Unpacking the paradoxical impact of ethical leadership on employees’ pro-social rule breaking behavior: the interplay of employees’ psychological empowerment and moral identity

This study investigates the relationship between ethical leadership and employees’ pro-social rule-breaking behavior, with a focus on the mediating role of psychological empowerment and the moderating effect of moral identity. Grounded in social cognitive theory, data from 515 nursing staff in public and private hospitals in Pakistan were collected at three different time points and analyzed using Partial Least Squares Structural Equation Modeling (PLS SEM). Contrary to expectations, our findings reveal a positive association between ethical leadership and employees’ pro-social rule-breaking behavior. Additionally, we find that psychological empowerment mediates this relationship, while moral identity moderates it. These results highlight the paradoxical nature of ethical leadership, challenging the conventional understanding of its universally positive impact and highlighting its unintended consequences. The results also underscore the need to consider employees’ psychological processes and individual differences in understanding this complex relationship. The study provides insights into the complexities of ethical leadership in organizations and offers implications for theory and practice.