The Consequences of Ethical Leadership in Terms of Employees and Organizations: A Conceptual Examination

 

By, Belgin Bahar, PhD. Galatasaray University, Istanbul, Turkey, published at OPUS (*)

 

EXTENDED ABSTRACT

Today, due to the ethical scandals, the ethical issue and the ethical leadership concept in businesses have started to gain more importance for enterprises. Leaders should be an essential source of ethical guidance for employees (Brown et al., 2005).

Ethical leadership is a form of leadership about how managers use their power in decisions and actions they take. The power and influence of this form of leadership is based on moral and ethical authority (Akdoğan ve Demirtaş, 2014). Researchers (Brown et al., 2005, Mendonca, 2001) have mentioned that ethical leadership includes attributes such as honesty, integrity, trustworthiness, fairness, respect for others, and alturism.

Many researchers emphasized the importance of the ethical leadership. However, the concept and its characteristics are not fully defined in the literature. In addition, there was some confusion in the literature on the structure of the concept in question.

The aim of this study is to provide a better understanding of the structure of the ethical leadership concept and to analyze its results for the organization and employees. In this contexte, national and international literature was first reviewed and by explaining the concept of ethical leadership the confusions of concept is tried to be resolved. Then, the relations of ethical leadership with other concepts are discussed. Therefore, a theoretical model was proposed to synthesize the results of ethical leadership.

Brown et al. (2005) define ethical leadership as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making.”

Dion (2009) examined the basic confusion in the literature about the structure of ethical leadership and gathered them into three groups. The first is ethnocentric confusion. Accordingly, it is wrong to argue that autocratic leadership is not always ethical and that transformational leadership is the most ethical leadership style. The types of leadership take their legitimacy from the culture they belong to. Second, it is the axiological confusion about whether the leader applies moral values within the institution. Thirdly, it can be defined as philosophical confusion about the philosophical basis of ethical leadership.

Ethical leadership has several organizational and individual consequences. One of the concepts in which ethical leadership behaviors are frequently associated is employee satisfaction. Ruiz-Palomino and Ruiz-Amaya (2011), in their empirical studies, have demonstrated that ethical leadership directly positively affects the employee’s job satisfaction. Brown et al. (2005) showed that ethical leadership has a strong impact on employee satisfaction.

On the other hand, the behavior of the leader can affect the psychological and physical well-being of employees. However, the relationship between ethical leadership and employee well-being has been the subject of very few studies. One of the first studies on this subject is conducted by Chughtai et al. (2015). The authors showed a positive relationship between the two variables and showed that trust in the leader plays an intermediary role between ethical leadership and employee well-being.

Being fair is one of the basic behavioral characteristics of an ethical leader. Therefore, ethical leadership is closely related to the provision of justice in an organization. Many researchers have demonstrated the relationship between ethical leadership and organizational justice.

Another concept that needs to be addressed when examining the impact of ethical leadership on employee behavior is organizational citizenship behavior. Studies investigating the relationship between ethical leadership and organizational citizenship are generally based on social change theory (Kacmar et al., 2011). In this context, it is suggested that ethical leadership behaviors can reveal the feelings of indebtedness that employees can respond through the demonstration of organizational citizenship behavior (Kacmar et al., 2011).

Finally, another concept in which ethical leadership is most associated in the litterature is organizational commitment. Studies on ethical leadership are more directed towards the affective dimension of organizational commitment. Studies show that the ethical behavior of the leader increases the employee’s desire to stay in the organization.

In the light of the findings of the theoretical and empirical studies leading to this study, a theoretical model is proposed. According to this model, ethical leadership affects employees’ job satisfaction, well-being, organizational justice perception, organizational citizenship behavior and organizational commitment directly and positively.

This research reveals the importance of ethical leadership for both the organization and the employees. Based on this study, we can recommand organizations to train their current leaders in ethical behavior or to work with leaders who demonstrate ethical leadership behavior. Thus, the role model leaders will motivate their employees to behave in a positive way and contribute to the formation of an ethical culture in their institutions.

Considering the lack of Turkish literature on ethical leadership, it is thought that an important gap is filled with this article. First, the study contributed to the ethical leadership literature by conducting a broad study on the subject. At the same time, it contributed to understand the structure, results and importance of ethical leadership. However, there are some limitations of the study. First of all, in this research the results of ethical leadership were examined and the antecedents of the concept and intermediary factors were not included. In the following studies, variables such as trust in leader or corporate reputation can be included in the model. In addition, empirical testing of the research model would be useful to verify the relationships between proposed links in future research.

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(*) Bahar, B. (2019). Etik liderliğin çalışanlar ve örgütler açısından sonuçları: Kavramsal bir inceleme. OPUS–Uluslararası Toplum AraştırmalarıDergisi, 11(18), 2506-2524. DOI: 10.26466/opus.553130553130