Messing with corporate heads? Psychological contracts and leadership integrity

The purpose of the paper is to present a model of leadership fulfiling the need of our times: The leadership psychological contract (LPC). In the current socio-economic environment of uncertainty and unprecedented change, both business environments and the community at large are marked by leadership crises. This instability makes an understanding of the relational aspects impacting the relationship between leaders and their constituencies both important and urgent. Now, more than ever before, extraordinary leadership is required. The psychological contract (PC) is recognised as one of the most emergent areas in organisational research. Its contribution to the leadership domain, however, is as yet undiscovered.

This paper addresses this deficiency by integrating contemporary leadership and PC literature. This paper also addresses criticisms raised in the leadership literature in the past 25 years relating to the scarce leadership research conducted at the unit/team level, despite the rhetoric that the main aim of leadership is in the collaborative domain, as well as the impact of leaders on emotional constructs and motivational or ‘extra-role’ behaviours.

The LPC is a predictive model that comprises three dependent variables (fulfillment of expectations, trust and fairness) – which constitute the health of the contract or the leader’s integrity/credibility, and four dependent variables (affective commitment, satisfaction, discretionary effort and innovation), which constitute the ‘consequences of the contract’ or the leader’s impact. The LPC model complements previous models of transformational leadership and leader–member exchange theory and addresses various criticisms and recommendations made in literature.

Frameworks such as authentic leadership, ethical leadership, moral leadership, spirituality and leadership each emphasise positive leader – follower relations. Taking into account the LPC and incorporating it into theory and practice should allow researchers to predict leadership effectiveness more completely and effectually than existing positive leadership approaches. The LPC model aims to enhance and refresh the value of effective and ethical leadership approaches that are emerging in response to the current socioeconomic landscape and leadership crises.