The impact of perceived ethical leadership on employees’ predisposition to behave ethically: a case study within a South African-based financial institution

Ethical leaders consistently set ethical principles within the institution and act in accordance with them; hence, leaders should be a key source of ethical guidance for employees. As the business world is constantly evolving, leaders increasingly are required to ethically lead across different sectors. Current literature on ethical leadership and its influence of employees reflects mostly a Western, European and Asian-based private-sector perspective, pointing toward a compliance-oriented understanding of ethical and unethical leadership. This study examined how perceived ethical orientation of a leader has an impact on employees’ predisposition to behave ethically within a South African context. Qualitative data was collected as the study adopted the interpretivist paradigm, which made it easier for participants to use descriptive words and qualifying statements to express the level of influence their leaders had on their ethical orientation. The target population of the study included all staff of the institution; and participants were chosen using the purposive sampling method. Data was collected from 12 employees using semi-structure interviews. Thereafter, thematic analysis was used to identify and organise participants’ experiences into themes that established the basis for the study findings. These findings confirmed that perceived leader ethical orientation has an impact on employees’ predisposition to behave ethically. The study found that ethical leaders had a track record of being consistent, honest, trustworthy, truthful and credible, and being a role model. In addition, the study also found that unethical leaders are easily identifiable by their perpetual inability to uphold principles of integrity, reliability, rationality, and social justice and fairness. The researcher concluded that the moral identity of the leader has an influence on followers’ predisposition to behave ethically or unethically. The implications of this study are that ethical morals, by their very nature, are transferable from one person to the other and ethical leadership was one antecedent through which this transfer takes place. However, ethical leadership was not the only apparatus that influenced employees’ ethical predisposition and these afford opportunities for future research