Dynamics of ethical climate: mediating effects of ethical leadership and workplace pressures on organisational citizenship behaviour

Abstract

The world has been facing unprecedented waves of financial crisis due to a number of challenging ethical issues and cultures within organisations, and ethical leadership and decision making amongst other things. Research has been undertaken to study the relationship between ethics and leadership. However, the assessment of interrelationships between specific ethical context dependent and independent variables are yet to be undertaken within a multi-cultural multi-industry context. Independent variables are conceptualised as organisational culture, ethical organisational climate; mediating variables are conceptualised as ethical leadership and decision making, and internal and external workplace pressures. Dependent variables are conceptualised as organisational citizenship behaviour, employee ethical behaviour and conduct, and perceived employee performance. This study examines these dynamics within a conceptual research model using a macro-meso-micro framework and establishes the interrelationships as well as mediating effects on organisational citizenship behaviour, employee ethical behaviour and conduct, and perceived employee performance. Out of an initial sample of 526, a total of 523 participants of varying backgrounds working in ‘large’ organisations across diverse industries in Mauritius (with a population of 2,534 ‘large’ establishments) were subject to empirical study. A quantitative study was performed which employed correlation, multiple regression, exploratory and confirmatory factor analysis, path analysis and model fit assessments. The outcomes of the study show that organisational culture and ethical organisational climate (as macro independent variables) jointly influence the dependent variables both directly and indirectly to varying degrees. It was also found that ethical leadership and decision making, and internal and external workplace pressures (as meso variables) have statistically significant mediating effects on the dependent variables of organisation citizenship behaviour and perceived employee performance. The model proved to have a good fit and can be adopted as a guiding model for the business and research communities. The study also helps to better understand the prevailing state of ethical climate, practices, and workplace pressures affecting employees’ ethical stance as well as the key ethics related actions that are critical for implementation as evidenced empirically in Mauritius.