fter years of focusing on explaining and predicting positive employee attitudes (e.g., job satisfaction, employee commitment) and behaviors (e.g., employee citizenship, work performance), organizational behavior researchers have increasingly turned their attention to understanding what drives costly misconduct in organizations (Bennett & Robinson, 2000; Giacalone & Greenberg, 1997; Robinson & Bennett, 1995; Robinson & O’Leary-Kelly, 1998; Treviño, 1986; Vardi & Wiener, 1996). Although researchers have used a variety of terms to describe such employee behavior (e.g., deviance, antisocial behavior, misbehavior, counterproductive behavior, unethical behavior), all of them share a concern with counternormative behavior intended to harm the organization or its stakeholders (O’Leary-Kelly, Duffy, & Griffin, 2000). Unethical behavior in organizations has been widely reported in the wake of many recent high-profile corporate scandals. As researchers and practitioners consider what may be driving such behavior, leaders are coming under increasing scrutiny not only because many senior executives are accused of having committed unethical acts but also because of the role that leaders at all levels are thought to play in managing the ethical (and unethical) conduct of organization members. For example, Bernie Ebbers, the former chief executive officer of WorldCom, was hailed as a great leader for growing the company into a telecommunications superpower.
70——MANAGING ORGANIZATIONAL DEVIANCE
Ebbers, however, was later discredited for his failure to provide moral leadership as WorldCom became engulfed in financial scandals that resulted in the largest bankruptcy in U.S. history (for more on Ebbers, see Case 3). As Turner, Barling, Epitropaki, Butcher, and Milner (2002) suggest, organizational researchers are increasingly interested in the “moral potential of leadership” (p. 304). The assumption is that a leader who exerts moral authority should be able to influence followers’ ethical behavior. Theory and research suggest that leaders should, and do, influence organizational ethics. The normative business ethics literature has focused on cases (e.g., Donaldson & Gini, 1996) or prescriptions regarding what leaders should do to provide ethical leadership (e.g., Ciulla, 1998; Freeman, Gilbert, & Hartman, 1988; Rost, 1995). The descriptive business ethics literature has reported that executive leaders set the ethical tone at the top of organizations (Murphy & Enderle, 1995) and shape their formal and informal ethical cultures (Treviño, 1990; Treviño & Nelson, 2004). Executive leaders have been found to play an important role in communicating ethical standards and using rewards and punishments to reinforce normatively appropriate conduct (Treviño, Hartman, & Brown, 2000). In addition, senior management’s concern for ethics has been shown to influence an organization’s values or compliance-oriented approach to ethics management and its integration of ethics into everyday activities such as performance appraisals (Weaver, Treviño, & Cochran, 1999a, 1999b). Leaders have also been found to influence employees’ ethical conduct. For example, employees’ perception that executives and supervisors sincerely care about ethics has been associated with the amount of unethical conduct observed in the organization (Treviño, Weaver, Gibson, & Toffler, 1999). However, despite this evidence suggesting that leaders “matter” when it comes to organizational ethics, the specific role of leadership in influencing unethical behavior in the workplace has yet to be fully explicated. In this chapter, we explore theoretical reasons why leaders should play an important role in influencing followers’ ethical and unethical behavior. Specifically, we look at this relationship from cognitive...