Status Threat and Ethical Leadership: A Power-Dependence Perspective

Whether, how and when do leaders engage in ethical leadership as a response to status threat? We propose that leaders facing status threat are likely to develop ethical leadership behaviors toward subordinates. Drawing on power dependence theory, we theorize that experiencing status threat augments leaders' dependence on subordinates who can provide them with status-relevant resources (e.g., performance, loyalty and trust). Dependence on subordinates further motivates leaders to absorb the resource constraints through displaying ethical leadership. However, if leaders are able to obtain alternative resources to cope with status threat, their dependence on subordinates is weakened. We conducted two studies to test the predictions. Using a moderation-of-process design, Study 1 found that when participants experienced status threat, they displayed more ethical leadership behaviors, but particularly so when their reward structure was team- rather than individual-based. Study 2 was a field study using a sample of 104 teams from two Chinese firms listed in the Top 500 private enterprises in China. We found that leaders who experienced more status threat were perceived to be more ethical by their subordinates, which was mediated by leaders' perceptions of dependence on subordinates. The mediated effect was stronger (weaker) for leaders who were less (more) skilled in networking. Implications for theory on the contextual factors of ethical leadership, dependence, and status threat are discussed.