Introduction

Notwithstanding a plethora of studies on leadership, only a small portion of research has focused on its ethical, contextual and systematic dimensions (Trevino et al. 2000; Riggio et al. 2010). Ethical leadership relates “to the context within which leaders are embedded and is bound by subjective interpretations” (Lemoine et al. 2019, p. 162). Scholarship on this topic suggests that ethical leadership shapes employee behavior and has a positive impact on ethical conduct and performance of organizations (Eluwole et al. 2022; Liu 2017; Martin et al. 2009; Waldman et al. 2017). This scholarly trend is spurred by a myriad of corporate scandals in diverse contexts, such as the Enron scandal in the USA (2009), the London Interbank Offered Rate scandal in the UK (2012), the Valeant Pharmaceuticals scandal in Canada (2015), Wells Fargo in the USA (2016), Wirecard’s collapse (2019), Carlos Ghosn (2019), Twitter’s security slip (2020), PPP fraud (2020) (Fortune 2020) and Facebook privacy policies (James 2021; Sarwar et al. 2020). Scholars of leadership have responded to the escalating incidents of ethical failures by highlighting the moral characteristics of leadership (Liu 2017). It has been argued that leaders who are involved in corporate corruption may not be “true leaders” (Liu 2017; Stouten et al. 2012).

Within the literature on leadership, contextual factors that affect ethical leadership remain relatively underexplored (Keating et al. 2007; Newman et al. 2015; Resick et al. 2006). Although there are dimensions of ethical leadership that are, arguably, cross-culturally recognized (Resick et al. 2011), there are important contextual differences, such as the ones based on the individualistic-collectivist culture (Keating et al. 2007; Martin et al. 2009) and the extent to which ethical norms and principles prevail in a society (Kimura and Nishikawa 2018). Contextual factors such as cultural norms, societal values, and religious principles develop expectations regarding the behaviors and practices a leader should exhibit in a specific situation (Martin et al. 2009).

In the study of ethical leadership, there has been a persistent dichotomy between focusing on individual traits and considering the influence of organizational systems. Research has often emphasized the role of individual characteristics, such as moral identity and personality, in shaping ethical leadership behaviors (Brown et al. 2005; Resick et al. 2006). This trait-based perspective posits that ethical leaders inherently possess certain virtues and moral standards that guide their decisions and actions. However, other studies have highlighted the significant impact of organizational systems in fostering or constraining ethical leadership (Mayer et al. 2012; Trevino et al., 2000). Organizational systems, such as ethical codes, reward structures, and leadership models, can either support or undermine ethical behavior of leaders (Heres and Lasthuizen 2012). Despite these insights, much of the literature continues to examine ethical leader’s traits and organizational systems in isolation, leading to a fragmented understanding of how ethical leadership emerges and operates in real-world settings.

We argue that ethical leadership is a systematic process that is not only context sensitive but also socially constructed. Therefore, instead of being exclusively described though traits or behaviors of a few individuals, interactions and practices of ethical leadership within organizational systems merit a deeper examination (Douglas et al. 2022; Painter-Morland 2008). The aim of the present article is to develop an integrative and co-evolutionary framework demonstrating how ethical leadership emerges from the interaction between ethical traits, organizational contexts, and systematic practices. The article contributes to the literature through emphasizing the dynamic and evolving nature of ethical leadership which cannot be understood through relying on either individual traits or organizational systems.

The article is structured as follows. It starts with an overview of the extant conceptualizations of ethical leadership comprising review of the key individual traits and their influence on ethical leadership. It then reviews leadership theories that incorporate systematic and contextual factors and how these factors shape ethical leadership. After this, an integrative framework of leadership is proposed and explained. The subsequent sections outline the agenda for future research along with practical implications.

Ethical Leadership

Ethics is a key behavior highlighted in several leadership theories such as transformational leadership (Bass 1985), authentic leadership (Avolio and Gardner 2005), servant leadership (Greenleaf 1977), and spiritual leadership (Fry 2003). There is a reference to the ethical treatment of followers and morality of leaders in these theories of leadership. For instance, the emphasis of transformational leadership is on the role-modeling of ethical leaders, authentic leadership focuses on fair decision-making practices in organizations, and spiritual leadership highlights the ethical treatment of followers.

According to Trevino et al. (2000), there are two dimensions of an ethical leader. The first is the moral person and the other is the moral manager. The moral person dimension is characterized by a leader exhibiting traits such as honesty, kindliness, and the one who makes balanced decisions. The moral manager dimension is characterized by a leader who communicates ethical standards to followers and uses rewards to enable and ensure that standards are followed.

Brown et al. (2005) define ethical leadership 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” (p.120). Brown et al. (2005, p. 126) suggest a scale for measuring ethical leadership, the Ethical Leadership Scale (ELS), through which a leader’s ethicality may be evaluated. The scale contains ten items, such as ‘disciplines employees who violate ethical standards’, ‘sets an example of how to do things the right way in terms of ethics’, ‘when making decisions, asks ‘what is the right thing to do?’

Tanner et al. (2010) developed a new measure, Ethical Leadership Behavior Scale (ELBS), which focuses on visible ethical behavior across situations. Example items are: ‘takes time to instruct new staff members’, ‘sticks to agreements’, and ‘helps to resolve team conflicts’ (p. 229). The ELBS was related to visible ethical behavior but was unable to focus on behavior in terms of the ethical guidance of employees.

The above discussion indicates certain behaviors and practices that an ethical leader usually manifests, i.e., doing the right thing, concern for people, being open, and personal morality (Fulmer 2004). We argue that ethical leadership is not just confined to a universal set of traits and behaviors manifested by ethical leaders. The ethical values and practices that a leader exhibit vary from context to context due to several interconnected factors which merit a systematic examination. The interaction between personality traits and contextual factors can lead to emergent behaviors that cannot be predicted from individual characteristics alone. For instance, a high level of conscientiousness might lead to excellent performance in a structured environment but could result in stress and burnout in a chaotic, unstructured context. The neglect of this interaction overlooks the integrative process where individuals, contexts and organizational systems influence each other (Uhl-Bien et al. 2007).

Leadership theories that incorporate systematic and contextual factors emphasize the importance of the environment in which leadership occurs, recognizing that leadership effectiveness is influenced by the dynamic interaction between leaders and their practices and context (Carroll et al. 2008; Uhl-Bien et al. 2007).

Evolutionary leadership theory (ELT) proposes that human mind contains many specialized psychological mechanisms that have enabled humans to solve problems (Vugt and Ronay 2014). Similarly, Complexity Leadership Theory (CLT) views leadership as an emergent property within complex adaptive systems, where leadership is not solely about individual traits but about the interactions among agents within a system, emphasizing the non-linear, dynamic nature of leadership (Heifetz et al. 2009; Uhl-Bien et al. 2007). These perspectives highlight the significance of understanding leadership as a process that is deeply embedded in and responsive to the broader environmental and systematic contexts.

The examination of these theories reveals that leadership emerges from a continuous interaction between leaders’ traits and the organizational contexts and systems where each affects and transforms the other over time.

The Integrative Framework of Ethical Leadership

The article proposes an integrative framework of ethical leadership exhibiting the dynamic interplay between traits of ethical leaders, organizational contexts, and systematic practices. Table 1 provides an overview of relevant studies in this domain.

Table 1 Key themes of ethical leadership in the literature
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Leaders’ Ethical Traits

Individual values, traits, and practices of ethical leaders play an important role in one’s moral code and approach to ethical leadership (Fehr et al. 2015).

Research points towards certain common practices and characteristics of ethical leaders. The first is integrity including traits such as honesty and trustworthiness. These traits are assumed to be important characteristics related to a leader’s credibility and effectiveness (Brown et al. 2005; Ciulla 2005).

Within the Big Five personality factors, the dimensions of agreeableness and conscientiousness are closely related to ethical leadership. Other traits such as humanity, dutifulness, honesty, compassion, and teamwork are related to agreeableness and conscientiousness. Fairness while making decisions is also one of the main traits exhibited by ethical leaders (Toor and Ofori 2009).

Crews (2015) highlighted three key elements of ethical leadership: value alignment, governance, and relationship-centeredness. Ethical leaders behave with integrity, courage, and trustworthiness. They are concerned with preserving relationships, fairness, and altruism. In terms of governance, ethical leaders demonstrate compliance with formal accountability measures and exercise discernment in their decision-making.

In the Chinese context, Wang et al. (2017) point towards six important components of ethical leadership i.e., moral courage, openness to criticism, incorruptibility, reliability, fairness, and role modeling.

At the core of ethical leadership, there is a cognitive component comprising “leaders’ values and knowledge (integrity, ethical awareness, and community/people-orientations) which then influence the way leaders behave and use their social power (motivating, encouraging, and empowering followers and holding people accountable)” (Resick et al. 2006, p. 348).

An individual’s internal disposition governs the degree to which he or she determines the nature of his or her reaction to an ethical problem and thereby influences ethical leadership practices. For instance, a leader with self-enhancement values will perceive and look for the potential for personal gain. A leader with transcendence values has high regard for the collective good of the organization when encountering a problem (Illies and Reiter-Palmon 2008).

Personal values affecting ethical leadership practices comprise moral standards, self-judgment, personality, role clarification, knowledge, commitment, emotional stability, and responsibility (Saha et al. 2020). Leaders’ actions are reflective of their personal beliefs and values. Leaders with strong personal values build good connections with employees. Such values also affect the way the leader uses power, especially the values constituting integrity, ethical awareness, and people orientation (Resick et al. 2006; Saha et al. 2020). A leader’s behavior is not only influenced by personal values but also affects organizational performance.

Organizational Contexts

Organizational context comprises organizational culture, internal policies, and ethical climate within the organization (Grojean et al. 2004). Despite the proliferation of ethical leadership studies over the last few decades, there is a dearth of research on how organizational context influences the practices of ethical leaders (Ahmad et al. 2020). One possible reason for this oversight is the overreliance of ethical leadership literature on Western perspectives (Eisenbeiss 2012; Resick et al. 2006), which do not always pay attention to how context plays an important role in shaping ethical leadership.

In their study in the Japanese context, Kimura and Nishikawa (2018) reveal a high frequency for “accountability” and a lower frequency for “consideration and respect for others”. Arguably, cultural and institutional characteristics of every culture necessitated the need for distinct dimensions of ethical leadership suitable to that culture.

Contexts differ based on moral content, including national cultures, political or religious climate, and industry or corporate cultures, suggesting the importance of context in the domain of ethical leadership. Ethical leaders are sensitive to contextual issues because they are bound to follow certain cultural and organizational norms in a specific situation (Lemoine et al. 2019; Martin et al. 2009).

Contextualization helps in determining culturally embedded constructs (Wang et al. 2017). For example, countries in South Asia generally offer a cultural context comprising power distance, paternalism, collectivism, and social relations (Loi et al. 2012). The contextual and institutional characteristics create unique leadership behaviors which influence the processes underlying the leadership effect as well as the role of leaders in socio-economic and organizational contexts (Loi et al. 2012).

The moral dimensions in a context depend upon its cultural milieu (Fehr et al. 2015). For instance, some cultures, such as the Buddhists, place special emphasis on moral dimensions of care and nurturing. This also depends on the nature of organizations and industries. For example, hospitals emphasize care and compassions as moral dimensions, while the military formations stress loyalty and respect for authority. The morality inherent in a specific situation translates into organizational practices, organizational climates, and norms regarding the way work should be performed in an organization (Fehr et al. 2015). Employees may not agree with their organizations’ moral practices but understand what it means to be moral in a certain context.

The integrative approach to ethical leadership may help align leadership behaviors with the organizational factors (Den Hartog 2015; Liu 2017; Wilson and McCalman 2017). Organizational contexts play an important role in developing perceptions and practices of ethical leadership and ethical leaders. For example, if a company has a strong ethical culture, is the leader more likely to act or to be perceived as an ethical leader? The contexts may vary from highly ethical to unethical, which may influence the perceptions of ethical leadership and vice-versa (Saha et al. 2020). Ethical leaders may embody and promote values like integrity, fairness, and transparency which may influence organizational culture to such an extent that the culture of organization becomes aligned with leader’s values (Brown et al. 2005). In short, ethical leader’s traits not only influence behaviors and decisions within the organization but also play an important role in shaping the broader organizational context leading to creation of an environment where ethical practices thrive and evolve.

Systematic Practices

Systematic practices comprising laws, regulations, and industry standards are critical part of the organizational context. Ethical leaders are required to align not only with the culture of organization but also the external mandates involving rigorous compliance programs (Aguilera et al. 2007).

There is some work done on this topic. For example, Avci et al. (2017) emphasize the use of ethics in everyday nursing practices. As a clinical practice, nursing comprises systematic problem solving and decision making, often confronted with ethical challenges. In a similar manner, our article emphasizes the systematic use of ethics to develop contextual leadership practices. Similarly, Bhatnagar (2017) propose a systematic leadership model comprising human, social and processes dimensions for leadership development, to enable positive change in organizations. Sankaran et al. (2014) propose a leadership capability framework in the Australian context. The authors describe leadership as a capability that goes beyond the standard parameters of operational management. Their study highlights how various forces in a contextual environment systematically affect leadership capabilities.

Systematic practices encompass societal values and norms which may influence organizational cultures and thereby influencing ethical leader traits (Carroll and Shabana 2010). Organizational practices are shaped by institutional pressures, comprising regulatory, normative and cognitive forces which may influence ethical leaders by abiding them to follow ethical standards, while making decisions (Scott 2005). For instance, ethical leaders may respond to external changes through adopting corporate social responsibility initiatives within their organizations, which reinforce systematic norms. Over the number of years, this may lead to the development of industry norms or changes in regulations. Alternatively, ethical leaders influence systematic practices by integrating ethical considerations into decision-making processes, policies, and routines (Scott 2005). This creates a feedback loop where leadership traits, organizational contexts and systematic practices are mutually reinforcing each other.

Discussion

In the preceding pages, we reviewed the role of organizational contexts and systematic practices along with traits of ethical leaders on ethical leadership practices. In line with a systematic practice approach (Carroll et al. 2008), we develop an integrative framework of ethical leadership and offered two propositions that are valuable for researchers (see Figure I). This proposed integrative framework is systematic in nature where many issues are addressed simultaneously in the form of a process.

Fig. 1
figure 1

An integrative framework of ethical leadership

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As depicted in Fig. 1, leader’s ethical traits, organizational contexts and systematic practices are interlinked with each other in form of continuous feedback loops. This relationship is dynamic, interdependent, and systematically affect ethical leadership practices. Additionally, the relationship between moral dimensions of organizational and societal context and values and traits of ethical leaders is dynamic and interdependent and collectively affects ethical leadership practices. These contextual moral dimensions and values and traits of ethical leaders become incorporated into the interactions between leaders and followers, ultimately influencing the practices of ethical leaders.

Indeed, organizations are “complex adaptive systems” as they are characterized by interconnecting relationships. Ethical leadership in organizations is an ongoing process to be integrated at all levels (Collier and Esteban 2000). This systematic process requires skills such as the capacity to build a shared vision, ability to recognize and acknowledge at all various mental models and foster systematic patterns of thinking. It involves a never-ending direction-finding process drawing on interactions between all members of organizational system comprising leaders and followers. The system is defined not by the values and passion of charismatic members but by the contextual contingencies of the system. Companies that last are built on a set of core values (Painter-Morland 2008).

According to the proposed integrative framework, both the leader and the context undergo mutual adaptation. Ethical leaders influence organizational context by modeling ethical behavior, which is internalized by employees, and reflected in the organization’s culture and systematic practices (Vugt and Ronay 2014). Simultaneously, the organizational context may bring changes to the leader’s behavior, which may create a more conducive environment for ethical leadership. Therefore, we suggest that practices exhibited by ethical leaders and the contextual factors in situation are dependent on each other and together shape the ethical leadership practices. We offer the following proposition:

Proposition 1

The mutual dependence between leaders’ ethical traits and organizational contexts shapes ethical leadership practices.

Furthermore, ethical leader’s traits can also influence systematic practices through ethical leaders. A leader prioritizing diversity and inclusion might implement diversity practices within organizations that might be followed by other industries (Meyerson and Fletcher 2000). The integrative framework posits that changes appearing at the organizational level can also result in systematic changes. For instance, if multiple organizations adopt ethical sourcing as a standard practice, this may result in creation of industry-wide standards, and potentially influence legislative changes (Trevino and Nelson 2021). Ethical leadership plays a key role in driving these changes by advocating for and institutionalizing ethical practices (Vugt and Ronay 2014).

The integrative view highlights the presence of feedback loops where systematic practices, organizational contexts and ethical leadership are linked to each other. For instance, ethical leaders may follow a systematic practice such as international labor standards and create a corporate culture that values human rights. Organization may advocate for stronger industry regulations as the culture strengthens, thereby reinforcing systematic practices (Schneider and Somers 2006).

Based on the above discussion, it can be inferred that ethical leadership is a continuous process where ethical leaders, organizational contexts and the broader systematic practices are coevolving and influence each other. This adaptive process is the central part of the integrative framework, shaping the future of organizations and society (Pettigrew et al. 2001). Therefore, we propose the following proposition:

Proposition 2

The higher the alignment between leaders’ ethical traits, organizational contexts, and systematic practices, the higher the effectiveness of ethical leadership practices.

A systematic approach to leadership fosters how ethical practices are achieved through consideration of moral and ethical dimensions in organizations and society as well as values and traits of ethical leaders. Systems thinking assumes everything happening in the world to be systematic in nature. The interdependent phenomenon can be group together to achieve a common purpose, thus solving many complex problems (Bhatnagar 2017) and resulting in improved practice.

Our conceptual discussion offers a valuable addition to the body of literature on ethical leadership by employing a systematic approach that views leaders’ practices as socially constructed through moral dimensions of societal and organizational contexts and values and traits of ethical leaders. It extends the findings of Den Hartog (2015) and Eisenbeiss and Geissner (2012), who emphasized the critical role of context in shaping ethical leadership practices.

Implications

Our proposed model adds to the extant body of knowledge by offering a fresh and systematic perspective on conceptualizing ethical leadership. From a practical standpoint, the integrative framework can inform the development of ethical leadership by emphasizing the importance of context in leadership training and development programs. Rather than focusing solely on individual traits, these programs can also address how leaders can effectively navigate and influence their evolving contexts and systematic practices to foster ethical behavior.

By applying the integrative theoretical lens to ethical leadership, organizations can better understand the complex, dynamic interplay among leaders’ traits, practices and their environments.

To promote ethical conduct, leaders may ask themselves what systematic practices they can engage in to make the ethical dimensions of their leadership salient in their organizational or social context. Leaders may care to convey a socially salient ethics agenda. One way to do so is to share information publicly about important organizational decisions – especially those that affect people – along with information about the principles and decision- making process that were used to make these decisions. Ethical leaders can display caring attitude towards followers in a variety of ways: listening, and visibly demonstrating concern for the greater good and the long-term best interest of the organization. They may communicate with employees regularly about ethical issues, and use socially salient action, such as rewards and punishments, to signal support for ethical values.

This study also suggests implementing systematic mechanisms such as ethics committees, whistleblower policies, and regular audits to ensure that ethical standards are upheld. These mechanisms hold leaders and employees accountable for their actions, reinforcing the importance of ethical behavior within the organization (Kaptein 2008).

In terms of its limitations, future scholars may wish to collect data in a variety of societal and organizational contexts and providing detailed case studies on how the integrative framework operates in real-world settings. Future research can use the present study to develop more complex and nuanced measures of the ethical dimension of leadership that will allow broader based empirical studies to be conducted.

Future research can be done regarding potential challenges in implementing the proposed integrative approach to devise solutions and strategies for overcoming any challenges in the way of ethical leadership.

Conclusion

This article has conducted a review of the literature to propose an integrative framework of ethical leadership, in which individual traits of leaders, organizational contexts, and systematic practices are seen as mutually reinforcing components. Additionally, we suggest several avenues for future research that could further our understanding of ethical leadership.