Leadership and Ethical Violations in Public Organizations: A Qualitative Study of Indonesia’s Ministry of Finance

Abstract

This study examines how leadership influences ethical violations within public sector organizations, focusing on the Ministry of Finance of the Republic of Indonesia. Despite strong institutional emphasis on integrity and accountability, disciplinary and ethical violations persist, suggesting that formal regulations alone may be insufficient to shape ethical behavior. This research aims to explore how leadership is interpreted and enacted in organizational practices, and how it contributes to the emergence of ethical violations through psychological and organizational mechanisms. Using a qualitative case study design, data were collected through semi-structured interviews with civil servants who had experienced disciplinary sanctions, complemented by analysis of internal investigation reports. The data were analyzed using thematic analysis based on the Miles and Huberman framework. The findings reveal that leadership functions as a critical source of moral signals that shape ethical climate, behavioral norms, and employees’ moral cognition. Leadership practices characterized by performance pressure, ambiguity in ethical standards, and inconsistent role modeling contribute to processes such as moral disengagement and ethical fading, which facilitate the normalization of ethical violations. This study contributes by offering a process-based explanation of ethical violations, highlighting the interaction between leadership, context, and cognition. Practically, it provides insights for designing integrity-based leadership systems in public organizations.