Ethical preferences of transformational leaders: an empirical investigation

Abstract

This study looked at the relationship between the four factors of transformational leadership – charisma, inspirational leadership, intellectual stimulation, and individualized consideration – and the leader’s preference for unethical behavior. Five ethical scenarios – bribery, endangering the physical environment, lying, personal gain, and favoritism – were studied using a sample of 100 pairs of managers and subordinates from four multinational organizations in India. Relationships between the leader’s ethical preferences and three outcomes – followers’ willingness to put in extra effort, perceived effectiveness, and satisfaction – were also analyzed. Findings indicate that inspirational leadership is negatively related to the leader’s preference for bribery and favoritism, and intellectual stimulation is negatively related to preference for bribery. Charisma and individualized consideration are not related to the leader’s ethical preferences. Followers’ willingness to put in extra effort is also negatively related to the leader’s preference for bribery and favoritism. Results also suggest that organizational culture might moderate the relationship between transformational leadership and ethics.