ethical leadership

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Journal of Business Ethics ISSN 0167-4544Volume 126Number 2 J Bus Ethics (2015) 126:273-284DOI 10.1007/s10551-013-1950-5

Ethical Leadership Influence atOrganizations: Evidence from the Field

Ozgur Demirtas

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Ethical Leadership Influence at Organizations: Evidencefrom the Field

Ozgur Demirtas

Received: 22 March 2013 / Accepted: 29 October 2013 / Published online: 9 November 2013

� Springer Science+Business Media Dordrecht 2013

Abstract While a number of studies are being done on

ethical leadership, little is known about the role of ethical

ideology and organizational justice in the relation of the

ethical leadership behavior and individual behaviors such

as work engagement and organizational misbehavior has

tended to be neglected in ethics literature. This study

examines the mediating effects of organizational justice on

the relations of ethical leadership, work engagement and

organizational misbehavior. Also, it investigates the mod-

erating effect of ethical ideology on the relationships

among these variables. It proposes that managers’ ethical

values and organizational members’ ethical perspectives

such as absolutism, exceptionism, situationism, and sub-

jectivism have the potential to be agents of virtue within

the organizations. Employee attributions and emotional

reactions to the unethical behavior of their leaders are

important factors on individual behavior outcomes. So, in

this study it is hypothesized that ethical leadership behavior

affects organizational justice perception and this, respec-

tively, affects organizational members’ work engagement

and organizational misbehavior. It is also hypothesized that

ethical ideology would moderate the relationship between

the ethical leadership and organizational justice. Results

indicate that ethical leadership has both direct and indirect

influence on work engagement and organizational misbe-

havior. Finally, practical implications are discussed, and

suggestions for the future research are made.

Keywords Ethical leadership � Organizational

justice � Work engagement � Organizational

misbehavior � Ethical ideology

Introduction

Business ethics has become rather more fashionable among

academics, practitioners, regulators and governments

(Manz et al. 2008; Mehta 2003) due to the corporate

scandals such as Enron, and National Irish Bank. The

world has seen that there are unethical leaders who seek to

fulfill their personal desires at the expense of their orga-

nizations (Padilla et al. 2007; Schaubroeck et al. 2007).

Trevino and Brown (2004) argued that unethical behavior

has existed ever since the existence of human beings. Also,

there have been ethical and unethical leaders since the

beginning of civilization.

Ethics is partly linked to leadership for managers and

academic researchers. In order to achieve effective and

successful working environment over the long term, lead-

ership ought to have an ethical frame. As a role model in

their organizations (Grojean et al. 2004), leaders must

display the highest moral behavior in their actions to pro-

vide a moral framework. There are a lot of studies on

ethical conduct that emphasize the importance of ethics for

leaders (Harris 1990; Ozgener 2009). In accordance with

global trend, a vast amount of ethics researches have

focused on ethical leadership as a critical antecedent of

organizational outcomes.

Ethical leadership refers to the actions, talks, and other

behaviors which consist of appropriate norms. Also, it can

be defined as the demonstration of normatively appropriate

conduct through personal actions and interpersonal rela-

tionships, and the promotion of such conduct to followers

O. Demirtas (&)

2nd Air Supply and Maintenance Center Command, Turkish Air

Force, Kayseri, Turkey

e-mail: [email protected]

123

J Bus Ethics (2015) 126:273–284

DOI 10.1007/s10551-013-1950-5

Author's personal copy

through two-way communication, reinforcement, and

decision-making (Brown et al. 2005). There are a lot of

studies investigating theoretical and conceptual aspects of

ethical leadership, but there are few studies which provide

empirical evidence from the field. Despite there are a lot of

studies and discussion of ethics in organizational studies,

which mostly tend to conceptualize ethical leadership in

very broad terms, empirical research on ethical leadership

is scarce (De Hoogh and Den Dartog 2008; Trevino et al.

2003). So, these limited researches and requirements for

more clarification on this subject are the reason of com-

mencing of this study.

The purpose of this study is to examine the mediating of

organizational justice on the relations of ethical leadership,

work engagement, and organizational misbehavior. Also, it

is to investigate the moderating effect of ethical ideology

on the relationships among these variables.

This article is organized in four main sections. First, a

review of the literature on ethical leadership, organiza-

tional justice, work engagement, organizational misbe-

havior, and ethical ideology are presented, followed by the

development of hypotheses. Second, the research

method—participants, procedures, and measures—are dis-

cussed in detail. Third, an analysis of the field study data is

presented along with the discussion of the results in rela-

tion to the literature. Finally, strengths and weakness,

research implications and future research recommendations

are mentioned (Fig. 1).

Theoretical Frameworks and Hypotheses

The study of leadership has been the central part of man-

agement and organizational behavior literature for several

decades (Yukl 2002). Most of the leadership researches

suggest that leadership is an important determinant of

organizational effectiveness. Leaders can significantly

effect individual, group, and organizational performance

(Ilies et al. 2007). As a role model in their organizations,

leaders must be able to define and articulate a vision for

their organizations, and the followers must accept the

credibility of the leader (Emery and Barker 2007).

Employees can learn what behavior is expected, rewarded,

and punished via role modeling (Brown et al. 2005).

Social-learning theory suggests that individuals learn what

behavior is appropriate or not, by witnessing their role

models (Bandura 1986). So, leaders are an important

source of such modeling firstly by virtue of their role.

Furthermore, they must be credible, legitimate, and

attractive in the eyes of others. In this era, the new lead-

ership style brings the virtue and moral behaviors to the

front. For that reason, in the following sections, ethical

leadership behavior and its relationships with other vari-

ables are described.

Ethical Leadership

Ethical conduct and ethical dimension of the leadership

become obvious when prominent ethical scandals are seen

in virtually every type of organization (i.e., in nonprofit

organizations, sports, religious institutions) (Brown and

Trevino 2006). In order to understand this leadership

phenomenon and its relationships with antecedents and

outcomes, firstly we have to know ‘‘what ethical leadership

is’’ and ‘‘how ethical leaders ought to behave’’. Survey

researches have linked perceived leader effectiveness with

perceptions of the leader’s honesty, integrity, and trust-

worthiness (Den Hartog et al. 1999; Kirkpatrick and Locke

1991; Kouzes and Posner 1993; Posner and Schmidt 1992;

Northouse 2004; Dikeman 2007; Mayer et al. 2012).

Ethical leadership is conceptualized as discussing with

employees what the right course of action is and acting

with the best interests of employees in mind (Brown et al.

2005). A number of exploratory studies are being done to

understand what the term ethical leadership means to

proximate observers of executives (Trevino et al. 2000).

From the interviews, a number of personal characteristics

which are related to ethical leadership were found. Ethical

leaders were seen as fair, principled decision-makers, and

they behaved ethically in their daily lives. The researchers

characterized these characteristics as the moral aspect of

ethical leadership. Based on these qualitative findings,

Brown et al. (2005) developed a ten-item instrument to

measure perceptions of ethical leadership, the ethical

leadership scale (ELS), and they defined ethical leadership

as the demonstration of normatively conduct behavior

through personal actions and interpersonal relationships. In

addition to this definition, ethical leadership is also defined

as the promotion of such conduct to followers through two-

way communication, reinforcement, and decision-making.

Ethical leadership behavior reduces people’s anxiety

toward the uncertainty of the jobs or behaviors in the

organizations by being considerate, open, trustworthy and

honest, and by stressing the importance of adherence to the

high ethical principles (Trevino et al. 2003). While defining

Ethical Leadership

Organizational Justice

Ethical Ideology

Work Engagement

Organizational Misbehavior

Fig. 1 The mediating of organizational justice on the relations of

ethical leadership, work engagement, and organizational misbehavior

274 O. Demirtas

123


the ethical leadership, behavioral scientists mostly

emphasized on integrity and honesty (Dickson et al. 2001;

Eubanks et al. 2012).

From the corporate social responsibility perspective,

when the value system of a corporation explicitly acknowl-

edges the importance of human values by granting them

parity with the values of profit and technology, then eco-

nomic responsibilities will be balanced with moral respon-

sibilities, the corporation will seek to balance the interests of

the stakeholders without sacrificing its economic responsi-

bilities, and the responsibilities of its managers will be not

only to the corporation and its shareholders but also to other

stakeholders. Therefore, in the workplace, leaders should be

a central source of such guidance (Clarkson 1991).

In a corporate environment where ethics messages can

get lost amidst messages about the bottom line and the

immediate tasks at hand, ethical leaders also focus atten-

tion on ethics by frequently communicating about ethics

and making the ethics message salient. They set clear and

high ethical standards for other stakeholders and follow

these standards themselves. The conceptualization of eth-

ical leadership behavior as defined by Brown et al. (2005),

and used in this research, does not encompass all aspects of

virtue but is consistent with aspects of character virtues

such as love, faithfulness, temperance, and justice. Also, in

a manner consistent with virtue ethics, ethical leadership

behavior is conceptualized as acting in a manner that

communicates the importance of considering the means by

which outcomes are achieved (Brown et al. 2005). It is vital

that these leaders cultivate ethical behavior in their firms.

Since appropriate values are at the root of moral conduct,

the business leader of today must possess a set of values

that will not only enhance a favorable perception in the

eyes of both internal and external stakeholders, but also

lead to greater effectiveness and efficiency of organiza-

tional members.

In addition, many organizations have some formal sys-

tems such as ethical codes, corporate ethics audits, stan-

dardized procedures, and ethics training programs. Also,

managers have a primary role in shaping ethical conduct and

perceived justice at all levels in the organizations. When

behaviors in an organization perceived to be ethical, these

perceptions influence the ethical decision-making and

behaviors of the organizational members as well as their

attitudes toward individual jobs (Brown and Trevino 2006).

So, the ethical leadership influence occurs by means of cre-

ating and perpetuating an organizational justice perception.


People care deeply about how they are treated by

others. Organizational justice focuses on perceptions on

fairness in the workplace (Greenberg 1990; Cropanzano

and Greenberg 1997; Angelidis and Nabil 2011), and it

involves three components (Colquitt 2001). The first

component is distributive justice, which refers to the fair

allocations of outcomes (rewards and punishments)

according to each employee’s individual performance

(Steensma and Visser 2007; Laurie et al. 2009). Distribu-

tive justice has been extensively studied since the equity

theory was developed by Adams (1963). The second

component is procedural justice which refers to the per-

ceived fairness of the processes, i.e., procedures and poli-

cies used and their enactments of determining outcomes or

resource distributions (Colquitt 2001; Rhoades et al. 2001;

Ambrose and Schminke 2009; Greenberg 2011). Proce-

dural justice defines neutrality, status (social position or

status within a group or process) and trust (Folger and

Cropanzano 1998; Cropanzano et al. 2001). The last justice

type is interactional justice, which can be defined as an

individual’s concerns about the ‘‘quality of interpersonal

treatment they receive during the enactment of organiza-

tional procedures’’ (Bies and Moag 1986). Although Bies

(2001) argued that interactional justice is a separate con-

struct which is different from procedural justice, some

authors consider interactional justice as a sub-component

of procedural justice (Greenberg 1993; Lind and Tyler

1988).

A review of the organizational justice researches found

that perceptions of distributive or procedural justice influ-

enced by organizational rules and practices (Colquitt

2001). Ambrose et al. (2007) hypothesized that individuals’

attitudes toward specific events would mediate the rela-

tionship between justice and system-related attitudes.

Supervisors or managers are the primary sources of inter-

actional justice (Bies and Moag 1986; Greenberg 1993;

Cohen-Charash and Spector 2001; Cropanzano et al. 2007).

Also, McGregor (1960) emphasized the relationship

between leadership and fairness in his writings on Theory

Y. Ethical leadership behavior is primarily concerned with

the procedural aspects of fair decision-making and the

distributive aspect of providing consequences for unethical

behavior (Brown et al. 2005). The perception of managers

as being interpersonally just likely elevates their status as a

moral authority, which heightens their influence on virtu-

ously shaping perceptions of an ethical work environment

(Roberson and Colquitt 2005). As such, managers are

likely to be more effectual in influencing the prevailing

perceptions of an ethical climate when the manager

exhibiting ethical leadership is also perceived as being

interactionally just (Cohen-Charash and Spector 2001;

Cropanzano et al. 2007). But, there are few studies related

to ethical leadership and organizational justice perception.

Rupp and Cropanzano (2002) emphasized that interactional

justice perceptions impact on the quality of the relationship

with managers. Also, other studies indicate that justice

Ethical Leadership Influence at Organizations 275

123


perception increases the managers influence and their sta-

tus as a moral authority (Brown et al. 2005; Roberson and

Colquitt 2005; Sara De Gieter et al. 2012). Thus,

Hypothesis 1 Ethical leadership is positively related with

perceptions of organizational justice.

Moderation: Ethical Ideology

There are different taxonomies to describe individual dif-

ferences in moral thought and underly ethical framework

(Forsyth 1980; Kohlberg 1984; Bateman et al. 2012). In

this study, ethical ideology variable, which based on For-

syth’s (1980) ethical ideology taxonomy, is used. In this

taxonomy, individuals’ ethical ideologies were categorized

as four mutually exclusive groups. The first is the extent to

which the individual rejects universal moral rules in favor

of relativism that represents a moral philosophy based on

skepticism. Relativistic individuals feel that moral actions

depend on the nature of the circumstance more than ethical

principles, norms, or laws. The second major dimension

which underlines individual variations in moral judgments

focuses on idealism, which represents the philosophy of

hurting others is always avoidable, and that hurt is almost

never necessary to produce good. When these two dimen-

sions are dichotomized and crossed as high and low, they

yield 2*2 classification of ethical ideologies (Forsyth

1980). Extremely high scores on both dimensions are

labeled situationists, because their rejection of fundamental

principles combined with a desire to achieve positive

consequences promotes a careful weighing of situational

information in arriving at moral judgments. Absolutists are

low in terms of relativism but high in idealism, so they

prefer actions that yield positive consequences through

conformity to moral absolutes. Subjectivists are high in

terms of relativism but low in idealism. Vitell et al. (1991)

called this group of individuals Machiavellian in their

study. Forsyth (1980) himself characterized subjectivists as

ethical egoists. As Machiavellian people mostly do, sub-

jectivists tend to maximize personal gains, rather than

societal gains, when they make moral decisions. Excep-

tionists who try to maximize social welfare score, are

low on both dimensions; therefore, they believe that

moral rules should guide behavior but that actions which

cause some negative consequences should not necessarily

condemned.

The relationship between ethical leadership and ethical

ideologies is still complicated. This confusion usually

causes gaps in researches since it is not explained how the

relationship between the two is related. There are so few

studies about the relationship with ethical leadership and

ethical ideology. Farrell et al. (2007) and Lofton et al.

(2007) examined ethics and ethical leadership with the help

of Forsyth’s Ethics Position Questionnaire and found a

relationship between ethical leadership and ethical ideol-

ogy. Butler (2009) found that there was a difference in the

ethical perspectives (absolutism, exceptionism, situation-

ism, and subjectivism) of leaders and they emphasized a

positive relationship between leadership and idealism, and

negative relationship between leadership and relativism. In

addition to ethical leadership and ethical ideology rela-

tionship, researches also indicate a relationship between

organizational justice and ethical ideology (Gilliand et al.

2002; Beekun et al. 2008). For example, Hastings and

Finegan (2011) emphasized that high relativists would

have no reason to engage in deviance when organizational

justice is high. In other words, relativism and justice should

interact to determine deviant reactions. Also, Henle (2005)

concluded that future research should measure features of

the workplace such as justice that might encourage rela-

tivists to react in a deviant manner. In addition, he sug-

gested that it may be the relationship between ethical

ideology and perceptions of justice.

As mentioned, there are very few studies for ethical

leadership effect on organizational justice while ethical

ideology is in the model. So, the necessity for an appro-

priate model behavior, the expectation for an appropriate

behavior, and the support of highest ethical standards for

the leaders of tomorrow, the following hypothesize is

established to foster the development of ethical leadership

effect.

Hypothesis 2a Idealist ethical ideology will moderate the

ethical leadership-to-organizational justice relationship

such that the relationship will be stronger for higher idealist

ideology than for lower idealist ideology.

Hypothesis 2b Relativist ethical ideology will moderate

the ethical leadership-to-organizational justice relationship

such that the relationship will be stronger for lower rela-

tivist ideology than for higher relativist ideology.

Mediation: Organizational Justice

Work engagement indicates the assumption of ‘‘optimal

functioning’’ at work in terms of well-being (Hakanen and

Schaufeli 2012). This concept stimulate motivation and

inspire positive emotions toward the organization (Chen

and Kao 2012). Also, it emphasizes high levels of energy

(that are invested in work), and makes reference to

involvement (being dedicated, enthusiastic, and inspired by

one’s work) and commitment (being engrossed and

attached to one’s work). But, work engagement is empiri-

cally separated from the previously established constructs

of job involvement (Kanungo 1982) and organizational

commitment (Meyer and Allen 1997) with respect to more

stableness and longer lasting (Csikszentmihalyi 1997).

276 O. Demirtas

123


Leaders tend to move away from past identities and

invest heavily in future identities (Ybema 2010). Hassan

and Ahmed (2011) emphasized that subordinates’ trust in

leaders who facilitate employees’ work engagement. Den

Hartog and Belschak (2012) take an integrative approach to

answer leadership questions by looking at the role of work

engagement and Machiavellianism in the ethical leadership

process. The results of their study indicate that the effects

of ethical leader behavior on engagement are weaker when

ethical leaders are high compared to the low levels of

Machiavellianism. Koning and Waistell (2012) analyzed

the narration of identities and ethics through metaphor of

business leaders. This paper takes forward the under-

standing of ethical leadership as a time- and context-bound

process in which managers aspire to an identity as ethical

leaders within a corruptive business context. Kalshoven

and Den Hartog (2009) found that followers see ethical

leaders as an ideal representation of the group’s identity.

Ethical leaders stimulate employees’ work engagement

since engagement forms a unique motivational state that in

turn enhances work engagement and decreases counter-

productive work behavior (Sirota et al. 2005; Schaufeli and

Salanova 2006; Bakker et al. 2004). Avey et al. (2012) used

a sample of 845 working adults to answer the questions

about ethical leadership and positive employee outcomes.

The results indicated that ethical leadership was related to

the work engagement.

In addition to these findings, Saks (2006) and Inoue

et al. (2010) have found that employees with higher per-

ceptions of justice are more likely to reciprocate to the

greater work engagement. Also, some other researches

indicated the relationship between organizational justice

perception and organizational members behavior which is

related to work engagement (Konovsky and Pugh 1994;

Moorman et al. 1998; Pillai et al. 1999; Colquitt 2001;

Cropanzano et al. 2002; Hakanen et al. 2006; Llorens et al.

2006; Koyuncu et al. 2006; Bakker et al. 2007).

Similar to work engagement, organizational misbehav-

ior which indicate any intentional action by members of

organizations that defies and violates (a) shared organiza-

tional norms and expectations, and/or (b) core societal

values, mores and standards of proper conduct (Vardi and

Wiener 1992; Vardi and Weitz 2001) is influenced by

ethical leadership. There are many different terms and

definitions such as ‘‘deviant workplace behaviors’’ (Rob-

inson and Bennett 1995; Robinson and Greenberg 1998),

‘‘unconventional practices at work’’ (Analoui and Kakab-

adse 1992), ‘‘non compliant behavior’’ (Puffer 1987),

‘‘counterproductive workplace behavior’’ (Sackett and

DeVore 2001) or in general ‘‘antisocial behavior’’ (Giac-

alone and Greenberg 1997) which are related to the phe-

nomenon of employees who is behaving badly at work.

These terms which are stated above generally define the

phenomenon of employees who is behaving badly at work,

nevertheless they have minor contextual differences. In this

study, the term Organizational Misbehavior is used to refer

a wide range of work related types of misconduct which

were presumably perpetrated by members of the researched

organization. Bennett and Robinson’s typology which is

widely used in the literature defines four types of voluntary

and harmful misconduct such as production deviance

(minor-organizational, i.e., wasting resources, absenteeism,

and slowdowns), property deviance (major-organizational,

i.e., stealing from the company, sabotage, and bribery),

political deviance (minor-personal, i.e., showing undue

favoritism, and gossiping) and personal aggression (major-

personal, i.e., sexual harassment, and putting one’s life in

danger) for organizational misbehavior (Bennett and Rob-

inson 2000).

Organizational justice focuses on perceptions on fair-

ness in the workplace. Folger and Cropanzano’s (2001)

fairness theory, which is analyzed according to people’s

judgment, is very helpful to explain how perceived justice

triggers organizational misbehavior. For this relationship,

some other researches indicated that perceived injustice

may cause organizational misbehaviors (Skarlicki and

Folger 1997; Lind 1997; Aquino et al. 1999; VanYperen

et al. 2000; Ambrose et al. 2002; Kennedy et al. 2004;

Alias et al. 2012). So, from the above literature and the

results; the ethical leadership effect on work engagement

and organizational misbehavior and mediating effect of the

organizational justice perception are hypothesized as

follows:

Hypothesis 3a Perceived organizational justice will

mediate the relation between ethical leadership and work

engagement.

Hypothesis 3b Perceived organizational justice will

mediate the relation between ethical leadership and orga-

nizational misbehavior.

Method

Sample

One thousand employees in a public firm, which is oper-

ating in aviation logistics in Turkey from 1926, were ran-

domly selected to participate in. For our purposes,

participants were selected through stratified sampling on

the basis of their department size and type. Also, partici-

pants were required to work fulltime, within an organiza-

tion, and have direct and frequent contact with their

manager. For this study, two surveys administered 3 weeks

apart to reduce the influence of common method variance

(CMV). Of employee who responded, 418 provided usable


123


questionnaires on all study variables for a response rate of

92.8 per cent. This is an acceptable response rate for this

kind of study (Harmon et al. 2002; Nahm et al. 2003). The

sample consisted of 298 (71 %) male and 120 (29 %)

female participants with an average age of 42.36 years.

Participants averaged 10.1 years spent in their current job.

In addition, sample was comprised of employees in the

technical (%37), quality management (%23), programming

and budgeting (%17).

Measures

Unless otherwise indicated, all measures used a

5-point Likert scale where 1 = ‘‘strongly disagree’’ and

5 = ‘‘strongly agree’’. Items are averaged within the scales

to create composite measures for each variable. Items were

coded such that high scores equate to high levels of the

construct of interest.

Ethical Leadership

Ethical leadership scale (ELS), which was developed by

Brown et al. (2005) is used in this study. The scale consists

of 10 items. An example item is, ‘‘My supervisor makes

fair and balanced decisions’’. The Cronbach’s alpha for this

scale was 0.95.


Organizational justice was measured by using the scale

adopted from Trevino and Weaver (2001). It consists of

nine items. An example item is, ‘‘In general, this entity

treats its employees fairly’’. The Cronbach’s alpha for this

scale was 0.94.

Ethical Ideology

The ethical position questionnaire (EPQ), which was

developed by Forsyth (1980) to test the taxonomy of eth-

ical ideologies, is used. Scores were derived from calcu-

lating the mean for items 1–10, which yield ‘‘idealism’’

scores, and a mean for items 11–20, which yield ‘‘relativ-

ism’’ scores. The scale consist of 20 items. An example

item is, ‘‘People should make sure that their actions never

intentionally harm others even slightly’’. The Cronbach’s

alpha for idealist ideology scale was 0.94, and the Cron-

bach’s alpha for relativist ideology scale was 0.95.

Work Engagement

The Utrecht Work Engagement Scale which developed by

(Schaufeli et al. 2002) is used. The scale consist of 17

items. An example item is, ‘‘I find the work that I do full of

meaning and purpose’’. The Cronbach’s alpha for this scale

was 0.88.

Organizational Misbehavior

Twenty-three items which contains behavioral descriptions

were derived from Vardi (2001). In order to minimize the

potential perceived ‘‘threat’’, as well as ‘‘social desirabil-

ity’’, the subjects were not asked whether they themselves

misbehaved, but whether and how often their coworkers

did. An example item is ‘‘I make private phone calls from

the factory phone during work hours or breaks’’. The

Cronbach’s alpha for this scale was 0.95.

Empirical Results

Minimization of Common Method Variance

All the data used in this study came from a common

source. Several precautions which are suggested by Pod-

sakoff et al. (2003) are taken to minimize common method

biases. The dependent and independent variables were

collected at different times. A time lag was introduced in

this survey to minimize consistency motifs. Furthermore,

the items within each scale were randomly ordered for each

respondent to counterbalance the question order and

decrease priming effects caused by the question context or

item embeddedness. Detailed information is given to insure

the confidentiality of respondents in an effort to decrease

socially desirable responding and increase respondent

candidness. Also, we reminded that there were no correct

or incorrect answers in the survey to decrease the evalua-

tion apprehension.

Initial Analyses

Table 1 reports means, standard deviations, correlations

among variables, and Cronbach’s alpha coefficients for this

study. As expected, ethical leadership was positively rela-

ted to work engagement (r = 0.49, p \ 0.01), organiza-

tional justice (r = 0.61, p \ 0.01) and idealist ideology

(r = 0.49, p \ 0.01). However, ethical leadership were

found to be negatively related to organizational misbe-

havior (r = -0.55; p \ 0.01) and relativist ideology

(r = -0.41; p \ 0.01). To explore more, for the discrim-

inant validity of these scales, we followed the procedure

outlined by Fornell and Larcker (1981) and calculated the

square root of the average variance explained for the items

which make up the scales in this study. This value is pre-

sented on the diagonal in Table 1. This value is expected to

exceed the corresponding latent variable correlations in the

same row and column. As shown in Table 1, we have

278 O. Demirtas

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evidence that the variance shared between any two con-

structs is less than the average variance. Thus, all the scales

used in this study demonstrate discriminant validity.

Hypotheses Testing

Hypothesis 1

Firstly, the mediator variable (organizational justice) on the

independent variable (ethical leadership) was regressed. As

shown in Table 2, the beta weight for ethical leadership

was significant and in the predicted direction. Thus,

Hypothesis 1 regarding the positive relationship between

ethical leadership and organizational justice was supported,

and the first requirement for mediation was satisfied.

Hypothesis 2a and 2b

Hypothesis 2a put forth the moderating effect of idealist

ehical ideology on the ethical leadership-to-organizational

justice relationship. First, idealist ethical ideology and

ethical leadership scales were centered to help alleviate

multicollinearity (Aiken and West 1991). Then, regression

analyses for moderation was obtained with hierarchical

regression analysis method. As shown in Table 3, the

interaction term was significant. In order to graphically

illustrate the significant moderation effects uncovered in

the analyses, a procedure similar to that is used by Stone

and Hollenbeck (1989), plotting two slopes: one at one

standard deviation below the mean and one at one standard

deviation above the mean. This plot is shown in Fig. 2. The

simple slope test (Aiken and West, 1991) was significantly

different from zero for high and for low idealist ethical

ideology suggesting that perceptions of organizational

justice significantly increase for both low and high idealist

ethical ideology. However, this effect is stronger when

idealist ethical ideology is high which provides support for

Hypothesis 2a. Also, as shown in Table 3, the interaction

term for relativist ethical ideology was significant, and the

simple slop test was significantly different from zero for

low and for high relativist ethical ideology suggesting that

perceptions of organizational justice significantly increase

for both low and high relativist ethical ideology. However,

this effect is stronger when idealist relativist ideology is

low which provides support for Hypothesis 2b (Fig. 3).

Hypothesis 3a and 3b

Using hierarchical regression, Baron and Kenny’s (1986)

three-step procedure for assessing the mediating role of the

Table 1 Mean, standard deviations and correlations

Variable Mean SD 1 2 3 4 5 6

1. Ethical leadership 3.36 0.93 0.82

2. Organizational justice 3.19 0.90 0.61** 0.81

3. Idealist ideology 3.41 0.91 0.49** 0.43** 0.81

4. Relativist ideology 2.85 1.36 -0.41* -0.35* -0.48** 0.82

5. Work engagement 3.30 0.96 0.49** 0.51** 0.43** 0.41** 0.83

6. Organizational misbehavior 3.11 0.90 -0.55** -0.45** -0.43* 0.63** -0.33** 0.71

n = 418, * p \ 0.05, ** p \ 0.01. Values on the diagonal are the square root of the average variance explained which must be larger than all

zero-order correlations in the row and column in which they appear to demonstrate discriminant validity (Fornell and Larcker 1981)

Table 2 Regression analyses for mediation

DV: work engagement DV: organizational misbehavior

Step 1 Step 2 Step 3 Step 2 Step 3

IV-Med IV–DV IV/Med–DV IV–DV IV/Med–DV

(b) (b) (b) (b) (b)

Independent variable

Ethical leadership 0.612** 0.507** 0.165** -0.548** -0.341**

Mediator

Organizational justice 0.478** -0.643**

Adjusted R2 0.23 0.21 0.17

F change 179.43** 61.12** 576.19** 89.53** 73.13**

n = 418, * p \ 0.05, ** p \ 0.01

Note standardized betas are shown. IV independent variable, DV dependent variable, Med mediator


123


organizational justice is used. First, the independent vari-

able should be significantly related to the mediator vari-

able; second, the independent variable should be related to

the dependent variable; and third, the mediating variable

should be related to the dependent variable with the inde-

pendent variable included in the equation. If the first three

conditions hold, then at least partial mediation is present. If

the independent variable has a non-significant beta weight

in the third step, then complete mediation is present

(MacKinnon et al. 2002). The results, shown in Table 2,

indicate that organizational justice partially mediated the

relationship of ethical leadership to work engagement

(H3a) since the beta for ethical leadership decreased after

adding organizational justice, but remained significant.

Similarly, organizational justice partially mediated the

relationship of ethical leadership to organizational misbe-

havior (H3b).

Sobel Test

Finally, to confirm support for mediational hypotheses,

Sobel tests were used to assess the significance of the

indirect effects (MacKinnon 2008; Sobel 1982). Sobel tests

involve calculating the magnitude of the unstandardized

indirect effect (a and b) and its accompanying standard

error (sa and sb). The ratio of the indirect effect over its

standard error, referred to as the Sobel statistic, is then

compared to a z-distribution to determine the statistical

significance of the indirect effect. Supporting Hypothesis

3a, the Sobel test results indicated that the indirect effects

of ethical leadership on work engagement for organiza-

tional justice (z = (a 9 b)/sab = -6.75 for 95 % confi-

dence level) was in the anticipated direction and

statistically significant. Supporting hypotheses 3b, the So-

bel test results indicated that the indirect effect of ethical

leadership to organizational misbehavior (z = 2.27 for

95 % confidence level) was in the anticipated direction and

statistically significant.

Conclusion

In conclusion, this study investigated the ethical leadership

influence on individual behavior. Ethical leadership

behavior directly and indirectly, through shaping organi-

zational justice, impacted individual’s work engagement

Table 3 Regression analyses

for moderation

n = 418, * p \ 0.05,

** p \ 0.01

Note standardized betas are

shown. IEI idealist ethical

ideology, REI relativist ethical

ideology

DV: organizational

justice (b)

Adjusted R2 DR2 F change

Model 1 0.612** 0.23 0.22 102.07**

Ethical leadership (EL)

Model 2 (IEI) 169.09**

Ethical leadership (EL) 0.498**

Idealist ethical ideology (IEI) 0.303** 0.29 0.21

Model 3 (IEI) 0.232** 0.28 0.14 98.54**

Interaction (EL 9 IEI)

Model 2 (REI) 89.09**

Ethical leadership (EL) 0.386**

Relativist ethical ideology (REI) -0.391** 0.19 0.17

Model 3 (REI) -0.156** 0.21 0.11 103.21**

Interaction (EL 9 REI)

0

1

2

3

4

5

6

7

Ethical Leadership

Org

aniz

atio

nal

Ju

stic

e

Idealist Ethical Ideology (Low) Idealist Ethical Ideology (High)

Fig. 2 The interaction of ethical leadership and idealist ethical

ideology on organizational justice

0

1

2

3

4

5

Ethical Leadership

Org

aniz

atio

nal

Ju

stic

e

Relativist Ethical Ideology (Low) Relativist Ethical Ideology (High)

Fig. 3 The interaction of ethical leadership and relativist ethical

ideology on organizational justice

280 O. Demirtas

123


and organizational misbehavior. Moreover, the influence of

ethical leadership behavior on organizational justice was

enhanced according to the ethical ideologies. Leaders who

are viewed as ethical by their subordinates run the possi-

bility of increasing the organizational justice perception

due to increase in idealist ideology and decrease in rela-

tivist ideology. Although some analyses have been done in

this study to explore ethical leadership influence, a

‘‘descriptive and predictive social scientific approach to

ethics and leadership has remained underdeveloped and

fragmented, leaving scholars and practitioners with few

answers’’ (Brown and Trevino 2006). This study contrib-

utes to the field by providing a description and analyses of

the influence of managers who seem as an ethical leader,

and findings fit with previous theoretical and empirical

research efforts and extend them.

Strengths and Weaknesses

This study has several notable strengths. First, in this study

a large number of full-time employees from all level of the

organization are involved. Second, the survey is made by

face to face to reduce questionnaire mistakes. The collec-

tion of the independent and dependent variables in this

study were separated in time, and various other proactive

steps were taken to reduce the possible common method

effects that could emanate from the same source. Third,

this study advances the ethical leadership literature by

which ethical leadership influences organizational justice,

work engagement and misbehavior of the organizational

members. Finally, this study is one of the rare researches

which studied on the moderating effect of ethical ideolo-

gies on the relationship between ethical leadership and

organizational justice.

This study also has several limitations which need to be

mentioned in order to fully interpret the results offered.

First, the sample was not demographically diverse. Data in

this study are gathered from a public firm in Turkey. There

were many interesting ways to do this research, however; it

was beyond the scope of this study to generalize it for other

cultures (e.g., Resick et al. 2006).

Future Research

The findings of this study suggested that relationships do

exist between ethical leadership and individual behaviors,

but further research is needed to examine more closely the

complexities of these relationships. Future researchers

should consider capitalizing on the weakness outlined

above. For example, this study could be extended by

including additional outcome variables such as political,

counterproductive, or deviant behaviors. Also, future

research could use a multi-level approach to theorize and

analyze the effects of ethical leadership. To overcome

single source data, research could collect data from a

source other than the organizational members themselves.

This approach will reduce social desirability effects and

minimize concerns regarding common method effects. In

addition, future research could gather data from work

groups so that the data could be aggregated to assess the

influence of ethical leadership on group level.

In this study, individual level effects of ethical leader-

ship on individual outcomes were studied. The demand for

an emphasis on ethical leadership and for institutions to

demonstrate and develop the required characteristics for

ethical leadership, is stronger than ever, especially in the

current trends witnessed in both private and public sectors.

Also, the relationship between ethical ideologies and eth-

ical leadership practices is still not well understood and

need to be studied more in detail.

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