14 Nov The Role of Ethical Leadership in Organizations
Introduction
Ethical leadership isn’t just about doing the right thing; it’s about creating a culture where people feel respected, supported, and guided by shared values. In this article, Mattia Zene and Riccardo Sartori from the Università di Verona explain how ethical leaders promote trust, fairness, and responsible decision-making across organizations.
At Maritime Utilia, we often discuss the deeper layers of leadership—and this is a good time to revisit one of them: psychological safety. In short, psychological safety means feeling comfortable speaking up, asking questions, and making mistakes without fear of embarrassment or punishment. Without it, even the most ethical leaders can fall short, because great ideas, honest feedback, and innovation only happen when people feel safe enough to show up fully.
What Ethical Leadership Means in Practice
The success of any organization depends largely on the quality and integrity of its leadership. Leadership isn’t just about managing—it’s about inspiring and guiding others toward shared goals. In this process, ethical considerations play a vital role. Leaders who work with diverse teams must act responsibly, ensuring their decisions align with strong moral and ethical principles.
Ethical leadership refers to a form of leadership guided by moral principles and values. Ethical leaders prioritize and uphold ethical behavior, integrity, and fairness in their actions (Brown et al., 2005).
The cultivation of reliable and trustworthy conduct among employees is reinforced through strategies such as:
- Two-way communication
- Fair Decision – Making
- Reinforcement of ethical behaviors
This perspective suggests that ethical leaders effectively address organizational challenges by emphasizing the importance of correct values and nurturing a culture of good character within the organization (Yukl et al., 2013).
How Ethical Leadership Impacts Employees
Reducing Anxiety and Building Trust
Ethical leadership behaviour diminishes employee anxiety toward job uncertainty or organizational changes by displaying consideration, openness, trustworthiness, and honesty (Treviño et al., 2003).
Supporting Development and Motivation
Ethical leadership also supports employee growth by offering guidance, individual consideration and encouraging creative thinking. Ethical leaders motivate their teams to reach their full potential while fostering a sense of purpose and meaning. This constructive influence enhances employees’ ability to express their identities and personal values, contributing to increased self-worth and job satisfaction (Yukl, 2013).
Encouraging Voice and Belonging
When leaders maintain open, two-way communication, employees feel more comfortable sharing feedback and ideas, which allows organizations to address concerns effectively and strengthens relationships built on trust. Recognizing emotional ownership enhances employee–leader relationships, fostering responsibility, alignment with organizational objectives, and a stronger sense of belonging (Mayer et al., 2013).
The Dark Side: Unethical Practices and Short-Term Gains
Abusive Supervision: Temporary Benefits, Long-Term Damage
Research by Li and colleagues (2022) found that abusive supervision can lead to short-term boosts in productivity, as employees temporarily work harder to avoid conflict or mistakes. However, these effects fade quickly—often within a week—and come at the expense of trust, morale, and long-term engagement.
The Double-Edged Sword Effect
Abusive supervision has been shown to have a contradictory effect on innovation. While it reduces psychological safety and stifles creativity, it can also increase stress-driven innovation—where employees push themselves to perform under pressure (Zhu & Zhang, 2019).
Researchers also found a positive connection between abusive supervision and organizational citizenship behaviors. This often happens because employees try to manage impressions and appear more compliant to protect themselves, rather than acting out of genuine motivation (Onaran & Göncü-Köse, 2022).
Key Takeaways
- Ethical leadership is a key driver for long-term organizational success.
- It fosters trust, fairness, and employee satisfaction.
- A positive environment enables people to thrive and share ideas openly.
- Unethical practices may lead to short-term gains but damage long-term performance and morale.
- Psychological safety is essential even in highly ethical leadership frameworks.
Explore Our Leadership Solutions
At Maritime Utilia, we support organizations in building ethical leadership cultures:
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