Ethical leadership across cultural value orientations

Abstract

Over the past few decades many serious ethical problems have been reported in both business and public organisations. In response there has been increasing scholarly research interest in the construct of ethical leadership. At the same time, a growing body of scholarly knowledge dealing with cross-cultural leadership suggests that cultural factors influence the relationship between leadership and outcomes. This has highlighted a need to understand the relation between individual culture orientations and leadership. Moreover, since ethical leadership is a relatively new construct, the effect of culture on ethical leadership specifically has to date received little attention. This study undertakes to address this gap by evaluating the effect of cultural value orientations at the individual level of analysis on the relationship between ethical leadership at the middle management level and selected employee behavioural outcomes. A cross-sectional survey study is done using a multinational emerging market data sample embodying cultural diversity. Social cognitive theory is used to elucidate how cultural orientations of individuals change the social learning process through which ethical leadership influences employee outcomes. Structural equation modelling is used to test hypotheses derived from theory, including moderation of relationships by cultural value orientations. The research findings contribute an empirically validated theoretical explanation of how the cultural value orientations of individualism-collectivism and power distance, measured at the individual level of analysis, influence the relationship between ethical leadership and employee outcomes such as organisational citizenship behaviour, ethical climate, and performance. The findings of the study advance our understanding of the effect of cultural value orientations on the relationship between ethical leadership and employee outcomes and should prove useful for multinational enterprises wishing to create an ethical climate and instil effective ethical leadership practices across different nationalities and cultural groups. The study empirically confirms that ethical leadership does not only relate positively to the ethical climate of an organisation but also relates positively to actual employee performance. Further research is recommended to determine the causal direction of such relationships.