Establish Ethical Leadership and Gain Social Capital

Prof. Ariño studies the Consequences of Executives’ Ethics

06/05/2014

Miguel Angel Ariño Martín

Does leaders’ behavior have any influence on the ethics of the company? Social learning theory states that employees learn standards of appropriate behavior by observing role models.

IESE professor Miguel A. Ariño and David Pastoriza of HEC Montreal surveyed 408 MBA students, who were working part-time, in order to determine whether ethical leadership has a direct influence on employees’ behavior.

The authors found ethical leadership of supervisors does indeed exert a significant influence on the creation of social capital in the organization, particularly in three areas:

Higher willingness of employees to share. Employees are more likely to share information and resources when supervisors show ethical leadership, partly because they are not afraid their supervisors will misappropriate that information or use it opportunistically.

Increase of employees’ trust. There is greater faith not only in the supervisor, but also in the moral authority of the organization, since workers perceive their rights are being respected.

Employees identify more closely with the firm. When supervisors display integrity and demonstrate concern, which, in turn, puts them in a better position to provide a meaningful interpretation of the firm's goals, employees perceive that the organization values and respects them. Therefore, it is easier for workers to identify with the organization.

The results of the study are presented in the article "Does ethical leadership generate internal social capital?" published in the Journal of Business Ethics.

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