The role of managerial hierarchy in the moral reasoning of local government managers

Falling public trust in Australia's institutions warrants revisiting how public sector managers approach ethical decision‐making. This study presents the findings of in‐depth interviews with 35 local government managers in Australia and seeks to understand how managerial hierarchy influences the moral reasoning of managers. Through the lens of social learning and moral development theoretical perspectives, the findings indicate that local government managers do engage in different types of moral reasoning when presented with hypothetical ethical dilemmas, and their managerial status plays a pronounced role in shaping the content of that reasoning. We also find support for differences in moral reasoning across gender, which appear more evident at lower levels of management. Through providing an in‐depth analysis of managerial hierarchy and ethical decision‐making, the findings from this study can be used to guide organisational and individual managers’ ethics training and development.Points for practitioners The declining public trust in public administrators warrants regular risk management audits of internal and external environments of public sector organisations to identify potential or existing ethical challenges that require a response. Moral reasoning and ethical decision‐making are context specific and include the ethical climate of the organisation. We find support for the importance of organisational leadership visibly ‘walking the talk’ when it comes to ethics. While management hierarchy is seen to influence moral reasoning, or the deliberations when arriving at a decision, there is widespread acceptance of the basic tenets of abiding by the law and being truthful. Therefore, organisational ethical policies and codes of conduct should clearly articulate the legal implications, and consequences of any breaches. A one‐size‐fits‐all approach to ethics training is not advised. We find that moral reasoning differs with managerial experience. A case is made to account for training tailored at different managerial levels, along with scenario‐based training and mentoring from higher levels of management.