Unethical leadership, moral compensation, and ethical followership: Evidence from a survey experiment with Chilean public servants

• Published date: 01 September 2024
• Author: Christian Schuster,Javier Fuenzalida,Kim Sass Mikkelsen,Jan‐Hinrik Meyer‐Sahling
• Date: 01 September 2024
• DOI: http://doi.org/10.1111/puar.13815

RESEARCH ARTICLE

Unethical leadership, moral compensation, and ethical

followership: Evidence from a survey experiment with Chilean

public servants

Christian Schuster

1

| Javier Fuenzalida

2

| Kim Sass Mikkelsen

3

|

Jan-Hinrik Meyer-Sahling

4

1

School of Public Policy, University College

London, London, UK

2

Blavatnik School of Government, University of

Oxford, Oxford, UK

3

Department of Social Science and Business,

Roskilde University, Roskilde, Denmark

4

School of Politics and International Relations,

University of Nottingham, Nottingham, UK

Correspondence

Christian Schuster, School of Public Policy,

University College London, 29–30 Tavistock

Square, London WC1H 9QU, UK.

Email: c.schuster@ucl.ac.uk

Abstract

Numerous studies associate ethical leadership with ethical behavior in the public

sector. By contrast, the effects of unethical leadership in the public sector have

largely not been explored. Yet, unethical leadership need not beget unethical fol-

lowership. Instead, we theorize that some bureaucrats may perceive unethical

leadership as a moral threat and respond to it with moral compensation and

greater ethical behavior. We provide evidence for our theorized effect through a

vignette experiment with 19,852 bureaucrats in Chile. Bureaucrats exposed in the

vignette to unethical role modeling by their superior or peers react with greater

ethical awareness and ethical intent. This effect is concentrated among bureau-

crats recruited through merit-based, public service criteria rather than connections,

and thus bureaucrats who more likely feel morally threatened by unethical leader-

ship. This suggests that unethical leadership in the public sector may differ in its

consequences from the mere absence of ethical leadership.

Evidence for practice

•Unethical leadership in the public sector can take many forms, including unethi-

cal role modeling.

•Bureaucrats recruited based on merit reacted, in our sample, to unethical role

modeling with moral compensation and greater ethical behavior.

•Merit recruitment constitutes an important practice to shield organizations from

(some) adverse effects of unethical leadership.

INTRODUCTION

How does unethical leadership affect public organiza-

tions? Shedding light on this question is arguably an

important task for public administration (Hassan, 2019).

Studies in management and psychology have started

such empirical inquiry (Brown & Mitchell, 2010;

Tepper, 2007). Public administration scholarship has

largely not, beyond limited work on politicization and

abusive supervision (Story et al., 2023), and the use of

incentives by managers to foster corruption (Mutahi

et al., 2023), for instance. Consequently, as Hassan (2019,

p. 554) puts it, “many important questions about

unethical leadership behavior in the public sector are yet

to be explored—for example, …How does unethical

leadership behavior affect work motivation and behavior

of public sector employees?”

This research gap on unethical leadership in the pub-

lic sector stands in sharp contrast to the manifold existing

studies on ethical leadership. Ethical leadership is typically

defined as the “demonstration of normatively appropriate

conduct through personal actions and interpersonal rela-

tionships, and the promotion of such conduct to followers

through two-way communication reinforcement, and

decision-making”(Brown et al., 2005, p. 120). By contrast,

unethical leadership is typically understood as leader

Received: 3 August 2021 Revised: 18 March 2024 Accepted: 19 March 2024

DOI: 10.1111/puar.13815

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribu tion and reproduction in any medium, provided the

original work is properly cited.

© 2024 The Authors. Public Administration Review published by Wiley Periodicals LLC on behalf of American Society for Public Administration.

848 Public Admin Rev. 2024;84:848–869.

wileyonlinelibrary.com/journal/puar

actions or behaviors that violate moral standards or pro-

mote unethical conduct among followers (Brown &

Mitchell, 2010, p. 588)—or the demonstration of norma-

tively inappropriate conduct through “personal actions

and interpersonal relationships, and the promotion of

such conduct to followers”(Brown et al., 2005, p. 120). By

way of example, a leader who encourages unethical con-

duct by employees, for instance by role modeling how to

cover up fraud or pressuring employees to participate in

cover-ups, leads unethically.

1

Dozens of studies in man-

agement and psychology have underscored the impor-

tance of ethical leadership for employee attitudes and

organizational outcomes (Brown et al., 2005; den

Hartog, 2015; Mayer et al., 2009). The same holds for man-

ifold studies in public administration (Downe et al., 2016;

Hassan et al., 2014; Wright et al., 2016; Young et al., 2021).

Unethical leadership, however, is not merely the absence

of ethical leadership. Instead, it is a distinct form of lead-

ership. It thus needs separate empirical inquiry.

What, then, are the consequences of unethical leader-

ship for follower behavior? We contribute to addressing

this question both theoretically and empirically. Theoreti-

cally, we, first, extrapolate from mechanisms in existing

ethical leadership studies to hypothesize that unethical

leadership decreases ethical awareness and behavior of

public servants. Subsequently, however, we posit a juxta-

posed hypothesis, drawing on research on social identi-

ties and moral compensation—understood as “a set of

compensating moral or worthy actions that cancel out

the ethical violation that preceded it”(Ding et al., 2016,

p. 2). While ethical leadership is generally associated with

positive outcomes, unethical leadership need not be gen-

erally associated with negative outcomes. Instead, we

argue that where followers experience unethical leader-

ship, unethical leadership can lead to moral compensa-

tion, with followers seeking to compensate for the moral

threat to themselves from unethical behavior by leaders,

by responding to it with ethical behavior. As moral com-

pensation occurs based on experienced moral threat,

compensating reactions should occur only if the leader’s

action presents a moral threat to followers. Building on

existing theorizing on the benefits of merit recruitment in

the public sector, going back to Weber (1978), we thus

hypothesize that bureaucrats hired based on merit (rather

than personal or political connections) may be expected

to identify more with public service and therefore be par-

ticularly susceptible to experiencing moral threat and

reacting with moral compensation.

We test our hypotheses through a vignette experi-

ment with 19,852 public servants in Chile. In the vignette,

we randomly assign bureaucrats to hypothetical scenarios

including or excluding one form of unethical

leadership—unethical role modeling—by their superior

or peers. Consistent with moral compensation, we find

that bureaucrats exposed to unethical role modeling by

superiors in the vignette react with greater ethical intent,

and that this effect is concentrated among bureaucrats

who were hired into the public sector based on merit

rather than through connections.

Our findings suggest that unethical role modeling can

lead to moral compensation in public service and greater

ethical behavior. They also underscore the importance of

merit bureaucracy in shielding public administration from

(some) adverse effects of unethical leadership. Finally, by

showing that unethical leadership does not have symmet-

ric effects to those identified in prior studies assessing the

(absence of) ethical leadership, we hope our findings

encourage other public administration scholars to study

unethical leadership.

LITERATURE AND THEORY: UNETHICAL

LEADERSHIP, MORAL THREAT, AND ETHICAL

BEHAVIOR

To develop our hypotheses linking unethical leadership

to (un)ethical follower behavior, we first review a theoreti-

cal mechanism based on social learning theory

(Bandura, 1986), through which ethical leadership—and

in particular ethical role modeling—has been argued to

influence followers. Conceptually, we follow the literature

in understanding morality as the principles and values of

individuals that guide what they perceive as right or

wrong, while referring, with the term “ethical,”to stan-

dards of right and wrong in a social or organizational

context—epitomized, for instance, in an

organizational code of conduct (Denhardt, 1988).

From a social learning perspective, leaders influence

followers by role modeling. Followers do not have fully

formed attitudes about—and do not ascribe salience to—

all potentially ethically salient issues. Consequently, they

look to leaders for ethical guidance and emulate them as

role models (den Hartog, 2015). Brown et al. (2005),

among others, utilize this mechanism to link ethical lead-

ership to ethical behavior. Social learning theory thus

leads to an expectation that conduct cascades from

leaders to followers: ethical behavior of leaders is repro-

duced by their supervisees, fomenting greater employee

ethical conduct (den Hartog, 2015; Mayer et al., 2009).

Research on unethical leadership has extended the

application of social learning theory to unethical leader-

ship to derive symmetric expectations. Employees seek-

ing guidance on ethical salience and attitudes from

unethical leaders are met with the converse: that ethical

dimensions of choices are rarely salient, and that unethi-

cal behavior is acceptable or even condoned (Ashforth &

Anand, 2003). Leaders role model unethical behavior

through their own acts or lead unethically by using their

position to get others to act unethically (Brief et al., 2001).

Unethical leaders thus become unethical role models. Fol-

lowing this line of reasoning, we hypothesize:

H1. Unethical leadership decreases ethical

awareness and behavior of public servants.

PUBLIC ADMINISTRATION REVIEW 849