The Loyalty Paradox: Why Inspirational Leaders Can Inadvertently Trigger Unethical Behavior

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While transformational leadership is often celebrated for boosting performance and fostering team spirit, a recent study reveals it can also function as a "double-edged sword" within public institutions. Research conducted by Puti Lenggogeni and Syahrizal from Universitas Negeri Padang, published in 2026, highlights how this leadership style can inadvertently encourage "Unethical Pro-organizational Behavior" (UPB)—actions that violate ethical or social norms, yet are committed by employees with the intent to benefit the organization.

The Study: Tax Office Dynamics

The research focused on 234 tax officials at the Regional Office of the Directorate General of Taxes (DJP) for West Sumatra and Jambi. Despite national efforts to prioritize integrity, the study sought to understand why some tax service offices struggled to meet integrity targets. The findings suggest that when transformational leaders set exceptionally high performance expectations, they may create intense pressure, leading subordinates to view unethical actions—such as administrative manipulation or withholding negative information—as a necessary "survival strategy" to demonstrate loyalty and meet institutional goals.

Key Findings

The study identified several critical dynamics in how leadership influences employee behavior:

·         Leadership’s Impact on Loyalty: Transformational leadership significantly fosters organizational identification, forging a strong emotional bond where employees link their personal self-esteem to the organization’s success.

·         The Mediation Effect: This sense of oneness acts as a catalyst; as employees identify more strongly with their institution, they become more likely to rationalize moral transgressions as a form of devotion to the organization.

·         The Failure of Moral Identity as a Shield: Contrary to expectations, the study found that an individual's personal "moral identity"—their internal commitment to honesty and fairness—failed to stop employees from engaging in UPB. In high-pressure environments, the desire to achieve organizational targets can override individual ethical values.

Practical Implications

The authors warn that current performance management systems that focus exclusively on revenue targets may inadvertently incentivize these unethical shortcuts. To foster a true culture of integrity, the researchers recommend:

·         Balancing Metrics: Performance evaluations should integrate "ethical process indicators" alongside final revenue targets, giving equal weight to how goals are achieved.

·         Redefining Loyalty: Leadership communication must shift to emphasize that the ultimate expression of organizational loyalty is maintaining the institution’s long-term reputation and integrity, rather than achieving short-term outcomes through questionable means.

Author Profiles:

  • Puti Lenggogeni - Universitas Negeri Padang.
  • Syahrizal - Universitas Negeri Padang.

Source:

Lenggogeni, P., & Syahrizal. (2026). The Loyalty Paradox: Why Do Inspirational Leaders Trigger Ethical Deviance? A Study on Unethical Pro-Organizational Behavior. International Journal of Business and Applied Economics (IJBAE), 5(3), 859-870.

 DOI: https://doi.org/10.55927/ijbae.v5i3.29

URL: https://journalijbae.my.id/index.php/ijbae


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