Unpacking the Paradoxical Impact of Ethical Leadership on Employees’ Unethical Pro-Organizational Behavior: The Interplay of Employees’ Psychological Capital and Moral Identity

Despite the widely recognized positive nature of ethical leadership, recent studies have reported inconsistent findings in the link between ethical leadership and employees’ behavior. Drawing on the social cognitive theory, this study seeks to address this gap by investigating the paradoxical influence of ethical leadership on unethical pro-organizational behavior among employees. Additionally, the study aims to explore the mediating mechanism of employees’ psychological capital and the moderating effect of moral identity. Three time intervals data were collected from nursing professional from public and private hospitals in Pakistan. The data were evaluated employing PLS SEM. Interestingly, the findings contradict the hypothesis and demonstrate a positive link between ethical leadership and unethical pro-organizational behavior among employees. Moreover, the relationship is mediated by employees’ psychological capital. Furthermore, employees’ moral identity moderates this relationship. These findings furnish important insights into the paradoxical impact of ethical leadership within organizations and challenge its universal perception of positive leadership style having significant theoretical and practical implications.