The Leadership Quarterly 22 (2011) 801–817

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The Leadership Quarterly

j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / l e a q u a

The effect of authentic transformational leadership on follower and

group ethics
Weichun Zhu a,⁎, Bruce J. Avolio b, 1, Ronald E. Riggio c, 2, John J. Sosik d, 3
a
Department of Labor Studies and Employment Relations, The Pennsylvania State University, University Park, PA 16802, USA
b
Center for Leadership & Strategic Thinking, Michael G. Foster School of Business, University of Washington, Seattle, WA 98195-3200, USA
c
Kravis Leadership Institute, The Claremont McKenna College, Claremont, CA 91711, USA
d
School of Graduate Professional Studies at Great Valley, The Pennsylvania State University, 30 East Swedesford Road, Malvern, PA 19355, USA

a r t i c l e i n f o a b s t r a c t

Available online 25 August 2011 We propose a theoretical model to examine how authentic transformational leadership
influences follower individual and group ethical decision making. We investigate how follower
Keywords: moral identity and moral emotions mediate the effect of authentic transformational leadership
Authentic transformational leadership (ATL) on follower authentic moral action. Furthermore, we explore how authentic transformational
Follower ethics leadership develops group ethical climate, which in turn contributes to enhancing group ethics
Group ethics and to developing follower moral identity and moral emotions. Future research and practical
implications are discussed.
© 2011 Elsevier Inc. All rights reserved.

1. Introduction

Hardly a day goes by without news of the unethical conduct of a leader, whether in the private sector, not-for-profits, or
government organizations. Despite the media's focus on unethical leadership, we also hear from time to time about those leaders
who strive to do the right thing, and followers who are willing to question them when they choose to do otherwise. The link
between how a leader behaves in terms of moral and ethical behavior, and how the leader's followers view themselves and their
actions as a consequence of leadership, is a link that has not been fully explored in either the leadership or ethics literature.
Accordingly, in this article, we utilize the moral identity (e.g., Blasi, 1993; Blasi, 2004; Reed, Aquino, & Levy, 2007) and moral
emotions literature (e.g., Tangney, 2003; Tangney, Stuewig, & Mashek, 2007; Weaver, 2006) to explain how leaders shape follower
moral identity and moral emotions to function as central motivational mechanisms for taking moral action.
Our work is grounded on Bass and Steidlmeier's (1999) authentic transformational leadership theoretical framework, which is
essentially based on the seminal work of Burns (1978) and Bass (1985). They studied leaders who, by being both morally uplifting and
acting as change agents, transformed followers into moral agents and effective leaders. We specifically posit the dynamics of the
relationship between “authentic transformational leadership” and the moral identity and moral actions of followers. We begin our
discussion by focusing on what we argue are key mediating mechanisms between leadership and moral action, referred to as one's
moral identity and moral emotions. We then explore how both moral identity and emotions enable individuals to address complex
ethical challenges, and to ultimately behave and lead more ethically. Furthermore, we investigate how authentic transformational
leadership influences group moral action through influencing group ethical climate, which leads to group ethics and helps develop
one's moral identity and moral emotions. This focus leads us to the presentation of a model that links leadership, moral identity, moral
emotions, ethical climate, and authentic moral action to provide a framework for organizing the remainder of our discussion.

⁎ Corresponding author. Tel.: + 1 814 865 5425.

E-mail addresses: wzhu@psu.edu (W. Zhu), bavolio@uw.edu (B.J. Avolio), ron.riggio@cmc.edu (R.E. Riggio), jjs20@psu.edu (J.J. Sosik).
1
Tel.: + 1 206 543 7908.
2
Tel.: + 1 909 607 2997.
3
Tel.: + 1 610 648 3254.

1048-9843/$ – see front matter © 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.leaqua.2011.07.004
802 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

Weaver (2006) argued that future ethics research should focus on examining what constitutes one's moral identity (i.e., what a
person is or has) rather than merely what a person thinks (i.e., moral reasoning), or what a person does (i.e., moral behavior).
Weaver also recommended an examination of how intra- and extra-group factors could affect or help shape one's moral identity.
For example, the ethical and moral standards that leaders set, and are seen living up to, could positively affect the moral identity
and moral emotional development of individuals led by those leaders. Where leaders fail to live up to and display high ethical
standards, we see that groups, organizations, and even societies can become corrupt (Bandura, 1991; Gardner, 1990; Gottlieb &
Sanzgiri, 1996) as evidenced by cases of ethical scandals at Enron, WorldCom, BP, the Catholic Church, and Nazi Germany.
With all of the bad press that leaders have received for recent unethical violations in both the public and private sectors (Brown
& Treviño, 2006b; Schminke, Ambrose, & Neubaum, 2005), it is somewhat surprising that prior theories and research on ethics and
leadership have not explored the influence of leadership on a follower's level of moral identity, moral emotions and authentic
moral action. Similarly, prior theory and research has also failed to examine how leadership and the ethical climate of a work
group impacts individuals and group moral actions/outcomes.
The model presented in Fig. 1 captures what we suggest are the central elements in determining follower moral identity, moral
emotions, and ultimately moral action. In our proposed model, we argue that authentic transformational leaders will positively
raise the moral identity and moral emotions of their followers based on prior theory and research on authentic, ethical and
transformational leadership (Avolio & Gardner, 2005; Avolio, Gardner, Walumbwa, Luthans & May, 2004; Bass & Riggio, 2006;
Brown & Treviño, 2006b). Next, using Bandura's (1991) social cognitive theory, we explain how the ethical orientation and style of
leadership influences individual follower and group ethics and actions. Specifically, we examine how individuals are shaped
through social learning processes such as moral role modeling or vicarious learning, and how these learning processes then
develop an individual's capability to address complex ethical challenges (McCauley, Drath, Palus, O'Connor, & Baker, 2006).
Beyond our focus on leadership, using theories of moral identity (Aquino & Reed, 2002; Blasi, 1984), self-concept-based
motivation (Leonard, Beauvais, & Scholl, 1999; Shamir, House, & Arthur, 1993), authentic leadership development (Gardner,
Avolio, Luthans, May, & Walumbwa, 2005), and moral emotions (Eisenberg, 2000; Tangney, 2003), we also explore how moral
identity and moral emotions become persistent motivational sources for authentic moral action. As shown in Fig. 1, we will also
examine how group ethical climate, in addition to influencing group moral action, serves as a mediating mechanism through
which leadership impacts follower moral identity and moral emotions, which then influences follower moral action. The model
presented in Fig. 1 provides the general guiding framework and boundaries for our discussion, while Table 1 offers a more detailed
explanation regarding the underlying influence that authentic transformational leadership is expected to have on individual and
group ethics.

2. Defining our main constructs

2.1. Moral identity

Identity is a theory of self. Personal identity is one's unique characteristics, such as traits and preferences that define how they
differ from others (Hoyle, Kernis, Leary, & Baldwin, 1999; Tajfel & Turner, 1979). Social identity is defined as “the individual's
knowledge that he belongs to certain social groups together with some emotional and value significance to the home of his group
membership” (Taifel, 1972, p.272). Taifel (1972), Tajfel (1978) argued that social identity is the knowledge of being a group
member and thus of what attributes define membership in the group, and also includes an emotional attachment to the group. The
moral aspect of personal identity is known as moral identity.
The concept of moral identity was initially proposed by Blasi (1982, 1984, 1993) and expanded on by a number of other
scholars (e.g., Aquino & Reed, 2002; Bergman, 2002). At a very basic level, moral identity can be characterized as one's answer to
the following two questions: Am I a moral person? What kind of moral principles and values do I hold, and how resolutely will I

Follower moral identity

Follower Follower
Authentic authentic
transformational authentic
moral
.
leadership
4 “Is” Follower moral emotions
(i.e., empathy, & guilt)
decision
making
moral
action

Moral identity/emotions

Moral choice/actions
Group Group
Implementing moral authentic
values and principles authentic
Group ethical moral moral
climate decision action
making

Fig. 1. The effect of authentic transformational leadership on follower and group ethics.
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 803

Table 1
The underlying influence mechanisms of authentic transformational leadership on follower and group ethics.

Theoretical link Influence mechanisms Influence outcomes

ATL → follower moral
identity/moral emotions
Follower moral
identity/moral emotions → follower
authentic moral action
ATL → group ethical climate
Role of group ethical climate
• Moral role modeling/coaching
• Setting clear moral standards
• Providing constructive moral feedback
• Followers' emulation and internalization
• Follower cognitive and emotional
perspective taking
• Self motivated to act ethically
• Moral regulation
• Reducing or eliminating negative feeling of
being guilty, and cognitive and moral cognitive
dissonance
• Integrating leaders' moral values
with leaders' vision,
articulation, execution, and actions
• Establishing ethical decision standards
and processes
• Developing guidelines for ethical choices
• Moral reward and disciplines
• Communicating ethics and values to followers
and to group
• Moral normative structure
• Moral standards/norms guide social expectation
• Followers having ethical exemplars as role models
• Creating a collective moral cognition,
and judgment pattern
guiding members' moral perceptions
• Ethical policies, procedures and processes
form moral decision framework
• Followers' enhanced analytical capacities to
examine moral issues
• Followers' identifying some moral choices
• Followers' strengthening the belief of being a
moral person
• Followers' being more empathetic
• Followers' higher level of feeling guilty of behaving
unethically
• Committed to moral ideals/principles
• Taking risks to be loyal to moral ideals/principles
• Inspiring others to think and behave ethically
• Placing the collective interest over personal ego
and interests
• Behaving consistent with moral values and principles
• Moral standards set up
• Moral norms established
• Ethical policies, procedures and processes become
institutionalized and reinforced
• Group members' ethical norms
• Group members' developing mutual trust
and a sense of responsibilities
• Knowing acceptable moral behaviors and actions
• Understanding positive and negative moral
consequences
• Strengthening followers' moral perspective-taking
abilities (e.g., empathy)
• Improved follower's belief of being a moral person
• Fostering group ethical decision making processes
and outcomes

stand up for these moral principles and values? Moral identity is defined here as the degree to which individuals identify
themselves as being a moral agent and how their identity influences their self-concept. This definition is consistent with Aquino
and Reed's (2002) examination of moral identity, which they defined as representing the self importance placed by the individual
on positive moral traits, such as being caring, compassionate, fair, friendly, generous, helpful, hardworking, honest, and kind in the
description of oneself (p. 1426). Blasi (1984) also discusses the central role of moral identity in moral action proposing that an
individual's moral identity is the ultimate motivation, source, and strength driving consistent sustainable moral action. Reinforcing
this principal focus, Blasi concludes that, “morality is more a characteristic of the agent than of either action or thinking; the
ultimate source of goodness lies in good will, and good will is at the core of what a person is” (p. 130). Therefore, moral identity is
used in our proposed theoretical model to support our opening comments on why certain individuals behave in an ethical way in
contrast to others who choose to act unethically.
Thomas (1997) argued that moral identity has four dimensions and characteristics: moral unity, moral conviction, moral
continuity, and moral self recognition. Moral unity is concerned with how well the many aspects of moral identity integrate with
one's self in a harmonious way. This characteristic enables an individual to deal with moral situations to form a well-integrated
and internally consistent unit. Moral conviction refers to the degree to which an individual is self assured that his/her moral values
and moral judgment are correct. This is also a characteristic that is reflected in what constitutes moral self confidence or moral self
efficacy (Thomas, 1997). Moral continuity is defined as one's feeling that his/her sense of moral identity is developed over time. It
means, over the long term, a person's moral identity is influenced by his/her environment, significant others, and laws etc. Lastly,
moral self recognition is the degree to which a person can consciously and clearly describe and express the values and expectations
of behavior that characterize his/her moral self.

2.2. Moral emotions

Based on the prior theoretical literature (e.g., Eisenberg, 2000; Tangney, 2003) on self relevant emotions, we include the moral
emotions of empathy and guilt in discussing the mediating roles in the relationship between leadership and follower and group
ethics. Tangney (2003) has argued that self conscious moral emotions, such as empathy and guilt, play important self regulatory
functions by providing important critical feedback into one's self thoughts, intentions, and behaviors. Empathy is defined as “an
affective response that stems from the apprehension or comprehension of another's emotional state and or condition and is similar
to what the other person is feeling or would be expected to feel” (Eisenberg, 2000, p. 671). Guilt is defined as “regret over wrong
doing” (Eisenberg, 2000, p. 667) or “an agitation-based emotion or painful feeling of regret that is aroused when the actor causes,
804 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

anticipates causing, or is associated with an aversive event” (Ferguson & Stegge, 1998, p. 20). Higher levels of empathy are
expected to be associated with greater levels of inhibition on the individual's part for acting unethically. Whereas, an individual's
guilt level would be expected to reinforce the individual to take greater responsibility for what he/she has done where actions
violate the individual's sense of, as well as moral standards or values (Eisenberg, 2000; Ferguson & Stegge, 1998; Hoffman, 1988).
We suggest that these two types of moral emotions could function as motivational and sanctioning mechanisms to motivate an
individual to act ethically.

2.3. Authentic moral action

May, Chan, Hodges, and Avolio (2003) define authentic moral action as the consistency between moral intention and moral
action without being influenced by organizational factors, such as financial resources and organizational rewards systems. In this
article, we extend this concept in looking at what is inside a person (i.e., moral identity and moral emotions) that determines one's
moral intention and final moral action, in addition to maintaining consistency between moral intention and moral action. More
specifically, we defined authentic moral action as self-consciously driven moral actions/behaviors due to individuals' belief that
they are moral persons, characterized with high-level moral identity and moral emotions, and that they should decide and behave
to maintain consistency between what they do and what they believe and who they are and what they should do. We argue that
such moral actions would be more consistent across different situations/challenges to the extent an individual views him/herself
as a moral person, and to the extent that leadership and group climate reinforce such actions through affecting follower moral
identity and moral emotions, as is shown in Fig. 1.

2.4. Ethical climate

Ethical climate is defined as “the prevailing perceptions of typical organizational practices and procedures that have ethical
content” or “those aspects of work climate that determine what constitutes ethical behavior at work” (Victor & Cullen, 1988,
p. 101). Ethical climate includes a group or organization's moral normative structure, referent others' behavior, expectations about
obedience to legitimate authority, and the group or organization's encouragement of employees to be responsible for their actions.
Victor and Cullen found that ethical climate influences employee moral attitudes and behaviors because ethical climate provides
information and criteria that guides the appropriate ways to process, examine and then address potential ethical dilemmas.
Social cognitive theory pulls together each of the components in our proposed model by offering an interactionist perspective to
explain individual moral action. Specifically, Bandura (1991, 1999) argues that moral thought, affective self-reactions, moral action, and
environmental/contextual factors all operate and influence each other reciprocally in terms of the decisions made by individuals.
Bandura further suggests that moral standards, moral self-regulation, and moral self-sanctions are important predictors of individual
moral action. By using this social cognitive perspective, we can further examine how moral identity and moral emotions operate as
mediators between authentic transformational leadership and follower authentic moral action, as shown in Fig. 1.
Now having defined the core concepts in our proposed model and potential linkages in Table 1, we will take a more in-depth
look at the influence leadership has on each of the mediating constructs. In doing so, we will examine three specific domains of
leadership that we believe are central to understanding how moral identity, emotions and actions can be positively impacted by
leadership.

3. Ethics-oriented leadership styles

In this section, we first introduce three ethics-oriented leadership constructs, including ethical leadership (e.g., Brown &
Treviño, 2006b; Brown, Treviño, & Harrison, 2005), authentic leadership (Avolio & Gardner, 2005; Luthans & Avolio, 2003), and
what has been referred to as authentic versus inauthentic transformational leadership (Bass & Steidlmeier, 1999; Burns, 1978;
Sosik, 2006). Based on the discussion and relevant comparisons of different contents, strengths, and mechanisms, we explain why we
chose the theoretical perspective of authentic transformational leadership, rather than other ethics-related leadership perspectives, as
our focus of leadership in this article.

3.1. Ethical leadership

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). Treviño, Brown, and Hartman (2003) argue that ethical leaders have two important
components: the “moral person” and the “moral manager.” Being a “moral person” means that ethical leaders are seen by
followers as possessing such moral characteristics as honesty and trustworthiness, along with moral values and principles such as
being fair, righteous, caring, and considerate and engaging in ethical reasoning (Brown & Treviño, 2006b).
Ethical leaders are also described as being motivated to influence followers' moral perspectives and are seen by others as being
“moral managers.” For example, ethical leaders communicate their ethical standards and moral values to followers within their
unit, as well as serve as their moral role model. In their role as moral manger, leaders also would be expected to establish reward
and punishment systems to address ethics-related behaviors and violations. Ethical leadership was found to significantly predict
followers' willingness to report ethical problems to their leaders (Brown et al., 2005).
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 805

3.2. Authentic leadership

Avolio and colleagues (Avolio & Gardner, 2005; Gardner et al., 2005) define authentic leaders as “those who are deeply aware of
how they think and behave and are perceived by others as being aware of their own and others' values/moral perspectives,
knowledge, and strengths; aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient, and of
high moral character.” Similar to our proposed model, Avolio and his colleagues describe authentic leadership as operating at
multiple levels (e.g., how the leader behaves and the ethical climate created), as well as multiple constructs such as: levels of
transparency, self awareness, ethical values and fairness in decision-making.

3.3. Authentic transformational leadership (ATL)

As indicated above, we adopted the authentic transformational leadership theoretical model of Bass and Steidlmeier (1999).
The concept of transforming leadership, first developed by James McGregor Burns in 1978 and later extended by Bernard Bass and
his colleagues (Avolio, 1999; Avolio et al., 2004; Bass, 1985; Bass & Riggio, 2006; Sosik & Jung, 2010), focused on examining leaders
who transform groups, organizations and even societies, in part by developing followers into moral agents and leaders. As
compared with other forms of leadership that were considered more transactional, a central distinguishing feature of
transformational leadership was that these leaders developed their followers into moral agents in addition to maintaining their
own high moral perspectives, behaviors and actions. They do not just lead followers to perform well; they also develop followers
to lead themselves and others to perform well.
Bass and Steidlmeier (1999) argued that to be truly transformational (ATL), leadership must be grounded on fundamental
moral foundations. Sosik (2006) proposed that the character strengths of (moral) courage and integrity are associated with ATL
behavior. Four behavioral dimensions (i.e., idealized influence, inspirational motivation, intellectual stimulation, and
individualized consideration) of authentic transformational leadership, in contrast to pseudo-transformational leadership, are
of moral content. These characteristics of authentic transformational leadership include: possessing moral character and having
concern for self and followers; embedding moral values in leaders' vision, articulation, and program that followers can embrace;
and establishing moral decision making processes and choices in which leaders and followers collectively engage and pursue.
One of the biggest strengths of adopting the concept of ATL is that this construct is linked to the seminal work of Burns (1978)
and Bass (1998), who each discuss the role of different types of moral values in the leadership process, while both emphasizing the
morally uplifting effect of leadership. In addition, this concept of ATL includes the moral component of both ethical and authentic
leadership. The key difference in terms of ATL and ethical leadership is that ethical leaders emphasize moral management, such as
through the use of rewards and sanctions, and in that regard they could be described as more transactional moral agents. However,
ATL focuses on describing leaders who have a moral vision and values for promoting virtuous behavior, which reflects more of the
transformational content of moral components described by Burns and Bass. ATL includes both transactional and transformational
components of moral decision making which contributes to leaders and followers with high moral identity and moral emotions,
and who act on that identity and emotion by conducting authentic moral decision making and choosing the right moral action
eventually.
ATL and authentic leadership style also overlap in that both of these leadership styles include a moral component and are
considered authentic (see Avolio & Gardner, 2005, for a more detailed comparison of these two leadership styles). However, according
to work by Avolio and his colleagues, authenticity is not necessarily described as being a necessary component of ethical leadership,
but is one necessary component of ATL. For example, a leader may consistently act in an ethical way because he or she fears
recrimination or punishment, and not because he/she is self-aware that such unethical behaviors would be inconsistent with his/her
moral identity and moral emotions. Authentic leadership theory considers self-awareness as a key component in describing authentic
leadership. This provides another reason for adopting the theoretical model of ATL as our leadership focus in this article.
To summarize, we have chosen to use authentic transformational leadership (Bass & Steidlmeier, 1999; Burns, 1978; Sosik,
2006) as our leadership focus in the present paper because the concept of ATL is a more comprehensive and inclusive one than
other ethics-related leadership constructs. This construct encompasses relevant components from both the models of ethical
leadership and authentic leadership, while also emphasizing what Burns referred to as being a defining characteristic of
transformational leadership in that it was “morally uplifting.” Although we focus on the integration of authentic, ethical and
transformational leadership in the present paper, we also will refer to these theoretical perspectives throughout our discussion
where they can be used to explain the underlying processes of how leadership affects follower individual moral decision making
and group moral decision making.

3.4. The moral component of ATL

Burns (1978) defines transformational leadership as a social influence process, whereby leaders and followers engage in a
mutual process of “raising one another to higher levels of morality and motivation” (p., 20). Bass (1998) supports Burns' core
conceptualization of transformational leadership, stating that, “Leaders are truly transformational when they increase awareness
of what is right, good, important, and beautiful; when they help to elevate followers' needs for achievement and self-actualization;
when they foster in followers higher moral maturity; and when they move followers to go beyond their self-interests for the good
of their group, organization, or society” (p. 171).
806 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

Authentic transformational leaders raise the bar by appealing to higher moral ideals, strong moral values, and the moral
needs of their followers. They practice and model moral values on their own and use their influence to attract followers to their
moral values, beliefs and principles. To demonstrate authentic transformational leadership, leaders must have a strong moral
identity and moral emotions, which enable these leaders to confront ethical challenges, to engage in high moral action, and to
serve as ethical role models for their followers (Bass & Steidlmeier, 1999; Burns, 1978; May et al., 2003; Zhu, Riggio, Avolio,
& Sosik, 2011).
Authentic transformational leaders will not compromise their moral values, but rather use them to engage followers in
reassessing their own moral values and perspectives (Burns, 1998). Inauthentic transformational leaders manage the impression
that they care for the greater needs of their followers, but as Bass and Steidlmeier (1999) suggest, such leaders may behave like
transformational leaders but they do not morally uplift followers. Indeed, much of the transformational leadership displayed, may
suit their own means versus the greater good of their followers.

3.4.1. Values and ATL

There are three types of values that are relevant to examining ATL (Burns, 1978, 1998). The first is termed “moral values,” such
as kindness and altruism. The second type of values are termed “modal values,” including honesty, integrity, trustworthiness,
reliability, and accountability. The third type of values is termed “end values,” which include security, equality, justice, and
community. According to Burns, transactional leaders may emphasize the first and second set of values. In contrast, authentic
transformational leaders, in addition to paying attention to these moral and modal values, also focus on end values. By focusing on
end values these leaders seek to reinforce fundamental changes in groups, organizations, and societies, in pursuit of enhancing
individual liberty, justice, and equality. The ethical components comprising ATL include three key components that correspond to
the ethical leadership model: (1) the moral character of the leader, which is consistent with what is called the “moral person” in
the ethical leadership model (Treviño, Hartman, & Brown, 2000), (2) the ethical values in the leader's vision, articulation, and
initiatives, and (3) the morality of the processes of social ethical choice and action engaged in by the leader.
We propose several components that characterize authentic transformational leaders that will positively influence follower
and group ethics. These components include possessing moral characteristics (e.g., moral values, integrity, and honesty),
individual moral behaviors (e.g., doing the right things), morality in decision-making processes and procedures at work (e.g.,
holding to moral values), moral role modeling through visible moral action, moral reward and discipline, and communicating
ethics and values to followers and to the group. We suggest that these core moral components equip authentic transformational
leaders to set high standards for moral/ethical actions, and to lead in ways that result in followers emulating the moral
perspectives and moral actions of these leaders (Kanungo & Mendonca, 1996), which we describe in more detail below. We focus
on leaders who have frequent contact and a close working relationship with followers, or what might also be called, leaders and
their direct reports. We believe that a close working relationship is an important factor for a leader to be seen as an ethical role
model (Brown & Treviño, 2006b).

4. The effect of ATL on follower individual ethics

We now explain how authentic transformational leadership influences followers' individual ethics through the direct and
mediated effects depicted in Fig. 1.

4.1. Direct effect on follower moral identity and moral emotions

As shown in Table 1, one of the most important social influence mechanisms through which authentic transformational leaders
impact followers' moral identity, moral emotions, and authentic moral action is through positive role modeling or “leading by
example” (Bandura, 1991) of leaders' high moral values, moral identity, moral emotions, and moral actions (Luthans & Avolio, 2003).
Theory and research on social cognitive theory (Bandura, 1991) suggest that “leading by example” is an extremely important social
influence mechanism whereby leadership positively affects follower development and performance (e.g., Bass & Steidlmeier, 1999;
Gardner et al., 2005; Lord, Brown, & Feiberg, 1999). Authentic transformational leaders serve as the “moral standard bearer” (May
et al., 2003) or as moral exemplars for followers with their expressed moral values, character, and authentic actions (Sosik, 2006).
The moral behavioral modeling helps followers to judge whether their moral values and expectations are correct, therefore his/her
moral conviction, and then moral identity, is strengthened. As indicated above, authentic transformational leaders are expected to
possess all three sets of positive values, especially modal (e.g., integrity) and end values (e.g. justice and equality), aspiring to enhance
individual liberty, justice, and equality within the groups they lead. Consistency between the leaders' communicated moral values and
their moral actions would be expected to cause followers to view their leaders as being ethical. Authentic transformational leaders
communicate moral values authentically to followers in an insightful way which will increase followers' ability to consciously describe
their own moral values and own expectations of moral behavior, which increases moral identity.
We also expect that moral identity of authentic transformational leaders has a positive effect on developing followers' moral
identity. Authentic transformational leaders possess a high level of moral identity unity, which means they are able to know and realize
where their moral boundaries are. High moral unity would be able to enable these leaders to integrate the moral self into their whole
self in a harmonious way. In this way, a higher level of moral unity once achieved would help the leader to not only process ethical
dilemmas in a consistent way, but also to appear to be consistent in dealing with moral issues to followers. Such consistency as a moral
role model for followers can help to shape the followers development in terms of moral unity, and moral identity eventually.
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 807

Authentic transformational leaders' high level of moral convictions can help develop followers' moral convictions. With moral
unity, authentic transformational leaders have a firmer and more coherent basis for moral convictions and commitments to moral
actions, which means they will not compromise their moral values, base their decision consistent with these moral values, and
deal with moral dilemmas in a consistent way. By observing leaders' moral conviction behaviors, followers will have more chances
and opportunities to revisit their moral perspectives and self reflect on their moral commitments, judgments, and confidence in
making moral decisions, which in turn helps to develop follower moral convictions and moral identity.
Authentic transformational leaders possess a higher level of moral continuity which refers to a person's feeling and belief that
his/her moral identity can be developed and that he or she is committed to developing that goal. This means that authentic
transformational leaders, over the long term, are open to their positive development through the influence of the environment,
and role models. Authentic transformational leaders see moral continuity in the sense that once they get to a higher level of moral
development, they would continue to incorporate moral experiences that would reinforce their moral development at those
higher levels, and in turn, enhance the moral developmental levels of followers. By frequent contact with leaders and observations
of the leaders' authentic moral behavior, continued development efforts and behaviors, followers will be able to be committed to
developing their own moral aspects and perspectives. Furthermore, followers tend to be more likely to explain these moral
changes in a way that suggests growth of moral insight and maturity, contributing to moral continuity, and to identity
development as a whole.
In line with self awareness and authentic leadership, we would expect authentic transformational leaders with a more
coherent moral identity, moral conviction and moral continuity to have greater recognition and awareness of how they see their
level of moral development and with greater clarity about their moral selves. This higher level of moral recognition and moral
awareness would allow them to provide much clearer moral messages to followers as well, which will enable followers to be more
aware of moral issues, and to moral identity development.
To summarize, with the moral behavioral modeling of authentic transformational leaders and social learning process of
followers, followers would experience the following moral developmental processes in their maturing of moral identity
advancing, (a) from more separateness among moral values to greater moral consistency and unity, (b) from less lack of
awareness to more sense and awareness of moral values, (c) from less to greater confidence in the correctness of one's moral
values, (d) from less to more ability to explain one's values and expected behaviors.

Proposition 1. ATL has a direct positive effect on follower moral identity.

Followers would pay greater attention to and emulate the moral attitudes, emotions, values, and behaviors of authentic
transformational leaders because prior literature indicates they consider these leaders exemplary role models who are typically
more successful in terms of sustaining higher levels of performance (Bass & Riggio, 2006; Brown & Treviño, 2006a; Sosik & Jung,
2010). Beyond serving as moral behavioral role models, authentic transformational leaders could intellectually stimulate and
challenge their followers' moral thoughts and to self recognize the status of their moral values, while also engaging them in re-
examining their level of perspective taking capacities. With increasing followers' moral perspective taking and their ability to
understand others' viewpoints, followers are able to have empathy of potential victims' loss, harm, or pain when they are
confronting moral issues and making moral decisions, and more likely to have feelings of guilt if they imagine they will behave
unethically, which will help prevent them from behaving unethically.
Authentic transformational leaders encourage followers to establish their own internal set of moral principles and ideals,
helping them develop such internal principles and ideals through the leader's use of individualized consideration (Avolio, 2005).
The content of these internal principles and ideals often reflect virtues and character strengths that define who the follower is
(Sosik, 2006). Individually considerate leaders learn where the follower is in terms of his or her moral identity, and then work to
develop or “uplift” them to a higher level of moral perspective. Eventually, followers of these leaders tend to be more individually
considerate in that they will take into account others' perspectives, and consider the interests and stakes of those who are involved
in the moral decisions. Consequently, followers are more empathic of those who might be affected by a decision, and tend to have
feelings of guilt if they do not abide by their moral values and behave unethically.
In line with the developmental focus described above, authentic transformational leaders would be expected to offer
constructive and positive feedback on how their followers perceive and act upon moral issues to help improve their understanding
of their own and others' moral perspectives (Eisenberg, 2000; Kuhnert & Lewis, 1987). Therefore, followers are more likely to
transcend their self-interests and needs, as they are guided by a self-determined moral identity, and are able to act according to
their own moral values based on emotions such as empathy or guilt. In line with Hoffman's (1977, 1988) moral socialization
perspective and Bandura's (1991) social cognitive theory, moral values, goals, principles, and norms will be transferred from the
external referent leader to an internal referent that constitutes the follower's feelings of empathy and guilt.
To summarize, we offer the following two propositions:

Proposition 2. ATL has a direct positive effect on follower empathy.

Proposition 3. ATL has a direct positive effect on follower guilt.

Another component of the model presented in Fig. 1 depicts how follower moral identity/moral emotions (i.e., empathy and guilt)
mediate the effect of ATL on follower authentic moral action, which is also further explained in Table 1. We now move from discussing
the direct effects to examining the mediating effects of the follower's level of moral identity and moral emotions (i.e., empathy and guilt).
808 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

4.2. Mediating role of follower moral identity

Erikson (1995a, 1995b) argued that being authentic to oneself in how one thinks and behaves is another aspect of identity
and suggested that a person will generally make his or her ethical decisions consistent with his/her moral identity. As we noted
above and depict in Fig. 1, this argument implies that an individual with a strong moral identity will strive to maintain a
consistency and balance between his/her moral identity and his/her moral actions/decisions (Aquino & Reed, 2002; Blasi, 1980,
1983, 1993), all of which would be expected to contribute to those individuals choosing to act morally and ethically in order to
remain consistent with their values and beliefs (Bolton & Reed, 2004; Reed et al., 2007). Bandura (2008) provides further support
for this logic, arguing that viewing oneself as having high moral standards is more likely to inhibit unethical actions. Such actions
result in self-condemnation as a consequence of its conflict with the individual's moral standards and identity.
Taking this position means that one's moral identity is deeply rooted in one's self concept, and therefore it becomes relatively stable
in terms of its influence on the individual's authentic moral action. However, this level of stability does not mean it cannot be changed
and developed across the life span (Avolio, 2005; Kegan, 1982). Indeed, our main premise is that authentic transformational leadership
does change the moral identity of followers in the direction of being morally uplifting. We also believe that corrupt, pseudo-
transformational or unethical leaders can “downgrade” the moral identity of their followers; however, to discuss such leadership is
beyond the scope of the present paper.
The underlying assumption of Blasi's (1984) moral identity theory is that moral action is more a function of individual
differences in moral positive perspectives, such as moral identity and moral emotions, and capacity, than environmental
contingencies and external factors. We suggest through our proposed model that both are relevant to examining the moral
identity, emotions and actions of leaders and followers.
According to Blasi (1984), authenticity and integrity emphasize the idea of moral self-consistency, intactness, and wholeness,
all of which should contribute to individuals who become trusted and successful in sustaining consistency in taking higher moral
action and expecting the same from those they influence. Moral identity can serve as a cognitive–affective structure, which is
antecedent to guiding what moral information the individual selects, perceives, interprets, and responds to when faced with a
moral dilemma (Hardy & Carlo, 2005; Lapsley & Narvaez, 2004; Narvaez & Lapsley, 2005). In line with these arguments, Colby and
Damon (1993) point out that when people have a strong moral identity, they are more likely to have identity-based moral
awareness and judgments, intent, and finally authentic moral actions, as indicated in Fig. 1 and Table 1.
Blasi's conceptualization of moral identity contains three components that are relevant to our discussion: the first is that a
sense of responsibility for acting ethically is a necessary part of being an ethical person. Second, being a moral person is a central
characteristic of one's sense of self. The third characteristic of moral identity lies in its self-consistency, which means that an
individual has a tendency to behave consistently with his/her moral self-concept. Therefore, if being moral is centered on the self,
the inclination to behave ethically will become an internalized motivation and an important force for moral action (Bolton & Reed,
2004; Reed et al., 2007).
The underlying explanation for the role of moral identity as a mediator between ATL and authentic moral action is that the
follower's moral identity enables him or her to integrate moral identity with moral decision-making. Colby and Damon (1992)
argue that moral exemplars are those that have an exceptionally high degree of unity of self and morality, or moral identity. People
with strong unity of self and moral identity make moral decisions based on greater levels of certainty, with little fear, doubt, or
agonized reflection, which indicates that individuals with high moral identity are more likely to behave ethically.
According to social cognitive theory, individuals can learn what constitutes moral and ethical actions through either vicarious
learning or direct observation (Bandura, 1991; Brown & Treviño, 2006a). Through vicarious learning, individuals learn by
observing those whose behaviors are ethically (and socially) acceptable and not acceptable within their group, which results in
their modifying behaviors to be in line with group norms. The individuals observed could be role models such as leaders or
respected peers, who either act in highly moral ways, or discuss the importance and provide the recognition and rewards for doing
so.
According to Bandura (1991), individuals with a high moral identity are characterized by high moral self-regulation, including
moral motivation and moral self-sanctioning. This means these individuals are able to recognize their own moral objectives and
social expectations and norms, by having processed pre-existing moral conceptions and affective states. With high moral self-
regulation as a motivational force, individuals are able to extract, weigh, and integrate morally relevant information in confronting
moral dilemmas before deciding upon a course of decision-making and action. On the other hand, one's moral actions will also
help shape one's moral values, moral identity, moral emotions, moral goals, and moral principles as shown by the feedback loops
in Fig. 1 that cause the individual to revisit those moral actions and their impact on others as well as group ethical climate over
time.
To summarize, prior research (Bergman, 2002; Colby & Damon, 1992) indicates that individuals with a strong moral identity:
1) commit to higher moral ideals or principles, 2) are more determined to behave consistently with their moral ideals or principles, 3)
are more willing to take risks to be loyal to their moral values, 4) have a greater tendency to inspire others to think and behave
ethically, and 5) place the collective interest over their personal ego and interests.
Taken together, our discussion above and as shown in Fig. 1 and Table 1suggest:

Proposition 4. Follower moral identity has a positive effect on follower authentic moral action.

Proposition 5. Follower moral identity mediates the effect of ATL on follower authentic moral action.
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 809

4.3. Mediating role of follower empathy and guilt

Another important mechanism through which ATL affects authentic moral action is through moral emotions (Hoffman, 1988;
Tangney, 2003), including follower empathy and feelings of guilt. Kegan (1982) mentions that moral emotion motivation is a very
important motivational mechanism for authentic moral decision-making and moral action. Others (e.g., Eisenberg, 2005; Tangney,
2003) have also proposed that moral emotions are at least as important as purely rational/cognitive ones in explaining and
predicting moral action.
We propose that stimulating followers' positive moral emotions is a critical mechanism through which ATL affects follower
authentic moral action. More specifically, ATL influences follower authentic moral action through a moral motivational mechanism
via follower empathy and a moral sanctioning mechanism via follower guilt, both of which can result in authentic moral action.
These two forms of moral emotions are linked to the collective interests of groups as well as that of individuals (Eisenberg, 2005).
With high levels of empathy and guilt, leaders are more likely to have internal attributions to more stable factors in terms of how
they make decisions, and how they should make moral decisions in dealing with moral dilemmas (Weiner, 2004). Consequently, the
attributions of leaders become more stable and more predictable in terms of how they respond to different moral dilemmas. With
higher level of empathy, these leaders will adhere consistently and continuously to the moral values and principles to make decisions
that maximize benefits and minimize the harm to most people. Moreover, authentic transformational leaders with the moral values of
altruism will transcend their self interests for the collective interests. These leaders are more likely to make internal attributions if they
violate the moral values and behave unethically. On the other hand, due to authentic transformational leaders' role modeling,
followers' attribution processes will also depend on how well followers know and observe, and recognize the behavioral and past
decision making histories of their leaders. The more these followers know about their leaders' moral perspectives, and the more
frequent perceptions followers have about their leaders' moral emotions, the more likely they are to develop stable internal
attributions about moral decisions, and base the decisions on their own moral values, identity, and emotions.
Eisenberg (2000) argued that empathy has two forms, one is best labeled as “sympathy,” and the other one is referred to as
“personal distress.” A sympathetic reaction occurs if a person views another person in a difficult situation that is likely to cause negative
emotions, which results in the individual empathizing with the situation and emotions. Personal distress is a type of self-focused
affective reaction that helps individuals to understand emotions, such as anxiety or pain, and coincides with the individual feeling of
sadness for being in a bad situation (Eisenberg, 2005; Eisenberg, Reykowski, & Staub, 1989). To the extent that leadership creates
higher levels of empathy we would expect higher levels of sympathy and distress to lead to moral or pro-social action (Batson, 1998).
Empathy and logical thinking can interact to influence moral action (Helmuth, 2001). For example, when individuals lack
empathy and compassion, they are less likely to exhibit higher moral judgments and action (Koenigs et al., 2007). This may occur
because individuals with higher empathy levels are more likely to take the perspectives of other people and put themselves in
others' positions and situations, and to understand others' values, needs and preferences when they are confronting ethical
challenges, enabling them to act at a higher moral level (Hoffman, 1988; Treviño, Weaver, & Reynolds, 2006).
Based on the above arguments, we posit:

Proposition 6. Follower empathy mediates the effect of ATL on follower authentic moral action.

As addressed above, feelings of guilt can also serve as a psychological sanctioning mechanism through which ATL can affect
authentic moral action, and through which moral identity could lead to moral action as well. It is generally argued that guilt is
caused by violating one's moral rules and/or failure to meet moral obligations (Lazarus, 2001). In particular, if these failures cause
harm or hurt others, physiologically, economically, or psychologically, then guilt can serve as a moral sanctioning mechanism that
promotes authentic moral action.
Bandura (1991) argues that moral action is also regulated by the interactional influence of self-sanctioning and social
influences. For example, shared moral standards, already part of an individual's internalized moral values or moral identity, would
enhance pro-social moral action, which should enable individuals to feel pride in the choices they have made. It is expected that
individuals who experience conflicts between their moral identity and actions will experience some sense of guilt when they act
against their moral identity or when they fall below their moral standards (Bandura, 1991). The level of emotional and cognitive
inconsistency or dissonance triggered may provide a signal for motivating change and personal development.

Proposition 7. Follower guilt mediates the effect of ATL on follower authentic moral action.

In the next section, we escalate our level of analysis to discuss the effect of leadership on group ethics/outcomes, including
ethical climate and group moral action. In addition, we examine ethical climate as a potential mediator for the effect of ATL on
follower moral identity and follower empathy and guilt level.

5. Linking ATL to group ethics

We now explain how authentic transformational leadership influences group-level ethics through the direct and mediated
effects depicted in Fig. 1.
810 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

5.1. Direct effect of ATL on group ethical climate

As indicated above and shown in Fig. 1, we view ethical climate as something that is fostered by authentic transformational
leadership. Authentic transformational leaders have strong moral values and goals, which lead to behaviors and decisions that
should promote ethical policies, procedures, and processes within their groups. This provides an important motivational force for
building an ethical climate as depicted by a direct theoretical link in Fig. 1.
Victor and Cullen (1988) were among the first to explore the notion of ethical climate. Treviño and her colleagues extended this
discussion (e.g., Treviño, Butterfield, & McCabe, 1998; Weaver, Treviño, & Agle, 2005) by developing the concept of ethical culture
and stressed the importance of leadership in shaping a group or organization's ethical culture.
Babin, Boles, and Robin (2000) have proposed a model of ethical climate that includes the following four dimensions:
responsibility and trust, ethical peer behaviors, ethical norms, and ethical practices. For the purposes of our discussion, we will
examine these four components in combination relative to how we expect they would influence a group's ethical climate. We
restrict our analysis of ethical climate in this section to the work group level and how direct leader interactions with followers
impact a work group's ethical climate. Due to space limitations, we will not discuss how leadership, such as the senior leadership of
an organization, can indirectly impact the ethical climate of work groups who do not work directly with them. We suggest that
such indirect or cascading leadership should be a focus for future research on authentic transformational leadership.
There are several specific ways that authentic transformational leaders can influence the ethical climates of their work groups.
These include leaders demonstrating their own authentic moral behaviors to the group; communicating their virtuous character
strengths and true moral values to followers; their setting up clear and high moral standards; and their establishing moral reward and
sanctioning mechanisms to help develop and sustain the ethical climate within the group. Burns (1978) and Bass (1998) argued that
those moral values and end values, such as integrity, fairness, and justice, can serve as standards and criteria to measure the character,
transactions, and policies within the group (see Dickson, Smith, Grojean, & Ehrhart, 2001; Treviño et al., 2000; Weaver et al., 2005 who
also suggest these linkages). Sosik (2006) proposed that authentic transformational leaders' virtuous character strengths allow them
to express who they truly are, and this self-expression often exemplifies what is expected of followers regarding organizational ethics.
Authentic transformational leaders, through their daily practices of demonstrating and setting ethical examples, could help
establish the norms and codes of conduct regarding moral actions among group members. Followers, through observing the daily
behavior of authentic transformational leaders, will look for the salience of ethical behaviors of their leaders. As Ingram, LaForge,
and Schwepker (2007) argue, ethical climate is impossible without followers perceiving that their leaders are fair in exercising
their reward systems, their judgment and decision-making, and their own ethical behavior and standards. For example, the
consistency between the words and behaviors of leaders has been shown to be helpful in setting up a sense of trust among
followers within a group, which then has a positive effect on the overall ethical climate of the group (Schminke et al., 2005). Such
leaders transfer their ethical codes, rules, norms, and regulations into feasible and understandable strategies for their work group
to practice (Ingram et al., 2007). Through the reinforcement of these ethical practices, a group's ethical climate would be expected
to be assimilated and strengthened over time (Babin et al., 2000; Brown & Treviño, 2006a).
In sum, authentic transformational leaders must ensure their words are consistent with behaviors in line with their ethical
standards and moral values, while also being able to make fair judgments and show care, concern and compassion for group
members (Weaver et al., 2005, p. 316). As noted above, authentic transformational leaders can also establish their moral standards
through articulation of a vision and agenda that focuses on ethical behavior, values, and outcomes. The articulation of an idealized
vision representing high moral standards helps to create, develop, and strengthen group ethical climate. Thus:

Proposition 8. ATL has a positive effect on group ethical climate.

5.2. The mediating role of group ethical climate in the relationship of ATL-group moral action

We know from prior research that ethical climate has a positive effect on individual ethical decision-making (Barnett & Vaicys,
2000; Cullen, Victor, & Bronson, 1993; Martin & Cullen, 2006; Schminke, Arnaud, & Kuenzi, 2007). However, very little research
has examined the effect of group ethical climate on ethical decision-making or moral action at the group level. Here we define
group ethical climate as consisting of the accepted group ethical norms and conventions within the structure and procedures of
the group. Group ethical climate is the group's collective perception of both formal and informal ethical policies, procedures, and
practices with moral content and moral consequences within a group that serves as a mediating mechanism for group members to
address ethical dilemmas (Martin & Cullen, 2006).
Schminke et al. (2007) reported that a group's ethical climate helped group members develop moral decision-making perspectives.
According to these researchers, ethical climate encouraged group members to share a similar pattern of moral interaction based on
what group members perceived a group's ethical standards to be. The underlying explanation is that as members come to understand
their group's ethical climate, the shared behavioral patterns provide social motivation and sanctions for (and positive recognition to)
group members to keep their behaviors in line with the group's ethical rules and standards (Stainer, 2006).
Based on the above argument, we posit:

Proposition 9. Group ethical climate has a positive effect on group moral action.

Proposition 10. Group ethical climate mediates the effect of ATL on group moral action.
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 811

5.3. The mediating role of group ethical climate with ATL-follower individual ethics

Group culture, climate, policies and procedures provide important guidance and directions to the social expectations of group
members and offer the basis for collective cognition, perception, interpretation, intention, and action (Weaver, 2006). Here we
focus on the cross-level effect or role of group ethical climate in examining the effect of authentic transformational leadership on
follower individual ethics.
Prior research suggests (e.g., Ashkanasy, Windsor, & Treviño, 2006; O'Fallon & Butterfield, 2005; Treviño & Nelson, 2007) that
an ethical climate can have a significant positive effect on the ethical behaviors and attitudes of members within a group. The
rationale and logic underlying this argument is that individuals will feel more attached and committed to a collective group's
ethical rules if they identify with that group, as well as believe their group supports and encourages ethical behavior and punishes
unethical behaviors (Engelbrecht, Van Aswegen, & Theron, 2005; Treviño et al., 1998).
The existence of an ethical climate requires the normative moral systems within a group be institutionalized (e.g., Martin &
Cullen, 2006; Victor & Cullen, 1988). Thus, group members will perceive the influence of existing norms and formal patterns of
conduct as an element of group ethical climate. These normative ethical patterns will over time come to serve as an important
force in shaping the shared mental model of the ethical environment in a group and in turn each individual's moral self concept,
such as moral identity and moral emotions.
A group's ethical climate would be expected to have a positive effect on the establishment of followers' positive moral emotions
(Eisenberg, 2000), moral identity (Aquino & Reed, 2002) and moral actions (Treviño, Weaver, Gibson, & Toffler, 1999). Specifically,
the group ethical climate could help group members develop altruism and stewardship behaviors, or those behaviors that place
collective long-term interests over individual interests (Davis, Schoorman, & Donaldson, 1997; Hernandez, 2008). If followers
perceive that there is a caring, ethical climate within their group, they would be more likely to adopt the same kind of caring
behavior, such as sacrificing their own interests and looking at the fundamental interests of the members inside and outside the
group. This sort of climate also encourages the formation of mutual trust between followers and leaders, and among followers
(Engelbrecht et al., 2005).
Trust and respect embedded in a group's ethical climate enable followers to develop a sense of empathy, guilt and shame.
Mutual trust and respect allow followers to overcome “normlessness,” a situation that certain group members “may not respect
(ethical) norms, may not trust others to respect them, may not perceive that there is a consensus with regard to (ethically)
appropriate behavior, and may be prepared to act in deviant (unethical) ways” (Aquino & Reed, 2002, p. 1431). Trust and respect
encourage followers to establish effective communication channels, which provide them with a platform to exchange ideas
regarding ethical issues.
Ethical climate, characterized by higher standards of ethical norms and regulations, would also serve to reinforce followers for
acting in line with the universal rules within their group (Ingram et al., 2007, p. 306). For example, these types of norms and
regulations would help enable followers to guide their moral decision making processes, and to commit to a higher level of moral
action. Eventually, followers could be expected to accept and internalize these moral norms and regulations as they work to
establish their own set of moral principles and ideas, which help develop an identity to be a moral agent (Avolio, 2005), and to be
more empathic of others' perspectives and to be more likely to feel guilty when engaging in unethical conduct.
Therefore, we propose the following propositions:

Proposition 11. Group ethical climate mediates the effect of ATL on follower moral identity.

Proposition 12. Group ethical climate mediates the effect of ATL on follower empathy.

Proposition 13. Group ethical climate mediates the effect of ATL on follower guilt.

5.4. The feedback loop of follower individual and group moral action

Hollander (1993) pointed out that “[W]ithout followers, there are plainly no leaders or leadership” (p. 29). Only a few scholars
(e.g., Burns, 1978; Klein & House, 1995) have noted the role of followers in eliciting, developing, and maintaining a relationship
with their leaders. For instance, Burns (1978) stated that transforming leadership is a process of mutual social influence between
leader and followers. Avolio and his colleagues (Avolio & Gardner, 2005; Avolio & Reichard, 2008) suggested that authentic
followership contributed to authentic leadership and that examining the interaction of leaders and followers was essential to
understanding authentic leadership and followership development.
In our proposed model, we have only explored the influence of the leader on the follower's individual ethics and group ethics,
not the reverse. Thus, there is a need to complement our work by examining the role of followers' authentic moral actions in
affecting their own and their leaders' moral perspectives and in developing a group's ethical climate. For example, Kark and Shamir
(2002) suggest that followers with a more stable self-identity can affect the leader–follower interaction dynamics, as well as the
leader's moral identity.
Building on Howell and Shamir's (2005) work, we predict that leaders with a stronger relational identity orientation place
greater value in their relationships with their followers, and are more likely to seek direction, self-validation, and satisfaction from
their personal exchanges and relationships with followers. We also know from prior research that the quality of leader–member
exchange has a positive effect on followers' reciprocity to their leaders as evidenced by higher levels of trust in those leaders
812 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

(Sanders & Schyns, 2006). Following this logic, we would expect that leaders with high quality relationships with followers are
more likely to be influenced by followers' authentic moral action. Taking a long-term perspective, we predict that this reciprocal
moral relationship between the leader and followers will also help shape and strengthen the leader's moral identity, moral
emotions, consequently developing ATL, and the ethical climate.
One of the guiding propositions in Gardner et al.'s (2005) theory of authentic leadership development suggests that authentic
leaders and followers engage each other in a way that enhances each other's authenticity and development. Similar to the position
taken by Howell and Shamir (2005), the model of authentic leadership development views the process of developing a high moral
self-concept as being a reciprocal process engaging both the leader and follower.
Bandura's (1991) social cognitive theory provides further explanation for the effect of follower authentic moral action on the
leader's moral component of ATL. When observing a highly respected follower's authentic moral actions, authentic
transformational leaders are more likely to be impacted by those actions in a way that might cause the leader to revisit his/her
moral perspectives, moral self-concepts and moral values. Through a process of observation and self-reflection, downward moral
social learning, such leaders are more likely to be open to developing their moral perspective-taking capacity, which will positively
impact their moral identity, moral emotions, and moral decision making and action, and consequently, ATL, leading to our next
proposition.

Proposition 14. Follower authentic moral action has a positive effect on developing leaders' moral identity, moral emotions, and
authentic moral action, which contribute to ATL development.

Also based on social cognitive theory, followers' authentic moral action will also help shape their own moral values, moral
goals, and moral principles through feedback loops (Bandura, 1991) that cause the individual to revisit those actions of moral
content, which impacts moral self identity and moral emotions as we have shown in Fig. 1 (Hardy & Carlo, 2005; Youniss & Yates,
1999). For example, through past successful authentic moral actions (moral self vicarious learning), followers enhance their belief
that they are moral people and are empathic to others' situations and perspectives. Authentic moral action helps strengthen one's
core belief and identity that he/she is a moral person in order to avoid an imbalance or dissonance between one's identity and
moral action and to eliminate the negative affect and emotion of feeling guilty when not acting consistently with one's authentic
moral identity and moral emotions, which leads to our next set of propositions.

Proposition 15. Follower authentic moral action has a positive effect on developing follower moral identity.

Proposition 16. Follower authentic moral action has a positive effect on developing follower empathy.

Proposition 17. Follower authentic moral action has a positive effect on developing follower guilt.

As suggested above in our discussion of group ethical climate, followers' individual authentic moral action and group moral
action are expected to have a positive effect on developing a group's ethical climate. For example, through observing other
colleagues' past successful authentic moral actions and group ethical decision making (moral vicarious learning), followers
perceive there is a positive caring climate within their group. There is a belief that group members will take care of one another,
which contributes to developing an ethical climate.
Follower authentic moral action and group moral actions are presumed to play an active role in institutionalizing ethical codes
of conduct, and establishing ethical norms and regulations within a group, which contribute to developing an ethical climate.
These moral norms and rules, working together with a group's moral action, serve as rewards and punishment for moral action,
and convey moral values, beliefs, and principles to group members, which develops an ethical climate within a group.
Based on the above arguments, we propose the following final two propositions:

Proposition 18. Follower authentic moral action has a positive effect on group ethical climate.

Proposition 19. Group moral action has a positive effect on group ethical climate.

6. Discussion

We set out in this article to introduce a parsimonious and testable theoretical model to explain how authentic transformational
leadership affects individual and group moral/ethical outcomes. We aimed to explain how ATL morally uplifts and develops
followers into moral agents - a core premise of transformational leadership theory (Bass, 1985; Burns, 1978). Our model and
propositions have highlighted the specific mechanisms whereby ATL impacts follower individual and group ethics (Avolio, 1999;
Bass, 1985; Burns, 1978). We believe our proposed model extends Blasi's (1984) identity theory and Bandura's (1991) social
cognitive perspective of ethics by considering the nature of leadership that positively influences moral identity, moral emotions
and moral action.

6.1. Boundary conditions for the proposed model

Notwithstanding our discussion above, it is important to emphasize that other types of social influences, such as peer influence,
peer moral emotions, and peer moral behaviors (Campbell & Bond, 1982), can also affect the development of followers' moral
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 813

identity, moral emotions, and authentic moral action. It is possible that followers can observe their colleagues' authentic moral
actions and moral emotions, and experience motivation to act morally, while also feeling pressured not to act unethically. These
mechanisms can influence the follower's own moral identity and moral emotions, and ultimately authentic moral action. This
would only be partially captured in terms of the hypothesized role of ethical climate in our proposed model and in some of the
references above that we have made to how the group's behavior can influence the individual. We suggest that these peer
influences, though embedded in the group ethical climate noted above, need to be more closely analyzed, which goes beyond the
scope of the present proposed theoretical model.
The proposed model also does not fully address the role of individual differences (Treviño et al., 2006) affecting the
establishment of moral identity and moral emotions, nor the demonstration of authentic moral action. As indicated by Hardy and
Carlo (2005), it is important to identify factors that foster moral self-concept, such as moral identity and moral emotions, because
understanding this issue will be of utmost importance for developing moral identity and moral emotions. For example, Hart
(2005) has identified five factors that are predicted to develop moral identity: personality, social structure (e.g., social economic
status), moral cognition, self-concept and identity, and opportunities for moral action. Future research could examine the
interactional relationships between these variables and leadership. For example, some followers may be more predisposed to
external influences. Specifically, individuals who start out with a higher level of conscientiousness (Brown & Treviño, 2006a,b)
openness to new experiences, or have a learning goal orientation, may be more likely to accept authentic transformational leaders'
moral values and moral perspectives. All of these issues are important considerations for future research.
Howell and Shamir (2005) proposed that followers who have higher levels of self-concept clarity are likely to have a higher
motivation for self-expression and to attach greater importance to self-consistency. This suggests that such followers would be
more motivated to protect and enhance their moral identity and moral emotions. Therefore, these followers may respond more
positively to authentic transformational leaders who link moral goals and moral action to valued components of the followers'
moral self-concepts, particularly their moral values, moral identity, and moral emotions. Therefore, future research might benefit
from examining the role of follower self-concept clarity with the relationship between ATL and follower moral identity, moral
emotions, and authentic moral action.
Another issue that needs to be addressed is whether developing ethics is universal or culturally specific (Treviño et al., 2006).
Though there are different opinions about whether moral identity or action is a universal phenomenon (Carlo & Edwards, 2005), it
is generally agreed that the ethics developmental process has universal elements that generalize across different cultures. For
example, Kagan (2005) proposed that there should be a universal developmental sequence for the separate components of
morality, including one's initial understanding of the concept of prohibited acts, the ability to infer the thoughts of another, the
acquisition of the values of good or bad, the ability to relate the past to present, and the recognition of social identity categories to
which self belongs.
Other researchers (Eisenberg, 2005; Hart, 2005; Narvaez, 2005; Staub, 2005) argue that there are generally similar cognitive
mechanisms and emotional processes that underlie ethics development around the world. However, there might be different
emotional processes and mechanisms in different cultures that contribute to the development process of moral identity and moral
emotions (Carlo & Edwards, 2005).
One particular argument regarding cultural differences is that moral emotions, such as guilt and shame, could have a stronger
effect on one's moral action in a Confucian- versus Western-oriented culture. For example, Bedford and Hwang (2003) argue that
the central difference in self-concepts between the American and Chinese cultures may lead to a differential impact in terms of the
role of guilt. Compared to Westerners, Chinese place greater significance on their identity in terms of their relationships with
others, and therefore they are more likely to be motivated by guilt and “saving face” (Hwang, 1999; Markus & Kitayama, 1991).
This means that the Chinese are more likely to feel shameful by their lack of action on the part of others. Therefore, it is possible
that positive moral emotions play a larger role in affecting the relationship between follower moral identity and moral action in
Chinese culture than in other cultures, especially where the individual is experiencing dissonance related to guilt or shame.
Extending the model proposed in this paper to address these cultural contingencies is certainly a worthwhile avenue for further
conceptual development and empirical research.

6.2. Recommendations for future research

The above limitations notwithstanding, our proposed model provides several avenues for future research on leadership and
development of follower individual ethics and group ethics that could be pursued. First and foremost, research is needed to
empirically test and validate the linkages of the proposed theoretical framework. Secondly, future research may explore the
proposed model by including other individual and situational factors that could significantly affect follower moral identity,
follower moral emotions, and authentic moral action, such as a follower's core self evaluation (Judge, Erez, Bono, & Thoresen,
2003), follower moral conation, which represents the motivation to act and address ethical transgressions, such as demonstrated
by moral courage (Hannah, Avolio & May, 2011). and/or the moral intensity associated with different situational challenges
(Flannery & May, 2000).

6.2.1. Level of analysis

Currently, the proposed model focuses on the direct influence of ATL on each individual's moral identity, moral emotions, and
authentic moral actions. According to Waldman and Yammarino (1999), if all members of a group are extremely cohesive and
homogenous, the individual level of analysis can be escalated to a group level of analysis, and the emergence of a group ethical
814 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817

climate. This is also consistent with Treviño et al.'s (2006) suggestion that group-level moral phenomena can surface from a
collection of individual moral actions within a group. On the other hand, to the extent the group has developed a strong set of
internal moral values and codes, where the leader fails to behave morally with one follower, the group may ultimately substitute
for the leader in influencing followers to act ethically. Such a “contagion” effect could lead to much more rapid downfalls of
unethical leaders where the group's collective moral identity is less tolerant of such behavior from their leader.

6.2.2. Indirect moral effect

Another research question worthy of future exploration regards the direct and indirect effects of ATL at the senior executive
level on developing moral identity, moral emotions, and moral action of employees at multiple organizational levels. This focus
would include examining the “indirect cascading moral effect” through the senior leadership influence on the moral identities,
emotions, perspectives and actions of middle to first-level managers. As we move in this direction, more attention should also be
placed on understanding how leadership at all levels builds a highly moral and ethical organizational culture.
It would also be interesting to examine whether the direct moral effect of authentic transformational leadership on immediate
followers and indirect cascading moral effect on distant followers function through different social exchange or influence
mechanisms. For example, as suggested by some researchers (e.g., Brown & Treviño, 2006b; Lord & Maher, 1991) and as argued in
this article, the direct moral effect emerges from followers' observation of moral actions and decisions of their immediate leaders.
However, the indirect cascading moral effect is more likely to be influenced by how top management sets the ethical climate for
the organization through their actions, decisions and reputation. Ireland and Hitt (1989) among others suggest that top leaders set
the ethical standards for the organization and provide guidance for what is and is not appropriate behavior, which has received
some preliminary support in recent research (Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). Examining how direct and
indirect leadership impacts the moral identity, emotions, and actions of followers either independently or through their
interaction, represents intriguing areas for future research to pursue.

6.2.3. Length of time with leader

Another question for future research to focus on is how the length of time working with a leader moderates the effects of
authentic transformational leadership on follower moral identity, emotions, and actions. Specifically, how much time is required
for a leader to impact a particular follower's moral identity? How does the amount of time vary as a consequence of the leader,
follower, and the context in which they operate? For instance, if a particular follower is more learning oriented and displays a
higher level of meta-cognitive ability, will that follower's moral identity change more rapidly than say a follower who is not
learning oriented and displays lower meta-cognitive ability? At this point, we are not aware of any research that has addressed
these individual dynamics and how they are linked with authentic transformational leadership.
Another important issue that future research should consider regarding the length of time that a leader and follower interact
with one another is the intensity of those interactions. For example, Nonaka (1994) talks about “high quality learning experiences”
that promote cognitive disequilibrium. In these instances, individuals realize that their requisite knowledge is inadequate to
address a current event or dilemma. Such events could then trigger self-reflection as the individual attempts to resolve the
challenge to their knowledge base and indeed moral identity. We suggest that high quality and intense moral learning experiences
delivered by respected role models could have a very dramatic impact on the individual's moral development.
As to the issue of time, it is also important to examine how leaders develop the context in which they are trying to stimulate
followers' learning and growth. Specifically, leaders can affect a follower's developmental readiness, defined as both the ability and
orientation to attend to, make meaning of, and appropriate new knowledge effectively into one's long-term memory structure
(see Hannah & Lester, 2009). One's developmental readiness is in part affected by one's learning goal orientation as suggested
above (Button, Mathieu, & Zajac, 1996; Dweck, 1989), as well as based on the developmental readiness of the context (e.g., where
there is a more transparent and trusting climate). The congruence between the leader's and followers' learning goal orientation
has been shown to be a key element in effective relationship development based on transformational leadership (Sosik, Godshalk,
& Yammarino, 2004). Taken together, the readiness of both the individual and the context for developing an individual's moral
identity, moral emotions, and moral action are clearly areas that require future research.

6.2.4. Other issues

Future research could also benefit from examining the feedback loop of group ethical climate, as collective moral cognition and
moral decision criteria, on developing the leader's positive moral identity and moral emotions, and authentic moral action, which
contributes to developing authentic transformational leadership eventually, as indicated in Fig. 1. In this paper, we propose that
moral identity is a mediator between authentic transformational leadership and follower moral action in order to emphasize the
developmental role of leadership with follower moral identity. It would be beneficial if future research also examines the
moderating role of moral identity in terms of the effect of leadership on follower moral action. Future research could also address
the complex and dynamic relationship among moral identity, emotions, judgment, and courage and how they individually, as well
as through their interaction, influence the effects of authentic transformational leadership on the moral actions of followers.

6.3. Implications for practice

There are also several important practical implications from our proposed model. First, once tested the proposed theoretical
model could be used to guide leader and follower moral identity and moral emotional development. In order to influence follower
 W. Zhu et al. / The Leadership Quarterly 22 (2011) 801–817 815

authentic moral action, leaders would have to help establish and strengthen follower moral identity and moral emotions as a
central step in the development process through good ethical role modeling. After establishing high moral identity and moral
emotions, followers would be better able to think in a positive way about acting morally for themselves, and their groups, which
has an impact on a group's sustainable survival, development, and performance.
Authentic transformational leaders could establish authentic and transparent decision-making processes to promote the
development of their followers' moral identity and moral emotions, and in turn higher standards for moral action in groups, thus
building and reinforcing a climate for authentic moral action (Gardner et al., 2005). Furthermore, authentic transformational
leaders could develop an ethical climate to improve group ethical decision making, to develop follower moral identity, moral
emotions, and consequently follower authentic moral action.
The second practical implication is that, in order to develop authentic and moral followers, groups need to develop authentic
transformational leaders. Therefore, groups could also use this theoretical model as justification for building a strategic and long-term
solution to developing ATL within the group to develop higher follower moral perspectives, i.e. moral identity, moral emotions, and
authentic moral action.
Another practical implication is that, to amplify authentic transformational leaders' strengths in moral perspectives and to
reduce their weaknesses, senior leaders need to monitor and reinforce positive moral relationships between their subordinate
leaders and followers. For example, inferring from Howell and Shamir (2005), leaders could build a well-developed group ethical
climate and a socialization process that emphasizes moral values and moral principles, which could then strengthen the effect of
ATL on developing follower and group ethics. In order to minimize or even eliminate immoral behaviors, leaders need to pay
attention to the development, maintenance, and openness of moral norms and principles within a group, which would then serve
to help shape follower moral identity, moral emotions, and consequently authentic moral action, especially for new followers
coming into the group over time.

7. Conclusion

Despite the increased emphasis on ethics-related models of leadership over the last 30 years, there has been relatively little
focus on testing their effects on follower and group ethics. In this paper, we have attempted to fill this gap by introducing a
theoretical framework that explores how authentic transformational leadership influences follower moral identity, moral
emotions, and group ethical climate, and their roles in promoting follower authentic moral action and group moral action. How
followers develop their moral identity and moral emotions may be an important topic especially where we have to increasingly
rely upon each follower's internal compass to guide what is considered right and wrong. We hope that by focusing on these
important constructs, we have helped pave the way for investigating the role of ATL in developing follower moral perspectives,
positive moral emotions, and group moral action. To some degree, we have returned after three decades to Burns' (1978) original
distinction that transforming leaders are morally uplifting, while attempting to explain how the “uplifting” process occurs. This
seems like an appropriate starting point to launch future work on this core and unique position in ATL theory.

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