The Relationship Between Ethical Leadership and Whistleblowing Intentions

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Intentions

Master Thesis, MSc Human Resource Management University of Groningen, Faculty of Economic and Business

July 2013 Viviana S. Mc Donald Studentnumber: 2047993 Reviusstraat 108 9721KW Groningen Tel: (+31) 624277950 v.s.mc.donald@student.rug.nl Supervisor Jennifer Jordan

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Abstract

The purpose of this investigation was to examine the relationship between ethical leadership and whistleblowing intentions. More specifically, I predicted that ethical leadership would be positively related to the whistleblowing intentions of individuals. I have also tested out a mediation effect that could explain how ethical leadership could lead to whistleblowing intentions. I reasoned that moral awareness would mediate this positive relationship. Furthermore, I believed that if there was an interaction between ethical leadership and moral identity this would increase individuals’ whistleblowing intentions. Thus I expected that moral identity would moderate this positive relationship. As moral identity had two subscales measurements (e.g., symbolization and internalization) I have chosen to concentrate on the internalized moral identity subscale for the purpose of this paper. Furthermore, there were two scenarios in this study, however only one scenario was tested further due to its significance outcome. In a sample of 38 respondents, I have found a direct positive relationship between ethical leadership and whistleblowing intentions. However, in contrast to my prediction there was no mediation effect of moral awareness on this relationship. Furthermore, moral identity did indeed have a moderating role on the relationship between ethical leadership and whistleblowing intentions thus increasing the whistleblowing intentions of individuals when interacting with ethical leadership. However there were also some other interesting findings. I discuss the research and practical implications of these findings.

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Introduction

Companies are more frequently engaging in organizational wrongdoing. Think for example on corruption, fraud, and other unethical acts in organizations like WorldCom and Enron. In the past, the act of wrongdoing in organizations was seldom heard of, however, “broad coverage of recent organizational wrongdoings has led to the widely held belief that these organizational wrongdoings will eventually be discovered in almost every business or organizations” (Anand, Ashforth, & Joshi, 2004, p. 42). Incidence of wrongdoing within organizations is being reported with greater frequency by direct members of the organization (e.g., by employees, board members, or internal auditors). These individuals are taking a risk of retaliation or other actions that can be taken against them in their efforts to uncover wrongdoing within their organization by both their organization (e.g., via job loss, demotion, decreased quality of working conditions) and by the public (e.g., character assassinations) (Jubb, 1999; Near & Miceli, 1985). But what factors make these people more or less likely to whistleblow on their companies? I investigate ethical leadership as one possible antecedent.

This phenomenon of members of an organization reporting wrongdoing within the organization is called, whistleblowing, and the members who report these wrongdoings are consequently called, whistleblowers. The term “whistleblowing” was first used for policemen who had to blow the whistle when they detected a crime taking place. This blowing of the whistle was a way of informing other law enforcement officers and the public, in general, of the crime (Dasgupta & Kesharwani, 2010). In this investigation I will refer to whistleblowing as Near and Miceli (1985, p. 6) define it: “organization members who disclose illegal, immoral or illegitimate practices under the control of their employer, to persons or organizations who may be able to effect action.”

Whistleblowing is generally perceived as a voluntary action of the employees, which has a very uncertain outcome. It is advisable to understand the factors that support whistleblowing acts within an organization, because this understanding would offer valuable insights into mechanisms of effective whistleblowing systems to prevent fraud (Bhal & Dahdich, 2011).

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ethical leadership. I will also examine a potential mechanism behind the ethical leadership to whistleblowing relationship, that is, moral awareness (Jordan, 2009; Reynolds, 2006).

Research on whistleblowing and leadership, despite being important, is limited. This may partly be because of the difficulties associated with studying these issues in a field setting. To overcome this problem, alternative mechanisms need to be used to understand the issues of whistleblowing and leadership in the workplace (Bhal & Dadhich, 2011). The present study, therefore, uses experimental design to explore the impact of ethical leadership, and moral awareness on people’s whistleblowing intentions.

This study also identifies the significance of the issue at hand by incorporating the role of moral identity as a moderator in the relationship between ethical leadership and whistleblowing intentions. Results of the study may be used to improve the implementation of whistleblowing processes in organizations (Bhal & Dadhich, 2011).

Theoretical Background

Ethical Leadership and Whistleblowing Intentions

In both the mass media and the academic community, there has been a surge of interest in leaders’ ethical behavior. Ethical leadership has been defined in many different ways. Executives in one study described ethical leadership by identifying several behaviors, values and motives (e.g., honest, trustworthy, altruistic, fair). A key characteristic was a leader’s effort to influence the ethical behavior of others (Treviño, Brown & Hartman, 2003). Brown, Treviño, and Harrison, (2005, p. 120) defined ethical leadership as, “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making.”

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among both private and public sector employees, show that the majority of employees favor reporting unethical act or conduct to their leader. Conversely, this same study found that many employees do not necessarily feel invigorated to do so (cf. Grimsley, 2000; Miceli et al., 2008; Ridge, 2000). Brown et al., (2005) explanation of ethical leadership propose that high ethical leadership will be more positive towards such reporting behavior of the employees. This work, based on social learning theory (Bandura, 1977, 1986), suggests that leaders who are seen as strong ethical leaders will be ethical role models for employees.

Research has shown that people working in a principle-based environment are more probable to report wrongdoings within the organization (Chung, Monroe & Thorne, 2004). Reporting problems is a form of whistleblowing behavior. There exists certain situational factor that makes it easier for subordinates to whistleblow in their organization. High ethical leadership can contribute in this principle-based environment, which helps facilitate whistleblowing. Moreover, when reporting the wrongdoing within the organization, subordinates are carrying the risks of negative consequence (e.g., reprisal), however they should be more willing to accept such a risk if they believe in the ethicality, trustworthiness, and support of the leader, which are characteristics of high ethical leadership (Brockner, Siegel, Daly, Tyler & Martin, 1997; Graham, 1986; Mayer, Davis & Schoorman, 1995).

On the other hand, I propose that low ethical leadership means less ethicality, less trustworthiness, and less support of the management, which will probably lead to subordinates being less willing to take the risk to whistleblow. From these arguments I hypothesize that:

Hypothesis 1: Ethical leadership has a positive relationship with whistleblowing

intentions.

Moral Awareness

It is probable that employees see their leaders as reliable figures of normatively appropriate behavior, due to their formal authority. Employees often imitate their leaders. Having an ethical leader is likely to make employees become more aware that these leaders report problems up the chain to their superiors, thus modeling this normatively appropriate behavior (Brown et al., 2005).

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According to Rest (1986), moral awareness is something of an interpretive process wherein the individual recognizes that a moral problem exists in a situation or that a moral standard or principle is relevant in some circumstances.

Reynolds (2006) defines moral awareness as a person’s determination that a situation contains moral content and legitimately can be considered from a moral point of view. Moral awareness suggests that moral issues are more likely to be noticed and that how people respond to a moral situation will be based on their level of moral awareness (e.g., ethical leadership), as opposed to situations in which moral issues are not noticed and therefore not considered (Tenbrunsel & Smith-Crowe, 2008).

I therefore argue that if a person has an ethical leader above him/her, he/she will be constantly confronted with moral issues, and will see that moral issues are an important part of good leadership. This observation will cause people to give more attention to the moral and ethical aspects of a situation. Thus, high ethical leadership will probably make people more aware of morality and ethicality, and as consequence will increase the moral awareness of these people. Thus, I predict that ethical leadership will emphasize morality and ethicality, making morality and ethicality more vivid in people’s minds.

On the other hand if ethical leadership is low, this means that there will be less awareness in the morality of any situation. In other words, there will be less attention given to morality because of the lack of saliency, vividness and accessibility of moral issues by the leader (Fiske & Taylor, 1991). As a consequence, subordinates will not be confronted with moral issues as regularly, and will probably not see these factors as being important within a situation.

Hypothesis 2: Ethical leadership has a positive relationship with moral awareness.

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Chiu (2003) revealed a positive relationship between the positive ethical judgment of whistleblowing and whistleblowing intention. I agree with this argument and I also believe that if a person experiences a wrongdoing and also perceive this wrongdoing as being immoral, this person will be more likely to respond against this immoral situation. And because this person has a high ethical leader he/she will be more eager to speak out his/her concern about this wrongdoing, thus, making the individual more likely to whistleblow against a wrongdoing. Thus I propose that the relationship between ethical leadership and whistleblowing intentions will be mediated by moral awareness.

Hypothesis 3: Moral awareness mediates the relationships between ethical leadership

and whistleblowing intentions.

Moral Identity as a Moderator

Ethical leadership and moral identity are similar in that they both focus on the morality within a situation, as well as following the rules and legislation that are made by the organization. A moral identity is a particular kind of identity that revolves around the moral aspects of an individual (Bergman, 2002). A moral identity acts as a self-regulatory mechanism that sets parameters for individual behavior and motivates specific action that is moral (Blasi, 1984; Damon & Hart, 1992; Erikson, 1964). The consistency principle argues that an identity creates a necessity for the individual to himself/herself, and as a consequence will also create the need for the individual to act consistently with his/her identity. This explains the motivating force of a moral identity (Erikson, 1964). This statement implies thus that a consequence for having a strong moral identity is that it forces an individual to act morally. To be more specific to act according to his or her moral believes (Colby & Damon, 1992; Oliner & Oliner, 1988). Moral identity is one of many possible identities that a person can use as a basis for self-definition (Aquino & Reed, 2002). There is growing evidence that this particular identity plays a key role in moral functioning by influencing how people interpret and respond to situations involving moral judgment and choice (Shao, Aquino, & Freeman, 2008).

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this will even enhance the step toward whistleblowing. I therefore argue that moral identity will moderate the relationship between ethical leadership and whistleblowing intentions. More specifically I hypothesize:

Hypothesis 4: The positive relationship between ethical leadership and whistleblowing

intentions will be moderated by moral identity such that the relationship will be stronger when moral identity is high.

Method

Design and Participants

This study uses a 2-way Ethical Leadership (high ethical leadership vs. low ethical leadership) x a 2-way Scenario (Scenario 1 vs. Scenario 2) randomly assigned between-subjects design.

Participants were bachelor and master students at the Rijksuniversiteit Groningen. One hundred and eleven individuals were contacted and about 45% completed all study-related tasks. I excluded those respondents who had no whistleblowing dependent variables, as those were the most important variables thus, leaving a final of 50 useable participants. However in the tests I have also excluded the non-completed questions. This left a final total of 38 respondents, which is about 34% of the contacted respondents. Fifty- eight percent were female. The age varied across the participants, with the youngest participant being 18 years old and the oldest one 32 years old. The average age was about 23 years old (M = 23.08, SD = 3.45). Furthermore, while the participants were all following their studies in Groningen there was diversity in their birthplaces. Examples of some of the birthplaces of the participants were: The Netherlands, Aruba, Curacao, Indonesia, Germany, South Africa and Great Britain. Regardless of their backgrounds, all participants had average level in the English language. The minimum level was a four which indicated that their English level was either bad or good and the maximum level was a seven which indicated that their level of English was very good (M = 6.21, SD = .73).

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Participants completed all study materials via the Internet from a location which suited them best so that they would be comfortable and in no rush to compete the study. After logging on, participants were asked to read a consent form in which all rules and procedures regarding participation in the study were stated. The study was divided in three parts. The first part was about personality characteristics. In the second part, participants were asked to read a scenario and completed related questions. Finally, participants were asked to answer several demographics questions. Before concluding their session, participants also completed questions measuring their recall of the moral- and ethics-related issues contained in the scenario. They were unaware that they would be completing the latter task when they began the session.

Experimental Manipulation

Ethical leadership. There were two different scenarios in which ethical leadership was manipulated in the form of a speech given by the leader. The ethical leadership manipulation speech was replicated from the study of Myer, Nurmohamed, Treviño, Shapiro, and Schminke (2013). Specifically, I manipulated high ethical leadership by giving the participants the following message from their leader:

Hi, I am your leader. I look forward to having you on our team. I also look forward to seeing the winning results of your work so that we can get the €5000. I’m counting on you to do things the right way, to follow instructions, and not to resort to short cuts, I value doing things the right way because it is important that people be fair. I’ll look forward to getting together with you when you have any questions or suggestions about the project. I hope that you fit well with the team but mostly I hope that this will be a useful learning experience for you.

Whereas I measured low ethical leadership by giving the participants the following message from their leader:

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Each scenario emphasized the process of teamwork (e.g., school project and internship project). Furthermore, the message of the leader was also adapted to fit the scenario. These scenarios can be found in appendix A.

Manipulation Checks

Ethical leadership. Participants indicated the extent to which the leader of their team exhibited characteristics consistent with ethical leadership using an adapted five-item scale of Brown et al.’s (2005) ethical leadership scale. Sample items included, my leader… “Expected team members to follow instructions” and “Valued having a fair competition”. Participants responded to these items using a 5-point Likert scale (1 = strongly disagree; 5 = strongly

agree). The Cronbach’s alpha was α = .87.

Wrongdoing. Participants indicated the extent to which they perceived the member of their team to exhibit characteristics of wrongdoing using a three-item scale. These items included: To what extent did you considered the issue of your team member sending a

questionnaire to the participant/committing plagiarism to “be immoral”, “be incorrect”, and

“not violating the rules”. Participants responded to these items using a 5-point Likert scale (1 = strongly disagree; 5 = strongly agree). The Cronbach’s alpha was α = .52.

Mediator

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Moderator

Moral identity. I measured moral identity using the ten-item scale of Aquino and Reed (2002). Some characteristics that might describe a person were listed for the participants. The characteristics were: Caring, Compassionate, Fair, Friendly, Generous, Helpful,

Hardworking, Honest, and Kind. It went on explaining that the person with these

characteristics could be you (e.g., the participant) or it could be someone else. Participants got the task to visualize for a moment in their mind the kind of person who has these characteristics. Then it followed with the statement: “Imagine how that person would think, feel, and act. When you have a clear image of what this person would be like, answer the following questions”. There were ten items that measured this variable. Furthermore, there were two subscales within these scales. The first subscale is referred to as Symbolization which consisted of five of the ten items. These items included: “I often wear clothes that identify me as having these characteristics” and “The types of things I do in my spare time (e.g., hobbies) clearly identify me as having these characteristics”. The second subscale is referred to as Internalization consisted of the other five items. These items included: “It would make me feel good to be a person who has these characteristics” and “Being someone who has these characteristics is an important part of who I am”. Two of these five items were reverse coded. Participants responded to the items using a 5-point Likert Scale (1 = strongly

disagree; 5 = strongly agree). These items were averaged into scales that showed acceptable

internal consistency reliabilities of α = .77 and α = .67 for Symbolization and Internalization, respectively. However, in this study I have only tested the internalized subscale on the hypotheses because I specifically wanted to measure the degree to which a set of moral traits is central to the self-concept of an individual (Reynolds & Ceranic, 2007).

Dependent Variable

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interview in person” and “I would mention that it was a hard task to complete within such short time notice (This was the reason why an in-person interview with one of the people was not possible)” and “The focus should have been more on teamwork and less about doing whatever it takes to win”. After the open-ended question, participants received one other item to measure this variable which was adapted to fit the given scenario. These two items (one for each scenario) were, “I would report the fact that my team member has cheated on the project/committed plagiarism” and “I would report the fact that my team member has violated the project’s/school’s code of conducts”. Participants responded to the items using a 5-point Likert Scale (1 = strongly disagree; 5 = strongly agree). These items showed high reliability, Cronbach alpha α= .83.

Control variables

As control variables, I included variables that previous research has shown to influence the dependent variable (i.e., whistleblowing intentions) in our study. These are: age and gender.

Age. Age has been shown to be a predictor of ethical behavior. Some argue that older people often make stricter judgments about ethical issues than younger people (Serwinek 1992). Other studies have shown diverse results for the relationship between a person’s age and their whistleblowing intentions. The result from the study of Soeken and Soeken (1987), show that the majority of the whistleblowers have a mean age of 40 years. My current participants were significantly younger than this age.

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Results

Manipulation Checks

There were two manipulations in this study. One manipulation was for the independent variable ethical leadership, which was manipulated by giving two speeches. Using the manipulation check, I conducted a 2x2 ANOVA to verify that the participants responded to the experimental conditions as expected. As expected, the main effect of ethical leadership was significant, F(1,36) = 15.05, p = .00, such that people in the high ethical leadership condition (M = 3.83, SD = .67) saw the leader as more ethical than those in the low ethical leadership condition (M = 2.89, SD = .94). Also, there was no main effect of scenario,

F(1,36) = .24, p = .63. However, contrary to expectations, there was an interaction between

ethical leadership and scenario, such that, in the first scenario, participants saw the high ethical leader as indeed more ethical (M = 4.04, SD = 0.66) than the low ethical leader (M = 2.56, SD = .89), t(36) = - 4.19, p < .01. However, this was not the case for the second scenario; people saw both the high (M = 3.64, SD = .65) and low (M = 3.20, SD = .91) ethical leader as statistically the same, t(36) = -1.30, p = .20. I discuss potential implications of this unintended effect in my Discussion.

The second manipulation check measured the wrongdoing within the scenarios. The purpose of this manipulation check was merely to see if people (across all conditions) saw the situation in the scenario as a wrongdoing (i.e., immoral, incorrect, and a violation of the rules). This manipulation check was assessed using a t-test on both scenarios to see if the ratings significantly differed from the midpoint of the scale (i.e., 2.5). The results of the first scenario indicated that overall, respondents did not consider the scenario to be immoral, (M = 2.84, SD = .96), t(18) =1.56, p = .14). In contrast with this finding, it appeared that respondents found the first scenario to be both incorrect, (M = 3.74, SD = .65), t(18) = 8.25, p < .01, and in violation of the rules, (M = 4.21, SD = .42), t(18) = 17.80, p < .01. The findings were different in the second scenario which indicated that the respondents found the scenario to be immoral, (M = 3.08, SD = 1.07, t (39) = 3.39, p < .01, incorrect, (M = 3.95, SD = .71, t (39) = 12.84, p < .01, and in violation of the rules, (M = 4.25, SD = .49), t(39) = 22.43, p < .01.

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however, had a marginally significant main effect of scenario, F(1,36) = 3.76, p = .06, such that people in the respondents saw scenario 2 (M = 4.1, SD = .73), more incorrect than scenario 1 (M = 3.74, SD = .65). I discuss potential implications of these unintended effects in my Discussion.

Descriptive Statistics

Table 1 presents the means (M), standard deviations (SD), and correlations for the control variables (e.g. age and gender), the independent variables (i.e., Ethical Leadership, Scenarios), the mediator (e.g., Moral Awareness), the moderator (i.e., Moral Identity with two subscales, socialization (S) and internalization (I)), and the dependent variable (e.g., Whistleblowing Intentions). Like I mentioned in my method section I have only tested the internalized subscale of moral identity, however I did include symbolization in the descriptive table to show how it correlates with the other variables.

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Table 1

Mean, Standard Deviation, and Correlation between all variables

M SD 1 2 3 4 5 6 7 1. WB Intentions 3.04 .99 2. Ethical Leadership 1.48 .51 -.06 3.Scenario 1.52 .51 -.12 .04 4. Moral Awareness 3.07 .50 .00 -.08 .05 5. Moral Identity S 3.01 .65 .13 -.07 -.21 .29 6. Moral Identity I 4.18 .53 .11 -.21 -.27 .38* .43** 7. Gender 1.58 .50 -.07 -.15 .05 -.19 .00 .06 8. Age 23.08 3.45 .11 -.29 -.15 .22 .24 .01 .41*

*Correlation is significant at the 0.05 level tailed). ** Correlation is significant at the 0.01 level (2-tailed).

Hypothesis Testing

Hypothesis 1 predicted that ethical leadership had a positive relationship with

whistleblowing intentions, with people who had an ethical leader having greater whistleblowing intentions in comparison to people who do not have an ethical leader. I also wanted to test if there would be a difference according to the specific scenario, although I predicted no difference. Based on this hypothesis, a two-way ANOVA tested the whistleblowing intentions of people who had either a high ethical leader or a low ethical leader regarding either a European competition program (Scenario 1) or plagiarism on a school project (Scenario 2).

As expected, there was no main effect of scenario on whistleblowing intentions,

F(1,46) = .61, p = .44 (see Table 2). And in contrast to what I expected, there was also no

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Table 2

Ethical Leadership and Whistleblowing Intentions

High EL Low EL

Scenario 1 3.46 (0.80)a 2.82 (0.84)b

Scenario 2 2.73 (1.17)c 3.12 (1.02)b, c

Note: Means with different subscripts are significantly different to one another at the level of p < .05.

Hypothesis 2 predicted that ethical leadership had a positive relationship with moral

awareness. Thus, I again ran a 2x2 ANOVA, now looking at moral awareness as my dependent variable. In contrast to Hypothesis 2, there was no main effect of ethical leadership,

F(1,35) = .20, p = .66. There was also no main effect of Scenario, F(1, 35) = .09, p = .76. And

no interaction between these two variables, F(1,35) = .03, p = .87. Thus, Hypothesis 2 was not supported.

Hypothesis 3 predicted that moral awareness mediated the relationship between ethical

leadership and whistleblowing intentions. Because the ethical leadership manipulation check only worked for Scenario 1, I tested this hypothesis only using the first scenario. I tested this hypothesis with Baron and Kenny’s (1986) steps for testing mediation. In the first step I regressed moral awareness onto the independent variable, ethical leadership, which was non-significant, β = -.08, SE= .16, p = .63. Given that the first requirement for mediation (i.e., the independent variable being related to the mediator) was not met, I was not justified in continuing with the model. However, for the purpose of learning, I continued to test the mediation. In the second step, I regressed whistleblowing intentions simultaneously on to the mediator (e.g., moral awareness) and ethical leadership. Results demonstrate when moral awareness is in the model, ethical leadership does not predict whistleblowing intentions, β = .01, SE= .33, p = .98. Thus, I can therefore conclude that hypothesis 3 was not supported.

Hypothesis 4 predicted that the positive relationship between ethical leadership and

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A linear regression analysis was used to test Hypothesis 4. The results of the regression analysis are shown in Table 3. The control variables of gender and age were entered in the first block. The outcome indicated that neither gender, β = .15, SE = .18, p = .44, nor age, β = .05, SE = .05, p = .36, significantly predicted whistleblowing intentions. Next, ethical leadership and moral identity were entered into the second block and the outcome also indicated that neither ethical leadership, β = -.06, SE = .18, p = .73 nor internalized moral identity, β = .13, SE = .18, p = .48, were related to whistleblowing intentions. Finally, the interaction effect of ethical leadership and internalized moral identity was entered in the third block. In support of Hypothesis 4, the results revealed that there was a significant moderation effect of moral identity, β = .41, SE = .18, p = .02, on whistleblowing intentions.

Table 3

Regression Analysis Internalized Moral Identity Whistleblowing Intentions Predictor β SE T P-value Block 1 Gender .15 .18 .79 .44 Age .05 .05 .93 .36 Block 2 Gender .15 .19 .79 .43 Age .05 .06 .95 .35 Ethical Leadership -.06 .18 -.35 .73 Moral Identity I .13 .18 .72 .48 Block 3 Gender .18 .18 .99 .33 Age .03 .05 .56 .58 Ethical Leadership -.05 .17 -.28 .78 Moral Identity I .09 .08 .49 .63 Ethical Leadership*Moral Identity I .41 .38 2.30 .03

Note: Unstandardized regression coefficients are presented.

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slope value = .49, t = 1.66, p = .11) nor the slope of high moral identity (gradient of slope value = -.38, t = -1.72, p= .10) were significant, which mean that there is no difference between high and low moral identity.

Figure 1

Relationship between Ethical Leadership and Internalized Moral Identity

Discussion

This investigation examined the relationship between ethical leadership and the whistleblowing intentions of individuals. I proposed and found that ethical leadership had a positive relationship with an individual’s whistleblowing intentions. I also found that this positive relationship depended on the type of wrongdoing. This direct relationship suggested that individuals that had a high ethical leader would have more whistleblowing intentions when they experience wrongdoings. It also suggests that high ethical leadership contributes to whistleblowing intentions but only in certain contexts. There is existing research that supports this point (Miceli et al., 2004). However, the fact that the scenario interacted with ethical leadership to affect whistleblowing intentions in the current study was likely due to the fact that participants did not perceive a difference in ethical leadership in Scenario 2. There are several reasons why this may be, which I discuss in my Limitations section.

While ethical leadership is important to the individual’s whistleblowing intentions, I found that it did not affect individuals’ moral awareness. Inconsistent with van Gils’ (2012) argument that the effectiveness of ethical leadership for whistleblowing intentions depends on the moral awareness of the individual (and with Hypothesis 2), I found that there was no

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significant effect in the relationship between ethical leadership and moral awareness. Furthermore I argued that moral awareness consequently will lead to whistleblowing intentions, implicating that moral awareness will mediate the positive relationship between ethical leadership and whistleblowing intentions (Hypothesis 3). This argument suggests that if individuals have a high ethical leader this will consequently lead to moral awareness among these individuals. And because these individuals become more aware of the morality within a situation, this will increase their whistleblowing intentions when experiencing a wrongdoing. However, diverging with my prediction, the results proposed that moral awareness did not mediate this effect. Maybe it is better to test moral awareness as a moderator in the relationship between ethical leadership and whistleblowing intentions, such that the relationship becomes stronger when moral awareness is high.

Another characteristic I believed to be important in the relationship between ethical leadership and whistleblowing intentions was internalized moral identity (Hypothesis 4). The current findings were consistent with the argument of Shao et al.,(2008) who stated that moral identity plays a key role in moral functioning by influencing how people interpret and respond to situations involving moral judgment and choice. The findings have shown that individuals who were high in internalized moral identity, that had an ethical leader, also had high whistleblowing intentions. More specifically, these individuals had higher whistleblowing intentions when they had a high ethical leader than when they had a low ethical leader. This implies that internalized moral identity strengthens the relationship between ethical leadership and whistleblowing intentions, thus increasing the whistleblowing intentions of the individual when having an ethical leader. Interestingly the finding has also revealed that individuals with low moral identity that had a high ethical leader had lower whistleblowing intentions than when they had a low ethical leader. This finding was unexpected; however, there is some literature that might provide some insights into this finding. For example, this finding could due to rationalization and the desire to be consistent. The consistency principle argues that an identity creates a necessity for the individual to himself or herself, and as a consequence will also create the need for the individual to act consistently with his or her identity (Erikson, 1964). This can imply that if these individuals have a low ethical leader this will collide with the individual’s personal identity (i.e., a low moral identity), making it even more important for the individual to speak up for his or her own interest.

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Research suggests that the nature or type of wrongdoing may influence observers' reactions to it, perhaps by affecting all the decision steps (Miceli et al., 1991). Some of the findings in this study have also shown similar results. First, the two scenarios were created in order to analyze the possibility of difference within dissimilar contexts. The findings indicated that the context does matter in the whistleblowing intentions of individuals. The fact that scenario made a difference in the current study is likely due to the failed manipulation in Scenario 2; people did not see ethical leadership as different in this scenario. There are several reasons for why this may have occurred. First, in contrast to scenario 1, scenario 2 stated more explicitly that one of the group members was assigned the role of the leader, thus, marginalizing the perceived power distance between the group member and the leader. This could have influenced the way that the respondents perceived the leader. Future research about ethical leadership could thus distinguish between the power levels of the leaders and test if power level could have an influence on how people perceive the ethicality of their leader. However, it is also possible that the scenario itself made a difference. For example, Miceli et al. (2004) pointed out that wrongdoing involving legal violations were more likely than many others to be reported. “ Observers of wrongdoing who whistleblowed in their study varied from a low of 17% (waste and discrimination) to a high of 53% for legal violations; mismanagement and sexual harassment were also more likely to be reported (43% and 40% respectively) while stealing and safety problems were far less likely to be reported (25% and 23%)” (Miceli et al., 2004, p. 230). Other research has also illustrated that the type of wrongdoing influences people’s reaction to the wrongdoing. People view situations that have greater negative consequences, or that are perceived to be wrong by many people, as having higher moral intensity and as a consequence are more probable to make a moral decision (e.g., whistleblow) (Flannery & May, 2000; Jones, 1991).

Another limitation of this study is that participants did not perceive Scenario 1 as having an explicit moral issue. Participants did, however, perceive both of the scenarios to contain incorrect action and to violate the rules. These findings may be due to the fact that plagiarism is seen as more serious of a violation than breaking the rules about an interview. Implication for future research could be to focus more explicitly on morality and not combining this with other types of wrongdoing, seeing that this could have an effect on the outcome. If the focus is mainly on morality the possibility for preference can be excluded which can give more accurate results.

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was a result of some data collection problems. Thus, future research should seek to replicate these effects using a larger sample.

In addition, because of this low power, I was unable to reliably test the mediation analysis. The fact that I did not find mediation by moral awareness could be due to this low power. However, it could indeed be that moral awareness does not mediate the ethical leadership to whistleblowing intentions effect. Thus, future research should look for other potential mediators. Mayer, Davis, and Schoorman, 1995, argue that trust in the leader will arise when a person has a high ethical leader. They believe that when a person trust his/her leader they will be more comfortable engaging in risk taking because they trust that the leader will not unfairly punish them for their actions. I believe that whistleblowing is a type of risk taking. Thus, future research could test trust as a potential mediator for the positive relationship between ethical leadership and whistleblowing intentions. Similarly, Edmondson (1999) stated that in environments that are considered to have high psychological safety, the importance of moral actions will be communicated through the ethical leader which will make sure that there will be no repercussions as a consequence. Thus, this argument states that psychological safety could mediate the positive relationship between ethical leadership and whistleblowing intentions. Future study could add this to the literature.

One interesting finding was the effects of moral identity on the relationship between ethical leadership and whistleblowing intentions. Especially interesting was the discovery that individuals that have a low moral identity and that are supervised by a high ethical leader will have less whistleblowing intentions than those supervised by a low ethical leader. Future studies could test the relationship between low ethical leadership and an individual’s moral identity. I predict that low ethical leadership will have a positive influence on internalized moral identity, thus an individual’s internalized moral identity will increase if they have a low ethical leader.

Practical Implications

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examples, and thus be ethical leaders. I do not recall a specific organization that emphasizes having ethical leadership within the organization. This I believe is more of a choice than a rule. Therefore, this research has the potential to inform organizations about the importance of having ethical leaders within the organization and can support in helping organizations to have employees who report unethical events. A way of achieving this is to for instance incorporate ethical leadership into leadership selection and assessment programs.

Another practical implication comes out of my result on the moderation of ethical leadership by internalized moral identity. It suggests that people with a high internalized moral identity are especially likely to whistleblow when supervised by an ethical leader. This means that if whistleblowing intentions are encouraged within the organization, it is best if people high in internalized moral identity should be paired with high ethical leaders. It also means that organizations should be wary of pairing people with a high internalized moral identity with a low ethical leader, as it may suppress their likelihood of whistleblowing.

Conclusions

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Appendix A Questionnaire

Regulatory Focus

1. Compared to most people, I am typically unable to get what I want out of life. 1-stronlgy disagree to 5- strongly agree

2. Growing up, I would “cross the line” by doing things that your parents would not tolerate.

1-stronlgy disagree to 5- strongly agree

3. I often accomplish things that got me “psyched” to work even harder. 1-stronlgy disagree to 5- strongly agree

4. I often get on my parents' nerves when I was growing up.

5. I often obey the rules and regulations that were established by my parents. 1-stronlgy disagree to 5- strongly agree

6. Growing up, I acted in ways that my parents thought were objectionable. 1-stronlgy disagree to 5- strongly agree

7. I often do well at different things I try. 1-stronlgy disagree to 5- strongly agree

8. Not being careful enough has gotten me into trouble at times. 1-stronlgy disagree to 5- strongly agree

9. When it comes to achieving things that are important to me, I find that I don't perform as well as I ideally would like to do.

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11. I have found very few hobbies or activities in my life that capture my interest or motivate me to put effort into them.

Ethical leadership manipulation (scenario 1)

You are doing an internship project for the European Union in Brussels. The project is a research study, which you have to conduct in a team consisting of 10 members. Your team will have the possibility to conduct this research about the European Union among 10 people working in the European Commission. In the end of the study your team will have to come up with a commercial pitch about the new developments taking place within the European Union. The team that has the best commercial pitch will win €5000. You will be competing with 20 other teams.

There are some rules regarding the project, which each team will have to follow. For example, everybody should get a task, each team will have a team leader, the participants can only be interviewed and this must be done in person, you have to finish the complete project in 3 months, and the commercial must be done in English.

Before officially starting with the project, the leader of your team has invited the team for a meeting. The leader gave the following speech:

High ethical leadership (scenario 1a)

Hi, I am your leader. I look forward to having you on our team. I also look forward to seeing the winning results of your work so that we can get the €5000. I’m counting on you to do things the right way, to follow instructions, and not to resort to short cuts, I value doing things the right way because it is important that people be fair. I’ll look forward to getting together with you when you have any questions or suggestions about the project. I hope that you fit well with the team but mostly I hope that this will be a useful learning experience for you.

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Hi, I am your leader. I look forward to seeing the winning results of your work so that we can get the €5000. I’m counting on you to get results and to be a winning team. Remember, we want to win! I’m hoping that the team finds a way to win and that we can celebrate together after the task. The goal is to have the best project possible and we should do whatever it takes to accomplish this task. Just like in the business world, producing results is what matters and I want you to do such a good job that we win the money.

You and another team member had the task to conduct the interviews. At first you wanted to conduct the interviews together, but seeing the busy schedules of the participants you decided that it would be much more efficient if you divide the work. So you and your team member had to interview 5 people each. After a few days you learned that your team member had sent a questionnaire to one of the participants via the mail. You and this team member both know this is a violation of one of the rules regarding this project. According to your fellow team member, the participant had an incredibly busy schedule and it was impossible to fit an in-person interview into it. Finally, you managed to get all the information and you could officially start with the commercial pitch – even though one of the interviews was not done in person.

Ethical leadership manipulation (scenario 2)

You are in a research group of 7 students. You are doing a big school project in which you are competing with other groups for a scholarship prize. For this project you have to make a project plan regarding a new business your team wants to open. In the beginning of the project everyone received an explanation about the project from the course supervisor. The supervisor assigned each team with a team leader who had the role to supervise and guide the team. The project consisted of three phases. By the end of the semester you would have to finish the project and you will present it in front of the course supervisor who will evaluate it.

After the introduction you had the first meeting with your group. Here the member assigned as team leader gave the following speech:

High ethical leadership (scenario 2a)

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things the right way because it is important that people be fair. I’ll look forward to getting together with you when you have any questions or suggestions about the project.

Low ethical leadership (scenario 2b)

Hi, I am your leader. I look forward to seeing the winning results of your work so that we can get the scholarship. I’m counting on you to get results and to be a winning team. Remember, we want to win! I’m hoping that the team finds a way to win and that we can celebrate together after the task. The goal is to have the best project possible and we should do whatever it takes to accomplish this task. Just like in the business world, producing results is what matters and I want you to do such a good job that we win the scholarship.

Furthermore, the team leader also divided the tasks among the group members. You were teamed up with one other team member. However, because you are a team you could help each other out when necessary. One other two-person group got the most difficult assignment and had many problems conducting it. They have come to you for help. Unfortunately neither you nor the other team members could really help them out. It was indeed a rather difficult task. One day you learned that they have found a very similar project online and have used part of this project for their own piece of the project (i.e., a piece of your total project). This is plagiarism and you know it is strictly prohibited in the Faculty. That said, you are pretty confident that they would not have been able to complete their part of the project on time had they not taken this information from the web.

Moral Awareness

Thinking back to the story you read, to what extent do you agree with the following statements:

1. There were very important ethical aspects to this situation. 1-stronlgy disagree to 5- strongly agree

2. This matter clearly involves ethics or moral issues. 1-stronlgy disagree to 5- strongly agree

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Imagine you had the chance to tell your leader what you thought went right in the project and what could be improved. Where there any special events that you would like to mention? ___________________________________________________________________________ ___________________________________________________________________________

After reading the scenario, to what extent do you agree with the following statements?

1. I would report the fact that my team member has cheated on the project/has committed plagiarism.

2. I would report the fact that my team member has violated the project’s/school’s code of conduct.

Perceived risk of whistleblowing

After reading the scenario, to what extent do you agree with the following statement? 1. If I tell about a wrongdoing in this group I will get support from the leader. 1-stronlgy disagree to 5- strongly agree

2. If I tell about a wrongdoing in this group I will be punished by the leader. 1-stronlgy disagree to 5- strongly agree

Employee Voice

Thinking back to the story you read to what extent did the team leader:

1. Volunteer to do things for this work group. 1-stronlgy disagree to 5- strongly agree

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3. Attend functions that help this work group. 1-stronlgy disagree to 5- strongly agree

4. Assist others in this group with their work for the benefit of the group. 1-stronlgy disagree to 5- strongly agree

5. Get involved to benefit this work group. 1-stronlgy disagree to 5- strongly agree

6. Help others in this group learn about the work. 1-stronlgy disagree to 5- strongly agree

7. Help others in this group with their work responsibilities. 1-stronlgy disagree to 5- strongly agree

8. Develops and makes recommendations concerning issues that affect this work group. 1-stronlgy disagree to 5- strongly agree

9. Speaks up and encourages others in this group to get involved in issues that affect the group.

Psychological Safety

Please think back to the story you read earlier in the session and answer the following questions as you think they would pertain to the leader and the team contained in the story. We realize that you did not get a lot of information on this individual leader nor the team. However, we ask that you answer these questions to the best of your ability.

Given what I know about this leader and the team he/she leads, I think:

1. He/she would regularly take time to figure out ways to improve the team's work processes.

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2. That the team would handle differences of opinion privately or off-line, rather than addressing them directly as a group.

3. That the team members would go out and get all the information they possibly can from others—such as customers, or other parts of the organization.

4. That the team would frequently seek new information that would lead them to make important changes.

1-highly unlikely to 5- highly likely

5. That the leader would always make sure to reflect on the team's work process. 1-stronlgy disagree to 5- strongly agree

6. That the members of this team would often speak up to test assumptions about issues under discussion.

7. That the team leader would invite people from outside the team to present information or have discussions on important issues.

Trust In this team,

1. I would be comfortable giving my leader a task or problem that was critical to me, even if I could not monitor his/her actions.

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3. I would be willing to let my leader have complete control over my future. 1-stronlgy disagree to 5- strongly agree

4. I really wish I had a good way to keep an eye on my leader. 1-stronlgy disagree to 5- strongly agree

5. If I had my way, I wouldn’t let my leader have any influence over issues that are important to me.

Assignment 9: Ethical leadership manipulation check

Thinking back to the story you read, to what extent did you perceived the team leader to:

1. Follow instructions.

1-highly unlikely to 5- highly likely

2. Value having a fair competition. 1-highly unlikely to 5- highly likely

3. Look forward to hearing team members’ suggestions for how to improve the process. 1-highly unlikely to 5- highly likely

4. Want team members to share any problems that arose after the task was complete. 1-highly unlikely to 5- highly likely

5. Encourage the team to be ethical while working on the project. 1-highly unlikely to 5- highly likely

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Thinking back to the story you read, to what extent did you considered the issue of your team member sending a questionnaire to the participant/committing plagiarism:

1. Immoral.

2. Incorrect.

3. Violating the rules.

Assignment 11: Moral attentiveness

1. In a typical day, I face several ethical dilemmas. 1-stronlgy disagree to 5- strongly agree

2. I often have to choose between doing what’s right and doing something that’s wrong. 1-stronlgy disagree to 5- strongly agree

3. I regularly face decisions that have significant ethical implications. 1-stronlgy disagree to 5- strongly agree

4. My life has been filled with one moral predicament after another. 1-stronlgy disagree to 5- strongly agree

5. Many of the decisions that I make have ethical dimensions to them. 1-stronlgy disagree to 5- strongly agree

6. I regularly think about the ethical implications of my decisions. 1-stronlgy disagree to 5- strongly agree

7. I think about the morality of my actions almost every day. 1-stronlgy disagree to 5- strongly agree

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9. I frequently encounter ethical situations. 1-stronlgy disagree to 5- strongly agree

10. I often find myself pondering about ethical issues. 1-stronlgy disagree to 5- strongly agree

11. I often reflect on the moral aspects of my decision. 1-stronlgy disagree to 5- strongly agree

12. I like to think about ethics.

Assignment 12: Moral identity (Aquino and Reed, 2002)

Listed below are some characteristics that might describe a person:

Caring, Compassionate, Fair, Friendly, Generous, Helpful, Hardworking, Honest, Kind

The person with these characteristics could be you or it could be someone else. For a moment, visualize in your mind the kind of person who has these characteristics. Imagine how that person would think, feel, and act. When you have a clear image of what this person would be like, answer the following questions.

1. It would make me feel good to be a person who has these characteristics. 1-stronlgy disagree to 5- strongly agree

2. Being someone who has these characteristics is an important part of who I am. 1-stronlgy disagree to 5- strongly agree

3. I often wear clothes that identify me as having these characteristics. 1-stronlgy disagree to 5- strongly agree

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5. The types of things I do in my spare time (e.g., hobbies) clearly identify me as having these characteristics.

6. The kinds of books and magazines that I read identify me as having these characteristics.

7. Having these characteristics is not really important to me. 1-stronlgy disagree to 5- strongly agree

8. The fact that I have these characteristics is communicated to others by my membership in certain organizations.

9. I am actively involved in activities that communicate to others that I have these characteristics.