The cascading effect of top management's ethical leadership: Supervisors or other lower-hierarchical level individuals?

Abstract

In the past two decades, both academics and practitioners have dedicated great efforts to successfully implementing organizational ethics. Nevertheless, the understanding of how ethical leadership of top management influences the average employee behaviour is still very elusive. Although it is expected that top management’s ethical leadership will affect individuals when it is made perceptible, a cascading effect is thought to happen through mid-lower managers as they are the ones who usually take, interpret and filter top management’s information. In reality, however, the process leading an individual to behave in an ethical/unethical way is much more complex and top management’s influence may use other indirect ways. Authors of this paper defend that as the contact with peers is also usually very proximal, top management’s influence on ethics may also use those people to become real. An empirical study was carried out in Spanish Banking companies to examine that idea and a partial cascading effect was found although not for supervisory levels but among peers. These findings support that contrary to popular belief, supervisory levels are not the ones which play a critical role but peers. Recommendations for successfully implementing ethics are finally proposed.

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