CHAPTER 5
IGNORING THE SIGNPOSTS
A Process Perspective of
Unethical and Destructive Leadership
This chapter examines how salient dimensions of leaders, followers, and organizations interact within organizational processes to enable unethical and destructive leadership behavior. Three questions frame this discussion: (a) how and why did leaders venture down paths of destructive behaviors?, (b) why did these leaders persist in behaviors that most knew or would identify as unethical and destructive?, and (c) why were these behaviors tolerated, and in some instances rewarded, by organizations and followers? This chapter assesses how social-cognitive tendencies operating within organizational processes affect destructive leadership behavior through leadership selection, self-enhancement motives, escalation of commitment, threat-rigidity response, organizational commitment, feedback-seeking behaviors and feedback environment, and pressures for conformity. Six propositions derive from a process model for unethical and destructive leadership.
INTRODUCTION
Research in organizational studies has presented alternative conceptualizations of negative, unethical, and destructive leadership, as well as the consequences of these leader behaviors (Einarsen, Aasland, & Skogstad, 2007; Padilla, Hogan, & Kaiser, 2007; Schilling, 2009). Destructive leadership has been defined as repeated behaviors that work against the legitimate interests of an organization and its members including the undermining the organization’s goal, resources, and quality of working life (Einarsen et al., 2007). Destructive leadership may involve dominance, coercion, manipulation of others, and selfish leader-focused orientation (Lipman-Blumen, 2005; Padilla et al., 2007). While previous studies have considered leader and follower characteristics that may be associated with the occurrence of destructive leadership, organizations succeed or fail based on the effectiveness and resilience of their processes for strategy and human resource development (Collins, 2001; Pfeffer & Sutton, 2006). As a result, antecedents of destructive leadership must be considered within the contexts of organizational processes. The purpose of this chapter is to examine how certain key variables of leaders, followers, and organizations may interact within organizational processes to enable unethical and destructive leadership.
In a recent qualitative study, Schilling (2009) found that only 25% of the identified variables accounting for negative leadership behaviors were attributable to individual leader characteristics, whereas 75% were attributed to situational variables. Leadership characteristics alone do not fully account for why leaders behave destructively. In most organizational settings, situational variables are strong determinants of employee behaviors. If followers in an organization observe leaders’ disregard of honesty, integrity, and ethical behavior, the minimum result may be confusion and an implied directive that such behaviors are an acceptable norm, setting the stage for social pressure to exhibit unethical, negative, and possibly destructive behaviors (Bazerman & Benaji, 2004; Brass, Butterfield, & Skaggs, 1998; Schweitzer & Gibson, 2008). Therefore examining organizational processes and the related outcomes are important for understanding how destructive leadership behavior may arise and be tolerated in organizational settings (Brown & Treviño, 2006a; Manz, Anand, Joshi, & Manz, 2008; Padilla et al., 2007; Schilling, 2009).
In explaining unethical and destructive leadership behavior, researchers have focused primarily on the characteristics of (a) leaders (Benson & Hogan, 2008; Dotlich & Cairo, 2003, Kellerman, 2004; Kets de Vries, 1993, 2006), (b) followers (Lord & Brown, 2004; Offerman, 2004), (c) environmental variables (Schilling, 2009; Zimbardo, 2006, 2007), or (d) a conflux of leader, follower and environmental conditions (Padilla et al., 2007; Popper, 2001; Rhode, 2006; Vardi & Weitz, 2004). However as we review and observe examples of destructive organizational leaders whose unethical and sometimes malicious behaviors have come to light, we are confronted by three penetrating questions related to why organizations and their members ignore the obvious signposts, the tell-tale signs of unethical and destructive leadership actions:
- How and why did such leaders venture down paths of such destructive behaviors?
- Why did these leaders persist in behaviors that most knew or would identify as unethical and destructive?
- Why were these behaviors tolerated, and in some instances rewarded, by organizations and followers?
The focus of this chapter is to address these three questions by examining how characteristics of leaders, followers, and organizations interact, while highlighting the organizational processes seldom explored in relationship to unethical and destructive leadership. Specifically we examine the effects of cognitive tendencies operating in organizational processes such as (a) self-enhancement motives (Pfeffer & Fong, 2005), (b) escalation of commitment (Street & Street, 2006), (c) threat-rigidity response (Staw, Sandelands, & Dutton, 1981), (d) organizational commitment (Peterson, 2003), (e) feedback-seeking behaviors and the feedback environment (Herold & Parsons, 1985; Janssen & Prins, 2007; Whitaker, Dahling, & Levy, 2007), and (f) pressures for conformity (Zimbardo, 1969, 2006, 2007).
Although unethical leadership behavior may not immediately eventuate in destructive organizational outcomes, the seeds of destruction have been sown despite whether or not unethical behaviors ever come to light, creating a desensitizing effect upon ethical values, standards, and conduct. Therefore, a fundamental premise of this chapter is that unethical leadership behavior is ultimately destructive in nature. Hence, we link the terms unethical and destructive leadership in tandem.
Figure 5.1 presents a model showing the linkages among the major organizational processes analyzed in this chapter.
1. WHY DO LEADERS VENTURE DOWN UNETHICAL AND DESTRUCTIVE PATHS?
In addressing the first of three major questions, we begin by examining the leadership selection process itself involving common selection biases. Some have argued that executive leaders are chosen to address short-term fixes rather than long-term success (Hogan & Kaiser, 2008), while others pinpoint the lack of systematically applied and valid selection criteria (DeVries, 1992), including demonstrated character and integrity (Treviño, Hartman, & Brown, 2000).
Figure 5.1. A process perspective of destrutive leadership.
1.1. Oversights in the Leadership Selection Process
The fundamental area of leadership selection is a relevant topic when considering the unethical and destructive behavior of leaders. The effects of the methods by which leaders are selected have not been explored extensively or empirically in the leadership literature (De Cremer & van Dijk, 2008). These methods may be laden with bias. Bias in leadership selection derives from the attraction-selection-attrition (ASA) framework (Schneider, 1987). The ASA process suggests that selection decisions tend to reflect in-group bias based on perceived similarities of candidates to existing occupants of organizational positions of power. This tendency operates, in part, due to a confirmation bias known as the “halo effect,” or the perception that positive qualities in one area apply to another (Cooper, 1981; Meindl & Erlich, 1987). Schneider, Goldstein, and Smith (1995) cautioned that leadership selection based exclusively on similarity-attraction may lead to over-homogenization that limits organizational flexibility and performance, producing an in-group bias. However, other empirical results suggested that perceived perceptions of threats or danger may alter the in-group focus to perceived tendencies toward more decisive, directive leaders (Hoyt, Simon, & Reid, 2009). If those making leadership selections tend to view current environmental conditions as threatening, there is an increased likelihood that candidates perceived as more directive and dominant may be preferred. While a dominant personality alone may not signal a tendency toward unethical or destructive behaviors, powerful personalities combined with perceived organizational threats may be a toxic combination (Padilla et al., 2007).
Observing that most executive searches are conducted without a systematic assessment process, Harshman and Harshman (2008) noted, “there seems to be a general feeling among boards and search firm executives that asking top level (Board of Directors, CEO, or president) candidates to participate in an assessment is demeaning and will drive good candidates away” (p. 186). Others advocate the use of formal cognitive and leadership assessments to evaluate leadership skills and technical ability (Hogan, 2006; Hogan, Curphy, & Hogan, 1994; Hogan, Raskin, & Fazzini, 1990). For example in a meta-analysis, Judge, Colbert, and Ilies (2004) found that the relationship between intelligence and leadership effectiveness, although significant, was lower than expected. Perceived intelligence was more strongly associated with leadership than intelligence measured objectively with tests. In addition, consistent with cognitive resource theory, the relationship of intelligence with leadership effectiveness declined significantly when leaders were under greater stress. Therefore, traditional intelligence assessments may not predict how leaders will interact in decision-making situations when under pressure. However as Padilla and Mulvey (2008) observed, most leadership selection measures assess productive job behaviors, not counterproductive ones, creating an imbalanced evaluative procedure.
Although intelligence, personality, world view, and style may be observable, other markers, such as character, integrity, and ethical standards, albeit less observable, remain vitally important to assess. In particular, “dark side” characteristics of leaders, which may underlie unethical and destructive behavior, are difficult to detect through assessments because candidates with strong social skills and a positive self-esteem demeanor may camouflage these characteristics (Hogan et al., 1994). In addition, a candidate may present several attributes that are highly consistent with the key characteristics within implicit leadership models used by the organizational selectors. However, as the “halo effect” suggests, there is a tendency to associate the presence of a few key attributes with the presence of others that may be unrelated. For example in their study of retail store managers, Porr and Fields (2006) found leadership success on an attribute considered important by different observers resulted in vastly different assessments of the same managers. Since most leadership selectors have little experience or expertise in the selection process, the role of their implicit leadership assumptions may be a key determinant in leader selection decisions. Without realizing it, leadership selectors may be unknowingly hiring those with hidden “dark side” characteristics that might later sabotage personal and organizational integrity.
As De Cremer and van Dijk (2008) noted, assigning the label of “leader” can make two possible competing individual motives salient. On one hand, being selected as a leader may motivate a person to model socially responsible behavior; on the other, selection as a leader may trigger feelings of personal entitlement to receive special privileges or rewards. Experimental results have shown that followers are more accepting of appointed leaders taking larger shares of available rewards and that appointed leaders exhibit lower levels of social responsibility than elected leaders (De Cremer & van Dijk, 2008). However, the latter differences disappeared when the appointed leaders demonstrated social responsibility and ethical behavior. Sessa and Kaiser (2000) observed that the likelihood of hiring unethical and destructive leaders may be reduced when selectors consult others, work as a team, add leadership selection criteria such as demonstrated integrity (Padilla & Mulvey, 2008; Singh, 2008), and emphasize expectations for leaders to demonstrate social responsibility (De Cremer & van Dijk, 2008; De Hoogh & Hartog, 2008). Unethical and destructive leadership might well be mitigated with carefully crafted leadership selection criteria and processes.
1.2. Leader Characteristics
As mentioned, certain personal characteristics of candidates for leadership positions can be readily measured with available standardized assessment instruments and procedures. Other attributes of leaders are more difficult to assess because standardized instruments do not readily exist or because organizations are unwilling to put candidates through an arduous assessment process. However, some of these underassessed leader attributes may be critical indicators of attributes that may lead to unethical and destructive leadership. These attributes include LOC, narcissism, degree of cognitive moral development, and responsibility disposition. These specific four characteristics have been selected for inclusion, as they have been found in the literature to impact the decision-making process and contribute to unethical and destructive leadership.
1.2.1. Locus of Control (LOC)
LOC is identified as a personality attribute that describes how individuals perceive their ability to control events and make attributions about causality (Lefcourt, 1966; Phares, 1976; Rotter, 1966). Those with an internal LOC surmise that they are able to influence events and leadership results based on their ability and skill. Those with an external LOC believe that circumstances outside of themselves are the primary causes for events and their leadership behavior. Researchers have found that managers with an internal LOC were more confident in their ability to control events, coped better with challenging situations, but also opted for riskier strategies in order to advance organizational performance (Anderson, 1977; Miller & Toulouse, 1986; Miller, Kets de Vries, & Toulouse, 1982). Treviño and Youngblood (1990) found individuals with greater internal LOC made more ethical decisions. Leaders with more external LOC were more likely to attribute causes to external conditions, possibly leading to their denial of personal responsibility for destructive behaviors and related outcomes. Leaders higher in self-regulation are more likely to control behaviors and decisions and may be less prone to unethical or destructive behaviors (Moss, Dowling, & Callanan, 2009).
Since the essence of self-regulation is a heightened awareness of self and self-responsibility, it seems likely that external LOC and self-regulation are negatively related. Street and Street (2006) found that those with an external LOC were more likely than those with an internal LOC to select unethical options related to decision-making, suggesting less personal self-regulation. While not necessarily leading directly to destructive leadership behaviors, LOC may impact leaders’ interactions with others through role-taking within organizational processes. LOC may affect the way that leaders make attributions and interact with others in organizational processes. Frankly, externals may be more likely to cave to external pressures, while internals may resist regulation. Both tendencies could lead to destructive behaviors worth noting in consideration of the way leaders act within organizational processes. While one would expect a difference in LOC related to persistence in achieving ends (i.e., internals have more persistence than externals), studies have found that there is no significant difference between internals and externals related to persistence (Littig & Sanders, 1979; Pittenger, 2002; Starnes & Zinzer, 1983) and that the effects of LOC may be both context-specific and related to self-efficacy, interpersonal control, and sociopolitical control (Paulus & Christie, 1981).
1.2.2. Narcissism
A second pertinent leader characteristic is narcissism, a personality trait often associated with egotism, self-interest, grandiosity, arrogance, and entitlement (Kets de Vries, 2006; Rosenthal & Pittinsky, 2006). With failure rates among senior executives cited as between 50-60% and the selection process seldom assessing personality (Hogan et al., 1994), narcissism becomes an important variable to consider. For example, narcissistic leaders take more credit for their successes, blame others for their failures, are disposed to lapses in judgment and conduct, and may be abusive (Hogan et al., 1990; Kramer, 2003; Rosenthal & Pittinsky, 2006). Although narcissistic leaders may possess the capacity to attract followers (Kohut, 1966; Maccoby, 2003), the weaknesses inherent to this personality trait can lead directly to unethical behavior through influences on leader actions within organizational processes (Kets de Vries & Miller, 1997; Padilla et al., 2007). Narcissistic leaders may pass selection screening because they possess strengths such as the ability to present a vision in a charismatic fashion, inspire others with rhetoric, and thereby persuade others to follow (Maccoby, 2000). With pressures to hire for competitive advantage, executives charged with selecting leaders may focus on these positive characteristics. However, these strengths may camouflage leaders’ underlying self-focus, lack of empathy, desire to control others, distaste for collaboration, and an intense desire to win at all costs. Narcissistic leaders’ faults may become more pronounced if they succeed and as their personal need for power nears fulfillment (Maccoby, 2003; Rosenthal & Pittinsky, 2006). Characterized by independence, arrogance, and inordinate need for recognition, narcissists risk intentional isolation to protect their perceived superiority and frequently exhibit amorality and/or moral myopia where “the ends justify the means;” and followers are expected to provide blind support (Rhode, 2006; Rosenthal & Pittinsky, 2006).
Narcissism may develop in childhood after not receiving the caring support needed for healthy psycho-social development. Attributed to damage in the formative “mirroring” process between infant and mother where the child is deprived in some way, this reactive narcissism creates a yearning for positive affirmation and individuation in later adult stages (Kohut, 1971; Pines, 1981; Popper, 2001). These feelings of inferiority may manifest in self-protective defense mechanisms leading to overcompensation (Jordan, Spencer, Zanna, Hoshino-Brown, & Correll, 2003; Ziglar-Hill, 2006), self-enhancement (John & Robins, 1994), and a compulsive need for recognition (Morf & Rhodewalt, 2001). These effects of narcissism may manifest in intimidation of others involved in regulatory processes within organizations limiting the ability of these processes to curb unethical and destructive behaviors of leaders.
1.2.3. Cognitive Moral Development (CMD)
Third, leaders’ lack of cognitive moral development (CMD) contributes to destructive leadership and decision making (Treviño, 1986, Treviño & Youngblood, 1990; Treviño, Hartman, & Brown, 2000). Kohlberg (1969, 1984) suggested that moral development advances from obedience motives and fear of punishment (stage 1), to reciprocity exchange (stage 2), to deciding issues of right and wrong based on expectations of others (stage 3), to abiding by rules and laws (stage 4), to internalized standards (stage 5), and then to universally held principles of justice and rights (stage 6) (Kohlberg, Levine, & Hewer, 1983). Stages 5 and 6 are associated with adulthood. Cognitive moral development has been shown to predict ethical decision making (Trevino & Youngblood, 1990). Building on previous models (Kohlberg, 1969, 1984; Rest, 1979, 1986; Trevino, 1986), Jones (1991) further argued that ethical decision making is contingent on the moral intensity of the subject issue, defining moral intensity as “the extent of issue-related moral imperative in a situation” (p. 372). Moral intensity involves the magnitude of the consequences of a decision, probability of effect, temporal immediacy, proximity, and concentration of effort. In an empirical study of ethical decision making, Paolillo and Vitell (2002) found that moral intensity accounted for significant portions of the variance in ethical decision making over other variables including job satisfaction and organizational commitment. It appears that tendencies towards unethical and destructive leadership depend not only on the level of leader moral development, but also the interaction of leaders’ moral development with the moral intensity of choices they must make as leaders. It is also likely that individual moral development may affect the nature and intensity of interactions among leader and others within organizational dynamics. Leaders with lower levels of moral development may pull off some “wins” in competitive situations that help insulate destructive leadership behaviors from scrutiny and regulation.
1.2.4. Responsibility Disposition
A fourth leader characteristic relates to responsibility disposition. Pearce, Manz, and Sims (2008) suggested that leaders may be differentiated by their personalized, as compared to socialized, power orientation. The key distinction between these types of power orientations can be measured by the leader’s responsibility disposition. Leaders with higher levels of socialized need for power tend to have a high responsibility disposition, while leaders with higher personalized need for power tend to have a low responsibility disposition. Mumford, Helton, Decker, Connelly, and Van Doorn (2003) found that individuals whose values stressed contributions to others, as opposed to personal gain, exhibited greater integrity in making decisions. Accordingly, these leaders may restrain use of power and may be less likely to use power for personal gain. Overall, this research suggests that leaders that have greater regard for socialized power may be less likely to engage in unethical and destructive behavior. In contrast, leaders with a greater need for personalized power may be lower in responsibility disposition and utilize power solely for personal gain (Hogan et al., 1994). Such leaders may persuasively stress the importance of personal allegiance to themselves as leaders, as opposed to loyalty to the overall organization. Compared to other characteristics of leaders considered in selection and promotion processes, LOC, narcissism, cognitive moral development, and responsibility disposition are formidable antecedents that affect leader performance in organizational processes and may thus indirectly make it difficult for organizations to regulate or “rein in” destructive leader behaviors.
Proposition 1. Leader selection processes are likely to overlook underlying leader characteristics such as LOC, narcissism, level of moral development, and responsibility disposition which may affect leader actions in organizational processes and limit the effects of regulatory safeguards to curb destructive leadership behaviors.
1.3. Organizational Characteristics and Processes
To address the question as to how and why leaders venture down unethical and destructive paths, we suggest that both internal and external organizational characteristics and processes contribute to creating ripe environments for such behavior (Treviño, 1986). Three factors impacting organizational context include ethical climate, goal setting pressure, and intense competition.
1.3.1. Ethical Climate
We maintain that ethical climate is a factor contributing to unethical and destructive leadership behavior. Schneider’s (1975) commonly accepted definition of organizational climate relates to perceptions that “psychologically meaningful molar [environmental] descriptions that people can agree characterize a system’s practices and procedures” (p. 474). In other words, organizational climate is fostered by members’ shared perceptions related to the organizational practices and procedures within psychological environments (Reicher & Schneider, 1990). Victor and Cullen (1988) proposed that ethical climates vary along two dimensions, namely ethical criteria relating to ethical decisions based on egoism, benevolence, or principle; and the focus of ethical reasoning relating to the scope of ethical decisions. With the ethical dimension of organizational climate impacting job satisfaction and performance (Cullen, Parbo-teeah, & Victor, 2003), we argue that when ethical climates exhibit weak ethical criteria and the focus of ethical reasoning is minimal, that unethical and destructive behaviors of leaders are more likely.
For example, in their empirical study, Schminke, Ambrose, and New-baum (2005) examined the impact of leader moral development upon ethical climate. Sampling 269 participants representing 47 firms, they found that moral development of leaders was strongly correlated with an ethical organizational climate. Second, they found that the relationship between leader moral development and ethical climate was stronger in younger versus older organizations in four out of five ethical climate types, which seemed to suggest that leaders’ ethical values, as they apply to organizational development, would be less hindered with fewer levels of bureaucratic and/or organizational structure. Third, results affirmed that value congruence between leaders and employees heightened job satisfaction and commitment, while reducing turnover intentions. These findings affirm that leader values and moral development impact followers’ shared assumptions (Schein, 1992), which in turn influence the overall ethical climate. An possible outgrowth of organizational climate is goal-setting pressure.
1.3.2. Goal Setting Pressure
When organizational pressures mount for goal accomplishment, the likelihood of unethical and destructive behaviors may likewise increase. After reviewing nearly 400 goal-setting studies, Locke and Latham (1990) found that the vast majority of these studies focused on the beneficial effects of performance due to setting specific, challenging goals. However, a study investigating Lewicki’s (1983) model of deception found that those with unmet specific goals were more likely to engage in unethical behavior than individuals attempting to “do their best” (Schweitzer, Ordonnez, & Douma, 2004). Lewicki also found that the relationship between specific goal setting and unethical behavior was particularly strong when people fell just short of reaching established goals. In the process, leaders may employ deception to protect themselves in order to frame their goal achievement in positivistic terms.
Often, self-deception, the paradoxical capacity to deceive oneself regarding the truth in the process of protecting self-image, may involve evasive mechanisms including willful ignorance, systematic ignoring, emotional detachment, self-pretense, and rationalization. A decision to deceive others may be based on decision makers’ perceptions of the costs and benefits of this course of action (Schweitzer et al., 2004). In particular, Lewicki (1983) speculated that people underestimate the costs of being deceptive because of self-justification. It appears, then, that the act of goal setting may alter perceptions of the benefits of engaging in unethical behavior. That is, leaders’ setting or accepting specific challenging goals may increase their perceptions of the benefits to be gained, in contrast to the costs, in undertaking unethical behaviors (Schweitzer et al., 2004). Likewise, Barsky (2008) argued that performance goals may intercept employees’ ethical sensibilities and disengage their internal moral and social controls (Bandura, 1999), by predicting that increasingly more difficult and specific goals increases the likelihood of unethical behavior. Goal setting pressures and goal achievement may contribute to leaders travelling down paths of unethical and destructive behavior.
1.3.3. Intense Competition
Competitive and unstable environments may place high levels of pressure on organizations to retain market share, financial viability, and dominance. When environments are unstable and unpredictable, the lack of previous precedents for how to make ethical organizational decisions causes organizational leaders to rely on their own personal ethical codes to guide behaviors. Organizational instability may result from shortage of resources, escalating costs, downsizing, mergers, and global factors such as economic recession, which are beyond the organization’s and leader’s control. A 2005 survey of over 1,000 executives and managers in global business found that 70% of the participants indicated that pressure to meet unrealistic business objectives and deadlines was the most prevalent reason leaders cited in explaining unethical behaviors (American Management Association, 2006). Pressure to meet targets within the constraints of time and resource allocation continues to plague organizational life, which provides greater conditions for ethical violations in the pursuit of survival (Webley & Warner, 2008). Given that leaders may venture down paths of unethical and destructive behaviors, the question arises as to why they persist in these behaviors in light of the potential negative outcomes, which could sabotage their credibility and the viability of their respective organizations.
Proposition 2. Organizational characteristics such as the prevailing ethical climate, pressure to set aggressive goals, and intense competition will combine to limit the impact that organizational processes may have on regulating destructive leader behaviors.
2. WHY DO LEADERS PERSIST IN UNETHICAL AND DESTRUCTIVE BEHAVIORS?
Most leaders confront challenges in their leadership roles related to uncertainty, priorities, decision-making, and interpersonal conflicts, which may challenge or reinforce personal value alignment. Whereas in some situations leaders may be confronted with options to behave unethically, self-monitoring may dissuade them from doing so (Bandura, 1997).
In other cases, leaders may persist in unethical and destructive behaviors. This section specifically addresses leader and organizational characteristics /processes in an attempt to explain the reasons for leaders’ persistence in unethical and destructive behavior.
2.1. Leader Characteristics
Leadership characteristics are salient variables in explaining unethical and destructive leadership behavior. We focus on characteristics that have received less attention in the research literature including personal values and the self-enhancement motive, escalation of commitment, and self-deception.
2.1.1. Personal Values and the Self-Enhancement Motive
The ethical values of leaders form a cornerstone of decision making, conduct, and ethical leadership (Cameron, 2003; Heath, 2002; Quinn, 2003). As such, leaders’ values create internal pressure to behave in a prescribed way, often in an effort to align behaviors with values (Illies & Reiter-Palmon, 2008; Rokeach, 1973). In other words, individual values are predictive of leader behavior. For example, Bass and Steidlmeier (1998) argued that an absence of honesty, fairness, and a disregard for justice may lead to misdirected and potentially destructive leadership behavior. Furthermore, individual leader values strongly influence the behavior of organizational members and the way that organizational values are implemented (Grojean, Resick, Dickson, & Smith, 2004; Meglino & Ravlin, 1998).
Schwartz (1992, 1994) developed and tested a value framework that incorporates 10 values that are related in a circumflex. The Schwartz value types include (a) self-direction, (b) stimulation, (c) hedonism, (d) achievement, (e) power, (f) security, (g) conformity, (h) tradition, (i) benevolence, and (j) universalism. These 10 values can also be aggregated into four major dimensions of self-enhancement, self-transcendence, conservatism, and openness to change. Applying Schwartz’s value theory, Illies and Reiter-Palmons (2008) found that participants with dominant self-enhancement values were more destructive in leadership situations than participants with self-transcendence values.
Originating from social psychology (Fiske, 2004) and social identity perspectives (Tajfel & Turner, 1986), self-enhancement theory predicts that persons high in self-enhancement tend to see themselves and their behaviors in the most positive light (Pfeffer & Fong, 2005) and ignore or avoid situations which expose unflattering information (Sedikides & Green, 2000). Sedikides (1993) found the self-enhancement motive as the dominant factor in self-evaluation processes over other variables, and Sedikides, Gaertner, and Toguchi (2003) identified self-enhancement as a universal human motive. Overall, leaders’ self-enhancement motives tend to prompt self-serving social judgments (Beauregard & Dunning, 1998) and distort self-assessments (Dunning, Meyerowitz, & Holzberg, 1989). Leaders with strong self-enhancement motives tend to favor others who are similar to themselves by establishing in-groups, which then reinforces social identity with others (Pfeffer & Fong, 2005). This propensity influences followers’ desire to enhance their self-image (Yun, Takeuchi, & Liu, 2007) and to discount contrary information (Kunda, 1987). With a natural tendency of followers wanting to associate with “winners,” self-enhancing leaders attract allies, followers, and supporters. Many leaders have access to resources, which enable them to act at will and believe they will not encounter interference or serious consequences from organizational processes that might limit behaviors that are headed in destructive directions (Keltner, Gruenfeld, & Anderson, 2003). In summary, leaders may venture down paths of unethical and destructive behaviors as a result of formidable self-enhancement motives, which may override other personal values and professional and social expectancies, thereby fostering unethical and destructive behavior.
2.1.2. Escalation of Commitment
A primary reason that leaders may doggedly persist in unethical and/or destructive behaviors, even if these approaches are not producing anticipated results, is a phenomenon described as escalation of commitment. Identified as “escalation” Staw (1976, 1981) and “entrapment” (Rubin & Brockner, 1975), the term describes the decision to continue a course of action in the face of negative feedback about prior resource allocation, uncertainty surrounding the likelihood of goal attainment, and choice about whether to continue (Brockner 1992). Street, Robertson, and Geiger (1997) argued that exposure to escalation situations increases the likelihood that individuals will select unethical decision-making options. Furthermore, leaders may escalate commitment to failing courses of action to (a) align actions with their belief system (Biyalogorsky, Boulding, & Staelin, 2006), (b) avoid cognitive dissonance (Festinger, 1957), (c) justify or rationalize their behavior (Bobocel & Meyer, 1994; Brockner, 1992), (d) diffuse responsibility and assign blame to others (Whyte, 1991), and (e) heighten prospects of success (Whyte, 1986).
Paradoxically, Whyte, Sakes, and Hook (1997) found a significant positive relationship between a leader’s self-efficacy and the tendency to persist in a failing initiative. They concluded, “[T]hose with a high level of skill and a history of selecting courses of action and making them pay off, are most likely to engage in the pursuit of a failing policy” (p. 428). Keil, Depledge, and Rai (2007) found that problem recognition and escalation of commitment were inversely related and that selective perception and illusion of control significantly affected both. Selective perception describes how people cognitively structure problems based on personal experience. Previous experiences may bias the information sought by leaders and create a tendency to disregard contradictory information (Hogarth, 1987). The illusion of control is the tendency to place success probability above objective reality, such as in the case of those with a previous success history or with entrepreneurs (Keil et al., 2007).
When leaders confront problems, the way forward may be unclear. In escalating commitment to a failing course of action, they may engage in unethical behaviors to counter negative feedback from the environment (McCain, 1986). Street and Street (2006) found that the greater the magnitude of the escalation situation (i.e., how large and broad an impact an escalating situation was in terms of increasing monetary values), the greater the likelihood of unethical behavior. Finally, by virtue of their roles, leaders have positional power, defined as the “capacity to alter others’ states by providing or withholding resources and administering punishments” (Keltner et al., 2003, p. 267). If leaders feel a reduced sense of power, they may escalate their commitment to prevent perceived failure, off-set an impending negative self-portrayal, or reframe their strategies in pursuit of a course of action to minimize negative effects of perceived failure (Raven, 2001). Therefore, escalation of commitment may contribute to the pursuit of unethical and destructive leadership behavior because leaders may persevere in pursuing goals at any and all costs.
2.1.3. Self-Deception
Bronner (2003) enumerated several decision-making pathologies that may explain leaders’ unwillingness to challenge unethical or destructive courses of actions. The pathologies focus on such self-deceptive practices as unrealistic framing of decisions, including the information received about decisions and their related consequences. Self-deception, the paradoxical capacity to deceive oneself regarding the truth in the process of protecting self-image, is a powerful psychological determinant (Tenbrunsel & Messick, 2004). Self-deceivers deny and/or conceal the truth, avoid personal commitment, and display evasive mechanisms including willful ignorance, systematic ignoring, emotional detachment, self-pretense, and rationalization (Fingarette, 2000; Haight, 1980; Martin, 1986).
If leaders fail to seek adequate information, devalue the information sources, and selectively perceive information received, they may cognitively push the moral implications of a decision to the background, allowing them to pursue deviant behaviors, whether consciously or unconsciously (Ludwig & Longenecker, 1993; Tenbrunsel & Messick, 2004). Ironically by ignoring or avoiding moral implications of decisions, self-interested leaders actually can retain self-perceptions that they are ethical leaders. Tenbrusel and Messick described this inductive self-deception process as “ethical numbing,” where repeated exposure to ethical dilemmas fosters tolerance for and support of unethical decision-making, removing leaders from ethical scrutiny, and further reinforcing self-deception. Self-deception of leaders, when combined with positional power and personal persuasion, may then lead to the persistence of unethical and destructive practices.
Proposition 3. Leader characteristics such as personal values, self-enhancement motives, self-deception, and tendencies to escalate commitment will affect leader behavior within organizational processes and perpetrate patterns of unethical and destructive leader behavior.
2.2. Organizational Characteristics and Processes
To further address the question as to why leaders persist in unethical and destructive behaviors, three specific organizational dimensions are addressed: ethical climate and norms, environmental uncertainty, and reactions to perceived threats (threat rigidity).
2.2.1. Ethical Climate and Norms
Ethical climate is influenced by organizational history, structures, and practices including the founder’s and subsequent leaders’ personal values, ethical policies and procedures, legal oversight, decision-making processes, and accountability structures (Dickson, Smith, Grojean, & Ehrhart, 2001; Schein, 1992; Victor & Cullen, 1988). However, the existence of stated ethical organizational policies, such as a code of ethics, does not necessarily inhibit unethical behavior. For example, Webley and Werner (2008) found gaps in organizations’ ethics policies and ethical practices. Such gaps may arise if ethics policies are not reflected in strategic goals and operating methods (Webley, 2003). When top organizational leaders do not regularly espouse and demonstrate behaviors consistent with ethical principles, it is likely that lower level managers and leaders may see ethics codes and policies merely as symbolic, but not necessarily normative, which encourages further deterioration of ethical standards.
Consistent with this assertion, Treviño, Weaver, Gibson, and Toffler (1999) surveyed 10,000 employees in six large U.S. corporations, resulting in three relevant findings. First, if employees were aware of relevant ethical and legal issues, they may be more likely to ask the right questions and ultimately do the right thing when faced with an ethical dilemma. An effective ethics/compliance management program encourages employees to look for ethical/legal advice within the company. Second, in cases where employees perceived that an ethics/compliance program was oriented primarily to protecting top management from blame, employees expressed greater tendencies to undertake unethical behaviors, were less committed to the organization, and rarely reported ethical/legal violations to management. Third, top leadership was a key in creating an effective ethical culture where employees perceived that executives take ethics seriously and consider ethics as important as the bottom line. When workers perceived such a climate was present, they were more aware of ethical issues, were less likely to consider unethical behaviors, and more likely to report unethical conduct.
Dickson et al. (2001) proposed that ethical climate proceeds directly from the values and motives of the organizational founders and early organizational leaders. They argued that ethical climate is created
when organizational founders and subsequent leaders explicitly attend to their own values, determine the values that they wish to instill in organizational members, and make strategic organizational decisions that will facilitate the development of shared perceptions of appropriate ethical behavior. (p. 198)
When environmental conditions are stable and predictable, organizational members generally have been found to follow ethical standards (Dickson et al., 2001). Conversely when the environment is unstable and unpredictable, members confront unfamiliar circumstances, where no precedent informs ethical decision-making. In this case, if ethical values and standards are not well established, leaders’ unethical/destructive behavior becomes more likely. Clear accountability structures are one safeguard against leaders’ unethical conduct.
Accountability within organizations is established when managers and employees expect that they will be called upon to explain, justify, and defend their behaviors and self-evaluations to one or more others (Lerner & Tetlock, 1999, 2003). In support of this assertion, Sedikides, Herbst, Hardin, and Dardis (2002) and Sedikides and Herbst (2002) found that accountability deters self-enhancement because of evaluation expectancy within organizational/social contexts. Although accountability may assist to safeguard ethical decision making, it is not fool-proof, as the effects of accountability are susceptible to dynamics of given situational contexts (Tetlock, 1992). Sedikides et al. (2002) concluded that self-enhancement is a controllable bias in response to admonitions for truthfulness, which accountability is designed to foster.
2.2.2. Environmental Uncertainty
Scholars pose various external factors related to the environment in explaining unethical/destructive leadership and corporate corruption. For example, Baucus (1994) identified both pressure, or the urgent corporate demands or constraints upon a firm; and the need, or the lack of adequate resources, as impacting the tendency to “cut corners” within uncertain environments (p. 704). A scarcity of financial and human resources creates what Pfeffer and Salancik (1978) termed resource dependence, whereby firms depend on stakeholders (i.e., customers, suppliers, regulators, the media) to acquire the needed resources to ensure viability. As a result of inadequate resources, leaders may compromise ethical standards to retain a competitive edge. For example, Staw and Szwajkowski (1975) assessed 87 Fortune 500 firms that had violated Federal Trade Commission Laws and found that firms within environments with scarce resources were more likely to violate the law to cope with external demands than those that were not. Similarly many scholars argue that the greater the stakeholder pressures, the more likely a firm will demonstrate corrupt behavior (DeCelles & Pfarrer, 2004; Finney & Lisieur, 1982; Szwajkowski, 1985). Within a culture of competition and environmental uncertainty (Coleman, 1987), unachievable target goals may further compel leaders to compromise ethical standards (DeCelles & Pfarrer, 2004; Kulik, O’Fallon, & Salimath, 2008).
In addition to stakeholder pressures and resource dependence, environmental complexity coalesces with these and other external factors to create further uncertainty and possible unethical and destructive leadership behavior. Fleming and Zyglidopoulous (2008) proposed a model of organizational deception identifying organizational complexity as a moderating variable in what Elliot and Schroth (2002) termed the “fog of complexity,” where unethical and destructive behavior is “difficult to control or understand as more activities are conducted out of the boundaries of normal managerial control” (p. 104). Because of environmental complexity, the default systems of leaders may amplify their own skewed cognitive filters and blind spots (McNamera, Luce, & Tompson, 2002) and exacerbate ethical compromise. In summary, competition within uncertain environments highlights the organizational demands that turbulence and change processes incur (Palmer & Wiseman, 1999), which may heighten predictable unethical corporate behavior from a loosening of checks and balances to a lack of regulation (Baucus & Near, 1991 ).
2.2.3. Threat-Rigidity Response
The threat-rigidity response (Staw et al., 1981) may help explain why leaders choose to persist in unethical and destructive behaviors. A “threat” is typically defined as a negative or adverse situation over which decision makers have little control and in which there is a potential for salient loss (Chattopadhyay, Glick, & Huber, 2001; Dutton & Jackson, 1987). Given competition amid times of environmental uncertainty, turbulence, scarcity of resources, and change, leaders are exposed to conditions outside their control and repertoire that threatens to impede their work. Therefore, they may seek to reduce uncertainty by resorting to behaviors characterized by caution, restriction in information processing, and centralization of control (Chattopadhyay et al., 2001; Harrington, Lemak, & Kendall, 2002; Sitkin & Pablo, 1992). In so doing, leaders may centralize their power, resulting in further rigidity. Staw et al. (1981) argued that threat-rigidity effects, which create psychological stress and anxiety, can either be healthy and functional or maladaptive and dysfunctional. If maladaptive, leaders may respond to threats by engaging in unethical and destructive behaviors to reduce the perceived threats from the environment for self-protection or organizational survival and viability. As a result, legitimate threats to the organization may lead to intergroup conflict, competition for resources, and pressures for uniformity, which augment leadership control and the restriction of information, further enhancing unethical tendencies. Conversely, toxic leaders may use perceived threats for personal advantage as a way to heighten follower dependency and exercise inordinate control (Kellerman, 2004; Lipman-Blumen, 2005).
A different theoretical lens, “prospect theory,” has also been applied to threat situations proffering different conclusions. According to prospect theory, people who perceive themselves to be in a negative situation tend to seek risk to better their position (Case & Shane, 1998; Kahneman & Lavallo, 1993; Kahneman & Tversky, 1979). While prospect theory may appear at first to contradict the threat-rigidity thesis, Chattopadhyay et al. (2001) suggested that the risk-seeking response of prospect theory will occur when a threat is perceived as controllable, while the threat-rigidity response will be manifested when a threat is perceived as uncontrollable. Palmer, Danforth, and Clark (1995) found evidence for both prospect theory and threat-rigidity response in a study of hospitals. Poor performing hospitals exhibited some riskier courses of action than superior performing hospitals. However, these risk-taking actions seemed to be embedded in an overall rigid response pattern and may have been viewed within the threatened organizations as a single risky alternative pursued within a general frame of control.
Because the threat-rigidity response is characterized by restricting some types of information flow, increasing emphasis on efficiency, and centralizing decision-making (D’Aveni, 1989), it tends to limit the capability of the organization to adapt to changing conditions and to increase the focus of top management on short-term objectives over longer-term goals. Likewise, perceived resource shortages may lead to reduction of the number of managers, leading to greater concentration of authority and power in the remaining managers. In these cases, perceptions and reactions to perceived organizational threats may prompt leaders’ unethical and destructive behavior to protect self-esteem through a self-serving bias (Campbell & Sedikides, 1999) and/or to insure organizational viability at all costs (Chattopadhyay et al., 2001).
Proposition 4. Organizational conditions such as ethical climate, norms, and accountability; environmental uncertainty; and perceived threats to organizational survival will impact organizational processes and reduce limitations on destructive behavior of leaders.
3. WHY ARE UNETHICAL AND/OR DESTRUCTIVE LEADERSHIP BEHAVIORS TOLERATED BY FOLLOWERS AND OTHER ORGANIZATIONAL STAKEHOLDERS?
Although leaders may acknowledge the benefits of ethical leadership reflecting values of corporate social responsibility, honesty, integrity, and believing that “ethics pay” (Rhode, 2006), many violate the trust of stakeholders, not the least of whom are followers, when engaging in unethical and/or destructive leadership behavior. Leader behaviors impacting followers include greed, lying, cheating, intentional deception, theft, extortion, and interpersonal manipulation, to name a few (Bok, 1999; Cruver, 2002; Doris, 2002; Martin, 1986). This section addresses specific follower and organizational characteristics which contribute to followers and stake holders tolerating unethical and potentially destructive leader behaviors.
3.1. Follower Characteristics
In addition to leader and organizational characteristics and processes which impact unethical and destructive leadership behavior, followers likewise have been shown to exert influence on leader behavior (Berg, 1998; Kellerman, 2008; Offerman, 2004; Rost, 1993). As Whicker (1996) argued: “To blame the decline of many institutions and organizations in the United States on bad leadership is to oversimplify the complex relationship between leaders and followers” (p. 51). Followers may play a highly instrumental role in supporting the unethical behavior of leaders by passive or active complicity (Kellerman, 2004; Lipman-Blumen, 2005; Padilla et al., 2007; Vardi & Weitz, 2004). Six specific follower characteristics contribute to the active and/or passive support of the leaders’ unethical/destructive behavior. The most salient characteristics related to followers and other organizational stakeholders are (a) self-concept, (b) self-efficacy and LOC, (c) values, (d) role modeling, (e) social identity, and (f) organizational commitment.
3.1.1. Self-Concept
Follower self-concept relates to the ways followers view themselves and their self-worth. Thought to derive from individuals’ knowledge of themselves including personality, image of one’s physical appearance, persona, and self-schemas, Lord and Brown (2004) defined the self-concept as “the overarching knowledge structure that organizes memory and behavior … and includes trait-like schemas that organize social and self-perceptions in specific situations” (p. 14). They argued that leaders’ behaviors are proximal determinants of followers’ self-concept activation. Contributing to the development of the followers’ self-concept, the leader-member exchange (LME) process fosters a psychological interaction enabling followers to experience protection and security, achievement and effectiveness, inclusion and belongingness, and commitment and loyalty (Messick, 2005). Graen and Uhl-Bien (1995) described the outcome of this psychological exchange as the formation of in-groups and out-groups, dyadic relationships of contrasting degrees of trust, interaction, and closeness. In-groups comprise the inner circle and can be conformers or colluders in leaders’ unethical behavior (Padilla et al., 2007). As such, Lord, Brown, and Freiberg (1999) cited that research has supported several precursors to (LME), namely leaders “liking” followers, follower demographics, and perceived attitudinal similarity (cf. Engle & Lord, 1997). As a result, followers’ self-concepts may be strengthened leading to further motivation, self-regulation, and information processes. Since people are motivated to preserve and increase their sense of self-esteem and status, followers will be highly motivated to preserve their self-identity, especially in their relationship to leaders within social contexts (Hogg, 2001; Hogg & Reid, 2001; Shamir, House, & Arthur, 1993).
The self-concept may be reinforced by the roles followers or stakeholders play in relationship to leaders (Brewer & Gardner, 1996). For example, leaders may increase followers’ self-esteem through appraisals, performance evaluations, and other positive reinforcements and rewards. If leaders are engaging in the slippery slope of unethical behavior, followers may unwittingly contribute to the process by remaining silent, unwilling to confront superiors about unethical behavior (Kellerman, 2004). If as Berg (1998) suggested the responsibility for the leader-follower relationship resides with the follower and if the underlying leader expectation is an “unchanging request for obedience,” then the likelihood of unethical and destructive behaviors being supported by followers will be strengthened (p. 33).
3.1.2. Self-Efficacy and LOC
Followers possess varying degrees of beliefs about their self-efficacy, defined as the freedom and power to act for specific purposes (Bandura, 1986). In certain situations, followers may disengage their own personal agency and self-sanctions related to ethical and moral behavior. This process of ethical/moral disengagement includes a reduction of self-monitoring and judgment, leading to detrimental conduct (Bandura, 1999; Bandura, Barbaranelli, Caprara, & Pastorelli, 1996). In addition to self-efficacy, followers’ locus of control (LOC) (e.g., Rotter, 1966, 1990) also contributes to how followers participate in or resist unethical behaviors of leaders. As such, followers with an internal (LOC) may take more initiative to resist or confront the unethical behavior of leaders than those with an external LOC who may be more easily manipulated.
3.1.3. Value Alignment
Value alignment between leaders and followers may likewise impact organizational processes that facilitate or tolerate unethical and/or destructive leader behavior (Bass & Stedlmeier, 1999; Shamir et al., 1993). Lord and Brown (2001, 2004) contended that leader behaviors activate and reinforce values in followers. For example, self-direction, achievement, power, and security (Schwartz, 1992, 1994) may be activated by leader-follower value compatibilities. Value similarity between leaders and followers forges increased follower motivation, commitment, and satisfaction (Jung & Avolio, 2000). Value incongruence may result in followers sublimating their espoused and realized values in the face of leaders’ unethical practices. In these cases, the cognitive dissonance experienced by followers may create pressures for reconciliation with a leader that is possible only through tolerance of the leader’s incongruent behaviors. Further, it is also possible that followers are selected by leaders because they share similar values that favor unethical behavior (Padilla et al., 2007).
3.1.4. Role Modeling
Another contextual factor in unethical/destructive behavior is role modeling by followers. Followers may model behaviors of their organizational leaders, or peers/counterparts. Advanced by social cognitive theory, role modeling describes a form of observational learning generated from what individuals attend to, retain, produce, and are motivated by when viewing others’ capabilities (Bandura, 1986). Generally speaking, people seek role models to whom they can aspire (Bandura, 1997). In examining the impact of three types of role models on the ethical development of leaders (e.g., childhood role models, career mentors, and top managers), Brown and Treviño (2006b) found that having an ethical mentor in one’s career was positively related to ethical leadership. Conversely, Bandura et al. (1996) found that role modeling can also include moral disengagement, or the process of selectively disengaging self-sanctions when faced with unethical conduct by a leader. The outcomes of moral disengagement include cognitive rationalization of unethical conduct and consequences, self-justification, and blaming the victim/s. In a setting where moral disengagement is wide-spread, prosocial behavior is undermined, and unethical or destructive behaviors are acceptable.
3.1.5. Social Identity
When followers attract to various organizational settings and roles through the ASA cycle (Schneider, 1987), they engage in a socialization process whereby shared beliefs, attitudes, expectations, and behaviors are interwoven with leaders, inclusive of the organizational vision and culture (Hogg, 2005). In-group association and distinctiveness, based on basic positive self-concepts needs, coalesce into in-group behaviors and prototypes. When followers are socially adept, they may identify more strongly with the organization and desire favored treatment by leaders. In the psychological exchange between followers and leaders, followers glean a sense of vision and direction, protection and security, inclusion and belonging, personal effectiveness, and pride, self-respect, and direction (Messick, 2005). In exchange, followers reciprocate by offering gratitude, loyalty, commitment, sacrifice, and obedience. Therefore when followers and leaders like each other, valuable LMEs benefit both parties (Graen & Uhl-Bien, 1995). As Lord and Brown (2001) observed, since followers desire to nurture positive self-evaluations based on these exchanges, they may be “especially sensitive to the affective feedback from leaders, using it as a basis for constructing a reflected self-identity” (p. 42). Leaders also activate and reinforce follower identity in the modeling of values as they relate to goal achievement (Lord & Brown, 2001), resulting in powerful psychological and emotional attachments (Popper, 2001). Because of this beneficial LME, followers may heighten organizational commitment and, in so doing, may acquiesce to unethical leadership behaviors to maintain their social standing, relational connections, and attachment to the leader (Brass et al., 1998; O’Reilly & Chatman, 1986).
3.1.6. Organizational Commitment
Organizational commitment of followers has been the subject of research related to unethical behavior (Cullinan, Bline, Farrar, & Lowe, 2008; Peterson, 2003; Street, 1995) and is distinctive from escalation of commitment. Organizational commitment is a multidimensional construct involving affective attachment to and identification with the organization (Meyer & Allen, 1991; Mowday, Porter, & Steers, 1982; Porter, Steers, Mowday, & Boulian, 1974). If as O’Reilly and Chatman (1986) argued, that organizational commitment is predicated on followers’ psychological attachment and identification with the goals, values, and characteristic of the organization, then we maintain that followers with high levels of organizational commitment may experience cognitive dissonance in the face of leaders’ unethical behavior. In order to uphold socially constructed organizational identity, followers therefore may deny problems to avoid the negative intrapersonal residue that the awareness of ethical/destructive behavior brings. In such cases, followers may ignore the leadership infraction, rationalize it away, or react to it through moral agency. Examples include Enron employees who realized something was awry but because of the company reputation were compliant and complacent in the face of tell-tale signs of leadership malfeasance (Cruver, 2002).
Various antecedents impact organizational commitment including positive factors such as job satisfaction, job security, and employee performance, as well as negative factors including role ambiguity, role conflict, incongruent job-fit alignment, and organizational turnover (Porter et al., 1974). Research examining the relationship between organizational commitment and ethical decision making reveal that followers with higher organizational commitment were less likely to engage in unethical behavior leading to personal gain and harmful organizational outcomes (Tang & Chiu, 2003). Cullinan et al.’s (2008) study involving employees from three companies found similar results, suggesting that followers with higher levels of organizational commitment may have a longer-term orientation, which would overshadow consideration of the short-term personal gains derived from unethical behavior.
When organizations face decline and crisis, five behavioral modes of commitment have been identified: (a) exit, active negative commitment, (b) voice, active positive commitment, (c) loyalty, passive positive commitment, (d) neglect, positive negative commitment, and (e) silence (Bar-Haim, 2007; Hirshman, 1970; Rusbult, Farrell, Rogers, & Mainous, 1988). We suggest that in the face of unethical leadership behavior followers with high levels of organizational commitment, LOC, and a strong belief/value system will be more apt to remain loyal to the organization, retain a sense of voice, and resist unethical/destructive leadership behavior. Or if the pressures to engage in unethical behaviors persist, followers’ commitment may decrease and their intention to leave will escalate (Peterson, 2003). Conversely, those who do not have high levels of organizational commitment will be more inclined to make an exit (active negative commitment), become neglectful of their jobs (positive negative commitment), or be more obliging in allowing unethical leadership behavior to continue (silence).
In support of this assertion, Street (1995) predicted that the high levels of organizational commitment and cognitive moral development of followers would increase the likelihood of whistle-blowing. The organizational commitment of followers is an important variable in answering the question related to why leaders persist in behaviors that they knew were unethical and destructive. Factors influencing followers’ passive acceptance of, collusion with, or active position against unethical behavior may be impacted by their tenure with the organization and the size of the organization (cf. Dozier & Miceli, 1985). In summary, followers’ self-concepts, self-efficacy and LOC, values, role modeling behavior, social identity, and organizational commitment interact with leader characteristics and organizational processes in contributing to the support of leaders’ unethical and destructive behavior.
Proposition 5. Characteristics of followers including self-concept, self-efficacy, LOC, value alignment, need for role modeling, social identity, and organizational commitment will combine to inhibit follower willingness to engage organizational processes that would limit destructive leader behaviors.
3.2. Organizational Dynamics
The reason followers and other organizational stakeholders tolerate unethical and destructive leadership behavior relates specifically to conducive environments. Factors previously identified as important antecedents include environmental instability, threat perception, cultural values, lack of checks and balances, and effective structural accountability (Padilla et al., 2007; Sedikides et al., 2002). Our focus includes three additional organizational processes: evaluations of actions, the feedback environment, and conformity dynamics.
3.2.1. Evaluations of Actions
Organizational explanations for actions may affect the willingness of employees to accept unethical leader behaviors and/or engage in unethical behaviors themselves. Schweitzer and Gibson (2008) found that organizational explanations that violate community standards of fairness (i.e., a company taking advantage of its market power) led to higher levels of employee intentions to behave unethically. The opposite effect was found for organizational explanations that were more consistent with community standards of fairness, such as a company passing along materials cost increases. Schweitzer and Gibson also found that employees obtained greater satisfaction and reduced anger from engaging in unethical behavior following perceived violations of fairness by an organization.
Anderson and Bateman (1997) found that cynicism and disillusionment in the workplace led to distrust of leaders’ motives, believing that employers might exploit employee contributions and other business relationships. Employee cynicism was predicted by excessively large compensation awards to executives, poor organizational performance, and impending layoffs. Anderson and Bateman found that employee cynicism about an organization predicted their intended lack of compliance with unethical requests from management. Paradoxically, cynicism toward a company and its management may reduce compliance with unethical requests.
3.2.2. Feedback Environment
The feedback environment refers to the contextual aspects of day-to-day supervisor-subordinate and coworker-coworker feedback processes, as opposed to the formal performance appraisal feedback (Steelman, Levy, & Snell, 2004). Feedback within organizational contexts has informational value, which assist leaders and followers meet goals and regulate behavior (Ashford, Blatt, & VandeWalle, 2003; VandeWalle, 2003). The feedback environment may suggest to followers, peers, and other stakeholders the degree of organizational support for feedback to leaders about their behavior. If the feedback environment discourages inquiry related to job performance and personal interaction, we contend that unethical and destructive leadership behavior will be more likely. Key determinants of feedback-seeking behavior relate to the perception of the ego cost of doing so (Ashford & Cummings, 1983), as influenced by goal orientation (Ashford et al., 2003).
For example, Whitaker, Dahling, and Levy (2007) posited that individuals who focused more on learning, as opposed to performance outcomes, were less concerned about the ego cost of seeking feedback. This supports the notion that high power and performance-oriented leaders would likely resist feedback seeking behavior, which could reinforce power disinhibition and unethical behavior. If, as Whitaker et al. suggested, feedback-seeking behavior leads to role clarity, then job performance will likely be a positive outcome. However as Ashford et al. (2003) cautioned, the motives and outcomes for seeking or quenching feedback seeking behavior should be evaluated (i.e., to perform well, defend/enhance leader ego, or enhance impression management), as the cost of isolation from feedback may incur devastating results, as seen in the recent avalanche of corporate scandals.
In a study of 150 subordinate–supervisor dyads across a variety of organizations, Rosen, Levy, and Hall (2006) found that when employees have greater access to information regarding behaviors that are acceptable and desired at work, perceptions of politics are reduced, and work outcomes are enhanced. Feedback environments supporting high levels of informal supervisor and coworker interaction are also associated with higher employee morale, as indicated by job satisfaction and organizational commitment, resulting in higher levels of organizational citizenship. Both positive and negative feedback are both essential for organizational viability, especially as leaders model the feedback-seeking process. As Herold and Parsons (1985) asserted, “negative feedback is not only important but needs to be assessed independently of positive feedback” (p. 304). Thus, we maintain that organizational environments typified by feedback-seeking on all organizational levels will increase job performance and lesson the propensity for unethical and destructive leadership behavior.
3.2.3. Conformity Pressures
Research on situational factors impacting human behavior has revealed the power of context in shaping how people respond in given situations (Bandura, 1999). Conformity in the perpetration of unethical and destructive behavior, particularly as it relates to leaders and followers in specific contexts, has received research attention. In particular, three research initiatives demonstrate the process of de-individuation, dehumanization, and the evil of inaction among participants who were ordinary people. The outcome of these studies, as summarized below, affirms the powerful effect of conformity processes when faced with group pressures to acquiesce to a certain view point or with pressures from authority figures to engage in unethical and/or destructive behavior.
One classic study on conformity to group norms undertaken by social psychologist Solomon Asch (1951, 1955) related to visual perception. Asch predicted that few participants would conform to the majority’s obvious incorrect responses related to judging the relative length of lines written on cards. When making solo decisions, participants made correct judgments 99% of the time. However when participants answered as a part of a group, after respondents intentionally gave incorrect answers, they responded incorrectly about 75% of the time. Only 25% of the participants were able to maintain their correct answers, despite the group’s differing opinion.
In a second social conformity study known as the 1971 Stanford Prison Experiment (SPE), Zimbardo (2006, 2007; Zimbardo, Maslach, & Haney, 1999) observed that situational context had a powerful effect on the behaviors of students placed in the roles of guards and prisoners in a simulated prison environment. Designed to assess the effects of social distance and pressures for conformity within emerging group norms, some “guards” came to abuse their power by demeaning and degrading the “prisoners,” actually fellow students; while others either went through their jobs methodically or were more reluctant to adopt more abusive approaches. However, none of the “good” guards intervened to limit the abusive behaviors of other guards, nor actively complained either to their abusive peers or to the supervisors of the simulation. The psychological and emotional experimental effects on participants were so detrimental that the 14-day experiment was abruptly called off after 6 days.
Zimbardo’s (2007) results are of particular interest when considering how pressures for conformity may stifle follower or peer tendencies to speak out against unethical or destructive leadership behaviors. When people are placed in relatively unusual settings where the rules for behaviors and interactions may be ill-defined and not perceived as consistent with previous experiences, a set of dynamic psychological processes may induce people to do evil, which Zimbardo termed “the Lucifer effect.” The behaviors adopted by these SPE “emergent leaders” may have provided a kind of sense-giving for other members of the group taking up relatively unfamiliar roles. Indeed, sense-giving, in which information is provided to help organizational members understand themselves, the nature of their work roles, and their relationships with others in the organization is a critical role for organizational leaders (Foldy, Goldman, & Ospina, 2008). However, this sense-giving gone awry by students assigned as guards illustrates the relative power of situations to incrementally introduce ‘evil’ into the average behaviors of otherwise good people. In more typical organizational situations, it may be similarly easy for persons working without contact with individual customers, constituents, or students to become cognitively caught up in a similar “us/them” perceptual trap. In such a case, Zimbardo’s work (1969, 2006, 2007) illustrates the relative ease with which peers and followers alike can become compliant with the expectations and pressures to conform and accept unethical and/ or destructive behaviors of leaders.
A third conformity study conducted by Milgram’s (1974) on obedience to authority likewise demonstrated that average people will conform to authority even when it could possibly bring harm to others. Asked to apply electric shock as punishment in the process of assisting people improve their memory in the learning process, over two-thirds (67%) of all participants (i.e., teachers) actually applied the highest shock levels of 450 volts at the urging of the authority figure supervising the setting, despite the desperate (but simulated) cries of the learners. The results convincingly demonstrated that one situational variable could cause compliance rates of over 90% of participants and conversely drop to a low of 10%. Situational context proved to be a powerful determiner of behavior, which in this simulated obedience study, surprised even Milgram himself.
All three of these studies affirm that, given specific situational contexts, average people may conform to dysfunctional group norms and disengage morally in supporting destructive conduct when authority figures so dictate and/or they justify their own behavior and minimize personal responsibility (Bandura, 1999; Bandura et al., 1996).
Proposition 6. Organizational characteristics such as prevailing evaluation of actions, the feedback environment, and pressures for conformity will combine to reduce the occurrence and effects of organizational processes designed to limit destructive leader behaviors.
SUMMARY
We set out in this chapter to consider how characteristics of leaders, followers, and organizational settings combine with organizational processes to provide answers to three questions. The questions were: (a) how and why do leaders venture down unethical and destructive paths?, (b) why do leaders persist in unethical and destructive behaviors?, and (c) why are unethical and/or destructive leadership behaviors tolerated by followers and other organizational stakeholders? After considering alternative perspectives related to each question, we believe we have demonstrated that considering the processes within organizations provides a powerful approach for understanding how destructive leadership arises and persists in organizations. Specifically, better understanding of destructive leadership requires consideration of the organizational processes that place people in leadership roles and limit internal regulation, which subsequently enable leaders to continue down paths that are detrimental to the organization and its members. Focusing on the processes that are the essence of how organizations operate enabled us to provide additional perspectives in which to evaluate how and why unethical and destructive leadership behaviors occur and explain why organizational members ignore the obvious signposts these behaviors present.
Within the unique dynamics between leaders, followers, and organizational/situational contexts, the complexity and potential fallout of unethical and destructive leadership resulting in damaged lives and organizational demise cannot be understated. Building upon previous conceptual frameworks (Brown & Treviño, 2006a; Jones, 1991; Padilla et al., 2007), we offered new lenses for viewing unethical and destructive leadership by exploring additional social-cognitive and management processes applied to unethical and destructive leadership, such as the leadership selection process, leaders’ escalation of commitment, self-enhancement motives, followers’ organizational commitment, and the organizational processes impacted by goal setting pressures, threat rigidity, the feedback environment, and conformity dynamics.
Our analyses suggest that leader characteristics as well as internal and external variables may impact organizational processes limiting the ability of these processes to regulate and safeguard against unethical and destructive leader behaviors. From a practical viewpoint, increased awareness of these possible limitations may help organizations develop and implement watchful approaches to identify and curb destructive and/or unethical leadership behaviors at an early stage. Clearly the more prepared an organization may be to identify and curb such behaviors, the more likely it is that norms for regulations within the organization will be reinforced and have the desired effect.
Directions for Future Research
The propositions presented above provide the primary basis for future research concerning how the interplay of leader, follower, and organizational characteristics within organizational processes may unintentionally facilitate destructive leadership. These propositions are summarized in Table 5.1.
We anticipate that testing proposition 1 may have significant payoff both theoretically and practically, in that the underlying implicit leadership models involved in leadership selection decisions are rarely made known. Consequently, the extent to which such characteristics as cognitive moral development and responsibility dispositions of leadership candidates are considered important attributes and thus are thoroughly investigated in the selection process is also unclear. In addition, impression management efforts may be more successful for candidates with personality tendencies that include narcissism. Better understanding of the evaluation criteria used by participants in the selection process will be critical for limiting the acceptance of persons who arrive in leadership roles with tendencies that increase the likelihood of unethical and destructive behaviors.
Table 5.1. Propositions for Future Research
| Proposition 1. Leader selection processes are likely to overlook underlying leader characteristics such as LOC, narcissism, level of moral development, and responsibility disposition which may affect leader actions in organizational processes and limit the effects of regulatory safeguards to curb destructive leadership behaviors. |
| Proposition 2. Organizational characteristics such as the prevailing ethical climate, pressure to set aggressive goals, and intense competition will combine to limit the impact that organizational processes may have on regulating destructive leader behaviors. |
| Proposition 3. Leader characteristics such as personal values, self-enhancement motives, self-deception, and tendencies to escalate commitment will affect leader behavior within organizational processes and perpetrate patterns of destructive leader behaviors. |
| Proposition 4. Organizational conditions such as ethical climate, norms, and accountability; environmental uncertainty; and perceived threats to organizational survival will impact organizational processes and reduce limitations on destructive leader behaviors. |
| Proposition 5. Characteristics of followers including self-concept, self-efficacy, LOC, value alignment, need for role modeling, social identity, and organizational commitment will combine to inhibit follower willingness to engage organizational processes that would limit destructive leader behaviors. |
| Proposition 6. Organizational characteristics such as prevailing explanations for actions, the feedback environment, and pressures for conformity will combine to reduce the occurrence and effects of organizational processes designed to limit destructive leader behaviors. |
Examination of the additional five propositions will largely bring to light the effects of both individual and organizational level variables in establishing and implementing norms that serve to regulate leader behaviors and bring leaders back from destructive behavioral patterns. We particularly anticipate that better understanding of the interplay between organizational pressures and the individual characteristics of leaders holds substantial promise. For example, self-enhancement motives of leaders may have limited negative effects until the leader’s organization or unit is faced with threats to survival. When faced with perceived threats, these leaders may have increased tendencies toward rigidity in behaviors, limiting information flow and blocking scrutiny of their behaviors.
Besides these propositions, our analyses suggest additional questions requiring further exploration: (a) what additional leadership selection criteria and assessments need to be developed to accurately evaluate “dark side” leader and follower characteristics to assist organizations prevent unethical/destructive leadership (Hogan et al., 1994)?, (b) in what organizational or situational contexts will leaders of proven integrity bow to unethical/destructive leadership behavior?, (c) what do exemplars of ethical organizational climate teach us about how to avoid unethical practices related to structural and accountability processes?, and (d) how might business and corporate ethics training be radically reevaluated and revised to include the most up-to-date research in real-world contexts to foster applied praxis? Insights from such research would have long-range implications in strengthening leaders, followers, and organizational processes in order to effectively address the obvious signposts of unethical and destructive leadership, foster ethical behavior and sustainability at all organizational levels, and promote public trust.
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