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‘’Morality works’’: A study connecting ethical leadership with
beneficial employee and organisational outcomes in the corporate
business field
Ioannis Mavroeidis 11181354
Thesis in Corporate communication master’s track Supervisor: Luzia Helfer
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Abstract
Although leadership styles cover an extended field in the academic literature, ethical
leadership as a two-way communication leadership model lacks of sufficient background. A Dutch healthcare corporation enacting in international level is placed under the researcher’s microscope and the study takes a ‘deep dive’ in the model of ethical leadership aiming to identify and connect it with beneficial employee and organisational outcomes. Employees’ proactive behaviour, turnover intention and perceived corporate credibility are the main elements being investigated. The study is also expanded, taking into account the differences between native and expatriate employees and between employees that make their first career steps and experienced ones.
Introduction
Goal of every for-profit organisation is the constant achievement of high performance, which eventually will lead to their ultimate aim, the greater profit. Organisational
performance is an outcome that depends at a large part on employees’ behaviours
(Hoogervorst & Koopman, 2004). Many studies in the past have linked supervision with a series of employee work behaviours and actions. The way leaders and supervisors
communicate their messages through their leadership styles may lead to various organizational outcomes. Janssen (2005) found a relationship between the supportive supervision with the employees’ innovative behaviour, while Lyons and Schneider (2009)
claimed that leadership styles based in a two-way communication model are associated with subordinates’ effort and performance expectancies. In addition, supervisors that acknowledge admiration from their employees tend additionally, to earn their loyalty, while they are recognized as more capable to guide their employees to certain work behaviours (Chen, Tsui
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& Farh, 2002). On contrast, limited communication between supervisors and employees is likely to lead employees to see management values and interests as incompatible with their own (Redman & Snape, 2005). Employees’ behaviour therefore, is greatly dependent on the messages that they receive by their hierarchically superiors. Managers and team leaders are the ones that through their leadership styles communicate specific messages to their
employees such as the culture, the values, the structure and the work standards of an organisation. Leadership styles concern the internal communication science field; among them symmetrical communication models are considered to be the most effective
communication strategies for building and maintaining employees’ relations (Men, 2014).
Ethical leadership is a two-way symmetrical communication leadership model. Cornerstones of this model is the integrity of the messages communicated, the promotion of the ethical standards and the employees’ fair treatment (Brown et al., 2005). The focus on process- orientation rather than just target- orientation is what makes the difference between ethical leadership and other leadership models (Brown & Trevino, 2005). In that sense, ethical leaders are not only interested in the organisational – work results but at a large part, they allocate their focus on the way these results are obtained. Once more, Brown and Trevino (2005) defined the ethical leadership model 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” (p. 120). However, ethical leadership is mostly discussed in theoretical terms and only few studies have provided empirical evidence about ethical leadership (Toor, & Ofori, 2009). Walumba and colleagues on a later study (2011) pointed out the limitation of the inadequate studies regarding ethical leadership and its connection with work-task
performances. Although empirical knowledge is limited, the importance of ethical leadership has already been valued and its relation to various work outcomes has been identified. Brown
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and colleagues (2005) linked ethical leadership with outcomes such as the perceived effectiveness of the leaders, subordinates’ job satisfaction, dedication, and willingness to report problems to management (Brown et al., 2005). A high value establishment was that one of Piccolo and colleagues (2010) whose study supported that ethical leadership has a positive impact on subordinates’ job performance (Piccolo, Greenbaum and Hartog, 2010). In general, evidences that ethical leadership relates to positive work outcomes have been
collected. However, many structural employee outcomes concerning the business field lack of investigation. Aim of this study is to provide new insights on whether ethical leadership style can be connected with such work outcomes. The difference of this study among others is that the researcher’s goal is to dive deeper in the organisational structures of the corporate environment and link ethical leadership model with outcomes that concern both the
management and the organisations themselves. Clarifying the intentions of the study, the relationship between ethical leadership and employees’ proactivity, employees’ perceived corporate credibility and the employees’ turnover intention will be examined.
A sufficient amount of academic literature in the domain of employees’ proactive behaviour in organizations can be found. The various literature portray proactivity as a crucial work outcome, which affects both employees and the organisations themselves (Grant & Ashford, 2008). As Grant and Ashford (2008) claimed, the knowledge regarding the nature, antecedents, processes, and consequences of proactivity has been enrichened. However, limited remains the awareness about the dynamics that might govern proactive behaviour. Therefore, the necessity of acquiring better knowledge for the concept of
proactivity is an aim to be accomplished by the study. In all, the study will examine whether ethical leadership works as a triggering factor for employees’ proactivity.
Moving forward, both managers and organisations as a whole seek for committed employees, or ways to inspire their employees’ loyalty. Kim & Lee (2009) suggested that
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supervisory styles related with supportive communication and upward communication lead to employees’ lower turnover intention. The researchers though, highlighted that despite the significant contribution of many studies, only few have examined the effects of supervisory communication and employees’ turnover intention in the corporate organisational field.
Nowadays, organisations’ willingness to ‘’transform’’ their employees into brand
ambassadors and advocates is more well- timed than ever. Marketing practitioners recognize the value of brand ambassadors suggesting that positive word-of-mouth is "the most
important marketing element that exists", and "the most powerful force in the marketplace’’ (Chung & Darke, 2006). Organisations that deliver messages that are in line with ethic values such as perceived fairness; distributive fairness and interactional fairness lead customers into having higher perception of the organisations and eventually lead them to the customers’
satisfaction (Davidow, 2003). Employees convinced for the credibility of their organisations
are more prone to engage both online and off-line interactions with external stakeholders. This statement can be assumed taking into account Boichuk and Menguc (2013), in study according to whom, retail employees refrain in expressing promoting work-related
discussions when they work in a perceived as non- satisfying quality environment. It is of
great importance therefore, for the employees to hold satisfying perceptions of their company’s credibility in order to get involved more willing to the creation of work-related positive word of mouth. In that sense employees’ perceived corporate credibility can be taken into account as an external organisational outcome, since its end can be the organisation’s external stakeholders.
In order for the study to extract safe conclusions, factors that would cause variations in the relationship between ethical leadership and the work outcomes are taken into
consideration. Therefore, individuals’ working experience and whether the employees are native or expatriate ones are elements that could present deviations when linking ethical
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leadership with employees’ proactive behaviour. Even more, it is examined whether employees’ communication satisfaction plays a role when it comes to their turnover intentions.
The study in all, investigates the question: ‘’to what extent does ethical leadership affect
employee and organizational outcomes?’’. First, a review of the literature on ethical leadership, the work outcomes and confounding variables is presented, followed by the hypotheses development. Second, the research methodology, procedures and participants are discussed in detail. Third, the analysis of the data acquired from the study field is presented along with the discussion of the results. Finally, implications in both theoretical and practical level and the study’s limitations and the conclusion take place.
Theory and Hypotheses development Proactivity and ethical leadership
Ethical leadership is a construct that consists of overlapping elements from various and different in-between them leadership styles. For instance, the charismatic/inspirational
dimension lies in the ethical leadership in a sense that provides followers with a clear sense of purpose that is energizing, while the ethical leaders act as a role model with the followers identifying themselves with the leader’s vision (Treviño, Brown & Hartman, 2003). At the same time, challenge of the ethical leader is the ‘individualized consideration dimension’, since the leader’s role is to understand and focus on the different needs of each subordinate
(Treviño et al., 2003). Evidence therefore, is provided that elements of the transformational
leadership are embedded in the ethical leadership style as well. Ethical leadership is
concerned with the ethical practices regarding management of employment, management of diversity, product development and distribution and the overall ethical orientation of an
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organisation (Hood, 2003). Brown, Treviño, and Harrison (2005), defined the ethical leadership model 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” (p. 120). Social learning theory posits that in work environment where ethical leadership takes place, employees will engage a desired work behaviour through the ethical leaders’ rewards on ethical and appropriate behaviours and the punishments and isolation of the unethical and inappropriate ones (Mayer et al. 2012). It is upon the ethical leaders eventually, to direct their employees in an appropriate and ethical way and inspire them with the desirable work values and attitudes. In order for leaders to achieve that, their effectiveness upon the employees must be apparent. This can be achieved under ethical leadership style, since leader honesty is associated with perceived leadership effectiveness (Den Hartog, et al., 1999). In their study,
Brown and colleagues (2005) supported that ethical leadership consists of two basic
constructs that compose the ‘legitimate’ leadership behaviour, the leader honesty and the considerate-fair treatment, concluding these factors can work as drivers for employee’s willingness to put extra work effort. Connecting the literature parts, ethical leaders are prone to be more effective inspiring their subordinates with beneficial work approaching mind-set and practices. Subordinates themselves, acknowledging their leaders as ethical figures are more prone to put further work effort. On the other hand, leader’s unfair treatment leads employees to perceive the work setting as unpleasant, while they perceive the overall work experience as unsatisfactory (Li, Liang & Crant, 2010). Li and colleagues also, in the same study connected the lack of work setting satisfaction with the employees’ reduction of extra-role behaviours, while they supported that an established just work environment works as a
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Employee’s proactivity has been a central focus point in the human resources
development literature, which examines the concept as a career-enhancing behaviour (Mihail,
2008). Employees’ proactivity is linked with various initiative actions and work approaching
behaviours. Many definitions for proactivity and proactive behaviour across academic literature can be found. An early study defined proactivity as ‘’the extent to which people take action to influence their environments’’ (Bateman and Crant, 1993, p.103). A decade later, extending their definition on the organizational strategy Bateman and Crant referred to proactivity as the active search of opportunities that emphasize in innovation and
environmental change. Sonnentag (2003), defined proactivity as ‘’the aim of improving given work methods and procedures and developing personal prerequisites for meeting future work demands’’ (Sonnentag, 2003, p.519). In the corporate environment, proactivity is of a
strategic importance business action where initiative changes in various policies take place rather than simply reacting to events (Aragón-Correa, 1998). According to Crant (2000), role of the proactive employee is to actively seek information and opportunities for improving organisational functions by creating opportunities rather than waiting for the information and the opportunities passively. Based on these statements, the current study will define
employees’ proactivity as the employees' active attitude towards work, their creation of favourable conditions through initiatives and active work stance rather than their passive or simply reactive work behaviour. Earlier studies examined the concept of employee’s
proactivity as an element deriving exclusively from employee’s personality. Personality traits therefore, such as openness and extraversion would be the predictors of proactive work behaviour (Major, Turner, & Fletcher, 2006). In other studies additionally, proactivity was linked with factors such as the gender, educational level and even the parental status (Crant, 1996). However, the administrative dimension also is considered to be a strong predictor for proactivity. The ways of administration refer to the organisational structures and processes
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that encourage or forbid certain behaviours and work approaches. In that sense, it can be assumed that administration can work as motivator in employees’ proactivity. The
relationship between ethical leadership and proactivity is examined under the first research hypothesis.
Hypothesis 1: Ethical leadership is positively related with employees’ proactive behaviour.
Proactivity and years of working experience
Early career employees are more likely to take more initiative actions than employees who have greater experience on the work-field in order to take advantage of career
opportunities (van Veldhoven & Dorenbosch, 2008). The study of Warr and colleagues (2001), regarding age and personality traits in the British population suggested that older individuals obtain lower scores on scales concerned with career-related achievement
motivation. Even more, earlier literature suggested that older individuals report lower career
motivation, while also a reduced interest in aspects of new learning (Warr & Birdi, 1998).
Proactivity is a work outcome that is linked to work motivation and ultimately to work and career achievements. Entry-level employees, in general are younger than the senior level ones therefore may show a more proactive work approach. In order to test this assumption the first part of the second hypothesis is formed.
Hypothesis 2a: Entry-level employees present a more proactive behaviour than the senior level employees do.
Early on, Pratt (1991) found that compared to younger employees, the older ones were showing more their ethical beliefs, while also they tended to behave more ethical. Following up some years later, Kim and Choi (2003) in their study aiming to evaluate personal ethical ideologies and professional standards among employees reached the conclusion that age repeatedly correlates with ethical behaviour. By using the ‘Ethical Position Questionnaire’
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(EPQ) to measure the ethical ideology of individuals, they found that overall the older respondents showed higher level of agreement with the ‘’code of ethics’’. Westerman and Simmons (2007) stated work environment fit with the employees’ personality traits is a substantial predictor of employees’ proactive seeking in an organization. Therefore, since there are evidences that older employees will develop a more proactive behaviour under an ethical work environment, which is supposed to fit with their temperament, the second part of the second hypothesis takes place.
Hypothesis 2b: Senior level employees show a more proactive behaviour than entry-level employees do when ethical leadership takes place.
Proactivity and expat/native employees
The term “expat” derives from the Latin prefix ex which means ‘out of’ and the noun patria (home- country). As “expats” in general, are considered to be the individuals who either temporarily or permanently live in a country that they were not born in or whose nationality is different. The study defines expatriate employees as the ones that find
themselves working in a country from which they have different nationality. Expatriate employees’ satisfaction with career prospects is higher than of the native employees’.
Compared to native employees, expatriates are in general more satisfied with a number of job characteristics. Specifically, they evaluate more positively the extent to which their jobs have task variety and autonomy, provide opportunities for learning, allow them to apply their knowledge and give them enough responsibility (Bonache, 2005). Decreased job satisfaction according to Li and colleagues (2010) as mentioned before is linked with the employees’ reduction of extra-role behaviours. It can therefore be assumed that since expatriate employees perceive higher job satisfaction than the native ones, they will undertake more proactive roles than the native employees will.
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Hypothesis 3a: Expatriate employees present more proactive behaviour than the native employees do.
Discrimination and dangling of foreign employees result in lower job satisfaction and job commitment, while on the other hand, managing and embracing diversity help managers to boost employees’ organizational performance (Dinsbach & Vries, 2007). Ethical
leadership promotes equality and promotes ethical work standards that would make possibly the expatriate employees to feel equally treated employees. According to Hood (2003) whose
study was quoted beforehand, ethical leadership contains the element of diversity
management and fair interactions between the management and subordinates, while arguments establishing ethical leadership and proactivity took place. As the literature indicated this diversity embracement would lead into boosting employees work
performances, one of which shall be the proactive behaviour. In order to test this assumption
the second part of the third hypothesis is provided.
Hypothesis 3b: Expatriate employees will present more proactive behaviour than the native employees will when ethical leadership takes place in the organisation they work for.
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Turnover intention and ethical leadership
Evidence through previous study suggests that having a supportive supervisor is significantly related to the decreased likelihood of workers’ turnover intention (Kim & Lee, 2009). Even more, it is suggested that ethical leaders create strong bonds with their
employees, which as an outcome has the development of a pleasant work environment; this environment is assumed to create a higher employee commitment and decreases the turnover
intention (Mulki et al, 2007). The definition of the turnover intention has been given from
much earlier study, the phenomenon of employee’s turnover intention is defined as ‘’the conscious and deliberate willingness to leave the organisation’’ (Tett & Meyer, 1993, p.262).
The assumption regarding ethical leadership and employee’s lower turnover intention is grounded on the study of Schwepker (2001). Schwepker, provided with evidence that workplace’s ethical climate relates to the lower turnover intentions of the sales persons. In order to provide spherical evidences in the corporate work field, the first part of the fourth hypothesis is constructed.
Hypothesis 4a: Ethical leadership is negatively related to employee’s turnover intention.
Communication satisfaction in turnover intention
Effective communication practices between supervisors and employees are linked with high quality supervision (Kim, & Lee, 2009). A developed or improved supervision model which leading to positive relationship communication will eventually lead to the decrease of employees’ turnover intention. Therefore, the construct of employee’s communication satisfaction shall be under investigation. Downs & Hazen (1977) identified in their study the basic principles of communication satisfaction, ‘’the primary dimensions of communication satisfaction include: general organizational perspective, organizational integration, personal
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feedback, relation with supervisor, horizontal-informal communication, and communication climate’’ (p.72). Brown et al. (2005) held that ethical leaders are transparent and engage open communication; this open communication is assumed to provide satisfaction towards the employees. Therefore, the ethical supervision model based into the symmetrical two-way communication will possibly lead to a better communicative environment and subsequently to a lower rate in employees’ turnover intention. The second part of the fourth hypothesis therefore, is formed.
Hypothesis 4b: Employee’s communication satisfaction partially mediates the relationship between ethical leadership and employee’s lower turnover intention.
Conceptual model 2
Corporate credibility and ethical leadership
Newell and Goldsmith (2000) defined corporate credibility as ‘’the extent to which
consumers feel that the firm has the knowledge or ability to fulfil its claims and whether the firm can be trusted to tell the truth or not’’ (p.235).The concepts of organisational
trustworthiness and expertise combined co-create the construct of corporate credibility (Lafferty, 2000). A little later, by the same authors, the definition of corporate credibility was expressed as ‘’the extent to which consumers, investors, and other constituents belief in a company's trustworthiness and expertise, makes up a portion of a corporation's image’’
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(Lafferty, 2002, p.2).Employees perceived organisations’ credibility concerns the external organisational outcomes. Employees are a dynamic part of the organisation’s stakeholders, who may act as corporate ambassadors and brand advocates that represent the organization on an external level. It is of great importance then, for the employees to hold high perception of their company’s credibility in order to communicate positive word of mouth regarding the organisation’s credibility. According to Brown and Trevino (2006), ethical leaders are credible because they are trustworthy since they practice what they preach. However, since leaders through their leadership styles communicate the overall organisational philosophy it can be assumed that employees can make direct associations between their leaders and the organisations themselves. This assumption goes in line with the concept of the
‘’personification of the organisation’’. In this concept it is claimed that ‘’supervisors plays a critical role as key agent of the organization through which members form their perceptions of the organization” (Liden, Bauer & Erdogan, 2004, p.228). Therefore, the researcher concludes to the fifth hypothesis.
Hypothesis 5: Ethical leadership is positively related with employees’ higher perception of their company’s credibility.
Conceptual model 3
Method
Procedure and design
Focusing on a case study, an international corporation in the field of healthcare in Amsterdam, Netherlands was chosen for this research. The corporation served the necessities
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of the research, since its Dutch origin would make it possible to reach a sufficient amount of Dutch employees, while at the same time its international profile would make it also possible to reach international employees as well. Even more, the building in Amsterdam is the organisation’s headquarters in where a sufficient amount of employees is employed. Therefore, employees with variety of years of working experience would be allocated, covering the precondition of reaching both senior level and entry-level employees. Crucial factor in choosing this corporation for this study was the fact that the researcher while conducting the research was employed by the organization as an intern. The researcher, after reaching his accountable manager and providing him with information for the nature of the research, requested his permission in order to distribute an online survey. The manager was informed that confidential data will not exposed and that the anonymity of the respondents will be secured. Receiving the manager’s approval at first the employees of the department that the researcher was employed were reached, who were used as pilot testers of the survey. When confidence for the survey was provided, the researcher during lunch breaks contacted several employees from different departments asking for their contribution in a master’s thesis survey and their e-mail addresses were asked in order to be reached. The participants were asked to contribute to a survey that examines the relationship between leadership and employee and organisational outcomes, without been given more specific information. The participants were also asked to forward the survey to other co-employees if possible. The online self-completion survey was distributed among the employees via e-mail. In the e-mail, with subject title ‘intern’s master’s thesis survey’, the researcher once more, informed the employees that subject of the survey is the examination of the possible relationship between leadership and work outcomes without on purpose making reference to the ethical leadership model or being specific regarding the outcomes expected. Moreover, in the e-mail the
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provided. The respondents were informed about the approximate duration of the of the survey filling, eventually the link to the survey was attached. Important to be mentioned is that the respondents were informed that their anonymity is ensured and that the collected data will be used only for academic purposes. The e-mail also encouraged the respondents to share the questionnaire with their co-workers. The respondents were informed that in case of any questions and concerns they could reach via mail or in person the researcher or via mail the thesis supervisor. The e-mail concluded in thanking the employees for their contribution. Respondents by clicking on the survey link attached provided in the e-mail would be transferred into the survey environment whereas they could fill in the online questionnaire. Before the questionnaire appearance the same information that were provided on the e-mail were presented once more and the respondents were asked to give their consent. A standard consent form of University of Amsterdam was used, which should be used for the thesis surveys of each master’s student. A survey-reminder e-mail was sent after two weeks to the respondents with the same content as the first one with the subject title ‘Reminder: intern’s master’s thesis survey’.
The research was conducted under an individual self-completion online survey design. The ‘Qualtrics’ software was used in order to construct and distribute the survey. After the data collection the tool of statistical analysis SPSS was used. The study took place using stratified, convenience and snowball sampling with the researcher’s aim to reach the amount of 150 to 200 respondents. In all, the study took place in the start of April until the later days of June, 2017 in Amsterdam, Netherlands.
Participants
The respondents reached the amount of 162 from whom 5 were excluded. The amount of respondents used therefore was 157 (N= 157). It has to be noted than among the
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157 respondents 2 at some point dropped out the survey indicating a drop-out rate of 3%.. Respondents ages ranged from 21 to 55 (M= 31.1). 50 of the respondents declared they have Dutch nationality (32 %), while 102 participants declared that they have distinct than Dutch nationality (68%). Among the expat respondents 21% of them had Greek nationality, in the second place with 7.6% the Spanish nationality is placed. Even more, among the respondents 44.6% were males and 32.5% females. 45.2% respondents stated that they are senior
employees (working for the organisation for more than 3 years), while 54.1% stated that are entry level employees.
Measures
Ethical leadership. The ‘Ethical leadership’ scale (ELS) (Brown .et al., 2005) was used to measure ethical leadership. ELS consists of ten items in a 5-point Likert scale ranging from (1) totally disagree to (5) totally agree. In the study, the item ‘’the leader conducts in his personal life in an ethical way’’ was removed, therefore the scale used consisted of 9 items. The respondents were asked to evaluate statements regarding their leaders’ stance, such as: ‘’Listens to what employees have to say’’, ‘’When making decisions, asks “what is the right thing to do?” were used in the scale. Principal component analysis was implemented,
indicating that the 9 item-scale can be used to measure ethical leadership, since they formed a single dimension scale and one component with Eigenvalue above 1 (Eigenvalue=5.6)
occurred explaining 62.2% of the total variance. Cronbach’s a reliability test provided the scale with a strong reliability (α= 0.79). The new variable ethical leadership (M= 39.48, SD= 10.33) was constructed.
Proactivity. Measuring employee’s proactive actions, the seven-item for ‘self-reported initiative’ scale as developed by Frese et al. (1997) was used to assess proactivity.
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as: ‘I take initiative immediately even when others don’t’’, ‘’I do more than I am asked to do’’, ‘’whenever there is a chance to get actively involved I take it’’ appear in the scale. Principal component analysis was implemented, indicating that the 5 item-scale can be used to measure proactivity, since they formed a single dimension scale and one component with Eigenvalue above 1 (Eigenvalue=3.96) occurred explaining 56.58% of the total variance. Cronbach’s a reliability test provided a very strong reliability to the scale (α= 0.87). A new variables occurred describing proactivity (M= 3.85, S= 0.81).
Employees’ perceived corporate credibility. The perceived corporate credibility scale as developed by Newell and Goldsmith (1997) was used. The answers of the 8-item scale ranged from 1 (very credible) to 7 (not credible). Among the items that were used, items such: ‘’ The Corporation is skilled in what it does’’, ‘’ The Corporation has great expertise’’ and ‘’ I trust the Corporation’’ appeared on the scale. Initially the items ‘’The Corporation does not have much experience’’ and ‘’I do not believe what the Corporation tells me’’ were re-coded in order to be in line with the other statements that they had no negative content. Principal component analysis was implemented, and although the above items were re-coded their coefficients loaded low in the component presented. Therefore, the items were not taken into account. The next principal component analysis with the 6 remaining items formed a single dimension scale and one component with Eigenvalue above 1 (Eigenvalue=4.25) occurred explaining 70.98% of the total variance. Cronbach’s α reliability test provided the scale with very strong reliability (α= .92) and the variable employee’s perceived corporate credibility (M= 2.37, S= 1.23) was constructed.
Communication satisfaction. Respondents were asked to indicate to what extent they feel satisfied with the communication within the corporation. In order to provide a valid scale, the communication satisfaction questionnaire from Downs and Hazen (1997) was used. Eight dimensions were provided therefore, on a 7-point scale. The questionnaire consisted of
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item referring to: corporate communication, communication climate, media quality,
supervisory communication, personal integration, co-worker communication and satisfaction from supervisory feedback. Principal component analysis provided the researcher with the confidence that the 7 item-scale can be used to measure proactivity, since they formed a single dimension scale and one component with Eigenvalue above 1 (Eigenvalue=4.25) occurred explaining 60.7% of the total variance. The reliability test provided the scale with very strong reliability (α= 0.89). Therefore, the communication satisfaction variable (M= 5.35, S= 1) was constructed.
Turnover intention. The turnover intention scale (Nissly, Baral & Levin, 2005) was used to measure the intention of the Philips employees to leave the organisation. The 4-items scale consisted of the items ‘’ In the next few months, I intend to leave this organisation’’, ‘’
In the next few years I intend to leave this organisation’’, ‘’I occasionally think about
leaving this organisation’’ and ‘’I would like to work in this organisation until I reach retirement age’’. In line with the study of Kim and Stoner (2008) the items were rated in a 7-point scale ranging from “strongly disagree” (1) to “strongly agree” (7). Before proceeding into the principal component analysis the item ‘’I would like to work in this organisation until the retirement age’’ was recoded in order to be in line with the rest of the items that contained a negative meaning. A single dimension scale once again occurred with one component with
Eigenvalue above 1 (Eigenvalue= 2.36) explaining 59% of the total variance. The reliability
of the scale was provided (α= 0.75) and the turnover intension variable (M= 3.93, S= 2.83) took place.
Entry-level and senior level employees. In order to divide employees into entry and senior, the years of working experience were taken into account. According to the company’s business principals the job descriptions for the ‘’Entry’’ level employees is defined between 0 and 3 years of working experience. Therefore, employees with 0 to 3 years of working
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experience were labelled as entry-level employees while the rest of the employees with 3 or more years of working experience were labelled as senior level employees.
Native and expat employees. Employees were asked to provide information in regards with their nationality, therefore the ones that declared having a Dutch nationality were taken into account as native employees, while the rest of the employees having a non-Dutch nationality were taken into account as expat employees.
Results
Hypothesis 1 suggested that ethical leadership will lead to increase in employees’ proactive behaviour. A single regression was used to test the first hypothesis with ethical leadership (M=39.48, SD=10.33) as the independent variable and proactivity (M=3.85, SD=0.81) as the dependent variable. The regression model was found statistically significant, F (1, 150) = 68.49, p < .001, 95% CI [0.03, 0.05]. The regression model therefore can be used to predict proactivity, while the strength of the relationship is of moderate strength, since 31% of the variance of proactivity can be explained by ethical leadership (R2 = 0.31). Even more, according to the model for every additional point increase in ethical leadership the proactivity level will be increased by .044, b* = 0.44, t = 8.27, p < .001, 95% CI [0.34, 0.55]. Therefore, the first hypothesis is confirmed.
Testing hypothesis 2a in order to see whether entry-level employees present a more proactive behaviour than the senior level employees, the independent samples T-test was implemented. The T-test provided with the confidence that entry level employees (M= 4.1, SD= 0.71) scored higher on proactivity than the senior level employees (M= 3.55, SD= 0.82), F (150, 135.37) = 1.92, p < .001, 95% CI [0.3, 0.8]. Hypothesis 2a is confirmed.
In order to proceed with the regression analysis to test hypothesis 2b, senior and entry-level employees were re-coded in a dummy variable in order to fit in the regression analysis. The new variable took were given the values ‘1’ for senior level employees and ‘0’ for entry-level
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employees. ‘PROCESS’ analysis tool for SPSS was used with independent variable the years of working experience, proactivity as the independent one and ethical leadership as the moderator variable. Overall, the model appeared to be statistically significant F (3, 148) = 30.52, p < .001, explaining 38.22% of the variance in the proactivity (R2 = 0.38), however the interaction effect was not statistically significant therefore hypothesis 2b cannot be
confirmed.
Independent samples T- test was used to test hypothesis 3a expat employees (M= 3.96, SD= 0.75) were shown to score higher on proactivity than the native ones (M= 3.59, SD= 0.86), F (150,81.42) = 2.69, p = .01, 95% CI [0.87, 0.66]. Hypothesis 3a is therefore confirmed. ‘PROCESS’ analysis tool for SPSS was used again testing whether ethical leadership moderates the confirmed relationship of hypothesis 3a. The variable referred to the the employee’s nationality was recoded in a ‘ dummy’ variable with values ‘1’ for expat employees and ‘0’ for Dutch employees in order to be appropriate for use in the regression model. The interaction effect was found statistically significant, F (3, 148) = 5.65, p = .018, 95% CI [-0.04, -0.004]. The interaction effect though acknowledges a weak strength, since the increase in the proactivity level from the expats when ethical leadership takes place is 24% (R2 = 0.24). In all, 3b hypothesis is confirmed.
Testing hypothesis 4a and 4b, ‘PROCESS’ analysis tool for SPSS (Model 4) was implemented with ethical leadership taking pace as the independent variable, turnover intention as the dependent one and communication satisfaction having the role of the mediator variable. The outcome of the analysis showed that ethical leadership itself is not a valid predictor of lower turnover intention since the model was not statistically significant. On the other hand a statistically significant positive relationship was acknowledged with ethical leadership being and communication satisfaction, F(1, 148) = 133.58, p = .01, 95% CI [0.06, 0.82]. In addition the information acquired by the model indicated that for every
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additional unit increase in ethical leadership the communication satisfaction will be increased by .07, b*= 0.7, t= 11.55. The model also acknowledged moderate strength, since 47.4% of the variance in communication satisfaction can be explained on the basis of ethical leadership (R2 = 0.47). In addition the mediation model was found statistically significant, a negative relationship was found between communication satisfaction and turnover intention F (2,147) = 133.58, p = .01, 95% CI[-1.67, -0.7]. The model also indicated that every additional unit increase in communication satisfaction, turnover intention will face a 1.18 decrease, b*= -1.18, t= -4.79. Overall, the variance in turnover intention based on the model is of a moderate strength (32.8%), R2= 0.33. According to the results therefore hypothesis 4a cannot be
confirmed, confirmation cannot also be acknowledge for hypothesis 4b since the mediation indicated in the hypothesis is not partial but absolute..
Hypothesis 5 was tested under a single regression, ethical leadership was taken into account as the predictor variable and perceived corporate credibility as the outcome one.
Unexpectedly, the model established a statistically significant negative relationship, F (1,148) = 110.84, p = .01, 95% CI[-0.9, -0.63], indicating that in every unit increase in ethical
leadership the perceived corporate credibility of the organisation is decreased by 0.08, b*=-0.08, t= -10.52. The correlation once again was of moderate strength, 43% of the variance explained in corporate credibility can be explained by the ethical leadership style, R2= 0.43. According to the results hypothesis 5 cannot be confirmed.
Table 1
Correlations when controlling for age and gender when ethical leadership is the independent variable and proactivity, turnover intention and perceived corporate credibility are the dependent ones
*p< .05; **p< .01
Variables(N= 157) Proactivity Turnover int. Perceived corporate cred. Ethical Leadership .56** -.31* -.57** Age -.2** .06 .00 Gender -.1 .08 .09
23 Discussion
The researched in all accomplished is main goal to answer to its main question. The extent to which ethical leadership can be related to positive work and organizational
outcomes was mapped. The importance of ethical leadership becomes apparent in the study. The extent to which employees perceived to be treated ethically by the supervision plays significant role in presenting a series of work and organizational outcomes. The study in all, accomplished to confirm most of the hypotheses assumed. At first, it was proved that ethical leadership is related with employees’ higher proactive behavior. Entry level and expatriate employees indeed, showed a higher proactive behavior than senior level and native
employees respectively. However, the effect on proactivity when taking into account ethical leadership as a moderator would be enhanced only in the case of expat employees. Ethical leadership was not acknowledged as a significant factor predicting employees’ lower
turnover intention, but when taking into account the communication satisfaction that derives from ethical leadership significant results were found in the decrease of the turnover feelings of the employees. Paradoxical surprising were the results of the last hypothesis whereas it was showed that beyond the researcher’s expectations ethical leadership can be somehow connected with lower perceived corporate credibility, which creates a new interesting field that should be investigated.
Apart from strictly focusing in the ethical leadership model and its outcomes, a holistic view should also be presented. Leadership styles are about ways and methods by which leaders and hierarchically superiors communicate their messages. Communication therefore is shown to play a significant role in the organizational business environment. Leadership models related to the two-way symmetrical communication model once more is proved to be in most of the cases a valid model while seeking for positive organizational results.
24 Limitations
The study focused only in the case of an international corporation in the field of healthcare based in Amsterdam, therefore its results would be difficult to be generalised for organisations enacting in different field or organisations that are based in other countries probably. The study also was conducted under a survey therefore causality between the variables cannot be established. The survey’s questionnaire contained sensitive questions regarding employees’ feelings for their supervision and their work behaviours and intentions. Since many of the employees would fill in the online questionnaire during their workday at their offices being next to other co-employees it is probable that the issue of social
desirability would have taken place. In other words, employees may had felt anxiety in case that they were watched which possibly led them into providing ‘social desirable’ answers. In addition, in the questionnaire there was lack of filtering questions regarding employees’ last meeting with their managers- team leaders and their feelings in regards with the feedback received. Therefore, as a limitation shall be recognized the possibility that employees who had received positive feedback before the filling the survey might had the tendency to evaluate their managers- team leaders higher in terms of their ethical stance and also could have scored higher in the proactivity, communication satisfaction and perceived corporate credibility statements and lower to the ones for turnover intention. On the other hand
employees’ who had received negative feedback likewise might have presented the tendency to evaluate their supervisors lower regarding their ethical stance and might have scored lower in the statements for proactive behaviour, communication satisfaction and perceived
corporate credibility while scoring higher in the turnover intention. Even more, when it comes to linking entry level employees with proactivity, it should be noted that many interns were taken into account as entry level employees. There might be also therefore, some deviations in proactive behavior between interns and actual employees, since in all interns
25
possibly would have felt even more intensively the need to show their capabilities and skills leading to a higher proactivity behavior than actual employees who already have acquired a contract of employment and probably feel more ‘safe’. Deviations also, might have been occurred in the communication satisfaction level. Most of the interns are employed for approximately six months, therefore the interaction time of interns with the other employees and with the overall corporate environment would be much less than the time of that actual employees who are employed for more than six months. Last but not least even though it would be about the same sample, the outcome of the survey may would have presented great deviations if it was conducted after the end of the year when employees receive their ‘’Year Performance Evaluations’’. In the same logic as mentioned beforehand, employees felling satisfied with their performance evaluation score would possibly rate their managers - team leaders as ‘’more ethical’’ while deviations may would have been occurred in the statements regarding proactivity, communication satisfaction and perceived credibility and even more in their turnover intentions. On the other way round, different outcomes might have been occurred for the employees that would receive disappointing feedback for their overall year performance.
Implications
In all the study provided with its insights regarding the relationship between leadership styles and work and organizational outcomes in the corporate business environment. More specifically, ethical leadership was placed in the epicenter and its
potentials where examined leading the researcher in obtaining crucial information. The study therefore, accomplished its main goal adding value to the existing literature of ethical
leadership style and in the two-way communication leadership models. Even more, the study could also be perceived as a small managerial ‘’guidebook’’ when inspiring and motivating
26
the employees to act more proactively is what management seeks. Management also have to be taught that by the ethical stance of the manager in combination with the overall
organizational communication satisfaction employees may find themselves to be more committed to their jobs and work environment. Even more, it is verified that younger employees with less working experience and employees who work abroad will present a more proactive approach in their work, meaning that they shall be considered as a structural part of the organizational base.
Conclusion
Although the ethical leadership as a concept in leadership style literature exists since a long time ago, the field is appropriate for further and deeper investigation. Future research should focus on more work and organizational outcomes when ethical leadership takes place, while as suggestion, intercultural differences shall be investigated. Even more, it would be of a high value if a pattern regarding ethical leadership and a series of various positive work outcomes could be established. In order for this pattern to take place, more positive work and organizational behaviors of essential importance should be landscaped. In line with this proposal future researchers could focus in the overall employees’ performance and their intention to positively evaluate their supervisor and engage a dialogue expressing positive opinion for their leadership when ethical leadership model is apparent.
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Appendix
Appendix a. Items used in ethical leadership scale: Your team leader:
1. Listens to what employees have to say
2. Disciplines employees who violate ethical standards 3. Has the best interests of employees in mind.
4. Makes fair and balanced decisions 5. Can be trusted
6. Discusses business ethics or values with employees
7. Sets an example of how to do things the right way in terms of ethics 8. Defines success not just by results but also the way that they are obtained 9. When making decisions, asks “what is the right thing to do?”
Appendix b. Items used in proactivity scale: Regarding your actions as an employee:
1. I actively attack problems
2. Whenever something goes wrong, I search for a solution immediately 3. Whenever there is a chance to get actively involved, I take it
4. I take initiative immediately even when others don’t. 5. I use opportunities quickly in order to attain my goals 6. Usually, I do more than I a m asked to do
7. I a m particularly good at realizing ideas
Appendix c. Items used in communication satisfaction scale: How satisfies you feel from:
1. The personal feedback you receive from your supervisor
2. The supervisory communication
3. The co-worker communication
4. The organisational integration (how well I fit in the organisation)
5. Corporate communication (the overall organisational communication flow)
6. Communication climate
7. Media quality (the communication equipment [software/hardware])
Appendix d. Items used in perceived corporate credibility scale:
1. The Corporation has a great amount of experience (in its action fields)
2. The Corporation is skilled in what it does
3. The Corporation has great expertise (in its action fields)
4. I trust the Corporation
5. The Corporation makes truthful claims 6. The Corporation is an honest organisation
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Appendix e. Items used in turnover intention scale:
1. In the next few months, I intend to leave this organisation.
2. In the next few years I intend to leave this organisation
3. I occasionally think about leaving this organisation
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