Our research tidbits this week considers leadership and integrity and the balance between individual behavioural characteristics and embedding virtues in the practice of organisational leadership.

The Virtues Project: Developing good leaders
Virtue words, such as justice, fairness, care, and integrity, frequently feature in organisational codes of conduct and theories of ethical leadership. And yet our modern organisations remain blemished by examples lacking virtue. The philosophy of virtue ethics and numerous extant theories of leadership cite virtues as essential to good leadership. But we seem to lack understanding of how to develop or embed these virtues and notions of good leadership in practice.

In 2012, virtue ethicist Julia Annas pointed to a training program which she touted as a practical application of virtue ethics. The program Annas (Ethical Theory: An Anthology, Wiley, New York, 2012) identified is called The Virtues Project, and while promising, she warned that in its current state, it lacked theorising.

The authors address this by aligning its practical strategies to extant theory and evidence to understand what virtues it might develop and how it might facilitate good leadership. Doing so makes two key contributions. First, it lends credence to The Virtues Project’s potential as a leadership development program. Second, it provides a means of applying theories of good leadership in practice.

The overarching objective is to advance The Virtues Project as a means of incorporating virtues into workplace dynamics and embedding virtues in the practice of organisational leadership.

Toby Newstead, Sarah Dawkins, Rob Macklin & Angela Martin. 2020. The Virtues Project: An Approach to Developing Good Leaders.

Journal of Business Ethics, 167(4), 605–622.

Perceived integrity in leadership matters
Perceived integrity of managers affects employee attitudes. Yet its impact on employee behaviour and organisational performance is unknown. Addressing this gap, the authors examine the effect of perceived integrity in leadership on both subjective firm performance and objective employee productivity.

Applying dynamic capabilities theory, the authors propose that perceived integrity in leadership may not only directly affect the outcome variables but also moderate the effect of the firm’s multiple-strategy implementation on outcome variables. The authors test the hypotheses using multiple informants from a transitional economy with an ineffective legal and incomplete institutional environment, which could seriously challenge the leader’s commitment to integrity.

As hypothesised, perceived integrity is associated with manager’s perception of firm performance directly and objective employee productivity through its moderating role in the firm’s implementation process of dual strategies. The results illustrate that perceived integrity in leadership plays as an important driver for employee productivity in dual-strategy and non-strategy firms. The authors provide detailed discussions about the integrity challenge and call for additional future research on this topic.

Yinghong Susan Wei, Hugh O’Neill & Nan Zhou. 2020. How Does Perceived Integrity in Leadership Matter to Firms in a Transitional Economy?

Journal of Business Ethics, 167(4), 623–641.

Are narcissistic CEOs self-serving?
Corroborating upper echelons theory, this study picks up the notion that narcissistic chief executive officers (CEOs) take advantage of accounting choices to enhance their firms’—and inherently their own—personal track records.

Using a set of 15 indicators, reflecting the narcissistic trait of 1126 CEOs for the period 1992 to 2012, the authors find evidence of highly narcissistic CEOs engaging in accrual-based earnings management (ABEM). In contrast to prior research, the results show evidence not only for income-increasing but also for income-decreasing ABEM. This indicates that highly narcissistic CEOs not only strive to influence stakeholders’ perception of current performance.

The authors conclude that they also assess their potential to influence perception of current and future earnings. The results imply that highly narcissistic CEOs’ accounting choices are driven by self-serving behaviour rather than by the intention to provide additional information to the market. When earnings management techniques are used to derive personal advantage from the presentation of a firm’s earnings, the literature refers to this as a case of low earnings quality reflecting unethical behaviour. Accordingly, this study contributes to the field of business ethics by showing that CEO narcissism is related to low earnings quality in that it is associated to discretionarily decreasing accruals.

Read this Open Access article online for free.

Frerich Buchholz, Kerstin Lopatta & Karen Maas. 2020. The Deliberate Engagement of Narcissistic CEOs in Earnings Management.

Journal of Business Ethics, 167(4), 663–686.

Integrity in CEOs: How CEO language reveals hubris
This article explores the link between CEOs’ language and hubristic leadership. It is based on the precepts that leaders’ linguistic utterances provide insights into their personality and behaviours; hubris is associated with unethical and potentially destructive leadership behaviours; if it is possible to identify linguistic markers of CEO hubris then these could serve as early warnings sign and help to mitigate the associated risks.

Using computational linguistics, the authors analysed spoken utterances from a sample of hubristic CEOs and compared them with non-hubristic CEOs. The authors found that hubristic CEOs’ linguistic utterances show systematic and consistent differences from the linguistic utterances of non-hubristic CEOs. Demonstrating how hubristic leadership manifests in CEO language contributes to wider research regarding the diagnosis and prevention of the unethical and potentially destructive effects of hubristic leadership.

This research contributes to the wider study of hubris and unethical leadership by applying a novel method for identifying linguistic markers and offers a way of militating against the risk of unethical and destructive CEO behaviours induced or aggravated by hubristic leadership.

Vita Akstinaite, Graham Robinson & Eugene Sadler-Smith. 2020. Linguistic Markers of CEO Hubris.

Journal of Business Ethics, 167(4), 687–705.

How followers perceive ethical and unethical leadership
While much research has focused on the effects of ethical and unethical leadership, little is known about how followers come to perceive their leaders as ethical or unethical.

In this article, the authors investigate the co-creation of ethical and unethical leadership perceptions. Specifically, the authors draw from emerging research on moral congruence in organisational behaviour and empirically investigate the role of congruence in leaders’ and followers’ moral foundations in followers’ perceptions of ethical and unethical leadership.

By analysing objective congruence scores from 67 leader–follower dyads by means of polynomial regression with surface response analysis, the authors find partial support for the theoretically derived predictions. Significant effects were revealed for the fairness, loyalty, and authority moral foundations but not for the care and sanctity moral foundations. The authors discuss theoretical and practical implications of these findings.

Maxim Egorov, Karianne Kalshoven, Armin Pircher Verdorfer & Claudia Peus. 2020. It’s a Match: Moralization and the Effects of Moral Foundations Congruence on Ethical and Unethical Leadership Perception.

Journal of Business Ethics, 167(4), 707–723.