Ethical Leaders Promote Creative Teams Under the Right Conditions

In a world where CEOs become thought leaders, being an ethical leader is paramount. But does this type of leader inspire their team to be creative? For years, it’s been a common assumption in the organizational behavior field that the more ethical a leader is, the less innovative their employees are. But new research from the Georgia Institute of Technology shows that ethical leaders are more likely to increase team creativity.

“It bothered me that there are a number of studies that talk about how you can be ethical, or you can be creative,” said Scheller College of Business Professor Christina Shalley. “I didn't think you had to choose, so I wanted to understand under what conditions can you be both ethical and creative.”

In a study of fast-food workers in South Korea, the researchers surveyed both managers and their employees about their creativity and their leadership’s ethics. They found that employees are most creative if their ethical leaders create a cohesive team identity and resolve problems quickly.

Shalley and her team published their findings in the paper, "How Does Ethical Leadership Relate to Team Creativity? The Role of Collective Team Identification and Need for Cognitive Closure,” in Group & Organization Management.

Defining Creativity and Ethics

Shalley has been studying creativity for more than 30 years in the organizational behavior field. Here, creativity is understood as ideas that are novel and useful. Employees who solve problems are often considered the most creative. This break-the-rules mindset seems to be the opposite of ethical leadership at first.

Ethical leaders follow societal norms and appropriate behavior. They demonstrate these ethics in their personal actions and interpersonal relationships, and influence their employees to follow suit via communication, reinforcement, and decision-making. Traditionally, the need for societal conformity appears to undermine the rule-breaking spirit of creativity. 

The researchers suspected that there were conditions among ethical leaders that could mitigate this creativity/ethics schism. The first is collective team identification — how emotionally attached employees are to their team. A strong collective team identity can create common ground among team members with differing opinions and lead to clearer communication. A safer workspace can encourage employees to share their creative ideas.

The second condition is the collective need for cognitive closure or finding an answer in an ambiguous situation. Although this can lead to individuals making quick decisions instead of seeking creative alternatives, an ethical leader can use it for the team’s benefit. Quick decisions can make the team feel more cohesive and effectively increase collective team identification.

“An ethical leader can definitely motivate their employees to be creative, but it’s a more complex issue,” Shalley said.

Studying Creativity and Ethics

To confirm these hypotheses, the researchers conducted a study with employees and leaders at a South Korean fast-food chain that supplies poultry to food vendors and operates restaurants of their own. Creativity is a fundamental value of the company, making them ideal for this research.

They surveyed 92 leaders and 55 teams with anywhere from three to 30 members, or 327 total team members, with three surveys separated by three weeks each. Employees received the first two surveys and managers received the last survey that asked about the level of team creativity, such as how often they came up with novel and useful solutions to problems at work. The employees’ questions focused on three areas:

• Ethical leadership: measured by whether the leader discussed ethics with their employees or set an example of how to do things ethically.
• Collective need for cognitive closure: 15 questions on a scale of agreement of how well employees handled uncertainty. 
• Collective team identification: employees used a scale to rate how close they felt to the team.

The results confirmed that ethical leaders do contribute to more creative teams and suggest that leaders wishing to promote more innovation should set clear standards and rules for their teams.

“We are interested in how you can structure the work environment to enable employees to be more creative,” Shalley said. “Ethical leadership fosters team creativity by strengthening collective team identification.”

CITATION: Keem, S., Koseoglu, G., Jeong, I., & Shalley, C. E. (2023). How Does Ethical Leadership Relate to Team Creativity? The Role of Collective Team Identification and Need for Cognitive Closure. Group & Organization Management, 0(0).

DOI: https://doi.org/10.1177/10596011211072951