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Financially insecure and less ethical: Understanding why and when financial insecurity inhibits ethical leadership

Qu, Yuanmei, Babalola, Mayowa, Ogbonnaya, Chidiebere, Ren, Shuang, Chen, Lu, Yang, Mengxi (2023) Financially insecure and less ethical: Understanding why and when financial insecurity inhibits ethical leadership. Human Relations, . Article Number 0018726722. ISSN 0018-7267. (doi:10.1177/00187267221142751) (KAR id:97689)

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With the recent COVID-19 pandemic among other crises (e.g., Russia–Ukraine conflicts and recession projections) threatening organizations’ financial conditions across the globe, supervisors may not only encounter challenges such as job cuts that test their ethical leadership, but also experience financial insecurity themselves. However, our knowledge of why and when supervisors’ ethical leadership behaviors may be affected in such a situation remains quite limited. In this research, we draw on uncertainty management theory (UMT) to examine the potential influence of financial insecurity on ethical leadership. Specifically, we suggest that financial insecurity triggers anxiety in supervisors, which inhibits their demonstration of ethical leadership. We also propose organizational pay fairness as a boundary condition for this process, such that supervisors who perceive their pay as fair are less susceptible to the anxiety resulting from financial insecurity than those who perceive their pay as unfair. Results from two multi-source, multi-wave studies supported our hypothesized model. We conclude by discussing the theoretical and practical implications of our findings.

Item Type: Article
DOI/Identification number: 10.1177/00187267221142751
Uncontrolled keywords: Ethical leadership, financial insecurity, organizational pay fairness, anxiety, uncertainty management theory
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Kent Business School - Division > Department of Leadership and Management
Depositing User: Chidi Ogbonnaya
Date Deposited: 29 Oct 2022 20:40 UTC
Last Modified: 17 Jan 2023 15:47 UTC
Resource URI: (The current URI for this page, for reference purposes)
Ogbonnaya, Chidiebere:
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