Moral Courage vs. Moral Deference: Ethical Leadership and Employee Outcomes During AI-Assisted Internal Crises

Abstract

This study examines how leadership stance and AI disclosure shape employee responses to CEO communication during an internal, value-based crisis. It further examines the mediating roles of perceived message sincerity and negative moral emotions and the moderating role of employees’ perceived risk. Drawing on ethical leadership theory, workplace courage research, and costly signaling theory, this study employed a 3 (leadership stance: courage-emphasis vs. adaptation-emphasis vs. deference-emphasis) × 2 (AI disclosure: disclosed vs. not disclosed) between-subjects online experiment with 570 participants recruited via CloudResearch. Results showed that courage-emphasis messages generated higher perceptions of ethical leadership, stronger advocacy intentions, and greater perceived organizational READINESS than adaptation- or deference-emphasis messages. Perceived message sincerity significantly mediated these relationships, whereas negative moral emotions did not mediate leadership stance effects. Contrary to expectations, AI disclosure did not produce direct effects but interacted with leadership stance, reducing perceived organizational READINESS for adaptation-emphasis messages. Furthermore, higher perceived risk strengthened the positive effects of courage-emphasis messages on perceptions of ethical leadership and advocacy intentions. The findings contribute to ethical leadership and internal crisis communication research while offering practical guidance for AI-assisted leadership communication during internal, value-based crises.