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 article info abstract 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 moral identity and moral emotions mediate the effect of authentic transformational leadership on follower authentic moral action. Furthermore, we explore how authentic transformational leadership develops group ethical climate, which in turn contributes to enhancing group ethics and to developing follower moral identity and moral emotions. Future research and practical implications are discussed. © 2011 Elsevier Inc. All rights reserved. Keywords: Authentic transformational leadership (ATL) Follower ethics Group ethics 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. The Leadership Quarterly 22 (2011) 801–817 ⁎ 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 Contents lists available at ScienceDirect The Leadership Quarterly journal homepage: www.elsevier.com/locate/leaqua