Journal of Leadership &

Organizational Studies
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The Effect of Leadership on Follower Moral Identity: Does Transformational/Transactional Style Make a
Difference?
Weichun Zhu, Ronald E. Riggio, Bruce J. Avolio and John J. Sosik
Journal of Leadership & Organizational Studies 2011 18: 150 originally published online 17 March 2011
DOI: 10.1177/1548051810396714
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The Effect of Leadership on Follower

Moral Identity: Does Transformational/
Transactional Style Make a Difference?

Journal of Leadership &

Organizational Studies
18(2) 150163
Baker College 2011
Reprints and permission: http://www.
sagepub.com/journalsPermissions.nav
DOI: 10.1177/1548051810396714
http://jlos.sagepub.com

Weichun Zhu1, Ronald E. Riggio2, Bruce J. Avolio3, and John J. Sosik1

Abstract
The goal of this article is to study the effects of transformational versus transactional leadership behavior on how followers
report their level of moral identity. Using field survey data (n = 672) and experimental data (n = 225), the authors found
that transformational leadership and transactional leadership (including contingent reward and active management-byexception) have a positive effect on priming follower moral identity. In addition, results also revealed that transformational
leadership behavior has a larger positive effect on follower moral identity than transactional leadership. Furthermore,
this study established the preliminary construct validity of a scale of moral identity. The theoretical implications, practical
implications, and future research recommendations of these results are discussed.
Keywords
transformational leadership, transactional leadership, follower moral identity, follower moral development

Developing followers into moral agents has been at the

center of transformational leadership theory (Bass, 1985,
1998; Bass & Riggio, 2006; Bass & Steidlmeier, 1999;
Burns, 1978). Burns (1978) argued that transforming leaders inspire followers by aligning their own and followers
value systems with important moral principles. Leaders
described as transformational also demonstrate high standards of ethical and moral conduct (Avolio, 1999, p. 43).
Interestingly, there are still relatively few empirical studies
examining the role that leadership plays in influencing followers moral development.
To begin filling this gap, the present study examined
whether transformational leadership and transactional leadership have a positive effect on followers reporting of their
level of moral identity. Furthermore, we examine whether
there is a significant difference between transformational
leadership and transactional leadership in affecting follower estimates of their moral identity.

Literature Review and Hypotheses

Moral Component of Transformational Leadership
In contrast to rational or transactional approaches to leadership, transformational and charismatic leadership theories
were proposed to explain the affective and emotional needs
and responses of followers. For example, Burns (1978)
defined transforming leadership as a process whereby both

leaders and followers raise one another to higher levels of

morality and motivation. Burns further argued that one of
the primary goals of a transforming leader was to transform
followers into leaders, who are also moral agents. For
Burns, to be transformational, the leader has to be morally
uplifting. This means that transformational leaders possess
positive moral perspectives, which not only enable them to
confront ethical challenges but also allow them to serve as
moral role models for others. Bass and Steidlmeier (1999)
also classified transformational leadership into authentic
and pseudo transformational leadership by emphasizing
that authentic transformational leadership is ethical
in nature, whereas pseudo transformational leaders are
not. They also further argued that the four components of
transformational leadership, idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration, have moral components. For example,
authentic transformational leaders embrace universal justice and moral values, whereas pseudo transformational
1

The Pennsylvania State University, Malvern, PA, USA

Claremont McKenna College, Claremont, CA, USA
3
University of Washington, Seattle, WA, USA
2

Corresponding Author:
Weichun Zhu, School of Graduate Professional Studies at Great Valley,
The Pennsylvania State University, 30 East Swedesford Road, Malvern, PA
19355-1443, USA
Email: wzhu@psu.edu

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Zhu et al.
leaders highlight wethey differences in values. Put simply, in this study, we will follow the perspective of Bass and
Steidlmeier (1999), as well as of Burns (1978), that truly
transformational leaders are ethical, or that we refer to as
transformational leadership is what Bass and Steidlmeier
(1999) called authentic transformational leadership.
Transformational leaders raise the ethical bar by appealing to the higher moral ideals and values of followers (Bass,
1985; Bass & Riggio, 2006; Burns, 1978; Howell & Avolio,
1992). Transformational leaders model moral values themselves and use their charisma in creating a moral contagion process (Lewis, 2000) that attracts followers to model
those same moral values. The content of their moral values
often reflects the display of character strengths representing
the best in humanity such as the moral virtues of wisdom,
courage, a concern for humanity, justice, temperance, and
transcendence (Sosik, 2006). Following this rationale, followers of transformational leaders would be expected to
model and emulate their leaders moral actions.
Transformational leaders therefore possess a positive
moral perspective, which includes moral capacity, moral
efficacy, and moral courage (Burns, 1978). Moral capacity
is ones ability to recognize issues of varying moral intensity and to view those issues from multiple perspectives
while also assessing the moral implications of alternative
courses of action (May, Chan, Hodges, & Avolio, 2003).
Higher moral capacity enables leaders to view the world in
a more comprehensive way and to deal with those difficult
and intractable issues that have no clear resolution or
shortcut.
Moral efficacy represents an individuals belief that he
or she possesses the abilities, skills, resources, and motivation to address a particular moral/ethical decision (Bandura,
1991). Luthans and Youssef (2004) argued that moral efficacy can predict the outcomes of moral decision making,
whereas moral magnitude (i.e., the level of moral task difficulty at which individuals expect to be able to perform)
and moral strength (i.e., the degree of certainty that individuals possess about their capacity to perform at a designated level of moral task difficulty) both affect the nature of
moral decision making observed.
Finally, moral courage is defined as the leaders fortitude to convert moral intentions into actions despite pressures from either inside or outside of the organization to do
otherwise (May et al., 2003, p. 255). Moral courage helps
leaders confront strong environmental and external pressures to allow them to continue doing what is ethical. For
example, leaders with moral courage would be committed
to their own true values and ideals and would act authentically to be consistent with their underlying moral identity.
Taken together, we suggest that all three positive moral perspectives enable transformational leaders to successfully
confront moral dilemmas, challenges, and tests.

Moral Identity
Thomas (1997) pointed out that there are various aspects to
ones overall self-concept. The physical aspect involves
such things as an individuals perception of his or her physical attractiveness or strength. However, the moral perspective of self-concept deals with these questions: Am I a good
and moral person or am I a bad and immoral person? What
kind of moral principles and values do I hold, and how resolutely will I stand up for these moral principles and values?
Therefore, moral identity is the degree to which a person
identifies himself or herself as a moral person. Moral identity determines when and why individuals behave in an
ethical way and why they may engage in activities that
serve the best interests of the collective, such as the group,
the organization, the community, or the society. Moral identity is known as the convergence of moral ideals with ones
personal identity or the extent to which commitment to
moral values is infused into a persons self-concept (Colby
& Damon, 1992; Nasir & Kirshner, 2003).
Hart, Atkins, and Ford (1998) defined moral identity as
a commitment to ones sense of self to lines of actions that
promote or protect the welfare of others (p. 515). Erikson
(1964) viewed identity as being true to oneself in action,
which is associated with ones understanding of reality.
Aquino and Reed (2002) argued that moral identity is a
parameter of social identity and represents ones selfconception organized around a set of moral traits. Therefore,
moral identity is linked to specific moral traits and may also
be a distinct mental image of how a moral person is likely to
think, feel, and behave (Kihlstrom & Klein, 1994).
Blasi (1984) proposed that moral identity has three basic
characteristics. The first is that moral identity is rooted in
the very core of ones being or selfhood. Second, moral
identity means being true to oneself in terms of moral decision making. The third characteristic is that moral identity
is associated with truthfulness (i.e., with respect to ones
own understanding of reality). McDougall (1936) pointed
out that moral ideas are not strong if decision-making intention or moral ideas are not rooted in a moral self. In other
words, a persons moral decision intentions may not be consistent or stable across different time periods or environments if he or she does not have a strong moral identity.
Prior research (Bergman, 2002; Colby & Damon, 1992)
indicates that individuals with a strong moral identity (a)
commit to higher moral ideals or principles, (b) are more
determined to behave consistently with their moral ideals or
principles, (c) are more willing to take risks in order to be
loyal to their moral values, (d) have a greater tendency to
inspire others to think and behave ethically, and (e) place
the collective interest over their personal ego and interests.
Therefore, Blasi (1984) indicated that morality is more a
characteristic of the agent than of either action or thinking;

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Journal of Leadership & Organizational Studies 18(2)

the ultimate source of goodness lies in good will, and good

will is at the core of what a person is (p. 130).

The Effect of Transformational/Transactional

Leadership on Follower Moral Identity
Transformational leaders set high standards for moral and
ethical conduct and for moral emulation (Avolio, 2005;
Sosik, 2006). Transformational leaders have strong moral
values and goals, which lead to behaviors and decisions that
promote ethical policies, procedures, and processes within
their organizations. Transformational leaders demonstrate
idealized influence (i.e., as high ethical role models or
moral exemplars) to encourage followers to establish their
own internal set of moral principles and ideals, which helps
establish a basis for follower moral identity, and ultimately
moral action (Avolio, 2005). Idealized influence may be
based on virtues and character strengths that reflect high
levels of moral development (Sosik, 2006). Turner and
Barling (2002) found that managers moral reasoning was
associated with transformational leadership. Specifically,
leaders who exhibited higher levels of moral reasoning also
exhibited more transformational leadership behavior than
leaders scoring in the lowest moral reasoning group. However, very few studies have examined the effects of transformational leadership and transactional leadership on
follower moral identity.
Transformational leaders engage in intellectual stimulation, which motivates their followers to challenge longterm assumptions and the dominant logic of the leader when
it is time to change direction (Avolio, 1999). Intellectual
stimulation can broaden followers perspective-taking
capacity, creativity, open-mindedness and love of learning
about moral issues, each of which reflects positive character strengths (Sosik, 2006). Intellectual stimulation is also
used to challenge followers moral thoughts, allowing followers to recognize their moral values, beliefs, and mindsets, and subsequently develop the belief that they are moral
people.
Through individualized consideration, transformational
leaders also focus on coaching and mentoring followers to
be prepared to assume greater moral responsibility and ultimately develop followers into moral exemplars through
moral socialization (Avolio, 2005; Avolio & Gibbons, 1988;
Bono & Judge, 2003; Hoffman, 1988). Individualized consideration reflects character strengths of kindness, love,
social intelligence, and appreciation of beauty of excellence
associated with moral virtue and identity (Sosik, 2006).
Thus, followers are more likely to maintain higher moral
principles and believe that they are moral people (i.e.,
strengthening their moral identity). Transformational leaders also show concern for followers needs, feelings, and
moral development. By offering constructive and positive

moral feedback to their followers, transformational leaders

help improve followers sense of understanding their own
and others moral perspectives, which contributes to developing a higher level of moral perspective and interpersonal
ability (Eisenberg, 2000; Hoffman, 1988). Under the influence of transformational leaders, followers are better able
to transcend their own egos, self-interests, and needs, as
they are guided by a self-determined moral identity.
The underlying mechanisms through which transformational leadership affects follower moral identity can be further explained by using Banduras (1986, 1997) social
cognitive theory. We suggest that transformational leaders
influence followers moral, emotional, affective, and cognitive development through modeling of positive virtues and
values (e.g., leading by example), psychological states,
behaviors, and self-development (Bandura, 1991; Bass &
Riggio, 2006; Bono & Judge, 2003; Burns, 1978; Luthans
& Avolio, 2003; Sosik, 2006). According to Banduras
social cognitive theory, a leaders symbolic modeling could
influence followers moral judgments by portraying what is
acceptable and suitable moral behavior in an organization.
In addition, Bandura (1991) further proposed familial and
social transmission models for morality, which means that
moral values, standards, and behavioral patterns are transmitted via family and social networks, among which leadership could be an important source of social influence. In
this regard, followers pay attention to and emulate the attitudes, emotions, values, and behaviors of leaders because
they consider these leaders exemplary role models
(Bandura, 1986; Bono & Judge, 2003; Brown, Trevio, &
Harrison, 2005; Burns, 1978).
Transformational leaders influence their followers by
selecting information that has moral relevance to each follower from a range of sources available in given situations.
These moral socialization procedures enable followers to
provide supporting justification for weighing various
options when making moral decisions and facilitating the
establishment or strengthening of the followers moral
identity (Hoffman, 1977, 1983). As a result, followers learn
how to think about their own roles, how to make their own
decisions, and how to behave in accordance with their
moral identity by observing leaders morally communicating, modeling, rewarding moral actions, and engaging in
moral behaviors.
Leaders modeling of moral behaviors proactively influences followers moral self-development by fostering followers moral self-discovery, including enhancing moral
self-awareness and moral self-knowledge. This means that
followers will have greater self-knowledge about their
moral values, identities, emotions, motives, and goals as
key aspects of their levels of moral self-awareness. This
would lead them to be more likely to exhibit higher moral
values, beliefs, emotions, motives, and goals. Ultimately,

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Zhu et al.
we would expect followers to internalize the leaders moral
values and objectives as their own (Gardner, Avolio,
Luthans, May, & Walumbwa, 2005; Hoffman, 1977), suggesting that transformational leadership could have a positive effect on follower moral identity.
Transformational leaders may also be able to influence
followers moral efficacy by demonstrating their knowledge and commitment to certain moral actions while
encouraging their followers to think through ethical/moral
dilemmas (Bass, 1985; Bass & Riggio, 2006; Luthans &
Avolio, 2003). Transformational leaders may also help followers extract morally convincing inferences and implications from moral experiences. This helps followers judge
the soundness of their moral evidence in support of their
views, identify moral assumptions underlying their arguments, and distinguish sound from faulty moral logic.
Viewing the internalization of the leaders moral values
and standards from a social learning theory perspective,
transformational leaders could influence followers by
selecting information that has moral relevance from the
configuration of information available in a given situation.
For example, transformational leaders may influence followers to select elements that are weighted and integrated
based on their moral rules and principles. In combination,
these strategies should enable followers to provide supporting justification for weighing various options in making
moral decisions while facilitating and strengthening the
establishment of moral identity.
In contrast, transactional leaders aim at monitoring and
controlling employees through rational or economic means.
One component of transactional leadership is contingent
reward, which refers to leadership behaviors focusing on
exchange of resources. That is, leaders provide tangible or
intangible support and resources to followers in exchange
for their efforts and performance while punishing followers
if they do not accomplish goals. Transactional leaders can
also use management-by-exceptionactive, which refers to
monitoring performance and taking corrective action as
necessary. The main focus of management-by-exception is
on setting standards and monitoring deviations from these
standards.
As to the effect of transactional leadership on follower
moral identity, since transactional leaders accept the goals,
structure, and culture of the existing organization, it is
expected that transactional leadership has a positive effect
on follower moral identity. Therefore, moral transactional
leaders could create ethics structure to instill moral standards in an organization. For example, transactional leaders
are likely to adopt explicit forms of moral practices and
strategies. They also look at ethical underpinnings, establish ethics committees, appoint chief ethics officers, and
create ethics codes and rules as the moral benchmark in
their organizations (Jose & Thibodeaux, 1999). It has been

suggested (e.g., Allen & Davis, 1993; Mathews, 1987) that

ethics codes have a positive effect on employee/follower
moral perspectives, including enhanced moral identity and
consequently more positive moral intentions and actions
among followers.
Transactional leaders tend to rely on formal organizational structures and systems to affect employees in organizations. It is argued that organizational rewards and
punishments influence individual attitudes and behaviors
(e.g., Brown et al., 2005; Nill & Schibrowsky, 2005). Organization structures, such as performance evaluation and
reward systems and decision-making rights and responsibilities, could provide ethical criteria to develop organizational members ethical decision making (Metzger, Dalton,
& Hill, 1993; Trevio & Nelson, 1995). Organizational
members are more likely to act in an unethical way if they
face pressure from their supervisor or have to face potential
punishments, such as demotion, salary stagnation, humiliation, and so on (Jones & Ryan, 1998).
Nevertheless, the management-by-exception form of
transactional leadership has been found to be a less effective form of leadership than both contingent reward and
transformational leadership (Avolio, 1999, 2005; Lowe,
Kroeck, & Sivasubramaniam, 1996). Transactional leaders
can also monitor follower performance and correct followers mistakes and errors. When transactional leaders engage
in active management-by-exception, they monitor deviations from standards, mistakes, and errors of followers, and
take action when necessary. This could lead to the moral
development among followers.
Empirically, prior research has indicated that transformational leadership has a more positive effect on many
leadership outcomes, such as work attitudes and performance. For example, one meta-analysis (Lowe et al.,
1996) showed that the mean correlation between contingent
reward and outcomes is .41, but the mean correlations
between transformational leadership components, including charisma (inspirational motivation and idealized influence), individualized consideration, and intellectual
stimulation, ranged from .60 to .71. This provides evidence
that transformational leadership has a more positive effect
on developing follower moral identity than did transactional leadership.
Based on the above arguments, we proposed the following hypotheses:
Hypothesis 1: Transformational leadership has a
positive effect on followers moral identity.
Hypothesis 2: Transactional leadership has a positive
effect on followers moral identity.
Hypothesis 3: Transformational leadership has a
larger positive effect on followers moral identity
than does transactional leadership.

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Journal of Leadership & Organizational Studies 18(2)

To test the above hypotheses, we conducted two studies,

one field survey (Study 1) and one experiment (Study 2).

Study 1
Participants and Procedures
An Internet-based survey was issued through a research
company (http://www.Zoomerang.com), which solicited
2,200 U.S. participants holding a variety of managerial
positions, which also included a broad variety of industries.
The research company sent the survey link to these potential participants on our behalf. As an incentive, these participants had the chance to win $10 gift certificates from the
Amazon Company. The final sample of 672 represented a
response rate of 30.6%. Of these, 375 (55.80%) were male
and 297 (44.20%) were female. The average age was 47.7
years (SD = 10.8) and most (70%) had a 4-year college
degree or higher. The leaders had an average of 20.5 (SD =
5.12) followers and had been in their current positions for
an average of 9.8 years (SD = 8.7). More than 70% of leaders rated were upper- to middle-level executives. Furthermore, participants were from more than 13 different
industries, including retail/wholesale (23%), banking
(13%), information technology (13%), and manufacturing
(12%). These participants rated their direct supervisors
leadership using a transformational leadership scale and
their own self-reported moral identity.
In the analysis, we randomly divided the whole sample
into two subsamples. One subsample (336 cases) was used
to conduct the exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) of the newly created scale of
moral identity. The other subsample (336 cases) was used to
test hypotheses. One-way analysis of variance (ANOVA)
results showed that main demographic variables, such as
gender, age, education, and industries, did not differ across
these two subsamples.

Measures
The Scale of Moral Identity. Though Aquino and Reed
(2002) developed a scale to measure moral identity, we did
not use their scale in our study for the following two reasons. First, the conceptualization of their scale is relatively
narrow since it only aspires to measure ones self-reported
importance of moral traits in ones self-concept. Second,
because of the question format of the scale, it was not possible to adapt it for use in the current study. Specifically, the
Aquino and Reeds moral identity scale determines the
importance a individual places on the level of moral identity associated with ones life. In the current set of studies,
we were interested in assessing how different leadership
styles primed an individual assuming a followers role

affected their reported level of moral identity associated.

This limitation required the development of an alternative
scale of moral identity suitable for both the survey and
experimental studies.
Based on the theoretical discussion of Blasi (1984) and
Bergman (2002), we originally created 12 items to measure
the concept of moral identity, such as commitment to moral
rules and willingness to take risks for being loyal to moral
values. After EFA analysis, we reduced the 12 items to 5
items (see the appendix for the scale items). One sample
item is: I am committed to my moral principles. The
Cronbach alpha of the scale in this subsample (n = 336) was
.91. EFA and CFA were conducted with two subsamples,
which clearly showed that a one-factor structure fits the
data well. More specifically, it was found that the onefactor structure explained 74.76% variance, and all loading
values of the five items were .78 or above. A CFA also
revealed that a one-factor structure fit the data well (2 =
43.75, df = 10, p < .01, CFI [comparative fit index] = .97,
TFI [TuckerLewis fit index] = .95, RMSEA [root mean
square error of approximation] = .08, SRMR [standardized
root mean square residual] = .03).
Furthermore, we used three relevant and psychometrically sound scales, namely, the ethical leadership scale
(Brown et al., 2005), authentic leadership scale (Walumbwa,
Avolio, Gardner, Wernsing, & Peterson, 2008), and the
laissez-faire leadership scale (Bass & Avolio, 2003) to further test the construct validity of our scale. As expected, we
found that moral identity is positively associated with ethical leadership (r = .30, p < .01), and with the authentic leadership scale (r = .30, p < .01), providing initial evidence for
convergent validity. On the other hand, moral identity is
negatively related to laissez-faire leadership scale (r = .24,
p < .01), which provided initial evidence for its discriminant validity. Specifically, moral identity should be positively related to both ethical and authentic leadership and
negatively related to poor (e.g., laissez-faire) leadership,
which on the whole has been determined to be an ineffective leadership style (Bass & Riggio, 2006). However, the
magnitude of the correlations (.30 or less) suggests that
moral identity is not the same as ethical or authentic leadership. Furthermore, moral identity was found to have a positive effect on moral decision intention (Zhu, 2006). This
shows that the scale has predictive validity. From the above
analysis, we concluded that the moral identity scale had sufficient preliminary evidence for both its reliability and
validity to proceed with its use in the current study.
Transformational/transactional leadership. Transformational/
transactional leadership actions/behaviors were evaluated
separately using items from the Multifactor Leadership
Questionnaire (MLQ; Bass & Avolio, 2003). Respondents
indicated whether they agreed with statements on a 5-point
scale ranging from 1 (strongly disagree) to 5 (strongly agree).

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Zhu et al.
Table 1. Descriptive Statistics and Correlations Among Variables (N = 336, Study 1)

1. Age
2. Gender (dummy)
3. Education (dummy)
4. Managerial level (dummy)
5. Income (dummy)
6. Transformational leadership
7. Transactional leadership
8. Follower moral identity

Mean

SD

47.47
0.50
0.65
0.38
0.29
3.67
3.34
4.45

10.83
0.50
0.47
0.49
0.45
0.89
0.66
0.62

1
.31**
.01
.20**
.14**
.09
.05
.27**

.20**
.23**
.23**
.04
.10
.08

.033
.19**
.05
.02
.02

.28**
.18**
.12*
.09

.04
.03
.04

.69**
.30**

.17**

Note. Dummy variables: gender (1 = female, 0 = male); education (1 = degree or above, 0 = others); income (1 = $100,000 or above; 0 = below $100,000);
managerial level (1 = upper middle and top level, 0 = middle and lower level).
*p < .05. **p < .01.

Subscales of the MLQ included the following: idealized

influence (8 items), intellectual stimulation (4 items), inspirational motivation (4 items), individualized consideration
(4 items), contingent reward (4 items), and management by
exception active (4 items). A sample item for transformational leadership representing intellectual stimulation is as
follows: My leader re-examines critical assumptions to
question whether they are appropriate. Responses to the first
20 items were averaged to form an overall transformational
leadership composite score (Cronbachs = .96). A second
higher order CFA revealed that data fit the model well (2 =
735.93, df = 166, p < .01, CFI = .91, TFI = .90, RMSEA =
.09, SRMR = .03).
One sample item of contingent reward is as follows:
My leader provides me with assistance in exchange for my
efforts. A sample item of management by exception active
is as follows: My leader focuses attention on irregularities,
mistakes, exceptions, and deviations from standards.
These eight MLQ items were averaged to create a score for
TSL (Cronbachs = .76). A CFA revealed that one-factor
structure fit the data well (2 = 115.39, p < .01, df = 190,
CFI = .92, TFI = .90, RMSEA = .09, SRMR = .05).

Results
The descriptive statistics and correlations for all study variables are presented in Table 1. Notably, follower moral
identity had a significant positive relationship with transformational leadership (r = .30, p < .01) and transactional
leadership (r = .17, p < .01).

Hypotheses Testing
Sociodemographic variables are important control variables in ethics research (Nill & Schibrowsky, 2005). For
example, age is found to be positively related to ethical
decision making (Loe, Ferrell, & Mansfield, 2000; Yoo &

Donthu, 2002). As to gender, females were found to be

more conscious of ethical issues and more likely to behave
ethically than are males (Franke, Crown, & Spake, 1997;
Robin & Babin, 1997). Furthermore, according to a metaanalysis (Loe et al., 2000), education has no influence on
ethical decision making in half of the studies and has a
mixed effect in the other half. Although we do not make any
directional hypotheses regarding the effects of demographic
variables on moral identity in this study, we believe that
including these control variables will help enhance interpretation of the research findings.
Hypotheses 1 and 2 predicted that transformational and
transactional leadership is positively related to follower
moral identity. Hierarchical regression analysis results are
presented in Table 2. All control variables were included in
the equation model. As shown in Model 2 of Table 2, transformational leadership had a positive relationship ( = .29,
p < .01) with follower moral identity, supporting Hypothesis 1. Similarly, as shown in Model 2 of Table 3, transactional leadership was found to be positively related to ( =
.17, p < .01) follower moral identity, thus Hypothesis 2 was
supported. Hypothesis 3 predicted that transformational
leadership has a larger positive effect on follower moral
identity than transactional leadership. Indeed, a Fisher
z score (z = 1.65, p < .05, one-tailed) indicated that there
was a significant difference between these two regression
coefficients (.29 vs. .17). This suggests that transformational leadership had a larger positive effect on follower
moral identity than did transactional leadership. Thus,
Hypothesis 3 was supported.
It is acknowledged that this study is essentially a correlational study in which causality of effect cannot be
determined. Following Bono and Judge (2003), we conducted an experimental study to examine whether we
could replicate the findings reported above and whether
the effect of leadership on follower moral identity could
be a causal one.

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Journal of Leadership & Organizational Studies 18(2)

Table 2. Hierarchical Linear Regression (Transformational

Leadership, N = 336, Study 1)
Follower Moral Identity
Model 1
Age
Gender
Education
Income level
Managerial level (leader)
Transformational leadership
R2
Adjusted R2

.31**
.20**
.02
.02
.07
.11
.09

Model 2
.30**
.20**
.03
.02
.02
.29**
.18
.17

Note. n = 336. Dummy variables: gender (1 = female, 0 = male); education

(1 = degree or above, 0 = others); income (1 = $100,000 or above;
0 = below $100,000); managerial level (1 = upper middle and top level,
0 = middle and lower level).
*p < .05 (two-tailed). **p < .01 (two-tailed).

Table 3. Hierarchical Linear Regression (Transactional

Leadership, N = 336, Study 1)
Follower Moral Identity
Model 1
Age
Gender
Education
Income level
Managerial level (leader)
Transactional leadership
R2
Adjusted R2

.31**
.20**
.02
.02
.07
.09
.11

Model 2
.31**
.21**
.02
.05
.02
.17**
.12
.14

Note. Standardized regression coefficients are shown. Dummy variables:

gender (1 = female, 0 = male); education (1 = degree or above, 0 = others);
income (1 = $100,000 or above; 0 = below $100,000); managerial level
(1 = upper middle and top level, 0 = middle and lower level).
*p < .05. **p < .01.

Study 2
Sample and Experimental Conditions
The data for this experiment were collected in several public school systems in the Midwest United States. A total of
215 teachers participated in the web-based experiment. Participants were assured that their participation was voluntary
and that their responses would be kept strictly confidential.
Among the participants, approximately 75% of the respondents were female, and 95.3% of the respondents were Caucasian. Approximately one third of the teachers were from
high school, middle school, and elementary school (32.6%,
30.7%, and 36.7%, respectively). About two thirds (64.7%)
of the respondents had masters degrees or above.
After completing an informed consent form to participate in the online study, all participants were randomly

assigned to one of two experimental conditions (transformational leadership [TFL] 113 cases; transactional leadership [TSL] 102 cases). ANOVA results revealed that all
control variables, including gender, marital status, education, years in the current position, years in the current organization, and type of school, did not differ across the two
conditions, suggesting that there was initial equivalence
before the leadership intervention.

Experimental Task
In the context of the experimental procedures, participants
(e.g., teachers) were asked to read a short story about a principal, who represented either a transformational or transactional leader in terms of specific actions/behaviors that are
described in greater detail below. Then, respondents rated
the principals leadership style as a manipulation check followed by an evaluation of their own moral identity assuming that they were teachers under the supervision of the
principal in the scenario.

Manipulations
Manipulation of transformational leadership actions/behaviors. The transformational leadership manipulations were
based on Bass and Avolios (1994) behavioral descriptions
of the components comprising transformational leadership.
Transformational leadership includes four Is of idealized
influence, inspirational motivation, intellectual stimulation,
and individualized consideration. The detailed message
used to manipulate transformational leadership behaviors/
actions was as follows:
In his school leadership role, John has provided us
with ideas that have challenged our basic thinking on
how to best lead in our classrooms (Intellectual
Stimulation). John believes in helping us and our
students to understand the basic meaning underlying
our work together, engaging in the shared goal of
learning together, and building the best learning community (Idealized Influence). He views the classroom
as center stage for leadership at the most local
level. John makes decisions by taking time to elicit
our views on how best to evaluate the situation and
then challenges core assumptions that need to be
addressed in the school (Intellectual Stimulation). He
works to constantly get us to question the status quo
to find a better way of approaching problem issues
and to consider what would be the most positive outcome for the greatest number of people (Intellectual
Stimulation, Inspirational Motivation). His over
arching goal is to create a positive, optimistic school
culture that breeds hope at all levels of the school
(Inspirational Motivation).

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Zhu et al.
John is the type of person that gets to know everyone. He is very good at recalling peoples names, and
shows a genuine interest in getting to know each
individual. He tends to focus a lot of his energy on
figuring out what are our individual strengths,
and then sets about challenging us to use those
strengths to achieve our full potential (Individualized
Consideration).
John has frequently demonstrated his commitment
to our school. He is generally the last one to leave the
building after school, and after an event. He makes a
lot of personal sacrifices in terms of his time and
resources to help us be the kind of school he envisions we can be (Idealized Influence).
Manipulation of transactional leadership actions/behaviors.
The transactional leadership manipulation was based on
Bass and Avolios (1994) behavioral descriptions of the
components comprising transactional leadership. Transactional leadership was characterized by contingent reward
and active management-by-exception in this study. The
detailed message used to manipulate transactional leadership behaviors/actions was as follows:
As a leader, John thinks that employees are motivated
by just reward and punishment and that organizations
like school systems work best with a clear chain of
command. He believes that we as teachers need to do
what he tells us to do to achieve the best results. He
often says: Do as I have asked in terms of goals and
expectations and I will make sure you get the
resources and rewards you need to be successful. Fail
to meet our agreed upon expectations and I will be
swift in correcting the problem. Both in success and
in failure you will know my position (Contingent
reward).
John is very hands on in terms of his style, and
constantly monitors and checks whether we have
deviated from the prescribed teaching goals and
deliverables for the school. If a teacher, staff member,
or student does something wrong, John will point it
out immediately and take whatever punitive action is
necessary. John spends a lot of time in trying to get
us to avoid making mistakes in our school. We all
know very clearly that when he allocates work to us,
he expects that we are fully responsible for it and to
make him aware immediately if we cant achieve the
goals. He is not someone who enjoys surprises, nor
excuses (Management-by-exception active).
John regularly spends time clarifying the goals we
have and his expectations in terms of deliverables.
Although he is swift in correcting mistakes, he is also
equally swift in providing rewards for achieving
expected performance. John is a performance driven
leader who focuses on outcomes, and is less concerned

about the process to get to those outcomes (Contingent

reward).

Measures
Transformational/transactional leadership. The manipulation of transformational/transactional leadership was evaluated by the five items/three items of the MLQ (Bass &
Avolio, 2003). Respondents indicated whether they agreed
with the statements on a 5-point scale ranging from 1
(strongly disagree) to 5 (strongly agree). A sample item of
transformational leadership (Cronbachs = .88) was as
follows: I expect this principal to re-examine critical
assumptions to question whether they are appropriate. One
sample item of transactional leadership (Cronbachs =
.71) was as follows: I expect this principal to provide me
with assistance in exchange for my efforts.
Moral identity. The same 5-item scale used in Study 1
(survey study) was adapted for the simulation. Respondents
indicated whether they agreed with the statements on a
5-point scale ranging from 1 (strongly disagree) to 5
(strongly agree) imagining that they were under the supervision of the principal in the scenario. Sample item: I
would view being an ethical person as an important part of
who I am. The Cronbachs alpha of this scale in this sample was .91.

Results
Manipulation check. Regarding the manipulation check
score for transformational leadership, results revealed that
the transformational leadership manipulation score in the
TFL condition (mean = 4.27, SD = 0.91) was significantly
higher, F(1, 213) = 110.01, p < .01, than that in the TSL
condition (mean = 3.00, SD = 0.85). As for the manipulation check score for transactional leadership, results
revealed that the transactional leadership manipulation
score in the TFL (mean = 3.83, SD = 0.85) was significantly
lower, F(1, 213) = 5.90, p < .05, than in the TSL condition
(mean = 4.08, SD = 0.69). These results suggest that the
manipulation of both transformational leadership and transactional leadership achieved the desired effects, although
the transformational scores in the TSL condition were
higher than expected.
The descriptive statistics and correlations for all variables are shown in Table 4.

Hypotheses Testing
Hypotheses 1 and 2 predicted that both transformational
and transactional leadership would be positively related to
follower moral identity. As shown in Table 4, both transformational leadership (r = .42, p < .01) and transactional leadership (r = .16, p < .05) are significantly correlated with
follower moral identity, providing support for Hypotheses 1

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Journal of Leadership & Organizational Studies 18(2)

Table 4. Descriptive Statistics and Correlations Among Variables (N = 215, Study 2)

Gender
Degree
Years in current teaching position
Years in this organization
Transformational leadership
Transactional leadership
Follower moral identity

Mean

SD

0.23
0.60
15.20
8.81
3.67
3.95
3.68

0.42
0.49
9.79
8.29
1.09
0.77
0.91

0.06
0.03
0.15*
0.01
0.02
0.12

0.16*
0.20**
0.04
0.09
0.01

0.70**
0.03
0.07
0.02

0.04
0.11
0.05

0.38**
0.42**

0.16*

Note. Dummy variables: gender (0 = female, 1 = male); degree (0 = others; 1 = masters).

*p < .05. **p < .01.

Table 5.Tests of Between-Subjects Effects (Study 2, N = 215)

Source
Corrected model
Intercept
Gender
Degree
Years in current position
Years in current organization
Leadership group
Error
Total
Corrected total

Type III Sum of Squares

a

34.81
669.57
1.80
0.28
0.06
0.36
30.62
171.87
3168.56
206.68

df
5
1
1
1
1
1
1
209
215
214

Mean Square

Significance

6.96
669.57
1.80
0.28
0.06
0.36
30.62
0.82

8.466
814.21
2.19
0.33
0.07
0.44
37.24

.00
.00
.14
.56
.79
.52
.00

Note. Dependent variable: follower moral identity. Leadership group: 1 = transformational leadership, 0 = transactional leadership.
a. R2 = .17 (adjusted R2 = .15).

and 2. Hypothesis 3 predicted that transformational leadership would have a larger positive effect on follower moral
identity than transactional leadership. The ANCOVA result
(F = 37.24, p < .01) in Table 5 showed that follower moral
identity (mean = 4.27, SD = 0.91) in the TFL leadership
condition was significantly higher (mean = 3.31, SD = .90)
than in the TSL leadership condition, providing support for
Hypothesis 3. The above experimental results showed that
both transformational leadership and transactional leadership had a positive effect on followers reporting of their
level of moral identity. Furthermore, transformational leadership was also found to have a larger positive effect on
follower moral identity than transactional leadership.
The results showed that we were able to replicate the
findings obtained from the survey study in the experimental
study.

Discussion
Taken together, the results of these studies suggest that both
transformational and transactional leadership have a positive priming effect on follower moral identity. Compared

with transactional leadership, transformational leadership

has a larger positive effect on participants assuming a follower role and their reporting of what they would expect
their moral identity would be working for a particular principal. The hypotheses were also supported with survey data
from employees rating their actual leaders in a wide variety
of industries, which means that the research results can
potentially be generalized to other types of organizations.
The hypothesized relationships were also supported in the
experimental study, which suggests that the effects of leadership on priming a followers level of moral identity might
be causal. Thus, these studies have important theoretical
and practical implications, which will be discussed in more
detail below.

Theoretical Contributions
The first theoretical contribution lies in the fact that we
extended transformational leadership theory by examining
the effect of transformational leadership on follower moral
perspectives. The effect of transformational leadership on
developing followers into moral agents has been at the

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Zhu et al.
center of transformational leadership theory (Bass, 1985,
1998; Bass & Riggio, 2006; Bass & Steidlmeier, 1999;
Burns, 1978). This is one of the first empirical studies that
examined the effect of transformational leadership on follower self-reported moral perspectives. Research findings
from these studies suggested that transformational leaders
can transform their followers into moral agents presumably
by demonstrating their own standards of virtuous, ethical,
and moral conduct. To do this, such leaders would be
expected to prime followers to place greater importance on
moral and ethical standards, which we expected to be
reflected in how participants in the current study also
viewed themselves in terms of judging their moral identity.
Second, this research makes a theoretical contribution to
the ethical decision-making literature. Although prior ethical decision-making models have considered moral intensity (Jones, 1991), issues-related characteristics (Trevio,
1986), and other organizational and individual factors (e.g.,
Hunt & Vitell, 1986), these prior models have neglected the
central role of leadership and moral identity, which influences what followers rely on as a basis for deciding on
moral action. This study has examined the important role of
leadership in potentially influencing follower ethical decision making.
This research also contributes a new scale for measuring
follower moral identity. This brief scale demonstrated good
psychometric properties and can be used by scholars investigating moral identity in adults, especially where future
research is examining how leadership primes followers to
view themselves as being at higher or lower levels of moral
identity. For example, in Jones (1991) ethical decision
model, there are four stages: moral awareness, moral judgment, moral intention, and moral behavior. One possible
research question is whether the manipulation of ones
moral identity based on the leadership that individual experiences will influence these four stages. If there is an effect,
what is the underlying influence process through which this
effect happens? Furthermore, the scale of moral identity
could be used to compare the difference between moral
identity and other relevant scales, such as moral intensity,
on moral decision making.
Finally, this research also makes an important contribution to research in moral development. In the area of moral
development, a number of researchers (Bandura, 1991;
Hoffman, 1977; Kegan, 1982; Kohlberg, 1969; Piaget,
1932; Reed, Aquino, & Levy, 2007; Weaver, 2006) have
attempted to explain the individual and situational factors
that influence moral development. For example, Hoffmans
work (1988) suggests that moral norms are transferred
through social moralization processes and that the development of an individuals empathy and related moral emotions are important antecedents for their moral motivation
and moral action. Bandura and other authors also focus on

identifying the antecedents to moral development by proposing that parental practices, actions, and behaviors have a
significant effect on a childs moral development, including
moral identity and moral action (Bandura, 1991; Hoffman,
1977; Kegan, 1982). Very few researchers, however, have
examined the role of leadership in affecting follower moral
identity development. Our research has started to fill this
gap by taking transformational and transactional leadership
factors into account and by generalizing it to working adults
in organizations in different industries. We believe that it
will be of great importance to further examine the role of
leadership in affecting followers moral development since
employees spend a large amount of time working with their
leaders. Indeed, we have witnessed in the current study how
a relatively short leadership manipulation primed participants in different leadership conditions to report out significantly different levels of moral identity. Future research
needs to further examine how such short interactions with
leaders or other significant role models could affect follower moral identity.

Practical Implications
The first practical implication is that managers by setting
high moral standards can likely strengthen follower moral
identity, which could consequently develop follower ethical
decision making and behaviors. Our findings showed that
leaders exhibiting transformational leadership behaviors
significantly affected how followers perceived their level
of moral identity. Based on our current preliminary findings, we can speculate that transformational leaders set high
standards of moral and ethical conduct for their followers to
emulate (Avolio, 2005; Bass, 1985; Bass & Riggio, 2006;
Burns, 1978). With strong moral values and goals, such
leaders promote ethical policies, procedures, and processes
within their organization. Being consistently high ethical
role models or moral exemplars would be expected to
encourage followers to establish their own internal set of
moral principles and ideals. Such leadership should help
establish a basis for enhancing follower moral identity
(Bass, 1985; Bass & Riggio, 2006; Burns, 1978). Transformational leaders also show concern for followers needs,
feelings, and development of morality. By offering constructive and positive moral feedback to their followers,
such leaders help improve followers understanding of their
own moral perspectives and those of others while also
developing a higher level of moral perspective and interpersonal ability in followers (Eisenberg, 2000; Hoffman,
1988).
Another important practical implication is that, to
develop moral followers, organizations need to develop
transformational leadership across different levels in
an organization. With strong moral values and goals,

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Journal of Leadership & Organizational Studies 18(2)

transformational leaders are more likely to promote ethical

climates, policies, procedures, and processes within their
organizations, which in turn would be expected to have a
positive impact on follower moral identity. Transformational leaders have been characterized as having higher levels of moral courage, which enables such leaders to adopt a
set of moral beliefs when dealing with ethical dilemmas
related to business contexts (Furnham, 2002; George,
2003). We predict that the level of moral courage displayed
by transformational leaders could be contagious, which
would consequently create the conditions for their followers to support a higher moral identity and more positive
moral decision making.
We also note from the current set of studies that active
transactional leadership can also affect how followers perceive their level of moral identity. Stating clear expectations and goals for high moral and ethical conduct would
certainly also contribute to a followers moral identity.
In the context of a public school setting, moral principals
help the moral development of teachers, who are taking the
responsibilities of training the next generations of American citizens. Another interesting question worthy of future
research exploration is whether moral teachers are more
likely to develop the moral identity of their students.

Limitations and Recommendations

for Future Research
Several general shortcomings are worth noting in these two
studies. First, it is important to recognize that other forms of
social influence exist in organizations, such as peer influence, which may certainly affect the development of followers moral identity. For example, it is possible that
followers can observe their colleagues moral behaviors
and feel the motivation or pressure from peers to act ethically, which, in turn, can influence their moral identity. In
fact, it is possible that these social influences are likely
embedded in the context of the ethical climate of organizations and require closer analysis. Therefore, from a theoretical perspective, it might be helpful for future research to
incorporate the effect of peer influence on follower moral
identity and test it empirically (Bandura, 1991; Kitts, 2006).
Second, we considered the construct of moral identity
as an individual-level construct. It is possible that
moral identity could be defined as a relational- and/or
an organizational-level construct (e.g., Lord, Brown, &
Freiberg, 1999; Waldman & Yammarino, 1999). For example, followers may develop a relational-level moral identity
with their moral leader because they respect and treat each
other with dignity and in a moral/ethical way. Moreover,
followers may develop an organizational-level moral identity that they belong to a moral organization, which values
being highly ethical above other desired outcomes and, in
turn, helps define what constitutes follower moral identity.

Third, we did not directly address the role of individual

differences in the relationships between leadership behaviors and follower moral identity and moral decision making. It is possible that followers who start out with a higher
level of conscientiousness might be more likely to internalize an authentic transformational leaders moral values and
moral perspectives, which could ultimately strengthen or
shape their moral identity and exhibit higher levels of moral
decision making.
Furthermore, one methodological limitation is that, since
all the questions are answered by the same respondent, common method variance might be an issue. We used Harmans
one-factor test (Podsakoff, MacKenzie, Lee, & Podsakoff,
2003) to examine the extent to which a common or singlemethod factor existed that would account for the variance in
our findings. To do this, we first performed an EFA by entering all three scales used (i.e., transformational leadership,
transactional leadership, follower moral identity) in this
study, and results showed that more than one factor emerged.
The general factor explained only 49.11% of the total variance. Finally, we performed a CFA including these three
scales using M-Plus (Muthn & Muthn, 2004). Results
showed that the goodness-of-fit indices of the hypothesized
model (i.e., three separate factors) exhibited a much better fit
to the data (2 = 5996.17, df = 1,175, p < .01, CFI = .72, TLI
[TuckerLewis index] = .71, RMSEA = .11) than the onefactor model (2 = 1959.97, df = 492, p < .01, CFI = .92,
TLI = .91, RMSEA = .06). The above analyses suggested
that common method/source variance was likely not a serious problem in the present study. Furthermore, we recommend that researchers could adopt a longitudinal research
design by testing ones moral identity at different time
slots to examine how it develops over time, which will help
better understand the complexity of moral developmental
dynamics.
Despite these limitations, this study has several strengths.
The first one lies in the random assignment of followers to
two different leadership experimental conditions. As confirmed in our preliminary analyses, random assignment
showed initial equivalence across the two conditions. With
initial equivalence in the context of the experimental design
used, we were able to test the causal effects of leadership on
follower moral identity. Second, the survey study included
a diverse sample of participants from a broad spectrum of
industries and organizations.
In closing, the results of our research indicate that
transformational leadership behaviors as opposed to
transactional leadership had a larger positive effect on
priming follower moral identity. We hope this preliminary study provides further impetus for examining the
role of transformational leadership in influencing followers moral decision-making perspectives, which
has not been thoroughly explored in prior leadership
studies.

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Appendix
The Scale of Moral Identity
Please indicate the degree to which you agree with the following statements (1 = strongly disagree, 5 = strongly agree).
There is no right or wrong answer.
1. I view being an ethical person as an important part
of who I am.
2. I am committed to my moral principles.
3. I am determined to behave consistent with my
moral ideals or principles.
4. I am willing to make a sacrifice to be loyal to my
moral values.
5. I am willing to place the collective interest over
my own personal ego and interest.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interests
with respect to the authorship and/or publication of this
article.
Funding
The author(s) received no financial support for the research
and/or authorship of this article.
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Bios
Weichun Zhu is an Assistant Professor of Management and
Organization and Co-Professor-in-Charge of the Master of
Leadership Development program at Penn State Universitys
School of Graduate Professional Studies in suburban
Philadelphia. His research interests include transformational/

authentic leadership, crisis leadership, and ethical decision

making in organizations.
Ronald E. Riggio is the Henry R. Kravis Professor of Leadership
and Organizational Psychology and former Director of the
Kravis Leadership Institute at Claremont McKenna College.
Professor Riggio is the author of over 100 books, book chapters,
and research articles in the areas of leadership, assessment centers, organizational psychology and social psychology.
Bruce J. Avolio is the executive director for the Center for
Leadership and Strategic Thinking and Marion B. Ingersoll
Professor of Management in the Foster School of Business at the
University of Washington. He has published ten books and over a
hundred articles on leadership and related areas. His most recent
book is Full Range Leadership Development with SAGE 2010.
John J. Sosik is Professor of Management and Organization
and Professor-in-Charge of the Master of Leadership Development
program at Penn State Universitys School of Graduate
Professional Studies in suburban Philadelphia. He has published
over 80 books, book chapters, proceedings, and research articles,
made over 85 academic conference presentations, and conducted
training and development programs to a wide variety of for-profit
and not-for-profit organizations on the topics of transformational/
charismatic leadership, mentoring, and group/team processes.

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