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SOCIAL BEHAVIOR AND PERSONALITY, 2016, 44(8), 12551266

2016 Scientific Journal Publishers Limited. All Rights Reserved.


http://dx.doi.org/10.2224/sbp.2016.44.8.1255

HOW DOES ETHICAL LEADERSHIP INFLUENCE


EMPLOYEES WHISTLEBLOWING INTENTION? EVIDENCE
FROM CHINA
PENG WEN AND CHENG CHEN
Central China Normal University
We investigated the relationship between ethical leadership and employees whistleblowing
intention, along with the mediating role of moral identity and the moderating role of power
distance orientation. We conducted a 2-wave survey with 172 participant managers in China.
Results indicated that ethical leadership was positively related to employees whistleblowing
intention and this relationship was mediated by moral identity. Moreover, employee power
distance orientation positively moderated the relationship between ethical leadership and
moral identity, such that the relationship was stronger for high power distance orientation
employees than for those with a low power distance orientation. Theoretical contributions and
practical implications are discussed.
Keywords: ethical leadership, whistleblowing intention, moral identity, employee power
distance orientation.

As an effective approach to influence organizational corrupt or illegal


activities, whistleblowing has attracted wide attention from management
researchers and practitioners (Miceli, Near, & Dworkin, 2008). Whistleblowing is
defined as the disclosure by organization members (former or current) of illegal,
immoral, or illegitimate practices under the control of their employers, to persons
or organizations that may be able to effect action (Near & Miceli, 1985, p. 4).
Although whistleblowing is a controversial topic and is even viewed as taboo in

Peng Wen, School of Economics and Business Administration, Central China Normal University;
Cheng Chen, College of Public Administration, Central China Normal University.
This research was supported by grants from the Natural Science Foundation of China (71402062) and
Social Science Foundation of China (15CGL030).
Correspondence concerning this article should be addressed to Cheng Chen, College of Public
Administration, Central China Normal University, No. 152 Luoyu Road, Wuhan, Hubei 430079,
Peoples Republic of China. Email: chengchen@mail.ccnu.edu.cn

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ETHICAL LEADERSHIP AND WHISTLEBLOWING INTENTION

some countries, Miceli et al. (2008) found in a number of surveys that it is an


ethical, positive behavior contributing to organizational long-term development.
Brown, Trevio, and Harrison (2005) introduced the construct of ethical
leadership, which plays an important role in employee ethical decision making.
For example, Mayer, Aquino, Greenbaum, and Kuenzi (2012) found that
ethical leadership reduces employees unethical behavior and conflict in a work
group. Den Hartog and Belschak (2012) also showed that ethical leadership
influences employee initiative as well as counterproductive work behavior.
However, although researchers have paid attention to ethical behavior, such as
whistleblowing (Mesmer-Magnus & Viswesvaran, 2005), less is known about the
relationship between ethical leadership and whistleblowing. Thus, in this study,
we investigated whether or not, and if so, why and when, ethical leadership is
related to employees whistleblowing intention.
Moral identity is the extent to which individuals consider themselves to be
a moral person (Aquino & Reed, 2002). Miceli et al. (2008) emphasized that
researchers should treat moral identity as an essential intermediate variable in
the whistleblowing process (p. 188). However, although moral identity plays an
important role in the process of ethical decision making, few researchers have
examined its intermediate role in the relationship between ethical leadership
and employees ethical behavior (Shao, Aquino, & Freeman, 2008). Thus, we
used moral identity to explain the relationship between ethical leadership and
employees whistleblowing intention.
Moreover, researchers have found that individual cultural values are directly
related to whistleblowing judgment, intention, and behavior (Miceli et al., 2008),
and influence employees reaction to leader behavior (Kirkman, Chen, Farh,
Chen, & Lowe, 2009). In comparison to other cultural values, power distance
orientation has a more theoretically direct relationship to leadership reactions
(Kirkman et al., 2009, p. 745). Therefore, we examined the moderating role of
power distance orientation in the relationship between ethical leadership and
moral identity.
Literature Review and Hypotheses
Ethical Leadership and Whistleblowing Intention

Ethical leadership is defined 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 (Brown et al., 2005, p. 120). The two
components of ethical leadership are moral person and moral manager (Brown
et al., 2005). Ethical leadership is positively related to prosocial behavior
(Avey, Palanski, & Walumbwa, 2011; Brown et al., 2005) and task performance

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(Walumbwa et al., 2011), and negatively related to deviant or unethical behavior


(Avey et al., 2011; Mayer et al., 2012).
According to the social learning perspective of ethical leadership, leaders
will influence employees ethical attitudes and behavior through role modeling
(Brown et al., 2005). In the ethical leadership moral person component, ethical
leaders are seen to be honest, trustworthy, and fair, and behave ethically in their
personal and managerial lives (Mayer et al., 2012). These leaders will, thus,
establish an ethical role model for their subordinates to observe and imitate,
so that they can become similarly ethical. As whistleblowing is viewed as an
ethical behavior, employees influenced by a moral person are inclined to report
wrongdoing.
In the ethical leadership moral manager component, ethical leaders will
encourage moral behavior and discourage unethical behavior through managerial
action, such as communicating, rewarding normative behavior, and punishing
unethical behavior (Brown et al., 2005). These actions will lead employees to
focus on ethical aspects in organizations. It is seen to be unethical not to report
others violation of organizational rules or social norms and this is discouraged
by ethical leaders. Therefore, as moral managers, ethical leaders will increase
the ethical sense of employees and promote their whistleblowing intention.
Therefore, we proposed the following hypothesis:
Hypothesis 1: Ethical leadership will be positively related to employees
whistleblowing intention.
Ethical Leadership and Moral Identity

Moral identity is a self-conception organized around a set of moral traits


(Aquino & Reed, 2002, p. 1424). According to the social cognitive perspective,
the importance of moral identity may be activated in any given situation (Shao
et al., 2008). Aquino, Freeman, Reed, Lim, and Felps (2009) empirically tested
the social cognitive framework and found that some situational factors (e.g., performance-based financial incentives) could influence individual moral identity.
In this study, we treated ethical leadership as the situational factor of moral
identity and argued that there is a positive relationship between ethical leadership
and employee moral identity. According to the social learning perspective
(Bandura, 1986), ethical leaders are role models for employees. As moral people,
ethical leaders principles and behavior will guide and encourage the employees
to establish their own set of moral values and goals (Ng & Feldman, 2015). As
moral managers, ethical leaders can use rewards and punishment to influence
followers moral identity and behavior. Because ethical leaders usually have
power and influence, great attention is paid to their managerial policies by
employees. Reinforcement (rewards and punishment) will promote the modeling
effectiveness because of employee attention and learning (Steinbauer, Renn,

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Taylor, & Njoroge, 2014). In this case, employees are prone to establish a high
moral identity and ultimately act morally according to leader requirements. Thus,
we proposed the following hypothesis:
Hypothesis 2: Ethical leadership will be positively related to employee moral
identity.
Mediating Role of Moral Identity

Moral identity has been viewed as a type of self-regulatory mechanism that


influences ethical intention and behavior (Shao et al., 2008). According to selfregulatory theory, people hold ideas and engage in behavior to remain consistent
with their self-concept (Aquino et al., 2009). Employees with a high moral
identity will view themselves as moral persons who should engage in ethical,
prosocial behavior, and will, thus, feel an obligation to blow the whistle when
they perceive wrongdoing in organizations. In contrast, employees with a low
moral identity will set their moral standards at a lower level and consider moral
values less important (Rupp, Shao, Thornton, & Skarlicki, 2013). Thus, they have
no motivation to engage in whistleblowing. Researchers have provided direct or
indirect evidence for this reasoning. For example, some researchers have found
that moral identity is positively related to prosocial behavior, such as charitable
giving (Aquino & Reed, 2002; Reed, Aquino, & Levy, 2007). However, others
have indicated that moral identity is negatively related to unethical behavior
(Aquino et al., 2009).
In summary, we argued that moral identity would mediate the relationship
between ethical leadership and whistleblowing intention, because ethical leaders
will be role models for employees to observe and learn from. Employees will
pay attention to leaders ethical goals and values that reinforce the importance
of their own high moral identity. This leads them to act morally, for example,
by whistleblowing. In a similar manner, Shu and Liang (2015) indicated that
ethical leadership can influence employee self-concept (e.g., organizationbased self-esteem), which, in turn, leads to employee work outcomes (task
performance, job satisfaction, and conscientiousness). Therefore, we proposed
the following hypothesis:
Hypothesis 3: Moral identity will mediate the relationship between ethical
leadership and whistleblowing intention.
Moderating Role of Power Distance Orientation

Power distance orientation refers to the extent to which an individual accepts


the unequal distribution of power in institutions and organizations (Hofstede,
1980; Kirkman et al., 2009). Researchers have found that power distance
orientation can influence employees acceptance of the reciprocity norm (Farh,
Hackett, & Liang, 2007), the effectiveness of transformational leadership
(Kirkman et al., 2009), and abusive leadership (Lian, Ferris, & Brown, 2012).

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According to social learning theory (Bandura, 1986), subordinates tend to


learn from their supervisors. Thus, as employees with a high power distance
orientation express strong deference to authority figures, they are willing to obey
leaders instructions (Farh et al., 2007; Hofstede, 1980). In this case, as leaders
ethical behavior and management policies will strongly influence employees
moral perception and self-concept, they are likely to become a moral person.
Further, in contrast to employees with a low power distance orientation, they tend
to pattern their behavior after a leader as they are more likely to view their leader
as a special, high-status person (Lian et al., 2012). Thus, the positive relationship
between ethical leadership and employee moral identity will be stronger for
the employees with a high power distance orientation. Conversely, low power
distance orientation employees may resist the directions of ethical leadership.
They may form their own moral sense and cognition that is inconsistent with
leader moral requirements. Thus, when employees have a low power distance
orientation, the relationship between ethical leadership and employee moral
identity will be weakened and may even disappear. Therefore, we proposed the
following hypothesis:
Hypothesis 4: Power distance orientation will positively moderate the relationship
between ethical leadership and moral identity, such that the relationship will be
stronger for those with a higher, rather than lower, power distance orientation.
Method
Participants and Procedure

Participants consisted of managers enrolled in business courses at a large


Chinese public university. Of the 172 participants, 89 (51.7%) were men. Most
participants were aged under 35 years (94.8%), 1.1% had a primary school
education, 19.8% high school education, 31.4% had graduated from a vocational
college, 45.4% from university, and 2.3% had a graduate school qualification. In
regard to organizational tenure, participants had mainly worked at their current
company for less than 1 year (36.0%), between 1 and 3 years (36.1%), or between
3 and 5 years (15.1%).
We conducted a two-wave survey with a 4-month interval. At the end of the
last class, we stated our survey intentions and assured the respondents that
all questionnaire data would be used only for research purposes and be kept
completely confidential. We distributed the questionnaires and pencils, which
we retrieved after 20 minutes. The first stage of the survey involved the ethical
leadership of their direct supervisor, their power distance orientation, and their
email address and demographic information, namely, age, gender, education
level, and organizational tenure.
We distributed the questionnaires 4 months after the first-stage survey via email
to the respondents, from whom we received 178 questionnaires, with a response

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rate of 89.4%. After we had deleted five questionnaires from respondents who
had left their former organizations and one largely unanswered questionnaire, we
obtained 172 complete responses. At the second stage of the survey, participants
moral identity and whistleblowing intention data were collected.
Measures

Because the survey questions were originally written in English and administered
in Chinese, we followed Brislins (1980) back-translation procedure. All
questionnaire items, except for the demographic variables, were measured using
a 5-point Likert scale ranging from 1 = strongly disagree to 5 = strongly agree.
Ethical leadership. We used the 10-item Ethical Leadership Scale (ELS)
developed and validated by Brown et al. (2005) to measure ethical leadership.
A sample item is My direct supervisor discusses business ethics or values with
employees (Cronbachs = .90).
Moral identity. We used Aquino and Reeds (2002) 10-item measure to assess
moral identity. A sample item is It would make me feel good to be a person who
has these characteristics (Cronbachs = .88).
Power distance orientation. We used a six-item power distance orientation
measure developed by Dorfman and Howell (1988). A sample item is Managers
should make most decisions without consulting subordinates (Cronbachs
= .89).
Whistleblowing intention. Participants were asked to answer the question If
you found wrongdoing in your workplace, how hard would you try to do the
following? Responses were rated on Park and Blenkinsopps (2009) eight-item
scale. A sample item of whistleblowing intention is Report it to the appropriate
authorities outside of the organization (Cronbachs = .75).
Control variables. Previous researchers have identified that gender, age, level
of education, and organizational tenure were related to the decision to engage
in whistleblowing (Mesmer-Magnus & Viswesvaran, 2005). There were eight
categories for age: 1825, 2630, 3135, 3640, 4145, 4650, 5155, and
over 55; five categories for level of education: primary school, high school,
vocational school, university, and graduate school; and six categories for
organizational tenure: below 1, 13, 35, 57, 715, and above 15 years. Gender
was dummy-coded, with 1 = male and 0 = female.
Results
Descriptive statistics and correlations for all variables are reported in Table
1. The results indicated that ethical leadership was positively related to moral
identity and whistleblowing intention. Moral identity was positively associated
with whistleblowing intention.

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Table 1. Descriptive Statistics and Correlation Matrix for Study Variables
Variables
1. Ethical leadership
2. Moral identity
3. Power distance orientation
4. Whistleblowing intention
5. Gender
6. Age
7. Education
8. Organizational tenure

SD

3.27
3.65
3.04
3.09
0.52
1.87
3.29
2.12

0.78
0.65
1.05
0.62
0.50
0.90
0.82
1.19

.22**
.23** .02
.30** .29*** .14
.01
.08
.07
.06
.10
.01
.01
-.09
-.06
.08
.02
-.06

-.03
.01
-.03
-.04

.08
-.27*** .02
.09
.32*** -.16*

Note. N = 172. * p < .05, ** p < .01, *** p < .001.

To test for the mediating role of moral identity, we used the traditional four-step
procedure. Regression results are reported in Table 2. In Model 1, ethical
leadership was positively related to moral identity. Thus, Hypothesis 2 was
supported. In Model 2, ethical leadership was positively related to whistleblowing
intention. Hypothesis 1 was, thus, supported. In Model 3, moral identity was
significantly related to whistleblowing intention. After simultaneously entering
ethical leadership and moral identity into the regression in Model 4, the results
showed that the effect of ethical leadership on whistleblowing intention became
weaker, but remained significant, suggesting partial mediation for moral identity.
To further assess the significance of this mediation, we applied Sobels (1982)
test for indirect effects. The result showed that the intervening effect of moral
identity (t = 2.45, p < .05) was significant. Therefore, Hypothesis 3, in which
we proposed that moral identity would mediate the relationship between ethical
leadership and whistleblowing intention, was supported.
Table 2. Hierarchical Regression Analysis Results for Mediation Tests
Predictive
variables

Control variables
Gender
Age
Education
Tenure
Ethical leadership
Moral identity
R2
F

Model 1

Model 2

Model 3

Model 4

Model
identity

Whistleblowing
intention

Whistleblowing
intention

Whistleblowing
intention

.05
.10
-.09
-.05
.22**

-.04
.02
-.05
-.07
.31***

-.05
-.01
-.02
-.04

.05**
2.44**

.10***
3.64**

-.05
-.01
-.03
-.06
.26**
.23**
.15***
4.81***

.29***
.08***
3.13*

Note. N = 172. R2 refers to changes in R2 from the basic model that only includes the control
variables. * p < .05, ** p < .01, *** p < .001.

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Regression results are reported in Table 3. In Model 3, the interaction effect


between ethical leadership and power distance orientation on moral identity was
positive and significant. To further depict the interactive effect, we have reported
the differences in the relationship between ethical leadership and moral identity
for low and high power distance orientation. In Figure 2, the relationship between
ethical leadership and moral identity was steeper for those with high power
distance orientation. Therefore, Hypothesis 4 was supported.
Table 3. Hierarchical Regression Analysis Results for Moderation Tests
Variables

Moral identity

Control variables
Gender
Age
Education
Tenure
Ethical leadership
Power distance orientation
Ethical leadership
Power distance orientation
R2
F

Model 1

Model 2

Model 3

.05
.10
-.08
-.03

.06
.08
-.09
-.06
.30***

-.04

.05
.10
-.09
-.05
.23**
-.09

0.89

.19*
.05*
2.08*

.03*
2.62*

Note. N = 172. * p < .05, ** p < .01, *** p < .001.

4.5

Moral identity

3.5

3
High power
distance orientation
Low power
distance orientation

2.5

Low

High
Ethical leadership

Figure 1. Moderating effect of power distance orientation on ethical leadershipmoral identity.

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We also conducted additional analyses to test a possible moderated mediation


model (Edwards & Lambert, 2007). The results indicated that there was
no significant difference in either the indirect effect (mediating effect of
moral identity) or the direct effect (ethical leadershipwhistleblowing) when
considering high or low power distance orientation.
Discussion
We examined whether or not, and if so, why and when, ethical leadership
influences employees whistleblowing intention. Results showed that ethical
leadership was positively related to whistleblowing intention, moral identity
mediated this relationship, and power distance orientation positively moderated
this relationship.
First, we found a positive relationship between ethical leadership and
whistleblowing intention in a non-Western country, China. As previous researchers
have suggested (Brown et al., 2005; Walumbwa et al., 2011), ethical leadership
provides learning opportunities for employees to engage in ethical behavior, such
as whistleblowing. Moreover, we responded to the call to conduct whistleblowing
research beyond North America (Miceli et al., 2008). In China, whistleblowing
is a sensitive topic as it may destroy harmonious interpersonal relationships
emphasized in the country (Zhang, Chiu, & Wei, 2009); nevertheless, we found
that ethical leadership was still an important predictor of Chinese employee
whistleblowing intention.
Second, we found that moral identity mediated the relationship between ethical
leadership and whistleblowing intention. This suggests that moral identity can
be altered by external leadership and plays an important explanatory role in the
process of whistleblowing. Thus, our results provide further evidence for the
social cognitive perspective that model identity may be influenced by situational
cues (Aquino et al., 2009; Shao et al., 2008). We also responded to Miceli et al.s
(2008) call to pay attention to the explanatory function of moral identity in the
whistleblowing decision process.
Third, we found that power distance orientation positively moderated the
relationship between ethical leadership and moral identity. Researchers have
called for a focus on the effect of power distance orientation on the effectiveness
of leader behavior and style (Kirkman et al., 2009). Our results indicate that
the positive relationship between ethical leadership and moral identity was
stronger for employees with a high power distance orientation as they are apt to
be influenced by leaders (Hofstede, 1980). The result is in accordance with that
of Lian et al. (2012), indicating that high power distance orientation employees
are more likely to pattern their behavior after a leader than are those with a low
power distance orientation.

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Managerial Implications

Our findings have several practical implications. Because of the direct effect
of ethical leadership on whistleblowing intention, organizations should try to
hire more ethical leaders by testing applicants integrity and moral level in
advance. Meanwhile, organizations should provide ethical training to improve
the moral sense and judgment level of existing leaders. We suggest that as we
have shown moral identity to be a mediator, managers should consider how to
increase employee moral identity by increasing moral communication frequency
and ethical training. In addition, leaders should consider employee differences of
power distance orientation when exercising ethical leadership. Organizations also
should try to increase the moral identity of employees with a low power distance
orientation through measures such as providing ethical training.
Limitations and Directions for Future Research

There are limitations in this study. First, we used self-report measures, which
may have increased the possibility of common method bias. To reduce this
likelihood, we used a two-phase method to collect data. Moreover, the measured
perceptions (ethical leadership, moral identity, and whistleblowing intention) are
relatively difficult for different response sources (e.g. employees supervisors) to
rate. Second, we studied employee whistleblowing intention only, and not actual
behavior. However, employees with a high whistleblowing intention do not
necessarily engage in whistleblowing behavior (Mesmer-Magnus & Viswesvaran,
2005). Future researchers should, therefore, examine whistleblowing behavior
and its relationship with ethical leadership and moral identity. Finally, we
collected data only from a non-Western country, China. This specific context
may limit our relationship findings, resulting in limited generalizability. Future
researchers should collect data from other contexts to further examine the
relationships in this study.
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