study aims to measure objectively the phenomenon that is occurring independent of the perception of social actors. Many times social actors remain oblivious of the influences that shapes their actions. From epistemological point of view, this study integrates intuitive knowledge, authoritative knowledge, logical knowledge and empirical knowledge. As the research process, which started with the selection of problem was based on intuition. Later, literature review build on authoritative knowledge, while logical knowledge was created through theory building and data analysis and this all led to empirical knowledge when conclusions were derived. However, mainly the researcher subscribes to positivist views where observable phenomenon can offer credible data. This approach provides rationale to this study design (Saunders, Lewis, & Thornhill, 2012).

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Experiments are the proper method to use when the research seeks to find the causal link between independent and dependent variables. In behavioral ethics as well as behavioral economics, one can see how experimental design allows to study the link between two variables clearly and to establish causality.

5.2

Population

The population of this study was private and for-profit schoolteachers in Islamabad. Our target population was the full-time employed teachers who were working for the private for-profit schools at elementary, primary and secondary levels, in the Islamabad. According to Pakistan Education Statistics (2013-2014) in the private education sector, there are 8 male teachers and 216 female teachers working at the elementary levels, 122 male teachers and 1,165 female teachers working at primary levels, 160 male teachers and 920 female teachers at middle school and 333 male teachers and 1,624 female teachers working at high school levels in the city of Islamabad. Therefore, in total there are 623 male teachers and 3,925 female teachers. The total number of teachers is 4,548 at elementary, primary, middle and high school levels, from which 13.70 % are males and 86.30 % are females. Now, the reason to choose schoolteachers as our population is significant. A recent report by UNESCO (Report, 2013-14) brought into light the need for the quality of primary and secondary teachers. As teachers are role models for their students then it is important to study the influence of leadership on teachers. How the macro level factors in the organization affect the thought processes of teachers, particularly when schools are building blocks of a society. As teachers have strong influence in creating strong moral characters, then it becomes imperative to know about how their morality is shaped in the organization and which reverberates in the lives of children, who are the representative of future. Thus, the role and influence of ethical leaders in these organizations take on greater importance, particularly the influences on ethical decision-making invites our investigation.

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5.2.1 Sample The population ratio (as mentioned above) of male and female teachers was also reflected in our sample and it showed the natural population ratio. The total number of participants in the experiments was 207. Thus, our sample ratio was 207/4,548 = 4.55 %. The sampling frame included the list generated through the internet, the keyword for the search was “Private for-profit schools in Islamabad” and school advertisements on social media and print media. One list was created from all the lists. Forty (40) schools were selected from this list to be contacted. The sample size was decided on the rule of thumb. According to Weber (1992), the sample size of experimental research in business ethics should be 100 or more than it. Also, Neuman (2006) suggested that in case if there are subgroups in the sample, then each subgroup should have 50 subjects. Initially the sample size was set at 320 so that each group would have 80 subjects. In order to achieve this sample size, the study required 8 (320/40 = 8) subjects to participate in the experiments. All 40 schools were contacted, out of these only 25 schools agreed to participate in the study. Therefore, the total data collected was 207 (8 * 25 = 200 + 7 more participants), which was less than the initial target. From one school 16 participants volunteered as the number of teachers at school was above average. At another school, the researcher had only 7 participants. This study did not employ random sampling method, as participants volunteered themselves for the participation in the experiment. However, in the experiment, all the participants were randomly assigned to the four conditions. The data of 36 teachers was later found be unreliable on DIT test, including those who did not complete the other measures, reducing the sample size to 176 for the dependent variable of moral motivation and 171 for the dependent variable of moral judgment. At each school, at minimum eight subjects were asked to participate in the study.

5.2.2 Pilot Test A pilot study was conducted to identify the problematic issues prior to the data collection on a large scale. The procedure of the pilot study and thesis data collection remained consistent with each other and was based on pretest-posttest design. After receiving organizations’ consent for the pilot study, the researcher visited the

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organization. Pilot study showed that the schools might not be willing to allocate two different days and two separate time slots for the study to conduct pre and posttests. The school in the pilot study asked the researcher to conduct the experiment on a single day. The time allocated for the complete experiment ranged between one to two hours. This led researcher to modify the gap between two sessions for final data collection. Only the gap of 15 minutes was allowed between these sessions, to avoid attrition rate of participants or denial to conduct a study on school premises. Another problem was that the principal of school kept visiting the place where the researcher was conducting the sessions. At this point, the principal was politely requested to stay away from the place until the sessions are finished.

5.3

Experimental Design

The data was collected in the month of March, April and May, 2015. First of all, all 40 schools were contacted by sending them a letter of introduction that highlighted research objectives and invitation to participate in the study. The schools were invited to take part in the study through a letter of introduction, which were sent through email and was followed by phone calls. Out of 40 schools, 25 schools showed their willingness to participate in the study. Once the positive intentions of the organizations for the study were established, it was followed by researcher’s personal visit. All the included organizations were told that the purpose of study was to study how leadership affect subordinates’ social problem solving skills and though the objective was close to research objective but not the exact one. This approach was used to overcome the threats to internal and external validity of the experiment (cf. Neuman, 2006). However, Participants who agreed to take part in the study were apprehensive about any risk attached and about the disclosure of their personal information. The main problem was the perception of teachers about the research results. They voiced their concerns about sharing the individual result with the school administration. At this point both school administration and researcher showed their commitment towards keeping the individual data confidential. The anonymity and confidentiality of individual level data of employees was ensured and the voluntary nature of their participation was emphasized. It was also communicated that data will be collected in two stages with a gap of 15

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minutes between each stage. For this purpose, participants were provided with an information sheet. The four conditions of this experiment, were labelled as ‘Ethical Leader Group’, ‘Moral Person Group’, ‘Moral Manager Group’ and ‘Indecisive Leader Group’ of independent variable (see Appendix A for scenarios of each leadership condition). The experiments used scenarios to elicit individual responses. The study used random sampling. All the school teachers were randomly assigned to these four conditions. First, the names of 8 teachers from a school were entered into a list. The first one was given moral person leader condition, the second one was given moral manager condition, the third one was given ethical leader condition and the fourth one was given indecisive leader condition. The same order was repeated for the other four participants. Then the individuals were told that the experiment measures how employees think about the social issues, to keep the experiment single-blinded (Neuman, 2006) and which is a common practice in experimental design. All the experiments were conducted by a single female experimenter.

5.3.1 Pretesting Phase First of all, the subjects at schools who were assigned to these four conditions were pretested. There was a gap of 15 minutes after pretesting and before experiment and post-testing to reduce the fatigue and priming effect of pretesting on the subjects. At the pretesting phase, the subjects were seated in a room and all the subjects received an envelope containing, consent forms, pretest measures and their instructions, scenarios of experimental conditions and posttest measurement scales. There were two sets of questionnaires in each envelope. The following measures were administered at pretest level. Three dilemmas of DIT-1 (Rest, 1979), the DIT-1 (Rest, 1979) contain six dilemmas, following the method of Dukerich et al. (1990), three dilemmas were presented to each person to answer individually. This is to measure the individual moral reasoning prior to the experimental manipulation. Also, to achieve our second objective, which was to measure the influence of ethical leaders on moral identity based moral motivation, self-importance of moral identity scale (Aquino & Reed II, 2002) along with balanced inventory of desirable responding scale (Paulhus, 1988) as

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suggested by Podsakoff, MacKenzie, Lee, and Podsakoff (2003) to measure social desirability bias, were distributed. To measure the existing perception of subject’s leader, revised ethical leadership scale was also administered to the subjects. Demographic information was also collected at this stage. 5.3.2 Experiment After the 15 minutes’ break, the experimental manipulation was conducted. Individuals were asked to go through the second set in the envelope, where each envelope contained a different condition. The subjects were seated with maximum distance from each other to minimize distractions while completing the experimental instruments. Each two subjects received the same condition. Subjects were then asked to read the instructions and begin. Each participant was asked to read four stories, which contained experimental manipulation. At the end of each story, participants were asked to agree or disagree with how the leader dealt with the ethical problem created by employees. Table 2 provides the summary of the scenarios and decisions taken by four different leaders and Figure 3 provides the flow of the data collection process. Table 2: Summary of Leader's Decisions in Four Conditions used as Experimental Manipulation

Conditions

Leader’s Decision in Stories

Indecisive Leader

1. 2. 3. 4.

Stealing from Organization– Report to superiors Doing One's Duty – Report good work to superiors Telling the Truth – Report lying to superiors Keeping Promises – Pass on to superiors

Ethical Leader

1. 2. 3. 4.

Stealing from Organization– Explains the ethical reasons and then fires person. Doing One's Duty– Praised for “doing good” and given a bonus of Rs. 5000 Telling the Truth– “Unjust”, lying is wrong, and must “discourage” this behavior. Fires person. Keeping Promises– Praise for doing the right thing and raises salary by 15%.

Moral Manager

1. 2. 3. 4.

Stealing from Organization – Must be punished and then fired. Doing One's Duty – “Fulfilled obligation” as Dr. and given bonus of Rs. 5000 Telling the Truth – Betrayal and unfairness. Fired. Keeping Promises – Praises him for keeping promises and raises salary by 15%.

Moral Person

1.

Stealing from Organization – Told he did a wrong action. Go and reflect on the right action to take. Doing One's Duty – Tells him he is a good doctor. Keep doing good. Telling the Truth– Unjust, unfair, example could cause harm. Because she admitted it, reflect on what she did. She stays in school. Keeping Promises – Praises him for keeping promise. Hopes he will stay with the company. Reflects on people who do not keep promises.

2. 3. 4.

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5.3.3 Post-testing Phase For the post-testing, after study manipulation, all the subjects needed to complete the new three dilemmas taken from DIT-1 (Rest, 1979), Revised Ethical Leadership Scale to report their perception about the leaders presented in the scenario, and three separate

Figure 3: Flow Chart of Data Collection Process

items to measure the intrinsic and extrinsic moral motivation. Once the post testing was completed, all the subjects were debriefed about the real objectives of the experiment and were told about the true objectives of the study. Researcher emphasized the necessity to keep experiments blind (Trevino, 1992a).

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Researcher answered the

questions raised by the subjects under study and asked them what they felt and thought was happening.

5.4

Measures

5.4.1 Ethical Leadership Scale The perception of ethical leader, moral person and moral manager was measured through revised Ethical Leadership Scale (RELS) as a manipulation check, which is built on Ethical leadership Scale (ELS) (Brown et al., 2005) a ten-item scale (α = 0.85). In the revised version few items were added to the scale along with the 10 original items of ELS. Each item was answered with a 5-point Likert-type scale where 1= Strongly Agree and 5= Strongly Disagree. The responses were later reversed, so that higher scores represent greater perception of ethical leadership demonstrated by the leader (Jordan et al., 2013). Sample items are ‘Sets an example of how to do things the right way in terms of ethics’, ‘ask what is the right thing to do while making decisions’ and ‘Listens to what employee have to say’. Brown et al. (2005) developed a 10 item scale for the measurement of ethical leadership, called the ethical leadership scale (ELS), which is theoretically based on social learning theory and the personal qualities and behaviors of a leader found in previous research. But still many possibilities to define and measure ethical leadership remains. Yukl, Mahsud, Hassan, and Prussia (2013) identified that previous theory and research in the field of ethical leadership led to confusion about what is the construct domain of ethical leadership and how to measure it. The behaviors and qualities most relevant to ethical leadership are; honesty and integrity, communication and enforcement of ethical standards, fair decision making and reward distribution, and kindness, concern and compassion towards the needs and feelings of others. But most of the research on ethical leadership chooses to focus on few behaviors and did not take into account the distinct qualities and behaviors needed to establish effective ethical leadership (Yukl et al., 2013). Yukl et al. (2013) also noted that in ELS, some of the relevant characteristics are not explicitly included (e.g., honest communication, behavior consistent with espoused values, fair allocation of assignments and rewards). In this study, we have developed on the ethical leadership scale (ELS) (Brown et al., 2005) and attended to

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the theoretical qualities that were not measured explicitly. This will enhance our understanding of the outcomes of ethical leadership at supervisory level. When Trevino et al. (2000b) assigned the moral management of employees to moral manager through role modeling, communication and reinforcement; she put more weight to rewards management and disciplining, but it is not measured explicitly in the ethical leadership scale (Brown et al., 2005), which asks only one question about disciplining. In order to make up for that gap, the items were added to ELS that explicitly ask questions both rewards and punishment, and highlighted the importance of both tangible and intangible rewards, to make it more reflective of the theory, and which also caters to our research needs. Moral management then becomes communicating about which values will be rewarded and which will be punished and the immediacy and consistency with which rewarding and disciplining is distributed in the organization. The adaptations to scale is discussed in the section (5.5) in detail. 5.4.1.1 Instrument Reliability & Validity The reliability of ELS was previously reported as α = 0.91 (Brown & Treviño, 2013), α = 0.85 (Jordan et al., 2013) and α = 0.91 (Den Hartog & Belschak, 2012).

5.4.2 Defining Issues Test Rest (1979) formulated Defining Issues Test (DIT) to measure of Cognitive Moral Development (CMD). DIT presents a series of hypothetical dilemmas to individuals who then rate and rank the variety of considerations that must be taken into account to take the decision of right action (Kish-Gephart et al., 2010). DIT remains the most widely used measure of cognitive moral development (Gibbs, Widaman, & Colby, 1982; Rest, Thoma, Narvaez, et al., 1997; Rest, Narvaez, Thoma, et al., 1999) & recent meta-analysis by Kish-Gephart et al. (2010) shows its extensive use in the moral cognitive investigations in organizations. Its P-score is the most frequently reported index (Rest et al. 1997) and measures the post-conventional moral reasoning. The DIT-1 contains six ethical dilemmas. After respondents study the dilemma, they were first asked to either answer yes or no about the decision the central character of

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the story should take. First, participants have to rate each statement on the importance it has for the decision and then to rank among these statements, the top 4 statements. The ratings on 12 statements range from most to no importance. Each of these statements represents a level of cognitive moral development. Respondents then rank the most important consideration that is influential in reaching their initial yes-no decision (Turner et al., 2002). The combination of rating and statement selection, which reflects the importance attached to certain considerations, is the basis of P-score calculation (Jordan et al., 2013). If a person is at higher levels of reasoning than he or she will take those items into consideration which reflects higher moral development level. If a person is below that level, he or she will remain oblivious to the relevance of higher level reasoning in reaching a decision and will not regard these as important or relevant (Rest, Bebeau, & Thoma, 1999). The P-score that results from the calculation of four most important consideration shows the proportion of post-conventional reasoning or arguments. P-score is calculated by giving four points to the statements that corresponds to the post-conventional level, at the first place, three points to postconventional thinking at the second place, two points to principled reasoning at third place and one for the post-conventional thinking at fourth place (Rest, Bebeau, & Thoma, 1999; Turner et al., 2002). The P-score is based on the sums of the weights given to the top four ranked items which is then divided by the total, depending on the version of instruments used (see Rest, 1979: 100- 102 for further understanding). “Measurement of an individual’ moral reasoning level is accomplished through the calculation of a weighted index of the percentage of stage five and six reasoning used to resolve the dilemmas” (Elm & Weber, 1994, p. 348). P- score is based on total number of points on all six dilemmas. It has a base of 60 points, which is converted into the percentage (base of 100). P-score has a range of 095. One cannot score 100 as not every dilemma has four possible principled items (Rest, Thoma, Narvaez, et al., 1997). Missing data on blank ranks are corrected by adjustment in the P-score based on the given responses (for example, if a respondent does not answer the rank 3 statement on one of the dilemmas, the P-score will be based on 58 points and not 60) (Rest, Thoma, Narvaez, et al., 1997).

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5.4.2.1 Instrument Reliability & Validity DIT is the measure of cognitive moral development which remains the most widely used (Gibbs et al., 1982; see Rest, Bebeau, Narvez, & Thoma, 1999). DIT ensured participant reliability through various devices and checks (see Rest, Thoma, & Edwards, 1997). One of the potential problems raised was the individual’s ability to choose items that sounds pompous and do not have true moral reasoning. Rest (1979) countered it with evidence that showed that individuals cannot ‘fake upward’ on defining issues test due to the statement that sound sophisticated and philosophical, but is actually devoid of any meaning, included among the 12 statements, rated by respondents. DIT has well-established reliability and validity (Davison, 1979; Davison & Robbins, 1978). Various studies have reported that reliability of scale ranges between 0.70 to 0.80 based on the version of DIT used (see Blasi, 1980; Rest, 1979; Snarey, 1985).

5.4.3 Self-Importance of Moral Identity Scale Moral identity was measured through self-importance of moral identity scale at the pretest stage. Self- importance of moral identity scale was developed by Aquino and Reed II (2002) which measures the two dimensions of moral identity, internalization and symbolization, on a Likert type scale (1= strongly disagree, 7= strongly agree). Each dimension is measured by five items. It is theorized that by providing specific characteristics stimuli, it becomes possible to call the network of characteristics which are associated with the identified traits (Reed II & Aquino, 2003). According to the previous research, stimulus cues like words can signify the importance of a certain social identity (Forehand, Deshpande´, & Reed, 2002). Aquino & Reed, by following the inductive approach identified a number of traits that are identified as characteristics of a person who is moral (Lapsley & Lasky, 2001; Walker & Pitts, 1998a). These are the traits which are used as “identity-invoking stimuli” (Reed II & Aquino, 2003, p. 1274), with the understanding that this list of characteristics is not exhaustive and the opinion about the traits of a moral person as identified, may differ from one place to another. The internalization dimension measures the degree to which moral self-schema is central to one’s self concept (Shao et al., 2008). While the symbolization dimension

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measures the degree to which moral self-schema is represented outwardly through one’s behaviors and actions towards others (Shao et al., 2008). First, the respondents were provided with a list of moral characteristics and were asked to imagine a person who has these characteristics. These moral traits are caring, compassionate, fair, friendly, generous, helpful, hardworking, honest, and kind. Respondents were asked to rate this person (or themselves) on the internalization aspect (the degree of importance of these moral traits to their self-definition) and symbolization aspect (the manifestation of these traits in the actions towards others) (Shao et al., 2008). The self-importance of moral identity scale has been validated across several studies (e.g., Aquino et al., 2008; Aquino et al., 2007; Moberg & Caldwell, 2007; Olsen et al., 2006; Reed II & Aquino, 2003; Reynolds & Ceranic, 2007; Sage et al., 2006) is found to have good psychometric properties. Being consistent with the previous research (Aquino & Reed II, 2002; Skarlicki, D., & Walker, 2008),

the items on internalization and symbolization dimensions were

averaged to create two subscales. Later, these two sub-scales were binned and each was divided into two bands of equal percentiles to use both components in factorial MANOVA. 5.4.3.1 Instrument Reliability & Validity The reliability of self-importance of moral identity scale ranges between α = 0.83 (Reed II & Aquino, 2003) and α = 0.89 (Aquino et al., 2009). The reliability and validity of the subscales of internalization was ( α = 0.78) and symbolization was (α = 0.80) as reported by Winterich et al. (2013).

5.4.4 Balanced Inventory of Desirable Responding Scale Balanced inventory of desirable responding scale (Paulhus, 1984, 1988) was administered along with moral identity scale to overcome the issues of social desirability that can affect our results, as suggested by Podsakoff et al. (2003). While social desirability “refers to the need for social approval and acceptance and the belief that it can be attained by means of culturally acceptable and appropriate behaviors” (Crowne & Marlowe, 1964, p. 109). It was included as a control variable. Social

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desirability was measured with Paulhus inventory of desirable responding (Paulhus, 1984). One item was dropped out of 40 “I never read sexy books or magazines” due to chance of reactivity. The same item has been dropped from other research due to the same reason (e.g., Brown et al., 2005). 5.4.4.1 Instrument Reliability & Validity The reliability of balanced inventory of desirable responding scale ranges between α = 0.70 (Lalwani, Shavitt, & Johnson, 2006) and α = 0.78 (Reynolds & Ceranic, 2007).

5.4.5 Moral Motivation Intrinsic and extrinsic moral motivations were measured through three single items regarding subject’s motivation under the circumstances described in the scenarios on Likert Scale, where 7 represented highly demotivated and 1 represented highly motivated. The items were later reversed. First, participants were asked to assume that there are few behavioral standards set by their school administration for teachers. These standards include coming to school on time; being honest with management, students and their parents; being fair with their colleagues; being fair with their students, and doing justice to their duties. It was then asked that how motivated they will be to follow these standards, if: The school administration will acknowledge their good behavior, with a reward of Rs. 5000 (to measure extrinsic motivation in the case of monetary rewards). The school administration will acknowledge their good behavior, with a certificate of good behavior given at school assembly (to measure extrinsic motivation in the case of social reward). The school administration will not acknowledge their good behavior i.e. no tangible reward (to measure intrinsic motivation).

5.4.6 Demographics The demographic variables included gender, age, education level, present job status and years spend at the same job and with the same supervisor.

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5.4.7 Scenarios for Experimental Manipulation Four scenarios were given to each participant in each group. These scenarios were inspired by Kohlberg’s (1976b) Heinz dilemma, Titmuss’s (1970) research on blood donation, and Fritzsche & Becker’s (1984)’s research. One dilemma was built around the specific context of the participants. In the first scenario, similar to Heinz, an individual was placed in an organization, who was working under either an ethical leader, moral person, moral manager and indecisive leader. Similar to Heinz, he robbed, but from the bank where he works to pay the bill of his brother’s operation who was suffering from cancer. In the second scenario, voluntary behavior of blood donation was rewarded, to reconstruct what Titmuss (1970) hypothesized. The third scenario was built on not disclosing trade secrets and based on vignette 2 of ‘conflict of interest’ by Fritzsche & Becker and being rewarded for it. The fourth dilemma was built around the specific context of the participants, representing unethical behavior by a schoolteacher and how school headmistress dealt with it (see Appendices: Appendix A). These vignettes were send to a group of business ethics researchers including philosophers and practitioners, and were further refined, in the lights of comments received.

5.5

Revision of Ethical Leadership Scale

There are a number of issues outlined in ethical leadership scale. First of all, the element of rewarding on the basis of ethical actions is absent, though it is being recognized as one of the building blocks of moral management and hence few items were added to ELS to reflect this aspect. Also, as leaders can provide social and monetary rewards. It becomes important to distinguish between these, to see the effects on employees. Also the visibility of the reward allocation has thus become relevant and important to study the effects of vicarious learning. The importance of temporal immediacy and consistency in rewarding and punishing behaviors were also recognized as important for social learning to occur, as theorized by Bandura (1971b).

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5.5.1 Qualitative Content Validation This study further build on the ethical leadership scale (Brown et al., 2005) and developed ten more items (a) by using a deductive approach to generate items based on relevant literature (b) obtained qualitative review of items from a panel of jurors who are experienced scholars in the field (cf. McKenzie, Wood, Kotecki, Clark, & Brey, 1999). Lawshe (1975, p. 565) stated that “If the subject matter experts are generally perceived as true experts, then it is unlikely that there is a higher authority to challenge the purported content validity of the test”. Table 3 shows the original ten items of ELS along with ten other items, which were added to the scale.

5.5.2 Establishment of Content Validity of the New Items Validity of an instrument is the degree to which it measures what it sets to measure (Borg & Gall, 1989). Validity of measurement instrument focuses on the degree to which the concept(s) are accurate in representation through the items on questionnaires, scales, test and other measurement tools (Green & Lewis, 1986). Validity remains a more important issue than reliability (McKenzie et al., 1999). If an instrument is unable to measure what it is supposed to than it does not matter how reliable it is (Neuman, 2006). The data collection which is biased or invalid will lead to errors in judgment and conclusion influencing future decision making (Borg & Gall, 1989). Table 3: Adaptations to Ethical Leadership Scale

Ethical Leadership Scale (10 Items) 1. Listens to what employees have to say 2. Disciplines employees who violate ethical standards 3. Conducts his/her personal life in an ethical manner 4. Has the best interests of employees in mind 5. Makes fair and balanced decisions 6. Can be trusted 7. Discusses business ethics or values with employees 8. Sets an example of how to do things the right way in terms of ethics 9. Defines success not just by results but also the way that they are obtained 10. When making decisions, asks “what is the right thing to do?”

Adaptations to the Scale 1. Makes sure that employees are promoted in organization because they show ethical behavior. 2. Acknowledges ethically valued behavior of employees. 3. Provides rewards to employees for ethically good behavior. 4. His/her decisions have the positive impact on organization and other stakeholders. 5. Lashes out at employees who show ethically flawed behavior, immediately. 6. The observation of his/her ethical behaviors inspires employees towards resolution of ethical dilemma in new and meaningful ways.

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7.

Treats employees with dignity and values worthy suggestions 8. Give employees freedom to choose their own course of action in ethical terms. 9. His/her actions reflect his/her moral beliefs. 10. His/her absence leaves employees confused in times of moral dilemmas.

Content validity is defined as the degree to which items on the measuring instrument become representative sample from the multitude of content of the field being addressed (Hopkins, Stanley, & Hopkins, 1990). Content validity involves the systematic logical analysis and is not same as face validity (Hopkins et al., 1990). Content validity is established at the phase of early development of scale unlike criterion and construct validity (Green & Lewis, 1986). The standard means for establishment of content validity is through qualitative processes (McKenzie et al., 1999). Although, quantitative process for establishing content validity has also been used (Lawshe, 1975, 1985). The establishment of content validity has three major tasks (a) Creating the initial draft of the instrument (b) Establishing a jury of Experts (c) completing a qualitative review.

5.5.3 Initial Draft of the Revised Scale First of all, to create the revised scale, scholarly articles in prestigious journals, books, doctoral dissertations, both published and unpublished, related to ethical leadership scale were reviewed. The intention was to revise ethical leadership scale (Brown et al., 2005), to make it more representative of the ethical leadership construct and this is the reason why no previous item was deleted of ethical leadership scale. The previous scale has also been validated, so this study focused on the content validity of the new items. The initial draft was revised many times. This final draft was sent to the jury for qualitative review.

5.5.4 Establishment of the Jury of Experts To establish jury of experts, the criteria for the selection of the jury was initially formulated. Commonly used criteria include position/job, experience, knowledge, and availability. So, the following criteria were created. 1. Is an expert on the subject matter. 159

2. Is either a leadership or management sciences, scholar, researcher or educator. 3. Be willing to become a Jury member. 4. Is able to complete the task in a timely manner. Based on the above mentioned criteria, four jury members were selected. An invite through email was sent to these members for their consent on becoming jury member. After taking their consent, the final draft of revised ethical leadership scale was sent to them.

5.5.5 Qualitative Review For the qualitative review, jury members were asked to provide their opinion about the following, regarding new items on the scale: 1. How representative these are of ethical leadership construct. 2. Addition or deletion of problematic items. 3. Revision, rewording or rephrasing of any item. 4. The layout of the scale. 5. Appropriateness, clarity and conciseness of the items 6. Additional comments Revised ethical leadership scale was sent to these members, along with the construct and its components’ definition, to facilitate the process. Once the researcher received all the qualitative reviews, researcher analyzed the scale in the light of comments received. The goal was to find out the consensus among the jurors, which is indicated through percentage in Table 4. Researcher also used her own judgment in keeping or deleting items. In the end, the scale was adjusted in the light of qualitative review. Then the updated draft of the revised scale was again sent to the jurors to identify any potential problem. After receiving the response, the revised scale was again adjusted for the identified problems.

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Table 4: Experts' Agreement on Added Items

Question no.

11

12 13 14

15

16

17 18

19 20

Qualitative Review

Expert 1

Expert 2

Expert 3

Expert 4

Makes sure that employees are promoted in organization because they show ethical behavior Acknowledges ethically valued behavior of employees Provides rewards to employees for ethically good behavior His/her decision have a positive impact on organization and other stakeholders Lashes out at employees who show ethically flawed behavior, immediately The observation of his/her ethical behaviors inspires employees towards resolution of ethical dilemmas in new and meaningful ways Treats employees with dignity and values worthy suggestions Gives employees freedom to choose their own course of action in ethical terms His/her actions reflects his/her moral beliefs His/her absence leaves employees confused in times of moral dilemmas

Y

Y

Y

Y

Percentage of Agreement with Item 100

Y

Y

Y

Y

100

Y

Y

Y

Y

100

Y

Y

Y

Y

100

N

Y

Y

N

50

Y

Y

N

Y

75

Y

N

N

Y

50

N

Y

Y

N

50

Y

Y

Y

Y

100

Y

Y

Y

Y

100

Two of the four jurors agreed that question no. 17 and 18 are problematic and may threaten the content validity of the scale. The percentage of agreement on these items was 50%. For this reason, these items (17 & 18) were dropped from the revised ethical leadership scale. One juror asked to rephrase question no. 20. Three jurors asked to rephrase question no. 15 and one juror asked to rephrase question no. 16. Jurors were sent the revised scale one last time to make sure that they agree to the all the changes. Again, one juror asked to rephrase the item no. 20. After taking care of these concerns, 8 items have been added to the scale. Once this phase was complete, revised ethical leadership scale was ready to be used in the study. The final 8 items included in the previous ethical leadership scale are shown in the Table 5.

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Table 5: Final Items Added to Revised Ethical Leadership Scale

1. 2.

Makes sure that employees are promoted in the organization because they show ethical behavior. Acknowledges ethically valued behavior of employees.

3.

Provides rewards to employees for ethically good behavior.

4.

His/her decisions have positive influence on the well-being of organization and other stakeholders. Reprimands employees who show ethically flawed behavior.

5. 6.

5.6

7.

The observation of his/her ethical behaviors inspires employees to resolve ethical dilemmas in principled ways. His/her actions reflects his/her moral beliefs.

8.

Employees find it difficult to solve ethical problems when the leader is away. (Reverse coded)

Conclusion

In this chapter, the methods and measures of the independent and dependent variables were identified. Each variable and its associated measurement scale were discussed. The manipulation of the independent variable was also discussed. In the next chapter, data analysis and results of the study are presented and discussed.

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Chapter 6 Results

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This chapter presents the results of factor analysis of revised scale, descriptive statistics, scale reliabilities, and hypothesis testing of the data collected for the study. Before conducting hypothesis testing, the measures of independent and dependent variables were assessed to make sure that the study constructs are reliable and valid. The present chapter is therefore organized into four sections. First section (6.1) discusses the Principal Component Analysis (PCA) of the revised ethical leadership scale. Second section (6.2) discusses the descriptive statistics, third section (6.3) presents reliability and validity of study variables, while the fourth section (6.4) discusses the manipulation check; last section (6.5) presents the tests of hypotheses.

6.1

Principal Component Analysis of Revised Ethical Leadership

Scale The 18 items of the Revised Ethical Leadership scale (RELS) were subjected to principal component analysis (PCA) using SPSS Version 21. Prior to performing PCA the suitability of data for factor analysis was assessed. Inspection of the correlation matrix revealed the presence of many coefficients of 0.3 and above. The Kaiser-MeyerOkin value 0.93, exceeding the recommended value of 0.6 (Kaiser, 1970, 1974) and the Bartlett’s Test of Sphericity (Bartlett, 1954) reached statistical significance, supporting the factorability of the correlation matrix (see Table 6). Principal components analysis revealed the presence of three components with Eigen values exceeding 1, explaining 51.84 percent, 6.65 percent and 6.06 percent of variance respectively. An inspection of the scree plot revealed a break after the second component. Using Cattell (1966) scree test (see Figure 4), it was decided to retain two components for further investigation. Table 6: KMO and Bartlett's Test (Revised ELS)

Kaiser-Meyer-Olkin Measure Sampling Adequacy. Bartlett's Test of Sphericity

KMO and Bartlett's Test of Approx. Chi-Square df Sig.

.926 1779.33 153 .000

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Figure 4: Scree Plot (Revised ELS)

To aid in the interpretation of these two components, Varimax rotation was performed. The rotated solution revealed the presence of simple structure (cf. Thurstone, 1947), with both components, showing a number of strong loadings on each component, and these loadings load substantially on only one component (see Table 7). The two Component solution explained a total of 58.10 percent of variance, with Component 1 contributing 29.07 percent and Component 2 contributing 29.03 percent. The interpretation of the two components was consistent with previous research on ethical leadership theory, except for the item “Disciplines employees who violates ethical standards”. While all the other items loaded respectively on moral person showed the characteristics of moral person and items loaded on moral manager component showed the characteristics of moral manager, as argued in Chapter 4. It may be possible that the perception of discipline attached to leadership is not as same as using organizational performance management system to reward or punish employees based on their ethical actions. It may be more consistent with the inculcation of selfcontrol through reflective practices in the organization, otherwise individuals would not have distinguished between the one who disciplines and the one who reprimands. The

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results of this analysis show the difference between moral person and moral manager more clearly. These items loaded on the two components are presented as follows. This revised ethical leadership scale was used as a manipulation check after the experiments. Table 7: Rotated Factor Pattern (Revised ELS)

Items

Moral Manager

Description

Moral Person

REL1

Listens to what employees have to say

.576

REL2

Disciplines employees who violate ethical standards

.522

REL3

Conducts his/her personal life in an ethical manner.

.530

REL4

Has the best interests of employees in mind

.610

REL5

Makes fair and balanced decisions

.690

REL6

Cannot be trusted.

REL7

Discusses business ethics or values with employees

.756

REL8

Sets an example of how to do things the right way in terms of ethics

.725

REL9

Defines success not just by results but also the way that they are obtained

.783

REL10

When making decisions, asks “what is the right thing to do?”

.610

REL11

Makes sure that employees are promoted in the organization because they show ethical behavior

.788

REL12

Acknowledges ethically valued behavior of employees.

.624

REL13

Provides rewards to employees for ethically good behavior

.707

REL14

His/her decisions have a positive influence on the well-being of organization and other stakeholders

.645

REL15

Reprimands employees who show ethically flawed behavior.

.629

REL16

The observation of his/her ethical behaviors inspires employees to resolve ethical problems in principled ways.

.722

REL17

His/her actions reflects his/her moral beliefs.

.551

REL18

Employees find it difficult to solve ethical problems when the leader is away.

-.615

.312

REL = Ethical Leadership (Immediate Supervisor) Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations.

The reliability of the revised ethical leadership scale was α = 0.90, while of ‘Moral Person’ component it was α = 0.88 and ‘Moral Manager’ component it was α = 0.76. An inspection into the column headed Alpha if item deleted showed that if item “Employees find it difficult to solve ethical problems when the leader is away” was removed from the Moral Manager component then the α value of this factor would

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increase to 0.88. For this purpose, this item was deleted from the Moral Manager component. After the removal of this item the reliability of the complete scale was checked again. It was found that the reliability of the revised ethical leadership scale had increased to α = 0.93.

6.2

Descriptive Statistics

6.2.1 Missing Value Analysis Missing value analysis was carried out using SPSS MVA. It was found that the number of missing values were not greater than 5% for manipulation check, dependent variables, demographic variables and covariates. However, demographic variable of age had 14 missing values (8 %), years spent on the same job had 19 (10.8%) and years spent with supervisor had 23 (13.1 %) missing values. The Little’s Missing Completely at Random (MCAR) test showed that χ2 = 171.590, df = 117, sig. = 0.001, which meant that there was no randomness in missing pattern. The insignificance of the Missing at Random (MAR) Separate Variance t-Tests showed that the data was not missing at random and thus cannot be ignored. As a substitute, the missing values of these variables were replaced by the mean of each variable as proposed by Tabachnick and Fidell (2001). The new mean of age was 30.64 (old mean: 30.62), years spent on the same job was 4.15 (old mean: 4.17) and of years spent with same supervisor was 1.9 (old mean: 1.9).

6.2.2 Demography Overall, among the 176 participants, 88.6 % were females and 10.2 % were males. The age of 35.8% participants was 26 years and below, of 34.7% was between 33 and 26 years, and of 29.5% was 34 years and above. The number of female subjects was considerably greater, as teaching is considered as one of the most appropriate professions for women in Pakistan, particularly at primary and secondary levels. But as previous research on moral reasoning did not find any significant difference between moral reasoning of men and women, then we did not discriminate between gender, although it may have an effect on moral identity of subjects. Approximately 25 % taught at secondary level, 54 % at primary level and 21 % at elementary level. About 65.9 % of the respondents had a Master’s degree, 30.1 % hold a Bachelor’s degree, 1.1 %

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completed intermediate levels and 2.8 % had MS or MPhil degree. The average number of years spent with the same supervisor was 1.90 and the number of years at the same job was 4.15 (see Table 8). Table 8: Demographic Profile of Participants

Demographic Variable

Category

Research Sample (n = 176) Frequency Percentage%

Gender

Female Male

156 18

88.6% 10.2%

Age

26-Below 33-26 34- Above

63 61 52

35.8% 34.7% 29.5%

Education Level

Masters Bachelors

116 53

65.9% 30.1%

Intermediate

2

1.1%

MPhil, MS Primary Teacher

5 95

2.8% 54.0%

Secondary Teacher

44

25.0%

Preschool Teacher

37

21.0%

Level of Class Taught

6.2.3 Normality First of all, the measures were checked for normality. Based on the measurement of both skewness and kurtosis (values range between +/-1 (very good) to +/-2 (acceptable)), it was evident that all study measures met assumptions of normality (see Table 9), except moral identity internalization, which had kurtosis of 1.98 and skewness of -1.49. Also, extrinsic motivation (monetary reward) and extrinsic motivation (social reward) were negatively skewed. However, both monetary and social rewards (extrinsic motivation) remain in acceptable limits of skewness and kurtosis. The skewness rather points towards the nature of variable here. Also, three variables of motivation in case of extrinsic motivation (monetary reward), extrinsic motivation (social reward) and intrinsic motivation (absence of reward) were each measured with one-item and are dependent variables, measured after experimental manipulation, then it was not possible for these manipulated variables to meet normality assumptions. Also, moral

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identity (both components separately) was used as one of the independent variables for hypothesis testing. Moral identity subscales of internalization and symbolization were binned into two equal percentiles for data analysis. To assess the normality of this variable, 80/20 principle of Paretian distribution (Pareto, 1897) was employed. Dividing both components on equal percentiles, it was found that for moral identity internalization, the percentage of participants who scored high was 48.9% while those who scored low was 51.1%. For moral identity symbolization, the percentage of participants who scored high was 54% and those who scored low was 46%. Hence, following the 80/20 principle, the normality of these two variables was established. Table 9: Descriptive and Normality Statistics of Study Variables

Variables

N

Mean

Statisti c 176

Statisti c 6.09

176

Std. Deviation Statistic

Missing

Skewness

Kurtosis

1.24

Co unt 0

Percen t 0

Statisti c -1.49

Std. Error 0.18

Statisti c 1.98

Std. Error 0.36

4.46

2.03

0

0

-0.49

0.18

-0.99

0.36

176

5.91

1.3

0

0

-1.17

0.18

0.97

0.36

171

10.36

4.11

5

2.8

-0.06

0.19

-0.71

0.37

PostStage4

171

11.02

4.07

5

2.8

-0.02

0.19

-0.4

0.37

PreStage23

171

8.84

4.4

5

2.8

0.38

0.19

-0.24

0.37

PostStage23

171

8.51

4.22

5

2.8

0.49

0.19

0.25

0.37

PrePrin

171

6.74

3.89

5

2.8

0.55

0.19

0.11

0.37

PostPrin

171

8.18

4

5

2.8

0.34

0.19

-0.13

0.37

SelfDeception Impression Management

174

64.47

8.41

2

1.1

0.22

0.18

-0.18

0.37

174

65.41

10.06

2

1.1

-0.01

0.18

-0.06

0.37

Monetary Reward (Extrinsic Motivation) Absence of Reward (Intrinsic Motivation) Social Reward (Extrinsic Motivation) PreStage4

Missing Values < 5%, Skewness and Kurtosis within specific range

169

6.2.4 Homoscedasticity To meet the second assumption of homoscedasticity of parametric statistics, which means homogeneity of variance, the Levene statistics was utilized for each construct and it was found that these variables were within the limits, thus meeting the assumption of homoscedasticity (see Table 10). The probability of the Levene statistics for each construct was p > 0.05 except the variable of absence of reward (Intrinsic motivation) (Levene = 6.32, p < 0.005). For this variable, a more conservative alpha level 0.01 instead of 0.05 for determining significance in the univariate F-test was set, as suggested by Tabachnick and Fidell (2001). Table 10: Levene's Test of Equality of Error Variances

F

df1

df2

Sig.

Monetary Reward (Extrinsic Motivation)

.69

3

161

.56

Absence of Reward (Intrinsic Motivation)

5.00

3

161

.002

Social Reward (Extrinsic Motivation) PreStage4

.52 .38

3 3

161 161

.67 .77

PostStage4

1.18

3

161

.32

PreStage23

.57

3

161

.64

PostStage23

.50

3

161

.68

PrePrin PostPrin Self-Deception Impression Management

.26 .80 1.61 .44

3 3 3 3

161 161 161 161

.86 .50 .19 .72

6.2.5 Outliers Two univariate outliers were identified in the variable of moral judgment at Post Stage23 and Post Stage4 levels. After inspection, it was decided to keep these two outliers as they were found to be representative of the target population. Also, the 5 % trimmed mean was studied and it was found that removing outliers did not bring any significant change in the mean of the levels of moral judgment variable.

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6.2.6 Multicollinearity Correlation among study variables were calculated and the issue of multicollinearity was not found among study variables (see Table 12).

6.3

Reliability & Validity

6.3.1 Reliability Reliability is defined as ‘consistency of measurement’ (DeVellis, 2012). All the measures of the study, inclusive of measures of control variables and manipulation checks, were analyzed for internal consistency, with the help of Cronbach’s alpha (Cronbach, 1951). The reliabilities of all measurement scales were above 0.70, meeting an accepted range of minimum reliability of a scale except the sub-scale of selfdeception enhancement (SDE) (α = 0.53), which is a subscale of Paulhus Deception scale (α = 0.74). The other sub-scale of impression management (IM) had α =0.70. To assess the indicator reliability, composite reliability, convergent and discriminant validity Confirmatory factor analysis (CFA) was conducted to test the discriminant validity of the revised ethical leadership scale (perception of leader in stories) used as a manipulation check and self-importance of moral identity scale by using SAS 9.3. The three dependent variables of motivation were not entered into the model, as these are measured through single item, where CFA requires that each variable should be measured through at least three items. The reliability of these three single item measures were also not assessed through applying correction for attenuation formula (Nunnally & Bernstein, 1994), as there was no other multi-item scale of moral motivation used in this study. Also, control variables of Balanced Inventory of Desirable Responding (BIDR) scale which has two sub scales of SDE and IM, and revised ethical leadership (perception of immediate supervisor) were not entered into the model due to sample size restrictions. The scale reliabilities along with composite reliability and validity, which were computed through CFA are reported in Table 13. Indicator validity was measured through squared multiple correlations. R2 value greater than 0.39 is considered ideal for this test (O'Rourke, Psych, & Hatcher, 2013). The

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reliability of items for four factors ranges between 0.07 to 0.73. It was important to see that whether the item reliability affected the composite reliability of factor, before deleting any item with low item reliability. Composite reliability is the index of internal consistency (O'Rourke et al., 2013) and measured through coefficient alpha values to estimate reliability of scale responses (Cronbach, 1951). Alpha values should generally be greater than 0.69, where values 0.80 and 0.90 viewed as ideal. All the factors demonstrate adequate internal consistency and the alpha value was above 0.69.

6.3.2 Validity Validity is the extent to which an instrument measures what it is supposed to measure (O'Rourke et al., 2013). Convergent validity was assessed by reviewing the t-test for the factor loadings. If all factor loadings for the indicators measuring the same construct are statistically significant, this suggests the convergent validity of those indicators (O'Rourke et al., 2013). T-values significance show that all path coefficients demonstrated that indicators effectively measure the same construct. All t-values were significant at p < 0.01 level (crossing the threshold value of 2.58). Variance extracted is the amount of variance captured by factors in comparison to measurement error. Fornell and Larcker (1981) suggested that construct should have variance extracted estimate greater than 0.49. Variance extracted estimates of three factors did not meet this criterion. However, to establish the discriminant validity of moral person factor and moral manager factor, chi-square difference test and confidence interval test were used. The chi-square test compares the difference in chisquare values of standard measurement model (model in which covariance between factors are freely estimated) and unidimensional model (model in which covariance between two factors is fixed). The chi-square value of the standard measurement model was 601.03 with 318 degrees of freedom, whereas the chi-square value of the unidimensional model was 609.5 with 319 degrees of freedom. The difference in model was 8.47. To determine the statistical significance of the difference value, the critical chi-square value for degrees of freedom associated with test was calculated (319 – 318 = 1). It was found that 1 degree of freedom was associated with the chi-square 172

difference test. Table of chi-square showed that with 1 df, the critical value of chisquare is 3.84 at p= 0.05 and 6.64 at p= 0.01. The chi-square difference value of our test was 8.47, the difference between the two models were significant at p < 0.01. It revealed that the standard measurement model in which factors were viewed as distinct but correlated constructs provided a significantly better fit than provided by unidimensional model. Thus, establishing the discriminant validity of two factors of moral person and moral manager. The second test of confidence interval calculates a confidence interval of plus or minus 2 standard errors around the correlation between factors and determines whether this interval includes 1.0. If the interval does not include 1, then the discriminant validity of the factors is supported (Anderson & Gerbing, 1988). The correlation between moral person component and moral manager component is 0.95, and the standard error for this estimate is 0.02 (see Table 11). Multiplying standard error by 2 (2 * 0.02 = 0.04) gave a value of 0.04. The lower boundary of the confidence interval (two standard errors below the correlation) 0.95 – 0.04 = 0.91, and the upper boundary of the confidence interval was 0.95 + 0.04 = 0.99. Thus, the confidence interval for the relationship between moral person component and moral manager component ranges between 0.91 to 0.99. This confidence interval did not include the value of 1.0 and thus the discriminant validity of the two factors was supported. Table 11: Covariance among Exogenous Variables

Var1

f_MP f_MP f_MP f_MM f_MM f_MID_INT

Var2

f_MM f_MID_INT f_MID_SYM f_MID_INT f_MID_SYM f_MID_SYM

Parameter

covf1f2 covf1f3 covf1f4 covf2f3 covf2f4 covf3f4

Estimate

0.95 0.39 0.08 0.42 0.11 0.34

Standard Error

0.02 0.09 0.10 0.09 0.10 0.10

95% Confidence Interval Upper Limit 0.99 0.57 0.28 0.60 0.31 0.54

MP = Moral Person, MM = Moral Manager, MID_INT = Moral Identity (Internalization) & MID_SYM = Moral Identity (Symbolization)

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Lower Limit 0.91 0.21 -0.12 0.24 -0.09 0.14

Table 12: Correlations Among Study Variables Variables 1. Gender 2. Age 3. Education Level 4. Level of Class Taught 5. Years spent at the Same Job 6. Years spent with same supervisor 7. Monetary Reward (Extrinsic Motivation) 8. Absence of Reward (Intrinsic Motivation) 9. Social Reward (Extrinsic Motivation) 10. Moral Identity (Internalization) 11. Moral Identity (Symbolization) 12. Moral Reasoning_Stage4 (Pre) 13. Moral Reasoning_Stage4 (Post) 14. Moral Reasoning_Stage23 (Pre) 15. Moral Reasoning_Stage23 (Post) 16. Moral Reasoning_Plevel (Pre) 17. Moral Reasoning_Plevel (Post) 18. Self-Deception Enhancement 19. Impression Management 20. Ethical Leadership (Supervisor) 21. Ethical Leadership (Stories)

Mean 30.64 -

SD 7.20 -

1

2

3

.28** -0.1

-.17*

-

-

0.02

0.00

4.15

4.33

.20**

.62**

1.90

1.79

-0.06

.40**

6.09

1.24

-.21**

-.16*

4.46

2.03

0.09

0.06

5.91

1.30

-0.14

-0.05

0.05

30.26

5.54

-.43**

-0.08

23.51

6.52

-.21**

0.10 0.09 0.05

4

5

6

7

8

9

10

11

13

14

15

16

17

18

19

20

0.00 -0.01

.53**

0.00

-.20**

0.02

0.02

0.03

-0.03

0.06

-0.05

-0.05

0.03

.48**

0.08

0.02

-0.09

-0.03

0.13

.19*

0.02

0.06

-.15*

0.07

-0.13

-0.00

0.09

0.07

-0.05

.17*

.33**

0.00

0.10

0.04

0.09

-0.01

.23**

0.09

0.10

0.02 0.05

12

10.36

4.11

-0.12

0.13

0.12

11.02

4.07

-.17*

-0.00

0.04

0.10

-0.09

-0.01

.23**

-0.03

.20**

.18*

.16*

.18*

8.84

4.40

0.05

-0.14

.16*

0.01

0.01

0.05

0.14

-0.06

-0.04

0.02

-0.11

-.44**

-0.01

8.51

4.22

0.08

-0.05

0.09

-0.15

0.06

-0.08

-0.07

-0.11

0.09

-0.07

-0.06

0.13

-.33**

0.02

6.80

3.90

0.05

-0.02

0.04

-0.08

-0.10

-0.04

-.26**

0.03

-.20**

-0.05

-0.01

-.39**

-0.15

-.45**

-.20**

8.20

4.23

0.06

-0.00

0.04

0.04

0.02

0.04

-0.12

.16*

-.22**

-0.11

-0.09

-.26**

-.46**

0.03

-.55**

.26**

64.05

9.62

-0.10

0.03

0.06

-0.05

0.10

0.10

0.15

0.04

.28**

.28**

.23**

0.09

.20**

-0.14

0.02

0.04

-.17*

64.62

12.13

-0.11

0.07

0.01

-0.04

-0.03

0.09

.22**

0.08

.36**

.19*

.15*

.22**

.19*

-.23**

0.06

-0.01

-.19*

.49**

80.52

18.64

-.42**

-.34**

0.08

-0.04

-.35**

-0.08

.31**

0.03

.24**

.35**

.20**

0.11

.19*

0.04

-.16*

-0.01

0.04

.25**

.39**

79.87

20.74

-.37**

-.22**

0.05

0.03

-.23**

-0.03

.27**

-0.02

.27**

.41**

.16*

0.09

.16*

0.04

-0.02

-0.12

-0.13

.25**

.31**

.62**

Note: n = 176, Dummy Variables: Gender (Female = 1, Male = 2), Education (M.S. or M.Phil = 1, Masters = 2, Bachelors = 3, Intermediate = 4) & Level of Class Taught (Primary = 1, Secondary = 2, Elementary = 3) ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

174

Table 13: Reliability and Validity of Study Variables

Items

Standardized Loading

Description

Moral Person (α=0.88, CR= 0.89., AVE = 0.50, SQAVE = 0.71) FEL1 Listens to what employees have to say FEL2 Disciplines employees who violates ethical standards FEL3 Conducts his/her personal life in an ethical manner. FEL4 Has the best interests of employees in mind FEL5 Makes fair and balanced decisions FEL7 Discusses business ethics or values with employees FEL8 Sets an example of how to do things the right way in terms of ethics FEL9 Defines success not just by results but also the way that they are obtained FEL10 When making decisions, asks “what is the right thing to do?” Moral Manager (α=0.88, CR= 0.86, AVE = 0. 46, SQAVE = 0.68) FEL6 Cannot be trusted. FEL11 Makes sure that employees are promoted in the organization because they show ethical behavior FEL12 Acknowledges ethically valued behavior of employees. FEL13 Provides rewards to employees for ethically good behavior FEL14 His/her decisions have positive influence on the wellbeing of organization and other stakeholders FEL15 Reprimands employees who show ethically flawed behavior. FEL16 The observation of his/her ethical behaviors inspires employees to resolve ethical problems in principled ways. FEL17 His/her actions reflects his/her moral beliefs. Moral Identity (Internalization) (α=0.74, CR= 0.75, AVE = 0.38, SQAVE = 0.62) MID1 It would make me feel good to be a person who has these characteristics. MID2 Being someone who has these characteristics is an important part of who I am. MID4 I would be ashamed to be a person who had these characteristics. MID7 Having these characteristics is not really important to me. MID10 I strongly desire to have these characteristics. Moral Identity (Symbolization) (α=0.78, CR= 0.78, AVE = 0.42, SQAVE = 0.65) MID3 I often wear clothes that identify me as having these characteristics. MID5 The types of things I do in my spare time (e.g., hobbies) clearly identify me as having these characteristics.

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RSquare

ta

0.73 0.70 0.60 0.72 0.70 0.49 0.82

0.53 0.49 0.36 0.52 0.49 0.24 0.67

16.61 14.70 10.15 16.16 14.77 7.01 25.04

0.86

0.74

31.18

0.48

0.23

6.72

0.26 0.68

0.07 0.46

3.15 13.28

0.81 0.69

0.66 0.48

23.91 13.84

0.83

0.69

26.74

0.43

0.18

5.82

0.83

0.69

25.71

0.70

0.49

14.10

0.81

0.66

15.52

0.65

0.42

10.12

0.51

0.26

6.68

0.46 0.61

0.21 0.37

5.69 9.10

0.53

0.28

6.97

0.74

0.55

13.10

MID6 MID8 MID9

The kinds of books and magazines that I read identify me as having these characteristics. The fact that I have these characteristics is communicated to others by my membership in certain organizations. I am actively involved in activities that communicate to others that I have these characteristics.

a All t tests were significant at p < .01

FEL= Ethical Leadership (Stories)

0.74

0.55

13.06

0.58

0.34

8.21

0.63

0.40

9.32

MID = Moral identity

Face validity is the “type of measurement validity in which an indicator ‘makes sense’ as a measure of a construct in the judgment of others, especially in the scientific community” (Neuman, 2006, p. 192). To establish the face validity of three single measure items, five business ethics faculty members were asked whether these three single items measure intrinsic, and extrinsic motivation. The agreement between these scholars was 95%. Convergent construct validity of the three single itemed measures were established by their significant and positive relation with some variables. Similarly, divergent validities of these three single itemed measures were established by their significant and negative relationship with other variables as shown in Table 12. It was found that extrinsic motivation in the presence of monetary reward was positively related to extrinsic motivation in the presence of social rewards (г = 0.48 , ρ = 0.01), conventional level of morality (posttest) (г = 0.23, ρ = 0.01 ), impression management (г = 0.23 , ρ = 0.01 ), perception of ethical leadership (immediate supervisor) (г = 0.31, ρ = 0.01 ) and perception of ethical leadership (stories) (г = 0.27 , ρ = 0.01 ) and negatively related to post-conventional level of morality (г = - 0.26 , ρ = 0.01), as it can be assumed that a person at post conventional level of morality will be motivated intrinsically rather than extrinsically. Also, intrinsic motivation in the absence of rewards was only found to be significantly related with post-conventional level of morality (posttest) (г = 0.16, ρ = 0.05) and negatively related to moral identity (symbolization) (г = - 0.05). Similarly, extrinsic motivation in the presence of social rewards was found to be positive and significantly correlated with moral identity (symbolization) (г = 0.17, ρ = 0.05), conventional level of morality (pretest) (г = 0.23 , ρ = 0.01), conventional level of morality (posttest) (г = 0.20, ρ = 0.01), self-deception enhancement (г = 0.28 , ρ = 0.01), impression management (г = 0.36, ρ = 0.01), perception of ethical leadership (immediate supervisor) (г = 0.24 , ρ = 0.01) and perception of ethical leadership (stories) (г = 0.27, ρ = 0.01), but at the same time negatively correlated to post-conventional level of morality (pretest) (г = - 0.20, ρ =

176

0.01), posttest (г = - 0.22, ρ = 0.01). The direction and significance of these relationships pointed towards the validity of these three single-itemed measures.

6.4

Manipulation Check

Before hypotheses testing, the effectiveness of manipulation check was assessed. It was found that manipulation was marginally effective. Though the manipulation produced differences between groups when tested for dependent variables, but it was not captured significantly by manipulation check. First, demographic variables were compared across conditions. The null hypothesis states that the distribution of the age, level of class taught, education level, gender, years spent at the same job and years spent with the same supervisor was the same across study conditions. Continuous demographic variables were analyzed using a non-parametric statistic – the independent- samples Kruskal Wallis test (see Table 14). The categorical demographic variables (Level of Class Taught, Education Level, Gender) were compared across conditions using chisquare test of independence. For the variables of gender and education level, the assumption of minimum number in each cell was violated. The chi-square value was not significant for any of the three variables (χ2 (6) = 8.59, p = 0.198, χ2 (9) = 8.15, p = 0.52, χ2 (3) = 0.03, p =0.99). The null hypothesis was retained with p > 0.05 for all demographic variables. Table 14: Kruskal Wallis Test to establish Equal Variance of Continuous Demographic Variables

Age Chi-Square df Asymp. Sig.

Years spent at the same

Years spent with the

Job

same supervisor

2.18

1.52

.82

3

3

3

.54

.68

.85

Grouping Variable: Leadership Condition

Further, participants’ ratings of their current leaders, along with the covariates were compared across conditions using ANOVA. For these variables, there were no significant differences across the four groups (see Table 15).

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Table 15: ANOVA test to Compare Participants on Perception of Immediate Supervisor & Covariates

REL

SDE

IM

Between Groups Within Groups Total Between Groups Within Groups Total Between Groups Within Groups Total

Sum of Squares

df

Mean Square

F

Sig.

273.60

3.00

91.20

0.31

0.82

48930.92

166.00

294.76

49204.52

169.00

253.52

3.00

84.51

1.21

0.31

11706.98

167.00

70.10

11960.50

170.00

308.52

3.00

102.84

1.01

0.39

17081.78

167.00

102.29

17390.29

170.00

REL = Ethical Leadership (Supervisor) SDE = Self-Deception Enhancement

IM= Impression Management

For the independent variable of ethical leader perceptions, a measure of revised ethical leadership was collected for the purpose of conducting manipulations checks. ANOVA results show no significant difference among perception of ethical leader (F = 1.35, p = 0.26), moral person leader (F =1.03, p = 0.38) and moral manager (F= 0.82, p = 0.48). This finding was a source of concern because the leaders’ decisions and actions were based on the behavior as suggested by ethical leadership theory, and ethical leadership measure was further revised to capture the moral person and moral manager components. However, ethical leadership measure captures a range of behaviors and characteristics that may be difficult to capture through four stories. Thus, two items were identified from the revised ethical leadership scale for the comparison among groups. These two items were “Reprimands employees who show ethically flawed behavior” and “Provides Rewards to employees who show ethically good behavior”. When item “Provides Rewards to employees who show ethically good behavior” was used as a comparison, marginally significant difference was found (F = 2.17 p = 0.09). LSD post hoc paired comparisons revealed that the mean score of participants in moral person condition (M = 4.57, SD = 1.52) and moral manager condition (M = 5.3, SD= 1.1) differ significantly at p < .05. When the item “Reprimands employees who show ethically flawed behavior” was used as a comparison, the perception of participants differed significantly at marginal level (F = 2.36, p = 0.07). LSD post hoc paired

178

comparisons showed that ethical leader (M= 4.70, SD =1.4) and moral manager (M = 4.64, SD = 1.4) differ significantly from moral person leader (M=3.9, SD= 1.6), while the perception of indecisive leader (M= 4.4, SD = 1.4) was not significantly different from these three groups. Also, many studies have shown that how followers perceive leader is shaped by their own’ cognitive frame of reference’ (Epitropaki & Martin, 2005; Lord & Maher, 2002; van Quaquebeke, van Knippenberg, & Brodbeck, 2011). From the perspective of followers that the perception of leader is constructed in part in the minds of followers (Meindl et al., 1985), and it has been shown that the follower’s self-concept has an important role in shaping these perceptions and ‘implicit theories’ regarding leadership (Dinh, Lord, & Hoffman, 2014; Lord & Brown, 2003). Giessner, Van Quaquebeke, van Gils, van Knippenberg, and Kollée (2015) also argued that the leader behavior and characteristics can only succeed in making an impression on followers, if followers will see being honest, caring and compassionate as normatively appropriate. They also found that the ethical leaders will be perceived as such, if there is a match between leader’s moral identity and follower’s moral identity, particularly with regards to the internalization dimension. It showed that the leaders with strong moral self-concept will be consistent in their actions but it does not follow that they will be perceived as ethical or moral, in equally positive ways by followers. It thus demonstrates that the perception of ethical leadership is rather a relational idea which builds on the relationship between leader and follower. At the same time, it does not imply that followers who do not see being honest, caring and compassionate are low on morality but rather it highlights the preferred moral orientation of the followers (Giessner et al., 2015). There is a debate in philosophy which can be traced back to Plato and Aristotle (Northouse, 2015). Northouse (2015) differentiated among three moral orientations, which are ethical egoism, utilitarianism and altruism. Similarly, Fehr et al. (2015) identified six moral foundations; Care/harm, Fairness/cheating, Loyalty/betrayal, Sanctity/degradation, Authority/subversion and Liberty/oppression. These researchers highlighted the need to understand the moral foundation of followers to understand the relationship of ethical leaders with the followers.

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When the manipulation check for participants high on moral identity was carried out, it was found that the moral identity (internalization) had a significant effect on the perception of ethical leadership, moral person and moral manager F (3,163) = 6.26, p = 0.0005, Wilks’ Lambda = 0.90; partial eta squared = 0.10. Univariate analysis also revealed that the moral identity (internalization) had significant effect on perception of ethical leadership (stories) F(1,169) = 16.92, p < 0.0005 partial eta squared = 0.09, moral person (stories) F(1,169) = 13.15, p < 0.0005 partial eta squared = 0.07 and moral manager (stories) F(1,169) = 18.79, p < 0.0005 partial eta squared = 0.10. While moral identity (symbolization) had significant effect on perception of ethical leadership (stories) F(1,169) = 16.92, p < 0.0005 partial eta squared = 0.09, moral person (stories) F(1,169) = 13.15, p < 0.0005 partial eta squared = 0.07 and moral manager (stories) F(1,169) = 18.79, p < 0.0005 partial eta squared = 0.10. Interestingly, the interaction effect of moral identity (Internalization) and moral identity (symbolization) was not significant on the perception of ethical leadership F(1,169) = 2.5, p > 0.05 partial eta squared = 0.015, moral person F(1,169) = 1.85, p > 0.05 partial eta squared = 0.01 and moral manager F(1,169) = 2.66, p > 0.05 partial eta squared = 0.02. Pairwise comparison showed that the mean of perception of ethical leadership (M = 87.68 SD = 11.43), moral person (M = 46.46 SD = 7.19) and moral manager (M = 41.22 SD = 5.52) differ significantly at 0.05 for the person high on moral identity (Internalization) in comparison to the person low on moral identity (Internalization). Similarly, the mean of perception of ethical leadership (M = 84.90 SD = 17.00) and moral person (M = 45.25 SD = 10.07) differ significantly at 0.05 for the person high on moral identity (Symbolization) as compared to the person low on moral identity (Symbolization). While there was no significant difference between moral manager perception for the two groups. It shows that the participants high on moral identity (Internalization) are the most observant and efficient in building the perception of ethical leadership, moral person and moral manager. Also, being high on moral identity (Symbolization) also led towards the perception of ethical leadership. Thus, manipulation check captured the difference in perception of ethical leader, moral person and moral manager. Given the normality of data, internal consistency and discriminant validity of the measures, and the effectiveness of the study manipulation, hypotheses tests were conducted, which are discussed next. 180

6.5

Hypotheses Tests

6.5.1 Moral Judgment Hypotheses (1, 1a & 1b) To test hypotheses, the dependent variables investigated were the DIT P%-score, Stage23% score and Stage4% score. The independent variable was the leadership condition. The DIT provides an individual overall P-score, Stage 4 scores and Stage 2 and 3 (combined) scores. As theorized by both Kohlberg and Rest, Stage23 represents the choices, which are based on self-interests; while Stage4 represents the choices, which are concerned with social norms and P-level represents the value of individual rights, human rights, equality and justice. An effective leader would ideally lead employees to construct their morality at P levels and decrease their Stage23 scores. Change in Stage4 scores marks the transition between the Stage23 level and Principledlevel. The DIT includes robust reliability controls. For that reason, it is quite common to lose 10 % data due to internal reliability checks (Beabeau & Thoma, 2003). In this study, 17.4 % data was found to be unreliable on DIT and was disqualified from the analysis. Mixed between-within subjects’ analysis of variance were conducted for the independent and dependent variables. The participants were divided into two groups, those who agreed with the leader’s decision on any of the four story and those who did not agree with the leader’s decision on all four stories. It was found that one participant did not agree with the leader’s decision on all four stories. The data of this participant was excluded from the analysis, as the complete disagreement with the leader’s decisions in stories, suggests that the participant was not even slightly influenced by the leader. 6.5.1.1 Leadership Condition & P-level Moral Reasoning Mixed between-within subjects’ ANOVA result for leadership condition as independent and principled score as dependent variable (Box’s M = 9.21, p =0.437), showed that the effect of time was significant on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.93, F (1,166) = 12.69, p < 0.0005, multivariate partial eta squared = 0.07]. The interaction between Time and condition

181

remained insignificant [Wilks’ Lambda = 0.98, F (3,166) = 1.16, p > .05, multivariate partial eta squared = 0.02]. The effect of condition on principled scores was not found to be significant between subjects (F (3,166) = 1.532, p = 0.20) (see Table 15). The error variance of dependent variables was homogenous across the four leadership condition (Levene test: F(3,166) = 0.32, 1.36, p > 0.10. A closer inspection into the mean scores (see Figure 5) of participants demonstrated that participants in moral person condition (M = 31.98, SD = 16.74) advanced more in their principled reasoning as compared to moral manager (M = 24.68, SD = 13.40), ethical leader (M= 25.63, SD= 11.50) and indecisive leader (M= 26.67, SD= 13.04) groups.

Principled Level Percentages 40.00 35.00

31.98

30.00 25.00

24.68

23.49

21.63

25.63 22.22

26.67 23.80

20.00 15.00 10.00 5.00 0.00 Moral Person Leader

Moral Manager Leader Pretest Percenatges

Ethical Leader

Indecisive Leader

Posttest Percentages

Figure 5: Principled Level Percentages of Participants in Four Conditions

This result demonstrated that participants in all conditions scored higher P-scores at posttest than pretest suggesting that the experimental manipulation influenced the reasoning of participants in all conditions. At the same time, it also showed that the moral person led participants to choose principled moral reasoning more than other leadership styles (see Fig. 5). To examine the effect of relevant story on Principled reasoning, pre and post percentages scores of principled level reasoning were also analyzed. Lockwood and Kunda (1997) showed that relevant exemplars that share the same background with subjects are more likely to bring positive change as compared to irrelevant models. Monin (2007) also came to conclusion that irrelevant exemplars can have negative

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impact on subject’s motivation. To control for this compounding effect, the same model was analyzed using only the story that was relevant to the subject’s background. Mixed between-within subjects’ ANOVA result for leadership condition as independent and principled level as dependent variable (Box’s M = 11.64, p =0.26) showed that the effect of time was significant on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.95, F (1,105) = 5.14, p < 0.025, multivariate partial eta squared = 0.047]. The interaction between Time and condition remained insignificant [Wilks’ Lambda = 0.986 F (3,105) = 1.43, p > .05, multivariate partial eta squared = 0.04]. The effect of condition on principled scores was found to be significant between subjects (F (3,105) = 2.85, p < 0.05, partial eta squared = 0.075) (see Table 16). LSD Post hoc comparison showed that at posttest for principled reasoning the mean percentage score of participants in the moral person condition (M = 33.83 SD = 15.96) differ significantly from the mean percentages of participants in moral manager (M = 23.73 SD = 13.78) and ethical leader condition (M = 23.45 SD = 9.13). There was no significant difference between subjects in indecisive leader condition (M = 25.83 SD = 13.04) and other groups (see Table 17). 6.5.1.2 Leadership Condition & Stage23 Moral Reasoning Mixed between-within subjects ANOVA result for leadership condition as independent and Stage23 as dependent variable (Box’s M = 7.63, p =0.59), showed that there was no significant effect of time on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.998, F (1,166) = 0.39, p =0.53]. The interaction between Time and condition remained insignificant [Wilks’ Lambda = 0.984, F (3,166) = 0.915, p > .05, multivariate partial eta squared = 0.02]. The effect of condition on Stage23 scores was not found to be significant between subjects (F (3,166) = 1.57, p =0.19) (see Table 15). The error variance of dependent variables was homogenous across the four leadership condition (Levene test: F(3,166) = 0.71, 0.77, p > 0.10). LSD post hoc paired comparisons showed no significant difference between the mean score of participants in all four conditions. An inspection of the mean scores (see Figure 6) demonstrated that when posttested participants in moral person condition (M = 24.44, SD = 15.79) scored lower at earlier levels of moral reasoning as compared to pretest, than the mean scores of participants in moral manager (M = 30.28, SD = 14.09), ethical leader (M =

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31.18, SD = 15.40) and indecisive leader (M = 27.40, SD =12.72) conditions. This result suggested that the moral person leader led participants towards reduction in earlier level moral reasoning when faced with moral dilemmas.

Stage23 Percentages 35.00

29.44

30.00

30.28 30.28

29.93 31.19

Moral Manager Leader

Ethical Leader

27.22 27.41

24.13

25.00 20.00 15.00 10.00 5.00 0.00

Moral Person Leader

Pretest Stage23 Percentages

Indecisive Leader

Posttest Stage23 Percentages

Figure 6: Stage23 Percentages of Participants in Four Conditions

Similarly, to control for the compounding effect of irrelevant stories, Stage23 reasoning was analyzed using only the relevant story. Mixed between-within subjects’ ANOVA result for leadership condition as independent and Stage23 level as dependent variable (Box’s M = 5.53, p = 0.80), showed that the effect of time was not significant on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.99, F (1,105) = 0.59, p > 0.05, multivariate partial eta squared = 0.006]. The interaction between Time and condition remained insignificant [Wilks’ Lambda = 0.95 F (3,105) = 1.85, p > .05, multivariate partial eta squared = 0.05]. The effect of condition on Stage23 reasoning was found to be marginally significant between subjects (F (3,105) = 2.56, p < 0.06, partial eta squared = 0.068). LSD Posthoc comparison showed that for Stage23 reasoning at posttest the mean percentages of participants in the moral person condition (M = 22.72 SD = 12.92) differ significantly from the mean percentages of participants in moral manager (M = 33.46 SD = 13.10) and ethical leader condition (M = 33.95 SD = 14.20). There was no significant difference between subjects in indecisive leader condition (M = 29.44 SD = 13.01) and other groups (see Table 17).

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Table 16: Mixed Between Within Subjects ANOVA Results for Leadership Conditions & Moral Judgment

Dependent Variable

P-Level (All four scenarios)

P-Level (Relevant scenario)

Stage 4 (All four scenarios)

Stage 4 (Relevant scenario)

Stage 23 (All four scenarios)

Stage 23 (Relevant scenario)

Factor

Variance

F

Sig.

Partial Eta Squared

Time

Within

12.69

0.00

0.07

Time × Leadership Condition

Within

1.16

0.33

0.02

Leadership Condition

Between

1.53

0.21

0.03

Time

Within

5.14

0.03

0.05

Time × Leadership Condition

Within

1.43

0.24

0.04

Leadership Condition

Between

2.85

0.04

0.08

Time

Within

3.49

0.06

0.02

Time × Leadership Condition

Within

1.83

0.14

0.03

Leadership Condition

Between

0.10

0.96

0.00

Time

Within

1.58

0.21

0.01

Time × Leadership Condition

Within

3.27

0.02

0.09

Leadership Condition

Between

0.31

0.82

0.01

Time

Within

0.39

0.53

0.00

Time × Leadership Condition

Within

0.92

0.44

0.02

Leadership Condition

Between

1.57

0.20

0.03

Time

Within

0.59

0.44

0.01

Time × Leadership Condition

Within

1.85

0.14

0.05

Leadership Condition

Between

2.56

0.06

0.07

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Table 17: Mean Moral Judgment Scores of Participants using Relevant Story (LSD Post hoc)

Dependent Variables

Moral Person

Moral Manager

Ethical Leader

Indecisive Leader (Control)

Pretest

Posttest

Pretest

Posttest

Pretest

Posttest

Pretest

Posttest

Principled or PostConventional

24.85 (13.1)

33.84a 15.97)

21.47 (12.62)

23.73ab (13.79)

21.85 (11.89)

23.46ac (9.13)

24.17 (14.79)

25.83a (13.05)

Conventional or Maintaining Norms

33.23 (14.87)

37.68a (15.4)

36.67 (14.59)

33.07a (8.6)

36.54 (10.72)

34.81a (11.6)

29.03 (11.53)

37.36a (11.92)

Pre-Conventional or Personal Interest

28.38 (14.68)

22.73a (12.92)

29.2 (13.95)

33.47ab (13.14)

29.01 (13.86)

33.95ac (14.2)

27.08 (14.46)

29.44 a (13.1)

Note: The posttest scores which did not share the same subscript differ significantly at 0.05 level. Standard deviation in Parentheses

6.5.1.3 Leadership Condition & Stage4 Moral Reasoning Mixed between-within subjects ANOVA result for leadership condition as independent and Stage4 as dependent variable (Box’s M = 5.31, p =0.82) showed the marginally significant effect of time on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.98, F (1,166) = 3.49, p =0.06]. The interaction between Time and condition remained insignificant [Wilks’ Lambda = 0.968, F (3,166) = 1.83, p > .05, multivariate partial eta squared = 0.03]. The effect of condition on Stage4 scores was not found to be significant between subjects (F (3,166) = 0.10, p = 0.96) (see Table 16).

Stage4 Percentages 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00

38.10 34.05

Moral Person Leader

35.46 34.47

35.93 35.93

Moral Manager Leader

Ethical Leader

39.35 32.41

Pretest Stage4 Percentages

Posttest Stage4 Percentages

Figure 7: Stage4 Percentages of Participants in Four Conditions

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Indecisive Leader

The error variance of dependent variables was homogenous across the four leadership condition (Levene test: F(3,166) = 0.38, 1.22, p > 0.10) LSD post hoc paired comparisons showed no significant difference between the mean score of participants in all four conditions. An inspection of mean scores (see Figure 7) of participants suggested that participants in two conditions scored higher at posttest Stage4 scores. Participants in moral person condition (M = 38.10, SD = 15.49) showed increase in Stage4 moral reasoning, demonstrating the transition from earlier levels of moral reasoning towards higher levels. At the same time, there was an increase in mean posttest scores of participants in the control condition (M = 39.35, SD = 12.10) whose leader remained indecisive, which showed that these participants based the resolution of moral dilemmas on societal morality, and looked towards social norms in the absence of any guidance when faced with a moral dilemma. As previously, Stage4 reasoning was analyzed using only the relevant story. Mixed between-within subjects’ ANOVA result for leadership condition as independent and Stage4 level as dependent variable (Box’s M = 17.86, p = 0.45), showed that the effect of time was not significant on dependent variable within subjects, across all conditions [Wilks’ Lambda = 0.98, F (1,105) = 1.57, p > 0.05, multivariate partial eta squared = 0.015]. The interaction between Time and condition was found to be significant [Wilks’ Lambda = 0.91 F (3,105) = 3.27, p < .05, multivariate partial eta squared = 0.085]. The effect of condition on Stage4 reasoning was found to be insignificant between subjects (F (3,105) = 0.31, p > 0.05, partial eta squared = 0.009). LSD post hoc comparison did not reveal significant difference. However, the means of condition and interaction of time, at posttest are as follows. Moral person (M = 37.67 SD = 15.39), Moral Manager (M = 33.07 SD = 8.60), Ethical Leader (M = 34.81 SD = 11.60) and Indecisive Leader (M = 37.36 SD = 11.91).

6.5.2 Moral Motivation Hypotheses (2, 2a, 2b, 2c, 2d, 2e, 2f, 2g & 2h) To test the second set of hypotheses, factorial MANOVA was conducted for leadership conditions (Moral Person Leader, Moral Manager Leader, Ethical Leader, Indecisive Leader) along with moral identity internalization (high, low) and moral identity symbolization (high, low) as independent variables. There were three dependent

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variables; extrinsic motivation in the presence of monetary reward, extrinsic image motivation in the case of social reward and intrinsic motivation in the absence of reward, for ethically good behavior. Before conducting the analysis, multivariate normality was checked by using Mahalanobis distances. Mahalanobis distances were also used to identify the multivariate outliers as MANOVA is sensitive to outliers. Linear regression was used to calculate Mahalanobis distances and Mahal. Distance was saved as another variable. Table 18: Tests of Between-Subjects Effects/ Homogeneity of Regression Slopes

Variable

Leadership Condition × Self Deception Enhancement

Leadership Condition × Impression Management

Monetary Reward (Extrinsic Motivation) Absence of Reward (Intrinsic Motivation) Social Reward (Extrinsic Motivation) Monetary Reward (Extrinsic Motivation) Absence of Reward (Intrinsic Motivation) Social Reward (Extrinsic Motivation)

Type III Sum of Squares

df

Mean Square

F

Sig.

4.66

3

1.55

1.10

.35

4.87

3

1.62

.42

.74

.91

3

.30

.20

.89

5.75

3

1.92

1.35

.26

6.51

3

2.17

.56

.65

3.61

3

1.20

.82

.49

The maximum Mahal. Distance is 20.28, which was compared with the critical value. The table that was used to identify critical values was provided in Pallant (2013, p. 251). The critical value for 3 dependent variables was 16.27. Both the maximum value of Mahal. Distance and critical value were compared. The Mahal. distance was larger than the critical value, indicating the presence of multivariate outliers in our data. Descriptive statistics of Mahal. Distance revealed the presence of two outliers, which were greater than the critical value of 16.27. These two outliers were removed from the further analysis. The pairs of dependent variables were also checked for the assumption of linearity between each pair of the dependent variable. The plots did not show serious evidences of non-linearity. The assumption of homogeneity of regression was tested and it was

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found that there was no interaction between the covariate and the experimental manipulation, as the interaction between the condition and impression management, and condition and self-deception were insignificant (see Table 18). The assumption of multicollinearity and singularity was checked through correlation. None of the correlation was above 0.8 or 0.9, and hence there was no issue of multicollinearity. In addition, none of the variable was a combination of another variable, so there was no issue of singularity as well. The assumption of homogeneity of variance-covariance matrices was part of MANOVA output and Box’s M Test of Equality of Covariance showed that for factorial MANOVA analysis the assumption of homogeneity of variance-covariance matrices was not violated and in the analysis the significant value of this test was greater than 0.001. Factorial MANOVA was conducted using Leadership condition (four levels) and Moral Identity Internalization (two levels) and moral identity symbolization (two levels) as independent variables (Box’s M = 149.53, p =0.004) (see Table 19). Levene tests showed that for all the dependent variables the assumption of equality of error variance is violated F(15,157)= 2.12, 2.77, 2.06, ps = 0.012, .001, 0.015. For that reason an alpha value of .025 was set as significance level for univariate F-test of extrinsic motivation through monetary and extrinsic reward, and 0.01 alpha value was set for intrinsic motivation in the absence of reward (Tabachnick & Fidell, 2001). Table 19: MANOVA Tests for Moral Identity Based Moral Motivation

Variable Leadership Condition Moral Identity (Internalization) Moral Identity (Symbolization) Leadership Condition × Moral Identity (Internalization) Leadership Condition × Moral Identity (Symbolization) Moral Identity (Internalization) × Moral Identity (Symbolization) Leadership Condition × Moral Identity (Internalization) × Moral Identity (Symbolization)

189

F

Sig.

2.68 2.67 2.36

0.005 0.05 0.07

Partial Eta Squared 0.05 0.05 0.04

0.93

0.50

0.02

1.46

0.16

0.03

0.74

0.53

0.01

0.73

0.68

0.01

It was found that statistically significant main effects difference exists between the leadership conditions on combined dependent variables: [F (9,377) = 2.68, p = 0.005, Wilks’ Lambda = 0.86; partial eta squared = 0.05] while there was a statistically significant effect of moral identity internalization on combined dependent variables [F (3,155) = 2.67, p = 0.05, Wilks’ Lambda = 0.95; partial eta squared = 0.05]. There was also a marginally statistically significant effect of moral identity symbolization on combined dependent variables [F (3,155) = 2.36, p = 0.07, Wilks’ Lambda = 0.96; partial eta squared = 0.04]. While there was no significant interaction, effect of independent variables on combined dependent variables. Table 20: Univariate Results of Independent Variables on Dependent Variables of Moral Motivation

Extrinsic Motivation (Monetary Reward) 0.44

Variable Leadership Condition

Moral Identity (Symbolization) 0.74 Moral Identity (Internalization) 1.81 Leadership Condition × Moral Identity 0.68 (Internalization) Leadership Condition × Moral Identity 0.91 (Symbolization) Moral Identity (Internalization) × Moral 0.82 Identity (Symbolization) Leadership Condition × Moral Identity (Internalization) × Moral Identity 0.64 (Symbolization) *** p < 0.005, ** p = < 0.01, * p = < 0.05, Ϯ p < 0.1

Intrinsic Motivation (Absence of Reward) 4.96***

Extrinsic Motivation (Social Reward) 2.29Ϯ

0.02 0.04

6.92** 2.35

1.92

1.69

1.38

0.93

0.02

2.22

1.05

1.26

When the result of dependent variables were considered separately (see Table 20), there were two differences that reached statistical significance, using a Bonferroni adjusted alpha level of 0.017 and corrected alpha level of 0.025 (for extrinsic motivation) and 0.01 (for intrinsic motivation), were the effect of leadership condition on intrinsic motivation in the absence of rewards: F (3,157)= 4.963, p= 0.003, partial eta squared = 0.087 and the effect of moral identity symbolization on extrinsic motivation in case of social reward F (3,157) = 6.917, p= 0.009. LSD post hoc paired comparisons of condition showed that for intrinsic motivation in the absence of reward for ethically good behavior, the mean score of participants in

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moral person leader condition (M = 5.51, SD = 1.4) differ significantly from ethical leader condition (M = 4.17, SD = 1.9), moral manager leader condition (M = 4.04, SD =2.14), and indecisive leader condition (M = 4.24, SD = 2.25). Also, the mean score of participants for extrinsic motivation in the presence of social reward in moral manager condition (M = 6.15, SD = 1.1) differ significantly from the mean score of participants in moral person condition (M = 5.48, SD = 1.23) (See Figure 8 and Figure 9). Post-hoc Tuckey test also revealed the same (see Table 21).

Table 21: Multiple Comparisons of Leadership Conditions-Post Hoc Test (Tuckey HSD)

Variable

Moral Person

Moral Manager

Ethical Leader

Indecisive Leader

6.02a

6.11a

6.98a

6.26a

(1.17)

(1.20)

(1.32)

(1.05)

5.51b

4.04a

4.17a.b

4.24c

(1.39)

(2.14)

(1.90)

(2.25)

5.48b

6.15a.b

6.02a

6.05a

(1.23)

(1.10)

(1.36)

(1.16)

(Control)

Extrinsic Motivation (Monetary Reward)

Intrinsic Motivation (Absence of Reward)

Extrinsic Motivation (Social Reward)

Note: For any single measure, means that share the same subscript do not differ (p < .05). Standard deviations appear in parentheses below means.

Hierarchical Linear Modeling (HLM) (cf. Woltman, Feldstain, MacKay, & Rocchi, 2012) was also used to statistically analyze the data structure where the teacher (level1) were nested within schools (level-2). The relationships between teacher’s intrinsic and extrinsic motivation (outcome variables) in the presence of monetary reward, social reward and in the absence of reward, and leadership condition (level-1 predictor variable) and the school category (level-2 predictor variable) were analyzed. School category represents the groups that cater to the educational needs of different social classes, and hence, also reflects the differences in the payment structure, facilities and training provided to the teachers. Arbitrarily, these social classes are: rich class (Monthly income of more than Rs. 200,000), upper middle class (Monthly income of between Rs. 100,000 and Rs. 200,000), lower middle class (Monthly income less than Rs. 75,000), and lower class (Monthly Income between Rs. 25000 and Rs. 50,000). School category 1 (Monthly fee higher than Rs. 15000), category 2 (Monthly fee between Rs. 10,000 – 15,000) and category 3 (Monthly fee less than 10,000). Category

191

1 represents rich and upper middle class, Category 2 represents upper and lower middle class, and Category 3 represents lower class. For each outcome variable, a separate analysis was used. Model testing was done in four phases: Unconstrained (Null) model, random intercepts model, means as outcome model, and intercepts and slopes as outcome model. For the variable of extrinsic motivation in the presence of monetary reward, the intercept only (Null) model showed an ICC of 0.1821. Thus, 18.21% of the variance in extrinsic motivation (monetary rewards) score is between schools, and 81.79% of the variance is between teachers. Because, variance existed at both levels of the data structure, predictor variables were individually added at each level. The random regression coefficient model tested using leadership condition as the only predictor variables. The regression coefficient relating to the condition on extrinsic motivation (monetary reward) was positive (β= 0.11, p < 0.09) and not significant. Thus, leadership condition had no effect on extrinsic motivation in the case of monetary reward. Next, the means as outcome model added school category as a level-2 predictor variable. The regression coefficient relating school category to extrinsic motivation (monetary reward) was positive (β=0.21, p < 0.302) and insignificant. Thus, school category had no effect on extrinsic motivation (monetary rewards). The analysis was then run for the outcome variable of intrinsic motivation in the absence of reward. The intercept only model revealed an ICC of 0.0087. Thus, 0.87% of the variance in intrinsic motivation (absence of reward) is between schools and 99.13% variance in intrinsic motivation is between teachers. Because variance didn’t exist at both levels, predictor variables were added to the model simultaneously. It was found that the regression coefficient relating leadership condition to intrinsic motivation (absence of reward) is negative and statistically significant (β = - 0.36, p < 0.002). It explains that as the leadership condition shifts from moral person towards moral manager, ethical leader and indecisive leader then leadership condition negatively affects the intrinsic motivation (absence of reward), while the interaction between leadership condition and school category was not statistically significant (β= 0.14, p < 0.43), which showed that school category had no significant effect on the

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strength of relationship between leadership condition and intrinsic motivation of teachers in the absence of reward. Lastly, the analysis was again run for the outcome variable of extrinsic motivation in the case of social reward. The intercept only model showed an ICC of 0.2091. Thus, 20.91% variance in extrinsic motivation score is between schools and 79.09% variance in image motivation is between teachers within a given school. As, variance existed at both levels of data structure, predictor variables were individually entered at each level. The random-regression coefficient model was tested using leadership condition on extrinsic motivation (social reward) was positive and statistically significant (β= 0.185, p < 0.03). Teachers’ image motivation scores were higher as leadership condition changes from moral person towards moral manager, ethical leader and indecisive leader. Next, means as outcome model added school category as a level-2 predictor variables. The regression coefficient relating school category to image motivation was positive (β= 0.205, p < 0.244) and statistically insignificant. School category had no effect on teacher’s extrinsic motivation in the presence of social reward. Finally, intercept model and slope as outcome model were tested simultaneously with all predictor variables tested in the model to look for the presence of any interaction between predictor variables. The cross level interaction between condition and school category was not statistically significant (β = 0.05, p < 0.65), which means that school category had no influence on the strength of the relationships between leadership conditions and extrinsic motivation (social rewards).

193

Figure 8: Moral Internalization and Moral Motivation

194

Figure 9: Moral Symbolization & Moral Motivation

195

6.5.3 The Effect of Demographic Variables on Moral Motivation and Moral Judgment To explore the differences among participants based on demographic variables and their effect on dependent variables, the variables of gender, level of education, the level of class taught, school category and age were entered for factorial MANOVA to see how these effect three dependent variables (Extrinsic Motivation in the Presence of Monetary Rewards, Intrinsic Motivation in the Absence of rewards, Extrinsic Motivation in the Presence of Social rewards) jointly. The variable of age was binned into 3 bands of equal percentiles to be used in MANOVA (see Table 22). It was found that only the school category had marginally significant effect on group of dependent variables F (6,234) = 1.96, p = 0.07, Wilks’ Lambda = 0.91; partial eta squared = 0.05. Univariate analysis also revealed that the School category had marginally significant effect on intrinsic motivation in the absence of reward F(2,471) = 2.77, p = 0.07 partial eta squared = 0.05, and extrinsic motivation in the presence of social reward F(2,182) = 2.75, p = 0.07, partial eta squared = 0.05. Mean scores were: category 1 (M = 4.85 SD= 1.83), category 2 (M = 4.60 SD= 1.96), category =3 (M = 3.87 SD=2.11) on intrinsic motivation in the absence of reward, and category 1 (M = 5.70 SD= 1.2), category 2 (M = 5.50 SD=1.52), category 3 (M = 6.11 SD=1.01) on extrinsic motivation in the presence of social reward. Table 22: Effect of Demographic Variables on Dependent Variables of Moral Motivation

Demographic Variables Age School Category Gender Education Level of Class Taught

F .73 1.96 .64 1.28 1.31

Sig. .62 .07 .59 .25 .26

Partial Eta Squared .02 .05 .02 .03 .03

Age × School Category

1.04

.41

.03

Age × Gender Age × Education Age × Level of Class Taught

.53 .73 .59

.67 .63 .85

.01 .02 .02

School Category × Gender

1.66

.13

.04

School Category × Education

1.20

.31

.03

196

School Category × Level of Class Taught

1.37

.18

.04

Gender × Education Gender × Level of Class Taught Education × Level of Class Taught

.14 .78 1.08

.94 .51 .37

.00 .02 .04

Age × School Category × Education

.66

.74

.02

Age × School Category × Level of Class Taught

.55

.93

.03

Age × Education × Level of Class Taught

1.23

.27

.03

School Category × Education × Level of Class Taught

1.01

.42

.03

Gender (Female = 1, Male = 2), Age ( 25 –below = 1, 26-32 = 2, 32 –above = 3), Education (M.S. or M.Phil = 1, Masters = 2, Bachelors = 3, Intermediate = 4) & Level of Class Taught (Secondary = 1, Primary = 2, Elementary = 3), School Category (1 = Monthly fee > Rs. 15000, 2 = Monthly fee Rs. 10,000 => 15,000), 3 = Monthly fee < Rs. 10,000)

Pairwise comparison showed that school category 2 and 3 are significantly different from each other at p < 0.05 level, on extrinsic motivation in the presence of social reward. The result showed that teachers who are teaching at category 3 schools were not as intrinsically motivated as teachers in the other two categories in the absence of reward, but at the same time the teachers at category 3 schools were highly motivated in the presence of social reward in comparison to other two categories. MANOVA results were not generated for interactions, where cells had less than required data points. To explore the differences among participants based on demographic variables and their effect on dependent variable of moral judgment, the variables of gender, level of education, the level of class taught, and age (binned into 3 bands) were entered for factorial MANOVA to see how these effect three dependent variables (Pretest Stage23, Posttest Stage23, Pretest Stage4, Posttest Stage4, Pretest Principled level & Posttest Principled level). It was found that only the level of class taught (Job Status) had marginally significant effect on group of dependent variables F (12,270) = 1.74, p = 0.06, Wilks’ Lambda = 0.86; partial eta squared = 0.07. Univariate analysis also revealed that the level of class taught had significant effect on Posttest Stage23 level F(2,169) = 3.34, p = 0.04 partial eta squared = 0.045. Pairwise comparison showed that the mean post principled percentage of teachers teaching at secondary level (M = 30.38 SD = 16.27) differ significantly at < 0.05 level from primary teachers (M = 26.19 SD = 12.52). Also, the post Stage4 percentage differ significantly for elementary teachers (M

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= 41.38 SD = 14.48) at < 0.05 level from secondary teachers (M = 33.41 SD = 12.56). More so, the post Stage23 percentage of elementary teachers (M = 24.62 SD = 14.61) differ significantly from primary teachers (M = 30.00 SD = 14.21) at < 0.05 level, which somehow establishes the indirect effect of education and age on cognitive moral development.

6.5.4 The Effect of Covariates on Moral Motivation Factorial MANCOVA was performed on three dependent variables associated with motivation: extrinsic motivation in the presence of monetary reward, extrinsic motivation in the presence of social reward, and intrinsic motivation in the absence of reward. Adjustment was made for two covariates: self-deception enhancement and impression management measured at pretest. These covariates were used to control for individual differences. As there was a concern for social desirability due to moral identity measurement, then these scales covariates can serve as the valid tools to detect any such effects. Independent variables were leadership condition, moral identity internalization and moral identity symbolization. Preliminary checks were conducted to ensure that there was no violation of the assumptions of normality, linearity, homogeneity of variance, homogeneity of regression slopes, and reliable measurement of the covariates. Table 23: MANCOVA Test to Adjust for the Effect of Covariates on Dependent Variables of Moral Motivation

Variable

F

Sig.

Partial Eta Squared

Self-Deception Enhancement Impression Management Leadership Condition

.85 1.41 2.31

0.47 0.24 0.02

0.02 0.03 0.04

Moral Identity (Symbolization)

1.53

0.21

0.03

Moral Identity (Internalization)

2.95

0.04

0.06

Leadership Condition × Moral Identity (Symbolization)

1.29

0.24

0.03

Leadership Condition × Moral Identity (Internalization)

0.96

0.48

0.02

Moral Identity (Symbolization) × Moral Identity (Internalization)

0.89

0.45

0.02

Leadership Condition × Moral Identity (Symbolization) × Moral Identity (Internalization)

0.62

0.78

0.01

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After adjusting for the effect of impression management and self-deception enhancement (Box’s M= 149.97, p=0.004) there was a significant main effect of the leadership condition [F (9, 150) = 2.31, Wilks’ Lambda = 0.87, p=0.015, partial eta squared = 0.04] and moral identity internalization [F(3, 150) = 2.95, p=0.035, Wilks’ Lambda = 0.94, partial eta squared = 0.06 on combined dependent variables. Neither of the interaction effect were significant. Levene tests showed that for all the dependent variables the assumption of equality of error variance was violated F(15,154) = 2.06, 2.75, 2.35, ps = 0.015, .001, 0.05 (see Table 23). The Univariate F-test was adjusted accordingly (0.025). Between subjects result showed that impression management had a moderate effect on extrinsic motivation in the presence of social reward F(1, 152) = 3.61, p =0.06, partial eta squared = 0.02. While leadership condition had a highly significant effect on intrinsic motivation in the absence of reward, F(3,152) = 4.99, p =0.002, partial eta squared = 0.09. Moral Identity symbolization had marginally significant effect on extrinsic motivation in the presence of social reward F(1, 152) = 4.05, p = 0.05, partial eta squared = 0.026. Also, moral identity internalization was found to have a marginally significant effect on extrinsic motivation in the case of social reward F(1,152) = 4.383, p = 0.04, partial eta squared = 0.03. None of the interactions between independent and covariates had any significant effect on any of the three dependent variables (See Table 24). It was also interesting to find that moral identity internalization had an effect on extrinsic motivation in the case of social reward. Mean difference revealed that participants who were high on moral identity internalization scored low on extrinsic motivation in the presence of social reward (M = 5.79, SD = 1.37) as compared to the participants who were low on moral identity internalization (M= 6.03, SD = 1.23). Table 24: Univariate Results after Adjustment for the Effects of Covariates on Dependent Variables of Moral Motivation

Variable Self-Deception Enhancement Impression Management Leadership Condition Moral Identity (Internalization) Moral Identity (Symbolization)

Extrinsic Motivation (Monetary Reward) 2.36 0.06 0.43 0.74 0.09

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Intrinsic Motivation (Absence of Reward) 0.03 0.2 4.99*** 0.06 0.01

Extrinsic Motivation (Social Reward) 1.36 3.61Ϯ 1.4 4.38* 4.05*

Leadership Condition × Moral Identity (Internalization) Leadership Condition × Moral Identity (Symbolization) Moral Identity (Internalization) × Moral Identity (Symbolization) Leadership Condition × Moral Identity (Internalization) × Moral Identity (Symbolization)

0.86

1.51

0.93

0.52

1.58

1.56

1.29

0.01

2.54

0.59

1.03

0.87

*** p < 0.005, ** p = < 0.01, * p = < 0.05, Ϯ p < 0.1

6.6

Conclusion

The study provided support for few of the hypothesis yet there are some theoretical possibilities, which remained unconfirmed. The hypotheses H2, H2a, H2c, H2e, H2f and H2h were supported empirically, there was partial support for hypotheses H1, H1a, H1b and H2d. There was no support for the hypotheses H2b and H2g. These findings are discussed in detail in the next chapter.

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Chapter 7 Discussion and Conclusion

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7.1

The Focus of the Study

The continued breaches of morality in organizational life made the function of organizational leaders more prominent, particularly when it comes to ethical decision making. Leaders through their behaviors and decision-making can serve as guides and role models. Still, there remains a quest to find a leadership style that brings the maximum good to the organization. One such leadership style “Ethical Leadership” has been forwarded to deal with the problems of unethical behavior in the organization. Ethical leadership grounds itself in the social learning theory. It has also been postulated that ethical leaders affect followers’ moral reasoning and motivate them towards moral actions. This study was then focused on two-steps of ethical decision making among four, as explained by Rest (1986). The first is moral judgment, which is the decision about ‘what is right (ethical) and what is wrong (unethical)’ (Tenbrunsel & Smith‐ Crowe, 2008)

and is based on one’s moral development. The second is moral

motivation, which is defined as a person’s “degree of commitment to taking the moral course of action, valuing moral values over other values, and taking personal responsibility for moral outcomes” (Rest, Bebeau, & Thoma, 1999, p.101 ) and to a degree is a function of one’s moral identity. The purpose of this research was to answer the questions regarding the influence of ethical leaders on ethical decision making in the organization. How these leaders affect the moral reasoning and moral identity based moral motivation of employees were the main questions of the study. It aimed to highlight the conflict within the construct of ethical leadership by pointing towards the conflicting influences ethical leadership casts on employees. These relationships were examined by employing various variables in an experiment. The decision making style of the leader was the main focus as how these leaders make decisions is also a part of their being an example, which lead followers to critically analyze and reflect on these judgments. This may bring change into followers own moral decision-making. This study examined whether ethical leadership and its moral person and moral manager components affect the moral judgment and moral motivation of employees. There were three main objectives of this study (1) to determine whether ethical leadership and its components of moral person and moral manager influences moral

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judgment of employees (2) to determine whether ethical leadership and its components of moral person and moral manager influences moral identity based moral motivation of employees and (3) to study the direction of these influences. The findings regarding these objectives are mixed.

7.2

Discussion of Findings

The set of hypotheses related to moral judgment found partial support (see Table 25). For principled level or post-conventional schema, it was found that there was no statistically significant difference among leadership decision-making style on moral judgment of participants while all participants scored better at posttest. When the same relationship was analyzed using the most relevant story, it was found that the effect of leadership decision-making style was significant on moral judgment of participants. The post hoc comparison revealed that the mean score of the participants in moral person condition was significantly different from the mean scores of participants in moral manager and ethical leader condition. In addition, the pretest and posttest score of control condition did not differ significantly, showing that there was no significant effect of indecisive leader on principled level or post-conventional reasoning. For Stage4 level reasoning or maintaining norms schema, when the effect of leadership condition on moral judgment using the relevant story was analyzed, it was found that the interaction between time and leadership decision style had significant effect on moral judgment. The mean percentage scores of participants in moral person condition and indecisive leader condition was higher than the moral manager and ethical leader condition. The result also showed that the time affected moral judgment slightly. It was interesting to note that participants in control condition also scored higher at Stage4 reasoning, revealing that the indecision of leader can lead participants to look towards social norms to come to a decision of moral nature. For Stage23 level or personal interest schema, the effect of leadership decision-making style was marginally significant between subjects. Post hoc analysis showed that the mean scores of participants in moral person condition was significantly different from those in moral manager and ethical leader condition. While the control condition was not significantly different from other groups.

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Visual inspection of the graphs and mean scores showed that the participants in moral person leader condition scored higher at both Principled level or Post-Conventional schema and Stage 4 or Maintaining Norms schema at posttest as compared to other leadership conditions, and scored lower at Stage23 at posttest than other leadership conditions. The effect of time was significant on moral judgment depicting the priming effect of experimental manipulation. Thus, our hypotheses regarding the effect of ethical leader, moral person and moral manager (Hypotheses 1, 1a and 1b) on CMD found empirical support. It was also found that the level of class taught influences moral judgment of teachers. Those teaching at higher levels scored better at principled level, in comparison with teachers, teaching at primary or elementary levels. As pointed out before, this effect may be an indirect function of age and education. The set of hypotheses related to moral motivation garnered statistical support (see Table 25). It was found that the ethical leader condition crowd out intrinsic moral motivation of individuals who are high on moral identity internalization, even in the absence of rewards (Hypothesis 2). The reason may be that ethical goals were already set, and expectations of rewards already existed in the organization. Consequently, setting ethical goals and attaching rewards and punishments to them may lead to the inaccessibility of the internalization component of moral identity even when no rewards were offered for ethical behavior. Although, the results about the impact of moral identity were not significant in the absence of rewards, but the difference in mean scores showed that it matters. On the other hand, it was supported that ethical leader crowd in moral motivation of the person to act morally, who is high on symbolization component of moral identity by providing social rewards (Hypothesis 2a), though the crowding out for monetary incentives was not supported (Hypothesis 2b). The reason why moral person did not crowd out extrinsic motivation in the case of monetary reward (Hypothesis 2d), could be the socioeconomic condition of the private school teachers in Pakistan, and where even a small amount can contribute to the well-being of teachers and their families. For example, most teachers in for-profit schools works for a small salary (Rs. 20,000 – 25,000) for a month. Even the reduction of small amounts might be meaningful to them. It shows that monetary rewards remained a ‘useful’ tool to control as it has the power to hurt the well-being of the employee and their families. May be if we take other 204

sample of employees working in some other kind of socioeconomic condition, in other organizational sectors or change the amount of reward, the hypothesized relationships may find support. It was also found that for employees who are high on moral identity symbolization, ethical leader and moral manager leadership conditions, crowds in moral motivation of the person to act morally, by providing social rewards (Hypotheses 2a and 2h). It was also supported that in the absence of rewards, moral manager and ethical leader crowds out intrinsic motivation to act morally; the former, for the employees who are high on internalization and the latter, for the employees who are high on symbolization (Hypotheses 2 and 2f). The reason may be that the rewards were expected and thus had signaling value and when the rewards were not offered after displaying ethical behavior, the employees high on symbolization were not motivated to act. It leads to the conclusion that even mentioning rewards and attaching it to an activity or a behavior can increase or decrease moral motivation. For the employees who are high on internalization component of moral identity, attaching ethical goals with rewards may have dampened their moral motivation by pronouncing trust deficit between leader and employee. The reasons why ethical leader and moral manager conditions did not crowd out extrinsic motivation in the case of monetary reward for the individuals high on symbolization may be the amount of reward, which was not significantly higher, and because of this, employees did not see it leading to the perceptions of personal greediness (Hypotheses 2b and 2g). It may be because the researcher did not mention that the distribution of monetary rewards would be done publicly. The results also highlight the concern that is being raised by other researchers as well (For e.g., Gastañaduy, Herrera, & Lens, 2014; Gneezy & Rustichini, 2000a; Holmås et al., 2010), about the possibility of demotivating employees, for the very same goals organizations are trying to promote. Attaching gains and losses with ethical actions change the framing of the issue. It makes ethical actions an exchange in the organization. It also shows that once the framework of employees is shifted towards benefit/loss frames, then it damages their intrinsic motivation. Previously, it was found

that control

mechanism shifts the decision framework of employees from social or moral to business (Tenbrunsel & Messick, 1999). 205

It was also interesting to note that moral identity internalization affects how participants respond to social rewards. The participants who were high on internalization component of moral identity were not as motivated as the other participants who were high on symbolization component of moral identity. It shows that the both components of moral identity of an individual does not act in unison, always. This finding also highlights the importance of understanding the role of moral identity in the organization. Particularly, when the internalization component is more close to ethical behavior. Additionally, it was found that impression management has a positive effect on extrinsic motivation in the presence of social rewards, and in the presence of impression management, the effect of moral identity symbolization was not significant on the group of dependent variables. This also opens up an interesting avenue to study moral identity symbolization and impression management, in the organization. Table 25: Summary of Findings

Hypotheses H1:

Findings

Ethical leadership leads employees to construct their morality at low levels of Cognitive Moral Development.

H1a:

Moral person component leads employees to construct their morality at higher levels of Cognitive Moral Development.

H1b:

Moral manager component leads employees to construct their morality at low levels of Cognitive Moral Development.

H2:

Ethical leader crowds out intrinsic motivation of the person to act morally who is high on internalization in the absence of rewards.

H2a:

Partially Supported

Supported

Supported

Ethical leader crowds out extrinsic motivation to act morally of the person who is high on symbolization component of moral identity by providing monetary rewards.

H2c:

Partially Supported

Ethical leader crowds in extrinsic motivation of the person to act morally who is high on symbolization component of moral identity by providing social rewards.

H2b:

Partially Supported

Not Supported

Moral Person leader crowds in the intrinsic motivation to act morally of the person who is high on internalization component of moral identity in the absence of rewards.

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Supported

H2d:

Moral Person leader crowds out the extrinsic motivation to act morally of the person who is high on internalization component of moral identity in the presence of monetary rewards.

H2e:

Moral Person leader crowds out the extrinsic motivation to act morally of the person who is high on internalization component of moral identity in the presence of social rewards.

H2f:

Not Supported

Moral manager crowds in the extrinsic motivation of the person to act morally who is high on symbolization component of moral identity by providing social rewards.

7.3

Supported

Moral manager crowds out the extrinsic motivation of the person to act morally who is high on symbolization component of moral identity by providing monetary rewards.

H2h:

Supported

Moral manager crowds out the intrinsic motivation of the person to act morally who is high on symbolization component of moral identity in the absence of rewards.

H2g:

Not Supported

Supported

The Strengths of Study

The study is significant as it is among the first ones (for e.g., Ciulla, 2011; Eisenbeiss, 2012) to identify the conflict inherent in ethical leadership construct forwarded by Brown et al. (2005) and which is important for the field of behavioral ethics, leadership ethics and ethical leadership theory. The results of this study may lead towards a shift in how we perceive ethical leadership. It provides basis to ask more critical question about moral management of employees. This is important as misconceptions about employees’ morality may marred the efforts of leaders and organization in pursuit of employee morality. This study is also among the first ones (e.g., Palmer, 2013) to utilize experimental approach to study the influences of ethical leadership and its components on ethical outcomes in organizational setting, and through utilizing this design, it has answered the calls to employ experimental research on leadership (Avolio, Walumbwa, & Weber, 2009; Brown & Lord, 2000).

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Previously, though ethical leadership has been manipulated in experiments, but except Ruiz et al. (2011) none has studied the two components of ethical leadership separately. In this study, ethical leadership and its two components are manipulated as three levels of the independent variable, which contributes to the body of knowledge, particularly reflecting on the role of ethical leadership in ethical decision-making process at the workplace, and it broadens our understanding of the construct and sharpens our reasons critically towards ethical leadership construct. The particular stories developed in the study helped to contextualize the moral issues in organizational setting. Various stories gave the reader vivid examples of moral problems in the organizations. Although the study employed complex design but this enable the researcher to examine the interplay of various kinds of influences on moral judgment and moral motivation, which added to the methodological rigor of the study. The methodological strengths are also the random assignment of subjects to the four different experimental conditions. The preliminary analyses showed that the random assignment demonstrated initial equivalence across the four conditions. This enabled the study to measure causal effects of leadership on employees’ moral judgment and moral motivation. In addition, this study highlighted the significance of experimental design in leadership studies. The experimental manipulation provided us with an understanding of the problems of ethical leadership construct. Without experimental design, it would not have been possible to compare the effect of different leadership style simultaneously. This research invites future researches to highlight this conflict in ethical leadership construct, using experimental design. Next, the study also answers the calls to study the influences of ethical leadership on moral outcomes as the focus of the majority of research is on the leader’s influence on unethical behavior (Mayer et al., 2012). However, what makes this study particularly unique is how it studies the effects of two components of ethical leadership (moral person, moral manager) separately. This study suggests that there is conflict inherent in the construct of ethical leadership and while it is presumed that ethical leadership’s influence on ethical outcomes will always be positive, but the opposite may be the case, if it is studied from up-close. The results of the study also implicate social learning theory.

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Another strength is that the results of this study are generalizable to private educational institutions in the other metropolitan cities of Pakistan, which shares the same characteristics with Islamabad. The major cities in Pakistan are metropolitan cities (e.g., Karachi & Lahore) and almost the similar private school brands exist in all these cities. As these schools had similar hiring and training policies for teachers all around Pakistan, then the findings are generalizable to these schoolteachers. This study also provide us the insight into the kind of leadership that can flourish in the school setting. At the same time, there is a need to replicate this study in different sectors to confirm or disconfirm the findings and its generalizations to other business sectors.

7.4

Theoretical Contributions

The first theoretical contribution is that this study extends ethical leadership theory by examining the conflicting effects of ethical leadership components on moral judgment and moral motivation. Previous research has demonstrated that ethical leader affects ethical behavior of employees in the workplace (for e.g., Mayer et al., 2012; Steinbauer, Renn, Taylor, & Njoroge, 2014; Walumbwa & Schaubroeck, 2009). Only few has identified the problems with ethical leadership construct and no one paid attention to how this conflict affects moral judgment and moral identity based moral motivation. Research findings of this study suggested that ethical leadership can affect positively moral judgment and moral identity based moral motivation through role modeling but at the same time, moral management affects the same negatively. In the field of behavioral ethics, this study makes important contributions. First, the interaction of situational influence (i.e. ethical leadership) with personal influence (i.e. moral judgment, moral identity & moral motivation) have been highlighted as important areas to study, in order to make progress in the field. It is interesting to note that how the relationships between situational and personal variables, which looks positive at one level changes its nature when studied at more intimate levels. Finally, there is no study until now that has questioned the validity of ethical leadership construct at the theoretical level and it is found that this construct behaved in unexpected ways. This study, then points towards the inadequacies and conflict within ethical leadership construct.

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This study also highlights the limitations of social learning theory in explaining the learning of moral behavior. At the same time, it emphasizes the social cognitive theory, which focuses on individuals’ self-regulatory mechanism, particularly when it comes to moral motivation. Bandura (1999, p. 193) explained “moral reasoning is translated into actions through self-regulatory mechanisms rooted in moral standards and selfsanctions by which moral agency is exercised.” By taking social cognitive perspective of moral identity, this study examined the variable of moral motivation and which deepens our understanding of the leader’s influences. This may lead other scholars and researchers to critically analyze the construct of ethical leadership and its influences. The issue of moral identity became part of organizational literature since last few decades (Aquino & Reed II, 2002; Blasi, 1993, 2004a; Hardy & Carlo, 2005; Lapsley & Lasky, 2001; Lapsley & Narvaez, 2004). Moral identity is recognized as an important factor for moral actions. This study highlights the role of moral identity and the findings of this study corresponds with the recent development in the field (Leavitt, Zhu, & Aquino, 2015; Reed II, Kay, Finnel, Aquino, & Levy, 2016; Xu & Ma, 2015). In addition, this study points toward the role of self as a moral agent and human agency, which connects with the self-determination theory (Deci, 1980). Self-determination theory highlights the role of individual competence and autonomy. Monetary rewards dampen the employees’ intrinsic motivation towards work (Olafsen, Halvari, Forest, & Deci, 2015). The findings of our study give support to the self-determination theory framework, which can be used to explore the effect of monetary rewards on moral motivation. More so, the findings of this study calls attention to the impression management in the organization. The work on impression management found the role of supervisor in initiating the impression management particularly self-promotion behavior of employees (Bolino et al., 2016; Long, Baer, Colquitt, Outlaw, & Dhensa‐Kahlon, 2015). The findings of our study also points towards the role of impression management to maintain the symbolization aspect of moral identity. A recent study shows how moral impression management works in the presence of in-group (Van Nunspeet, Derks, Ellemers, & Nieuwenhuis, 2015). Our study also provides an initial support to study the role of both impression management and moral identity in the organization.

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Also, the role of forgiveness has been recently given heed to in the organizational context. Forgiveness plays an important role in building a tolerant organization. Recently, it is found that idealized influence aspect of transformational leadership leads to forgiveness in the organization (Zdaniuk & Bobocel, 2015). Our study also points towards the role of moral person leaders in promoting moral motivation in the organization. Then, this study also adds to leadership ethics research, by making obvious the philosophical divide inherent in this ethical leadership construct. Moral leadership has long been a subject of philosophy and morally managing others has always been looked at with suspicion from philosophers, particularly Kantian philosophers (e.g., Bowie) and virtue ethicists (e.g., Ciulla). This study extends the research on leadership ethics by confirming these suspicions. In addition, this research also contributes to ethical decision making literature. Though the importance of moral intensity (Jones, 1991), issue-related characteristics (Trevino, 1986), organizational and individual factors (Hunt & Vitell, 1986), Leadership (Steinbauer et al., 2014; Zhu, Riggio, Avolio, & Sosik, 2011) is identified, but how leadership can affect moral judgment and moral motivation through role modeling and rewards and punishment was not studied prior to this study in organizational context and particularly where both moral judgment and moral motivation are steps towards moral behavior. This study has contributed by examining the role of ethical leadership on ethical decision making of employees. This research also contributed to ethical leadership theory by constructing a more representative scale of ethical leadership construct. This scale can be used for capturing the perceptions more relevant to the two components of moral person and moral manager of ethical leadership construct, and can be utilized to study ethical leadership. It helps us to better represent the characteristics and behaviors of both moral person and moral manager. Through this scale, the perception of ethical leaders can be studied more accurately. In the end, this research also contributes to the moral development research. Moral development is studied by a number of researchers (Aquino & Reed II, 2002; Bandura, 1991; Colby & Damon, 1992, 1993; Gibbs, 2013; Hoffman, 2000; Kohlberg, 1969b; Piaget, 1932b; Reed et al., 2007b; Weaver, 2006) to explain the relationship between

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individual and situational factors in influencing moral development. Hoffman (1988) suggested that development of empathy and associated moral emotions lead towards moral action. He signified the role of social moralization process for such development. Bandura and few others emphasized the role of parents’ behaviors, actions and practices, as a significant influence on child’s moral development (Bandura, 1991; Hoffman, 1979). The role of leadership has also been examined by few researchers (for e.g., Steinbauer et al., 2014; Zhu et al., 2011). Only a few studies have questioned the behavior and practices of ethical leadership construct, and how it may regress or progress an individual’s moral development. It will be worthwhile to pursue these influences over a longer period and a longitudinal study will be insightful in this regard. This study also points towards the interaction of leadership influences and moral identity of an individual, and how the behavior of leaders may crowd in or crowd out moral identity based moral motivation.

7.5

Practical Implications

The first practical implication is that leaders by demonstrating high moral standards and advanced moral reasoning can contribute to the moral development of the individuals, which will consequentially lead to ethical decision making in the organizations. On the other hand, the study demonstrates that the practice of moral management should be employed with caution in the organization. The findings of this study indicated that the moral person leader has been most successful in bringing positive changes to moral judgment and moral motivation of employees. Ethical leadership overall affects moral judgment and moral identity based moral motivation negatively. Thus, moral person leadership should be promoted in the organizations, as this will lead to the moral development of employees and will encourage them towards moral action. Another implication is that the organizations need to focus on the reflective practice among employees, rather than distribution of rewards and punishments. The findings of our study point toward the degree of freedom required in the organization in order to increase and inculcate ethical decision-making. It is important to engage employees in the aftermath of their unethical decision-making. When employees are being talked to about their unethical actions; when they are given a chance to reflect on their harmful behavior; when they are forgiven for their wrong actions (though this may not be true

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for the habitual unethical decision maker) and when they are asked to come up with a solution of the problems their behavior had initially led to, then it sharpens their reason and motivate them intrinsically to pursue ethical actions in future. It may help them see what went wrong with them in the first place, and it may show them that they can use this opportunity to correct their failure. It will lead to the understanding of the harmful effects their behavior can lead to. Thus, engagement of employees after organization faces the moral failure and assigns responsibility is important for employees to flourish morally. Another significant practical implication is the development of moral person leaders across different levels of organization, in order to develop moral judgment and moral motivation. This will lead employees at all levels to be more aware of their own unethical decisions and actions. Their leader will not only demonstrate moral standards and high moral reasoning, but also gives importance to individual dignity and freedom when it comes to moral outcomes in the organization. The inculcation of reflective practice in the organization is also emphasized by Bazerman and Gino (2012). It also points towards the hollow façade of ethical leadership, where one pillar of EL (i.e. moral manager) works against the other (i.e. moral person). It is of high practical importance and provides a lesson to the organization to refrain from applying performance management techniques on complex human behaviors and instead, to focus on character building of employees, which alone can provide a sound foundation to morality in the organizations. It also implies that leader serves as a guide and teacher. Leader should lead employees to reflect critically on their actions and at the same time become an example for them. There is a greater need to provide the real and rational view of the world where it rains the same way on all and misfortune does not only visit the immoral rather contrary is the case with the world. It is important to teach them how to keep their moral compass in the right direction in such social setting. Employees should learn to not give in to gratification (i.e. rewards) or act under duress (i.e. punishments) but out of their own identity and moral integrity. Organizations should make room for tolerance and forgiveness and should turn over a new leaf of safeguarding individual morality from ill forms of leadership.

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In the context of school setting, the moral person leader will benefit the organizations most rather than an ethical leader or moral manager leader. Moral person leader will lead teachers towards moral development and encourage them intrinsically towards moral behavior. There is an acknowledgement that ethical leaders in school can build tolerant and peaceful society. If moral person leaders will be developed in this setting, their effect will trickle down. As the teachers are influenced by their leaders, and as they significantly influence and shape the development of next generation, this remains a highly significant practical implication. An interesting avenue of research also opens here that how moral person leaders affect teacher’s morality, and how teachers’ morality is translated into the morality of students.

7.6

Limitations and Future Recommendations

Apart from the contribution of this study, several limitations have affected this study. A significant issue of conducting experimental manipulation is that the observed effects may be the consequence of priming effect. Reading the different stories about leader may have developed a context that primed the concept of ‘ethical leader’ ‘moral person’ or ‘moral manager’ in the subjects, in these conditions. In general, priming effects have been identified as an issue in behavioral research (Podsakoff et al., 2003). It has been suggested that this effect could be reduced by alternating the order in which dependent and independent variables are given to the participants; however, this method is not possible to carry out in experimental design, where the order of presentation of variables is critical to study the causal link between these variables and to interpret the findings. To overcome these issues, future experiments should study the actual behavior of the leaders to study closely this cause and effect relationship. More so, the break time between first and second session was only fifteen minutes. In the post APS scenario, schools did not allow the experimenter to introduce an hour break or to carry out second session the other day. This has affected the study, as many participants were exhausted and complained of questionnaire fatigue. Future research should overcome this shortcoming. In addition, it was difficult to measure behavior in a scenario study and thus it remained unclear that whether moral motivation also transforms into action. As moral motivation is one of the dependent variables of the study, which was used to measure behavior intent towards moral action, and though

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this is a common approach in behavioral ethics research, it is often found that intentions accounts for rather smaller amount of variance in moral behavior (Weber & Gillespie, 1998). Future studies should study the influence of ethical leadership on actual behavior. Another significant limitation is the use of scenarios to study independent variable. The stories cannot replace actual leaders, and as the dissemination of rewards did not actually occur, it has affected the empirical yield of the study. In future, it will be worthwhile to study the actual leadership style and how rewards or controls affect the actual moral behavior of employees. Yet another major issue was of the control condition, where an indecisive leader was introduced. It is important to note that even the indecision of leader has its consequences, and that it affects employees’ motivation. There is a need to design better control condition. Perhaps one which does not have a leader to influence employees, would be better than having a leader who does not take decisions and actions. Finally, the particularity of educational institutions delimits the generalizability and external validity of our experiment. This research extends the invitation to replicate this study to confirm or disconfirm the observed effects on employees, in different organizational settings. If the same study is to be replicated in educational institutions setting, it will be prudent to comparatively study the effect of academic and general administrative leaders on the moral reasoning and moral motivation of employees, particularly in higher education sector. In addition, it is important to test these hypotheses in a different organizational hierarchy. The hierarchy in the school is simpler as compared to other forms of organization. How the complex hierarchies affect moral motivation of employees, and the role of supervisory ethical leaders in complex organizations, should be explored. As previously discussed, there is a rising debate about how school leaders can change the moral out look of the society and work towards a more tolerant and free society. Organizations should learn to empower their employees and should reduce the use of unnecessary organizational power on employees. In this context, the use of organizational power over employees can also be studied.

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It is also important to highlight that there are various types of social influences that exist in the organization, for example, peer influence, which may affect both moral judgment and moral motivation of employees. It will be worthwhile to study the effect of peer influence on individual’s moral judgment and moral motivation. For the future studies, it is also recommended that researchers should use longitudinal study design by testing one’s moral judgment, moral identity and moral motivation at different times and circumstances to better understand the dynamics of the complex process of moral development. Additionally, more research is needed to enhance our understanding of ethical leadership influences on ethical decision making in the organization. Research in the future may study how ethical leaders influence the moral awareness of ethical issues. The future research agenda should also include the direct effect of ethical leadership on employee moral identity. In addition, future research on ethical leadership theory should continue to examine the complex interactions between leaders and followers. One path is to investigate how rewards and punishments influence the moral development of employees in organizations in the long run. Also, researchers could track how past practices of rewards or discipline have affected moral motivation or what is the impact on moral motivation when rewards or punishments for moral actions are removed. In the area of moral reasoning, researchers could investigate how previous rewards and punishments affect current moral reasoning; for e.g., does fear of punishment or expectancy of reward remain effective over the long run to inspire moral action. In regards to ethical leadership, what is the most influential factor that creates the perception of ethical leadership and is perception of ethical leadership synonymous with true ethical leadership? The connection and interaction of moral reasoning and moral identity could also be studied. Do higher CMD levels of moral reasoning make moral identity more central to one’s self-concept, or does strong moral identity facilitate the construction of morality at higher levels? Also, what is the relationship between ethical leadership, moral reasoning, and moral identity of a leader? Is the perception of ethical leadership tied strongly to a leader’s moral identity or to moral reasoning? It was reported recently that moral identity of a leader corresponds with moral identity of followers (Zhu, Treviño, & Zheng, 2016). There is a need to further explore this issue. It will also be interesting to study that whether there is any gender difference in the demonstration of ethical leadership. 216

Many of these research questions can be verified empirically and carried out experimentally. In addition, a longitudinal study can be employed in which the moral person and moral manager leadership styles and their influence on moral reasoning, moral motivation, and moral identity can be studied in a real setting. Along with this, the difference between perceived and actual ethical leadership should be studied through the observation of leader behavior in public or private, through diaries, and through decision making attitudes in public or private. These questions are important and the search for their answers will enhance our understanding of both ethical leadership and its influence on moral behavior.

7.7

Conclusion

This study started out with the purpose to develop and test hypotheses, which would examine the influence of ethical leaders, its components, moral person and moral manager on employee’s moral judgment and moral motivation. This study tested the hypotheses by using experimental design and thus has causal interpretability, which makes it stands among the few studies on ethical leadership that has used experimental design (e.g., Palmer, 2013). Next, it is the only study to date, which has highlighted the conflict within a construct of ethical leadership at both theoretical and empirical levels, though the construct of ethical leadership was criticized before, theoretically (e.g., Ciulla, 2011; Eisenbeiss, 2012) and empirically (e.g., Ruiz et al., 2011). Finally, emphasizing the moral identity variable, which explains moral motivation adds to the growing body of research that highlights the role of moral identity in the organization. Overall, this study showed that a moral person leader is a style that has the most positive effect on moral judgment and moral motivation of employees, among the three leadership styles of moral person leader, moral manager leader and ethical leader. It also demonstrates that moral management, as a leadership style should be used with caution. The study also implies that the distinctiveness of ethical leadership style, which is based on moral management, should be looked at with doubt, leading us to question and critically analyze the ethical leadership construct, which was previously assumed as unproblematic. The external reinforcement of behavior remains a powerful leadership tool for behavior modification, but when these reinforcements are attached to behaviors and actions that

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have an intrinsic relationship with the individual, then the explanation of external rewards and punishments becomes problematic. More so, there are other kinds of effects that consistent rewarding can create in the organization. First, the same kind of rewards for the same kind of behavior can lose their motivational value over time (Bandura, 1971b). Second, consistent rewards can make an individual less persistent in the absence of rewards, especially when goals are difficult to achieve (Bandura, 1971b). In other words, some leadership styles could suppress follower moral judgment and motivation. A surprising conclusion may be that that practicing some forms of ethical leadership in the organization may result in unintended and negative outcomes. If ethical leadership theory does not take into account the positive and negative impacts of specific actions, then organizations will struggle to develop more ethical employees.

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doi:

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Appendices

264

Appendix A: Questionnaire

265

INFORMATION SHEET

Some questions that you may have

• Do I must to say ‘yes' to participate? Who I am My name is Shazia Rehman. I am pursuing doctorate in management at COMSATS Institute of Technology, Islamabad. I am interested in studying how leadership influences employees’ social decisions. I need your help. I am hoping to involve 200 teachers in a research project. You need to solve few cases, answer few questions and fill few surveys.

No. It is your choice.

• How long do I have to stay in the study for? I would very much like this to be a positive experience for you, and hope that you may want to stay in the study for up to two sessions. These sessions will be conducted within a short duration of time.

How can I get in touch?

• Where and when will we meet?

You can ring me on: 0301 2214843 (mobile)

I will see you at your school. Participation in this study will be voluntary. At any point in research you can say ‘No’ and you are free to walk away from these sessions. I hope to learn a lot from you about how social issues are perceived by teachers. I will then write research articles and thesis, to share what is learnt with many others, including teachers like you. In this way our study will give people a better understanding of influences of organizational leaders.

You can email me at: [email protected]

• How will this information be used? Everything that you say will be kept confidential. It will remain with researcher to write scientific research papers, and results will be used in aggregated form. Your identity will be protected at all times.

• Will anyone reading the book or articles be able to recognize me? No, because the results will be reported in aggregated form and no recognizable identification will be used.

266

PARTICIPANT CONSENT FORM I, ................................................................................... agree to take part in this research study titled The Influence of Ethical Leadership on Moral Judgment and Moral Motivation of Employees.

In giving my consent I state that: ü

I understand the purpose of the study, what I will be asked to do, and any risks/benefits involved.

ü

I have read the Participant Information Statement and have been able to discuss my involvement in the study with the researcher if I wished to do so.

ü

The researcher has answered any questions that I had about the study and I am happy with the answers.

ü

I understand that being in this study is voluntary and I do not have to take part.

ü

I understand that I can withdraw from the study at any time.

ü

I understand that my questionnaire responses cannot be withdrawn once they are submitted, as they are anonymous and therefore the researchers will not be able to tell which one is mine.

ü

I understand that personal information about me that is collected over the course of this project will be stored securely and will only be used for purposes that I have agreed to. I understand that information about me will only be told to others with my permission, except as required by law.

ü I understand that the results of this study may be published, and that publications will not contain my name or any identifiable information about me. I consent to:

• Being contacted about future studies

YES o NO o

• Receiving feedback about my personal results

YES o NO o

Would you like to receive feedback about the overall results of this study? YES o NO o If you answered YES, please indicate your email address: o Email:

___________________________________________________

................................................................... Signature ........................................................................... Name

267

Required Information about Participant

Name: _______________________________________________________ Respondent’s Code: ____________________________________________ Gender: _____________________________________________________ Age: _______________________________________________________ Education level: ______________________________________________ Present Job Status: ____________________________________________ Years Spent at the Same Job: ___________________________________ Years Spent with Same Supervisor: ______________________________

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This questionnaire is designed to study leadership in organizations. Please indicate how each of the following statements describes your immediate supervisor, by selecting the most representational response. Mark the number of your choice on the scale. Strongly Disagree 1. 2.

3. 4. 5. 6. 7. 8.

9.

10.

11.

12.

13.

14.

15.

16.

17. 18.

Moderately Disagree

Listens to what employees have to say. Disciplines employees who violate ethical standards. Conducts his/her personal life in an ethical manner. Has the best interests of employees in mind. Makes fair and balanced decisions. Cannot be trusted. Discusses business ethics or values with employees. Sets an example of how to do things the right way in terms of ethics. Defines success not just by results but also the way that they are obtained. When making decisions, asks “what is the right thing to do?” Makes sure that employees are promoted in the organization because they show ethical behavior. Acknowledges ethically valued behavior of employees. Provides rewards to employees for ethically good behavior. His/her decisions have positive influence on the well-being of organization and other stakeholders. Reprimands employees who show ethically flawed behavior. The observation of his/her ethical behaviors inspires employees to resolve ethical problems in principled ways. His/her actions reflects his/her moral beliefs. Employees find it difficult to solve ethical problems when the leader is away.

269

Slightly Disagree

Slightly Agree

Moderately Agree

Strongly Agree

DIT

Identification Number: _________________

DEFINING ISSUES TEST University of Minnesota University of Alabama Copyright, James Rest All Rights Reserved, 1979

OPINIONS ABOUT SOCIAL PROBLEMS The purpose of this questionnaire is to help us understand how people think about social problems. Different people have different opinions about questions of right and wrong. There are no "right" answers to such problems in the way that math problems have right answers. We would like you to tell us what you think about several problem stories. The papers will be fed to a computer to find the average for the whole group and no one will see your individual answers. Please give us the following information: Level of Class Taught ___________________________________________________________________ School ____________________________________________________________________ Education _____________________________________________________________________ The Identification Number at the top of the answer sheet may already be filled in when you receive your materials. If not, you will receive special instructions about how to fill in that number. In this questionnaire you will be asked to give your opinions about several stories. Here is a story as an example. Frank Jones has been thinking about buying a car. He is married, has two small children and earns an average income. The car he buys will be his family's only car. It will be used mostly to get to work and drive around town, but sometimes for vacation trips also. In trying to decide what car to buy, Frank Jones realized that there were a lot of questions to consider, For instance, should he buy a larger used car or a smaller new car for about the same amount of money? Other questions occur to him. If you were Frank Jones, how important would each of these questions be in deciding what car to buy? (Check one) ______ Buy new car.

______ Can’t decide.

270

______ Buy used car.

Instructions for Part A: (Sample Question) On the left hand side check one of the spaces by each statement of a consideration. (For instance, if you think that statement #1 is not important in making decision about buying a car, check the space on the right.) IMPORTANCE: GREAT

MUCH

SOME

LITTLE

NO 1.

ü

2. ü

ü

3. ü

ü

4.

5. ü

6.

Whether the car dealer was in the same block as where Frank lives. (Note that in this sample, the person taking the questionnaire did not think this was important in making a decision.) Would a used car be more economical in the long run than a new car. (Note that a check was put in the far left space to indicate the opinion that this is an important issue in ranking a decision about buying a car.) Whether the color was green, Frank's favorite color. Whether the cubic inch displacement was at least 200. ( Note that if you are unsure about what “cubic inch displacement” means, then mark it “no importance.”) Would a large, roomy car be better than a compact car. Whether the front connibilies were differential. (Note that if a statement sounds gibberish or nonsense to you, mark it “no importance.”)

Instructions for Part B: (Sample Question) From the list of questions above, select the most important one of the whole group. Put the number of the most important question on the top line below. Do likewise for your 2nd, 3rd, and 4th most important question on the top of the line below. (Note that the top choices in this case will come from the statements that were checked on the far left-hand side – statement #2 and #5, were thought to be very important. In deciding what is the most important, a person should re-read #2 and #5, and then put the other one as “second most important,” and so on.) Most Important Second Most Important

5 . 2

.

Third Most Important 3 . Fourth Most Important 1 .

271

HEINZ AND THE DRUG In Europe a woman was near death from a special kind of cancer. There was one drug that doctors thought save her. It was a form of radium that a druggist in the same town had recently discovered. The drug was expensive to make, but the druggist was charging ten times what the drug cost to make. He paid $200 for the radium and charged $2,000 for a small dose of the drug. The sick woman's husband, Heinz, went to everyone he knew to borrow the money, but he could only get together about $1,000, which is half of what it cost. He told the druggist that his wife was dying, and asked him to sell it cheaper or let him pay later, But the druggist said, "No, I discovered the drug and I'm going to make money from it." So Heinz got desperate and began to think about breaking into the man's store to steal the drug for his wife. Should Heinz steal the drug? (Check one) ______ Should steal. GREAT

MUCH

SOME

______ Can’t decide. LITTLE

______ Should not steal.

NO 1. 2.

Whether a community's laws are going to be upheld. Isn't it only natural for a loving husband to care so much for his wife that he'd steal? 3. Is Heinz willing to risk getting shot as a burglar or going to jail for the chance that stealing the drug might help? 4. Whether Heinz is a professional wrestler, or has considerable influence with professional wrestlers. 5. Whether Heinz is stealing for himself or doing this solely to help someone else. 6. Whether the druggist's rights to his invention have to be respected. 7. Whether the essence of living is more encompassing than the termination of dying, socially and individually. 8. What values are going to be the basis for governing how people act towards each other. 9. Whether the druggist is going to be allowed to hide behind a worthless law which only protects the rich anyhow. 10. Whether the law in this case is getting in the way of the most basic claim of any member of society. 11. Whether the druggist deserves to be robbed for being so greedy and cruel. 12. Would stealing in such a case bring about more total good for the whole society or not

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

272

ESCAPED PRISONER A man had been sentenced to prison for 10 years. After one year, however, he escaped from prison, moved to a new area of the country, and took on the name of Thompson. For eight years he worked hard, and gradually he saved enough money to buy his own business. He was fair to his customers, gave his employees top wages, and gave most of his own profits to charity. Then one day, Mrs. Jones, an old neighbor, recognized him as the man who had escaped from prison eight years before, and whom the police had been looking for. Should Mrs. Jones report Mr. Thompson to the police and have him sent back to prison? (Check one)

______ Should report. GREAT

MUCH

SOME

______ Can’t decide. ______ Should not report. LITTLE

NO 1. 2. 3. 4. 5. 6. 7. 8. 9.

Hasn't Mr. Thompson been good enough for such a long time to prove he isn't a bad person? Everytime someone escapes punishment for a crime, doesn't that just encourage more crime? Wouldn't we be better off without prisons and the oppression of our legal system? Has Mr. Thompson really paid his debt to society? Would society be failing what Mr. Thompson should fairly expect? What benefits would prisons be apart from society, especially for a charitable man? How could anyone be so cruel and heartless as to send Mr. Thompson to prison? Would it be fair to all the prisoners who had to serve out their full sentences if Mr. Thompson was let off? Was Mrs. Jones a good friend of Mr. Thompson?

10. Wouldn't it be a citizen's duty to report an escaped criminal, regardless of the circumstances? 11. How would the will of the people and the public good best be served? 12. Would going to prison do any good for Mr. Thompson or protect anybody?

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

273

NEWSPAPER Fred, a senior in high school, wanted to publish a mimeographed newspaper for students so that he could express many of his opinions. He wanted to speak out against the use of the military in international disputes and to speak out against some of the school's rules, like the rule forbidding boys to wear long hair. When Fred started his newspaper, he asked his principal for permission. The principal said it would be all right if before every publication Fred would turn in all his articles for the principal's approval. Fred agreed and turned in several articles for approval. The principal approved all of them and Fred published two issues of the paper in the next two weeks. But the principal had not expected that Fred's newspaper would receive so much attention. Students were so excited by the paper that they began to organize protests against thehair regulation and other school rules, Angry parents objected to Fred's opinions. They phoned the principal telling him that the newspaper was unpatriotic and should not be published. As a result of the rising excitement, the principal ordered Fred to stop publishing. He gave as a reason that Fred's activities were disruptive to the operation of the school. Should the principal stop the newspaper? (Check one) ______ Should stop it. GREAT

MUCH

SOME

______ Can’t decide. ______ Should not stop it. LITTLE

NO 1. 2.

Is the principal more responsible to students or to parents? Did the principal give his word that the newspaper could be published for a long time, or did he just promise to approve the newspaper one issue at a time? 3. Would the students start protesting even more if the principal stopped the newspaper? 4. When the welfare of the school is threatened, does the principal have the right to give orders to students? 5. Does the principal have the freedom of speech to say "no" in this case? 6. If the principal stopped the newspaper would he be preventing full discussion of important problems? 7. Whether the principal's order would make Fred lose faith in the principal. 8. Whether Fred was really loyal to his school and patriotic to his country. 9. What effect would stopping the paper have on the student's education in critical thinking and judgment? 10. Whether Fred was in any way violating the rights of others in publishing his own opinions. 11. Whether the principal should be influenced by some angry parents when it is the principal that knows best what is going on in the school. 12. Whether Fred was using the paper to stir up hatred and discontent.

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

274

Respondent’s Code No. __________________________ Instructions: Listed below are some characteristics that might describe a person:

Caring, Compassionate, Fair, Friendly, Generous, Helpful, Hardworking, Honest, and Kind The person with these characteristics could be you or it could be someone else. For a moment, visualize in your mind the kind of person who has these characteristics. Imagine how that person would think, feel, and act. When you have a clear image of what this person would be like, answer the following questions.

Strongly Disagree

Moderately Disagree

Slightly Disagree

Neither Agree nor Disagree

Slightly Agree

Moderately Agree

Strongl y Agree

It would make me feel good to be a person who has these characteristics.

1

2

3

4

5

6

7

Being someone who has these characteristics is an important part of who I am.

1

2

3

4

5

6

7

1

2

3

4

5

6

7

I would be ashamed to be a person who had these characteristics.

1

2

3

4

5

6

7

The types of things I do in my spare time (e.g., hobbies) clearly identify me as having these characteristics.

1

2

3

4

5

6

7

The kinds of books and magazines that I read identify me as having these characteristics.

1

2

3

4

5

6

7

Having these characteristics is not really important to me.

1

2

3

4

5

6

7

The fact that I have these characteristics is communicated to others by my membership in certain organizations.

1

2

3

4

5

6

7

I am actively involved in activities that communicate to others that I have these characteristics.

1

2

3

4

5

6

7

I strongly desire to have these characteristics.

1

2

3

4

5

6

7

I often wear clothes that identify me as having these characteristics.

275

Instructions: Read each statement, and circle the number that best describes you. From Not True to Very True about you. 1.

My first impressions of people usually turn out to be right.

2.

It would be hard for me to break any of my bad habits.

3.

I don't care to know what other people really think of me.

4.

I have not always been honest with myself.

5.

I always know why I like things.

6.

Not True

+

Somewhat True

+

Very True

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

When my emotions are aroused, it biases my thinking.

1

2

3

4

5

7.

Once I've made up my mind, other people can seldom change my opinion.

1

2

3

4

5

8.

I am not a safe driver when I exceed the speed limit.

1

2

3

4

5

9.

I am fully in control of my own fate.

1

2

3

4

5

1

2

3

4

5

11. I never regret my decisions.

1

2

3

4

5

12. I sometimes lose out on things because I can't make up my mind soon enough.

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

15. I am a completely rational person.

1

2

3

4

5

16. I rarely appreciate criticism.

1

2

3

4

5

17. I am very confident of my judgments.

1

2

3

4

5

18. I have sometimes doubted my ability as a lover.

1

2

3

4

5

19. It's all right with me if some people happen to dislike me.

1

2

3

4

5

20. I don't always know the reasons why I do the things I do.

1

2

3

4

5

10. It's hard for me to shut off a disturbing thought.

13. The reason I vote is because my vote can make a difference. 14. My parents were not always fair when they punished me.

276

Not True

+

Somewhat True

+

Very True

21. I sometimes tell lies if I have to.

1

2

3

4

5

22. I never cover up my mistakes.

1

2

3

4

5

23. There have been occasions when I have taken advantage of someone.

1

2

3

4

5

24. I never swear.

1

2

3

4

5

25. I sometimes try to get even rather than forgive and forget.

1

2

3

4

5

26. I always obey laws, even if I'm unlikely to get caught.

1

2

3

4

5

27. I have said something bad about a friend behind his/her back.

1

2

3

4

5

28. When I hear people talking privately, I avoid listening.

1

2

3

4

5

29. I have received too much change from a salesperson without telling him or her.

1

2

3

4

5

30. I always declare everything at customs.

1

2

3

4

5

31. When I was young I sometimes stole things.

1

2

3

4

5

32. I have never dropped litter on the street.

1

2

3

4

5

33. I sometimes drive faster than the speed limit.

1

2

3

4

5

34. I have done things that I don't tell other people about.

1

2

3

4

5

35. I never take things that don't belong to me.

1

2

3

4

5

36. I have taken sick-leave from work or school even though I wasn't really sick.

1

2

3

4

5

37. I have never damaged a library book or store merchandise without reporting it.

1

2

3

4

5

38. I have some pretty awful habits.

1

2

3

4

5

39. I don't gossip about other people's business.

1

2

3

4

5

Instructions: Read each statement, and circle the number that best describes you. From Not True to Very True about you.

277

Respondent’s Code No : ____________________________

Ethical Leader Scenarios Story One: Stealing from Organization Mr. Ali is an honest and trustworthy person. He has worked as a branch manager in a local bank for fifteen years. He is respected for his personal morality and integrity. He is also open and communicative about ethical values to other employees at banks. Employees trust him, as Mr. Ali is always concerned about their well-being, and they see him as highly credible. Ali sahib provides a good example of morally right behaviors. At the same time, he strongly emphasizes and demands moral behavior from employees at the bank. He emphasizes doing things ethically and not just producing results. He frequently communicates that the organization will reward morally good behavior and punish unethical behavior. Fahad is an accounts manager, who has been working at this branch for five years. Fahad respects Mr. Ali sahib as a moral person and a good team leader. Recently, Fahad has been going through a very tough time and his younger brother is very sick. He has been diagnosed with cancer and has to have an operation. Fahad tries his best to save money for his operation. He saves Rs. 200,000, but remains short of Rs. 60,000. On the other hand, time is running out. One day, Fahad steals Rs. 60,000 from the bank vault to pay the doctor for his brother’s operation. The next day, the whole bank comes to know that Fahad has stolen from the bank. The issue has been brought forward to Mr. Ali. Fahad tells Mr. Ali about his problems and that he has tried everything but in the end left with no other way. He apologizes for his mistake and seeks repentance. Mr. Ali listens to Fahad, and tells him that he understands how important it is save human life, but of equal importance is the trust and credibility that the clients has given to this organization. He tells Fahad that he is firing Fahad, for breaking the trust of the clients and for not fulfilling his obligations towards his organization. Q1:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

278

Story Two: Doing one’s Duty Doctor Ehsan Khan is a senior doctor at a local hospital and works as a registrar. Many junior doctors are working under his supervision. He is regarded as highly respectable due to his personal morality and integrity. All the junior doctors trust him and see him as a role model of morally excellent behavior. Dr. Ehsan is not only concerned about his morality but that of the people working under him, and for this reason he attaches ethical goals to the economic goals of organization. Not only that, but he also makes sure that employees are rewarded and punished according to these ethical goals. Recently, there arises an emergency in the locality, and all the doctors worked diligently and dutifully. Because of the emergency, a shortage of blood occurred. Local news channels announces the need for blood donations, particularly B+ Blood group, as two patients are in immediate need of a blood transfusion. At the hospital, Dr. Ehsan Khan and his team are busy taking care of the critically injured patients. The parents and relatives of these patients are very worried, as the required blood is not yet arranged. One of the patients is a young boy and his mother is crying continuously. A junior doctor Fahim has been looking after him. Seeing the child’s mother extremely worried, Fahim decides to donate blood immediately, as his blood group is B+. Doctor Ehsan later comes to know about it and when the emergency has ended, he calls Fahim in his office. Dr. Ehsan then tells Fahad that what he did is very good, and he saved a human life. For his extraordinary action, he will be awarded a bonus of Rs. 5000. Q2:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

279

Story Three: Telling the Truth Mrs. Naheed is a head mistress at a local school. She is an honest and trustworthy person. Throughout her career she displayed exemplary personal morality and integrity. Other teachers at school respect her as their leader and trust her highly. She always emphasizes high ethical values. In addition to this, she demands everyone at school to follow moral values and attaches organizational rewards and punishments to their ethical actions. Rukhiya is one of the teachers, who has worked at the school for three years. She is responsible for two classes. As a school policy, the performance of teachers is also measured through the performance of the students in their class.The annual Performance report is thus a measure of a teacher’s performance in the class. The school announced that only those teachers would be given a salary raise whose students show atleast a 60% passing rate. Rukhiya is a hard working and intelligent teacher. She tries her best to enable student learning in her classes. But, still many students in her classes are poor learners and this is reflected in their results. To Rukhiya’s disappointment the results of her students are 55% for one class and 57% for the other. Rukhiya becomes frustrated by this, and falsifies the results to make them appear 62% for one class and 61% for the other. After the result is announced, Rukhiya gets depressed and tells Mrs. Naheed about her cheating. Mrs. Naheed listens, and appreciates that Rukhiya has moral courage to speak the truth. But, she also tells her that she was unjust in doing that, as she was unfair to many students and did not fulfill her duty. It is important to discourage such behavior in the organization, which could only be possible if the one who did the wrong thing is punished. As a result, she fires Rukhiya from the school. Q3:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

280

Story Four: Keeping Promise Mr. Javed runs a software company named “N Designers” and is respected as highly trustworthy due to his personal morality and integrity. He is known for his honesty and an exemplary character. He also emphasizes the same moral values and expects his employees to behave ethically. To ensure this, he attaches rewards to morally good behavior and punishments for unethical behavior. Recently his company hired new software engineers and designers. Few of them were previously employed at one of the competitors of N Designers. Rehan is a diligent and highly creative software designer and is hired for his technical knowhow that he gained at his previous job. One day, one of the executives at the company asks Rehan to share some of the technical knowhow with other software designers to train them. Rehan knows that it is wrong, as it is part of the competitive advantage of his previous employers. Rehan remembers that he has taken oath at the previous company to not reveal important information about their organization. The executive keeps pushing Rehan for this ‘training’ and becomes a nuisance. So, Rehan one day tells him plainly that he will not reveal this training and also tells him the reason. Mr. Javed overhears the dialogue between the two, and asks Rehan to come and see him. Mr. Javed tells Rehan that he did the right thing by keeping his promise to his previous employer, and that by keeping high moral value, he proves that he would be an asset for his organization. He emphasizes how important it is to keep one’s words and we all should take moral stand against dishonesty. To appreciate his moral behavior, he tells him that his salary will be increased by 15%. Q4:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

281

Respondent’s Code No : ____________________________ Indecisive Leader Scenarios Story One: Stealing from Organization Mr. Ali is an honest and trustworthy person. He has worked as a branch manager in a local bank for fifteen years. He is respected for his personal morality and integrity. He is also open and communicative about ethical values to other employees at banks. Employees trust him, as Mr. Ali is always concerned about their well-being, and they see him as highly credible. Mr. Ali provides a good example of morally right behaviors. At the same time, he also strongly emphasizes and demands moral behavior from employees at the bank. He emphasizes doing things ethically and not just producing results. He frequently communicates that the organization will reward morally good behavior and punish unethical behavior. Fahad is an accounts manager, who has been working at this branch for five years. Fahad respects Mr. Ali sahib as a moral person and a good team leader. Recently, Fahad has been going through a very tough time and his younger brother is very sick. He has been diagnosed with cancer and has to have an operation. Fahad tries his best to save money for his operation. He saves Rs. 200,000, but remains short of 60,000. On the other hand, time is running out. One day, Fahad steals Rs. 60,000 from the bank vault to pay the doctor for his brother’s operation. The next day, the whole bank comes to know that it is Fahad who has stolen from the bank. The issue has been brought forward to Mr. Ali. Fahad tells Mr. Ali about his problems and that he has tried everything but in the end has no other way. He apologizes for his mistake and seeks repentance. Mr. Ali listens to Fahad. He tells Fahad that he will report both his theft and the reason for it, to the superiors, and that he should wait for their final decision. Q1:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

282

Story Two: Doing one’s Duty Doctor Ehsan Khan is a senior doctor at a local hospital and works as a registrar. Many junior doctors are working under his supervision. He is regarded as highly respectable due to his personal morality and integrity. All the junior doctors trust him and see him as a role model of excellent behavior. Dr. Ehsan is not only concerned about his morality but that of the people working under him, and for this reason he attached ethical goals to the economic goals of organization. Not only that, but he also makes sure that employees are rewarded and punished according to these ethical goals. Recently, there arises an emergency in the locality, and all the doctors worked diligently and dutifully. Because of the emergency, a shortage of blood occurred. Local news channels announced the need for blood donations, particularly B+ Blood group, as two patients are in immediate need of a blood transfusion. At the hospital Dr. Ehsan Khan and his team are busy taking care of the critically injured patients. The parents and relatives of these patients are very worried, as the required blood is not yet arranged. One of the patients is a young boy and his mother is crying continuously. A junior doctor Fahim has been looking after him. Seeing the child’s mother extremely worried, Fahim decides to donate blood immediately, as his blood group is B+. Doctor Ehsan later comes to know about it and when the emergency has ended, he calls Fahim in his office. Dr. Ehsan then tells Fahim that he will commend his kind action to his superiors. Q2:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

283

Story Three: Telling the Truth Mrs. Naheed is a head mistress at a local school. She is an honest and trustworthy person. Throughout her career she displayed exemplary personal morality and integrity. Other teachers at school respect her as their leader and trust her highly. She always emphasizes high ethical values. In addition to this she demands everyone at school to follow moral values and attaches organizational rewards and punishments to their ethical actions. Rukhiya is one of the teachers, who has worked at the school for three years. She is responsible for two classes. As a school policy, the performance of teachers is also measured through the performance of the students in their class. The annual Performance report is thus a measure of a teacher’s performance in the class. The school announced that only those teachers will be given a salary raise whose students show at least a 60% passing rate. Rukhiya is a hard working and intelligent teacher. She tries her best to enable student learning in her classes. But, still many students in her classes are poor learners and this is reflected in their results. To Rukhiya’s disappointment the results of her students were 55% for one class and 57% for the other. Rukhiya becomes frustrated by this, and falsifies the results to make them appear 62% for one class and 61% for the other. After the result is announced, Rukhiya gets depressed and tells Mrs. Naheed about her cheating. Mrs. Naheed listens and tells her that she will tell the principal who will decide about her case. Q3:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

284

Story Four: Keeping Promise Mr. Javed runs a software company named “ N Designers” and is respected as highly trustworthy due to his personal morality and integrity. He is known for his honesty and an exemplary character. He also emphasizes the same moral values and expects his employees to behave ethically. To ensure this, he attaches rewards to morally good behavior and punishments for unethical behavior. Recently his company hired new software engineers and designers. Few of them were previously employed at one of the competitors of N Designers. Rehan is a diligent and highly creative software designer and is hired for his technical knowhow that he gained at his previous job. One day, one of the executives at the company asks Rehan to share some of the technical knowhow with other software designers so as to train them. Rehan knows that it is wrong as it is part of the competitive advantage of his previous employers. Rehan remembers that he has taken oath at the previous company to not reveal important information about their organization. The executive keeps pushing Rehan for this ‘training’ and becomes a nuisance. So, Rehan one day tells him plainly that he will not reveal this training and also tells him the reason. Mr. Javed overhears the dialogue between the two and asks Rehan to come and see him. Mr. Javed tells Rehan that he appreciates the situation he is in. He says that he will ask his superiors about how to manage the conflict between the executive and Rehan. Q4:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

285

Respondent’s Code No : ____________________________

Moral Manager Scenarios Story One: Stealing from Organization Mr. Ali is an honest person. He has worked as a branch manager in a local bank for fifteen years. He is also open and communicative about ethical values to other employees at banks. Mr. Ali provides a good example of morally right behaviors. At the same time, he strongly emphasizes and demands moral behavior from employees at the bank. He emphasizes doing things ethically and not just producing results. He frequently communicates that the organization will reward morally good behavior and punish unethical behavior. Fahad is an accounts manager, who has been working at this branch for five years. Fahad respects Mr. Ali sahib as a good team leader. Recently, Fahad has been going through a very tough time and his younger brother is very sick. He has been diagnosed with cancer and has to have an operation. Fahad tries his best to save money for his operation. He saves Rs. 200,000, but remains short of 60,000. On the other hand, time is running out. One day, Fahad steals Rs. 60,000 from the bank vault to pay the doctor for his brother’s operation. The next day, the whole bank comes to know that Fahad has stolen from the bank. The issue has been brought forward to Mr. Ali. Fahad tells Mr. Ali his problems and that he has tried everything but in the end left with no other way. He apologizes for his mistake and seeks repentance. Mr. Ali listens to Fahad, and tells him that he has betrayed the customers and the organization, and that he should be punished at all cost. Ali sahib tells him that he cannot be forgiven as this will lead others to steal from the organization and it’s customers. He fires Fahad. Q1:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

286

Story Two: Doing one’s Duty Doctor Ehsan Khan is a senior doctor at a local hospital and works as a registrar. Many junior doctors are working under his supervision. He is regarded as highly respectable due to his personal morality and integrity. All the junior doctors trust him and see him as a role model of excellent behavior. Dr. Ehsan is not only concerned about his morality but that of the people working under him, and for this reason he has attached ethical goals to the economic goals of organization. Not only that, but he also makes sure that employees are rewarded and punished according to these ethical goals. Recently, there arises an emergency in the locality, and all the doctors worked diligently and dutifully. Because of the emergency, a shortage of blood occurred. Local news channels announces the need for blood donations, particularly B+ Blood group, as two patients are in immediate need of a blood transfusion. At the hospital, Dr. Ehsan Khan and his team are busy taking care of the critically injured patients. The parents and relatives of these patients are very worried, as the required blood is not yet arranged. One of the patients is a young boy and his mother is crying continuously. A junior doctor Fahim has been looking after him. Seeing the child’s mother extremely worried, Fahim decides to donate blood immediately, as his blood group is B+. Doctor Ehsan later comes to know about it and when the emergency has ended, he calls Fahim in his office. Dr. Ehsan then tells him that he did a great job, and that he fulfilled his obligation as a doctor. For this reason, he announces that Fahad will be given Rs. 5000 as a bonus. Q2:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

287

Story Three: Telling the Truth Mrs. Naheed is a head mistress at a local school. She is an honest person. Other teachers at school respect her as their leader. Also, she always emphasizes high ethical values. In addition to this, she demands everyone at school to follow high moral values and attaches organizational rewards and punishments to their ethical actions. Rukhiya is one of the teachers, who has worked at the school for three years. She is responsible for two classes. As a school policy, the performance of teachers is also measured through the performance of the students in their class. The annual Performance report is thus a measure of a teacher’s performance in the class. The school announced that only those teachers would be given a salary raise whose students show atleast a 60% passing rate. Rukhiya is a hard working and intelligent teacher. She tries her best to enable student learning in her classes. But, still many students in her classes are poor learners and this is reflected in their results. To Rukhiya’s disappointment the results of her students are 55% for one class and 57% for the other. Rukhiya becomes frustrated by this, and falsifies the results to make them appear 62% for one class and 61% for the other. After the result is announced, Rukhiya gets depressed and tells Mrs. Naheed about her cheating. Mrs. Naheed listens and appreciates that Rukhiya has the moral courage to speak the truth, but at the same time she has betrayed both school and the parents. She was also unfair to the students who now believed they are better than they were not. For this reason, Mrs. Naheed fires Rukhiya. Q3:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

288

Story Four: Keeping Promise Mr. Javed runs a software company named “ N Designers”. He is known for his honesty, and emphasizes the high moral values and expects his employees to behave ethically. To ensure this, he has attached rewards to morally good behavior and punishments for unethical behavior. Recently his company hired new software engineers and designers. Few of them were previously employed at one of the competitors of N Designers. Rehan is a diligent and highly creative software designer and is hired for his technical knowhow that he gained at his previous job. One day, one of the executives at the company asks Rehan to share some of the technical knowhow with other software designers to train them. Rehan knows that it is wrong as it is part of the competitive advantage of his previous employers. Rehan remembers that he has taken oath at the previous company to not reveal important information about their organization. The executive keeps pushing Rehan for this ‘training’ and becomes a nuisance. So, Rehan one day tells him plainly that he will not reveal this training and also tells him the reason. Mr. Javed overhears the dialogue between the two and asks Rehan to come and see him. Mr. Javed tells Rehan that it is highly important that we all keep promises because it builds trust. We all should keep our promises to each other, and that doing right thing has its’ rewards. As an appreciation of his right behavior, he is increasing his salary by 15%. Q4:

Do you agree with how the leader dealt with this issue?

_______________________________________________________________________________

289

Respondent’s Code No : ____________________________ Moral Person Scenarios Story One: Stealing from Organization Mr. Ali is an honest and trustworthy person. He has worked as a branch manager in a local bank, since fifteen years. He is respected for his personal morality and integrity. He is also open and communicative about ethical values to other employees at banks. Employees trust him, as Mr. Ali is always concerned about their well-being, and they see him as highly credible. Mr. Ali provides a good example of morally right behaviors. Fahad is an accounts manager, who has been working at this branch for five years. Fahad respects Mr. Ali as a moral person and a good team leader. Recently, Fahad has been going through a very tough time and his younger brother is very sick. He has been diagnosed with cancer and has to have an operation. Fahad tries his best to save money for his operation. He saves Rs. 200,000, but remains short of 60,000. On the other hand, time is running out. One day, Fahad steals Rs. 60,000 from the bank vault to pay the doctor for his brother’s operation. The next day, the whole bank comes to know that Fahad has stolen from the bank. The issue has been brought forward to Mr. Ali. Fahad tells Mr. Ali about his problems and that he has tried everything but in the end has no other way. He apologizes for his mistake and seeks repentance. Mr. Ali listens and tells Fahad that saving human life is an obligation, and he is glad that Fahad has saved his brothers life. But, he also tells him that others’ private property cannot be used for our purposes. At the end, he asks Fahad to reflect on what he did and to decide for himself, the right action to be taken, in this regard. Q1:

Do you agree with how the leader dealt with this issue?

______________________________________________________________________________

290

Story Two: Doing one’s Duty Doctor Ehsan Khan is a senior doctor at a local hospital and works as a registrar. Many junior doctors are working under his supervision. He is regarded as highly respectable due to his personal morality and integrity. All the junior doctors trust him and see him as a role model of excellent behavior. Recently, there arises an emergency in the locality, and all the doctors worked diligently and dutifully. Because of the emergency, a shortage of blood occurred. Local news channels announces the need for blood donations, particularly B+ Blood group, as two patients are in immediate need of a blood transfusion. At the hospital Dr. Ehsan Khan and his team are busy taking care of the critically injured patients. The parents and relatives of these patients are very worried, as the required blood is not yet arranged. One of the patients is a young boy and his mother is crying continuously. A junior doctor Fahim has been looking after him. Seeing the child’s mother extremely worried, Fahim decides to donate blood immediately, as his blood group is B+. Doctor Ehsan later comes to know about it and when the emergency has ended, he calls Fahim in his office. Dr Ehsan then tells him that he is a good doctor, that he hopes that he will stay the same. Q2:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

291

Story Three: Telling the Truth Mrs. Naheed is a head mistress at a local school. She is an honest and trustworthy person. Throughout her career she displayed exemplary personal morality and integrity. Other teachers at school respect her as their leader and trust her highly. Rukhiya is one of the teachers, who works at the school since three years. She is responsible for two classes. As a school policy, the performance of teachers is also measured through the performance of the students in their class. The annual Performance report is thus a measure of a teacher’s performance in the class. The school announced that only those teachers would be given a salary raise whose students show atleast a 60% passing rate. Rukhiya is a hard working and intelligent teacher. She tries her best to enable student learning in her classes. But, still many students in her classes are poor learners and this is reflected in their results. To Rukhiya’s disappointment, the results of her students are 55% for one class and 57% for the other. Rukhiya becomes frustrated by this, and falsifies the results to make them appear 62% for one class and 61% for the other. After the result is announced, Rukhiya gets depressed and tells Mrs. Naheed about her cheating. Mrs. Naheed listens, and appreciates that Rukhiya has the moral courage to speak the truth. But, she also tells her that she was unjust in doing that, as she was unfair to many students. And if all teachers begin the same practice, then it will result in great harm. However, because she did morally right thing by being honest about it. Mrs. Naheed asks her to reflect on what she did, how it can be fixed and let Rukhiya stay at school. Q3:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

292

Story Four: Keeping Promise Mr. Javed runs a software company named “N Designers” and is respected as highly trustworthy due to his personal morality and integrity. He is known for his honesty and an exemplary character. Recently his company hired new software engineers and designers. Few of them were previously employed at one of the competitors of N Designers. Rehan is a diligent and highly creative software designer and is hired for his technical knowhow that he gained at his previous job. One day, one of the executives at the company asks Rehan to share some of the technical knowhow with other software designers to train them. Rehan knows that it is wrong, as it is part of the competitive advantage of his previous employers. Rehan remembers that he has taken oath at the previous company to not reveal important information about their organization. The executive keeps pushing Rehan for this ‘training’ and becomes a nuisance. So, Rehan one day tells him plainly that he will not reveal this training and also tells him the reason. Mr. Javed overhears the dialogue between the two, and asks Rehan to come and see him. Mr. Javed tells Rehan that he is glad that they hired Rehan, and he hopes that he will stay with them for a long time. He also tells him that he also thinks that it is wrong to break one’s promise, because then there will be no sanctity in anyone’s word, and no one will trust another. He says he wonders whether people who asks for these kinds of favor from employees, who has worked for other organizations previously, ever thought that the same could come to haunt them, if their employees go for work elsewhere and reveal the organization’s secrets of trade. Q4:

Do you agree with how the leader dealt with this issue?

___________________________________________________________________________

293

This questionnaire is designed to study leadership in organizations. Please indicate how each of the following statements describes the leaders in the stories, by selecting the most representational response. Mark the number of your choice on the scale.

Strongly Disagree

Moderately Disagree

Listens to what employees have to say. Disciplines employees who violate ethical standards. Conducts his/her personal life in an ethical manner. Has the best interests of employees in mind. Makes fair and balanced decisions. Cannot be trusted. Discusses business ethics or values with employees. Sets an example of how to do things the right way in terms of ethics. Defines success not just by results but also the way that they are obtained. When making decisions, asks “what is the right thing to do?” Makes sure that employees are promoted in the organization because they show ethical behavior. Acknowledges ethically valued behavior of employees. Provides rewards to employees for ethically good behavior. His/her decisions have positive influence on the well-being of organization and other stakeholders. Reprimands employees who show ethically flawed behavior. The observation of his/her ethical behaviors inspires employees to resolve ethical problems in principled ways. His/her actions reflects his/her moral beliefs. Employees find it difficult to solve ethical problems when the leader is away.

294

Slightly Disagree

Slightly Agree

Moderately Agree

Strongly Agree

DOCTOR’S DILEMMA A lady was dying of cancer which could not be cured and she had only about six months to live. She was in terrible pain, but she was so weak that a good dose of pain-killer like morphine would make her die sooner. She was delirious and almost crazy with pain, and in her calm periods, she would ask the doctor to give her enough morphine to kill her. She said she couldn't stand the pain and that she was going to die in a few months anyway. Should the doctor give her an overdose of morphine that would make her die? (Check one) ______ He should give the lady an _____ Can’t decide.

GREAT

MUCH

SOME

LITTLE

______Should not give overdose overdose that will make her die.

NO 1.

Whether the woman's family is in favor of giving her the overdose or not. 2. Is the doctor obligated by the same laws as everybody else if giving an overdose would be the same as killing her. 3. Whether people would be much better off without society regimenting their lives and even their deaths. 4. Whether the doctor could make it appear like an accident. 5. Does the state have the right to force continued existence on those who don't want to live. 6. What is the value of death prior to society's perspective on personal values. 7. Whether the doctor has sympathy for the woman's suffering or cares more about what society might think. 8. Is helping to end another's life ever a responsible act of cooperation. 9. Whether only God should decide when a person's life should end. 10. What values the doctor has set for himself in his own personal code of behavior. 11. Can society afford to let everybody end their lives when they want to. 12. Can society allow suicides or mercy killing and still protect the lives of individuals who want to live.

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

295

WEBSTER Mr. Webster was the owner and manager of a gas station. He wanted to hire another mechanic to help him, but good mechanics were hard to find. The only person he found who seemed to be a good mechanic was Mr. Lee, but he was Chinese. While Mr. Webster himself didn't have anything against Orientals, he was afraid to hire Mr. Lee because many of his customers didn't like Orientals. His customers might take their business elsewhere if Mr. Lee was working in the gas station. When Mr. Lee asked Mr. Webster if he could have the job, Mr. Webster said that he had already hired somebody else. But Mr. Webster really had not hired anybody, because he could not find anybody who was a good mechanic besides Mr. Lee. Should Mr. Webster have hired Mr. Lee? (Check one)

______ Should have hired Mr. Lee _____ Can’t decide hired him

GREAT

MUCH

SOME

LITTLE

______ Should not have

NO 1.

Does the owner of a business have the right to make his own business decisions or not? 2. Whether there is a law that forbids racial discrimination in hiring for jobs. 3. Whether Mr. Webster is prejudiced against orientals himself or whether he means nothing personal in refusing the job. 4. Whether hiring a good mechanic or paying attention to his customers' wishes would be best for his business. 5. What individual differences ought to be relevant in deciding how society's roles are filled? 6. Whether the greedy and competitive capitalistic system ought to be completely abandoned. 7. Do a majority of people in Mr. Webster's society feel like his customers or are a majority against prejudice? 8. Whether hiring capable men like Mr. Lee would use talents that would otherwise be lost to society. 9. Would refusing the job to Mr. Lee be consistent with Mr. Webster's own moral beliefs? 10. Could Mr. Webster be so hard-hearted as to refuse the job, knowing how much it means to Mr. Lee? 11. Whether the Christian commandment to love your fellow man applies to this case. 12. If someone's in need, shouldn't he be helped regardless of what you get back from him?

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

296

STUDENT TAKE-OVER Back in the 1960s at Harvard University there was a student group called Students for a Democratic Society (SDS). SDS students were against the war in Viet Nam, and were against the army training program (ROTC) that helped to send men to fight in Viet Nam. While the war was still going on, the SDS students demanded that Harvard end the army ROTC program as a university course. This would mean that Harvard students could not get army training as part of their regular course work and not get credit for it towards their degrees. Harvard professors agreed with the SDS students. The Professors voted to end the ROTC program as a university course. But the President of the university took a different view. He stated that the army program should stay on campus as a course. The SDS students felt that the President of the university was not going to pay attention to the vote of the professors, and was going to keep the ROTC program as a course on campus. The SDS students then marched to the university's administration building and told everyone else to get out. They said they were taking over the building to force Harvard's President to get rid of the army ROTC program on campus for credit as a course. Were the students right to take over the administration building? (Check one) ______ Take it over.

GREAT

MUCH

SOME

______ Can’t decide. ______ Not take it over.

LITTLE

NO 1.

Are the students doing this to really help other people or are they doing it just for kicks. 2. Do the students have any right to take over property that doesn't belong to them. 3. Do the students realize that they might be arrested and fined, and even expelled from school. 4. Would taking over the building in the long run benefit more people to a greater extent. 5. Whether the president stayed within the limits of his authority in ignoring the faculty vote. 6. Will the takeover anger the public and give all students a bad name. 7. Is taking over a building consistent with principles of justice. 8. Would allowing one student take-over encourage many other student take-overs. 9. Did the president bring this misunderstanding on himself by being so unreasonable and uncooperative. 10. Whether running the university ought to be in the hands of a few administrators or in the hands of all the people. 11. Are the students following principles which they believe are above the law. 12. Whether or not university decisions ought to be respected by students.

From the list of questions above, select the four most important: Most Important _________ Second Most Important _________ Third Most Important ________ Fourth Most Important _________

297

1. How likely that you want to work under the leaders described in these scenarios?

Highly Likely

Moderately Likely

Slightly Likely

1

2

3

Neither Likely nor Unlikely 4

Slightly Unlikely

Moderately Unlikely

Highly Unlikely

5

6

7

2. Suppose there are few behavioral standards set by your school administration for teachers. These standards include coming to school on time; being honest with management, students and their parents; being fair with your colleagues; being fair with your students, and doing justice to your duties. How motivated you will be to follow these standards, if: •

The school administration will acknowledge your good behavior, with a reward of Rs. 5000.

Highly Motivated

Moderately Motivated

Slightly Motivated

1

2

3

•

Neither Motivated nor Demotivated 4

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

5

6

7

The school administration will acknowledge your good behavior, with no reward.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

•

The school administration will acknowledge your good behavior, with a certificate of good behavior given at school assembly.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

298

3. Suppose not following these behavioral standards set by your school administration for teachers will be dealt strictly. How motivated will you be to follow these standards, if: •

The school administration will discipline your bad behavior, with a 5% deduction from your salary.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

•

The school administration will discipline your bad behavior, by issuing a serious warning at school assembly.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

•

The school administration will discipline your bad behavior, by firing you from school.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

•

The school administration will not take any disciplinary action towards your bad behavior.

Highly Motivated

Moderately Motivated

Slightly Motivated

Neither Motivated nor Demotivated

Slightly Demotivated

Moderately Demotivated

Highly Demotivated

1

2

3

4

5

6

7

299

Appendix B: Approvals

300

301

302

Appendix C: List of schools

303

1. PakTurk International Schools and Colleges Address: #3, Park Road, Near Tramwery Chowk Chak Shahzad, Islamabad Phone: +92-51-8466664, +92-51- 8466741 Mobile: +92-321-26157 81 Fax: +92-51-8466665 E-mail: [email protected] 2. SLS High School & Montessori Address: H # S-6, St # 118/124, G-11/4, Islamabad Phone: +92-51-2301603, +92-51-2301604 Website: www.slsschool.edu.pk 3. PakTurk International Schools and Colleges Address: 605, Street 29, G-10/2, Islamabad Phone: +92-51-2352625, +92-51-2352926 E-mail: [email protected] 4. The Educator School Address: 331, Main Sawan Road West, G-10/1, Islamabad Phone: +92-51-2350585 5. Sheikh Zayed International Academy Address: Street # 8, Sector H-8/4, Islamabad Phone: +92-51- 4939299, +92-51- 4939301 6. Lahore Grammar School Address: H-8, Plot number 86, Faiz Ahmad Faiz Road, H-8/1 Islamabad. Phone: +92-51- 4922092, +92-51- 8356295, +92-51- 8356296 Fax: +92-51- 4442782 7. Hillsdale school Address: F-7, Address: Kaghan Rd, Islamabad Phone: +92-51- 2287609 8. Global System of Integrated Studies Address: GSIS Building, Pitras Bukhari Road, H-8/1 Islamabad Phone: +92-51- 4939263, +92-51- 4863266, +92-51- 4939286 -9 Fax: +92-51- 4430594 Email: [email protected] 9. Khaldunia School Address: Plot # 2, St 94, G-11/3, Islamabad Phone: +92-51-2223620 10. Liberal Arts School Address: House 70, Margalla Road F-7/2, Islamabad Phone: +92-51- 2609666-7

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11. ASAS International School Address: 4A Main Margalla Road, F-8/3, Islamabad Phone: +92-51- 2286878 - 879, +92 -51- 2286877 Email: [email protected] 12. Dar-e-Arqam School Address: House no. 1 park road near Chatta Bakhtawar, Islamabad Cell: +92-333-5121749, +92-345-5309409, +92-333-5139019 Phone: +92-51-2321264, +92-51-2321265 Email: [email protected] 13. OPF Boys College Address: Sector H-8/4, Islamabad Phone: +92- 51- 4939281-83 Fax: +92 -51- 4939222 Email: [email protected] , [email protected] 14. Headstart School Address: Najeeb Murtaza Road off Park Rd, Near CDA/Park Enclave Kurin Islamabad Phone: +92-51-8435473, +92-51-8435474 Email: [email protected] 15. Beacon House School Address: House no. 257, St No. 54, F 11/4, Islamabad Phone: +92-51-211 0110 16. Dar-e-Arqam School Address: Main Taramari Chowk Lehtrar Road, Islamabad Phone: +92-51-2625729 Email: [email protected] 17. Commodore's Academy Address: Main Park Road (Near Chak Shahzad), House no.1, Lane no. 9, Chatha Bakthwar, Islamabad Phone: +92-51-2321087-8 18. Oxbridge International School Address: 6-7, Double Major Road, F-11/3, Islamabad Phone: +92-51-222 5155, +92-51-222 5166 Email: [email protected]

19. The City School Address: House no. 34, Main Margalla Road, F-8/3, Islamabad Phone: +92-51-2287028 Email: [email protected] 20. Roots International Schools Address: Plot # 66, Street # 7, H-8/4. Islamabad 305

UAN : +92-51-111724111 Direct : +92-51-8439033-39 Fax : +92-51-2261217 Email : [email protected] Facebook : RISWellingtoncampus 21. Dar-e-Arqam Schools Farash Town Campus Address: Ali Pur Farash Town, Jhang Syedan Litraar Road, Islamabad Cell: +92-345-5309409, +92-333-5121749 22. International Islamic University School Address: IIUI Schools, Park Road Chatta Bakhtawar, Islamabad Phone: +92-51-2321248, +92-324-8536944 Email: [email protected] 23. Beacon house Schoool Address: I-8, I Area, Margalla Road, Near Shifa International Hospital, Islamabad Phone: +92-51-2215326 Email: [email protected] 24. International Islamic University School Address: IIUI Schools, # 18, Main Road, Sector I/8-3, Islamabad Phone : +92-51-4864208-9 Email: [email protected] 25. The City School Address: I-8/ 2 Kindergarten, House 21, Main Service road, Sector I-8/2, Islamabad Phone: +92-51-4939173 Email:[email protected]

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