Beyond the universal perception: Unveiling the paradoxical impact of ethical leadership on employees’ unethical pro-organizational behavior

Ethical leadership, widely recognized as a positive leadership style, has shown inconsistent relationships with employees' unethical pro-organizational behavior in the workplace. This study draws on the social cognitive theory to investigate the paradoxical impact of ethical leadership on employees' unethical pro-organizational behavior. It also examines the mediating role of employees' psychological empowerment and the moderating effect of moral identity. The study collects data from 515 nursing staff working in public and private hospitals in Pakistan at three different time intervals, and analyzed using PLS SEM. Contrary to the previous studies and our initial hypothesis, the findings reveal a positive relationship between ethical leadership and employees' unethical pro-organizational behavior. Additionally, the study demonstrates that employees' psychological empowerment positively mediates the relationship between ethical leadership and employees' unethical pro-organizational behavior. This underscores the significance of employees' psychological processes. Furthermore, the relationship between ethical leadership and employees' psychological empowerment is moderated by employees' moral identity. This highlights the role of the individual differences in shaping employees’ behavior within the workplace. Overall, these results challenge the universal perception of ethical leadership as a positive form of leadership, shedding light on the unintended consequences and paradoxical impact it can have in organizations.