ABSTRACT
A major line of inquiry in leadership studies examines the institutionalization of ethics through transformational leadership. Carlson and Perrewe (1995) develop a theoretical model of a transformational leadership process that leads to institutionalized organizational ethics. This process requires visionary leaders with strong core values and an understanding of human needs. The transformational leader communicates the vision of an ethical organization and empowers employees to behave ethically. Employees then internalize ethical values as they change the culture of the organization. The result is a “psychological contract” that equates commitment to the organization with a commitment to ethics.
