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Ethical Leadership Perceptions: Does It Matter If You’re Black or White?

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Abstract

Ethical scandals in business are all too common. Due to the increased public awareness of the transgressions of business executives and the potential costs associated with these transgressions, ethical leadership is among the top qualities sought by organizations as they hire and promote managers. This search for ethical leaders intersects with a labor force that is becoming more racially diverse than ever before. In this paper, we propose that the ethical leadership qualities of business leaders may be perceived differently depending upon the race of the leader. Using two experimental studies in the USA, we examine the difference in ethical leadership perceptions between a Black (White) hypocritical CEO and an ethical CEO (Study 1). Next, we consider a Black (White) ethically ambiguous CEO and an ethical CEO (Study 2). The findings indicate that a Black leader faces larger negative impact in hypocritical and ambiguous conditions than a similar White leader. There were no significant race effects in the ethical conditions in which a leader demonstrated a personal commitment to ethics through words or actions. We discuss the implications of these findings.

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Notes

  1. We used a one-tailed test for all directional hypotheses in Study 1 and Study 2.

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Author information

Authors and Affiliations

  1. Department of Management Sciences, College of Business, Abilene Christian University, Mabee Business Building 262, Abilene, TX, 79601, USA

    Dennis J. Marquardt

  2. School of Management, Business and Economics, Texas Woman’s University, 1315 Bell Avenue, Denton, TX, 76204, USA

    Lee Warren Brown

  3. Department of Management, College of Business, The University of Texas at Arlington, 701 S. West Street, Arlington, TX, 76019, USA

    Wendy J. Casper

Authors
  1. Dennis J. Marquardt
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  2. Lee Warren Brown
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Correspondence to Dennis J. Marquardt.

Appendices

Appendix 1: Study 1: Hypocritical Leader Manipulation

Text of Hypocritical Leader Article

Michael Smith, CEO of TempStart, Inc. was just fined $500,000 for his involvement in expense account abuse and invoice fabrication at his previous company. Smith also recently pleaded guilty to federal wire-fraud and tax-evasion charges.

Text of Ethical Leader Article

Michael Smith, CEO of TempStart, Inc. was just awarded with the Ethical Excellence Award for his extreme commitment to honesty and integrity. Early in his career, Smith is known for giving up a lucrative Wall Street job because he questioned the ethical integrity of his supervisors.

Appendix 2: Study 2: Ethically Ambiguous Manipulation

Ethical Leader Condition

Memorandum

From the time this company began, it has demonstrated an unwavering commitment to performance with integrity. But none of this matters if each of us does not make the right decisions and take the right actions. As your CEO, I take integrity and ethical conduct very seriously. Throughout my career I have done my best to make ethics a chief priority in both business and personal interactions. At times, this meant sacrificing short-term gains, but it has always produced long-term success. This is why I ask each person in our community of employees, beginning with me, to make a personal commitment to follow our Code of Conduct. This set of policies on key integrity issues guides us in upholding our ethical commitment. All of our employees must comply with not only the letter of these policies, but also their spirit.

Kind regards,

Ethically Ambiguous Condition

Memorandum

Due to recent governmental regulations, our company adopted an ethical code of conduct. Please review the code of conduct form below and sign it so we can meet the terms of this recent legislation.

Kind regards,

Ethical Code of Conduct (attached to memorandums in both conditions)

Company Code of Conduct

  • Be honest, fair and trustworthy in all your company activities and relationships.

  • Avoid all conflicts of interest between work and personal affairs.

  • Foster an atmosphere in which fair employment practices extend to every member of the diverse organizational community.

  • Strive to create a safe workplace and to protect the environment.

  • Through leadership at all levels, sustain a culture where ethical conduct is recognized, valued and exemplified by all employees.

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Marquardt, D.J., Brown, L.W. & Casper, W.J. Ethical Leadership Perceptions: Does It Matter If You’re Black or White?. J Bus Ethics 151, 599–612 (2018). https://doi.org/10.1007/s10551-016-3250-3

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