Ethical Leader Behaviour and Leader-Member Exchange as Predictors of Subordinate Behaviours

Abstract

The role of leader or leadership in management has occupied the attention of both theorists and practitioners alike. Of late, its role has also been considered significant in ethical issues given the exposure of various ethical scandals. Research on ethical leadership, despite its importance, is limited. Part of the problem may lie in the difficulties associated with studying ethical leadership in a field setting. This study, therefore, uses an experimental design to explore the impact of ethical leadership on subordinates' outcomes (behaviours and perceptions). This concept of ethical leadership is juxtaposed with exchange-based relationship between the leader and the member (leader-member-exchange or LMX). LMX focuses on one-to-one exchange-based relationship between a leader and a subordinate. However, ethical leadership based on Brown et.al's (2005) work is conceptualized as the leader's ethical-moral behaviour in general. This study explores the relative impact of ethical leader behaviour and LMX on subordinate outcomes which are distinguished in terms of ethics-related (leaders honesty, willingness to report problems, affective trust, and cognitive trust) and work-related (leaders effectiveness, satisfaction with the leader, and extra effort) outcomes. The study makes several contributions to the existing leadership literature. To begin with, and to the best of our knowledge, no research has explored the relative impact of one-on-one relationship with the leader (LMX) and ethical leaders' behaviour on subordinate outcomes. Second, subordinate outcomes have been conceptualized as belonging to either of the two categories — pragmatic⁄generic jobrelated behaviours (outcomes), (e.g., extra effort of the subordinate, effectiveness of the subordinate, and satisfaction with the leader) or idealistic ethics-related outcomes like (leader's honesty, willingness to report problems, affective trust, idealized behaviour, and idealized attribute). It is argued that theoretically, though LMX is a strong determinant of pragmatic job-related behaviour (outcomes), ethical leadership is more likely to predict idealistic ethicsrelated outcomes. The hypotheses are tested through an experimental study. The overall design of the experiment was a 2 (Ethical Leadership: Ethical, Unethical) X 2 (LMX: Low; High) between-participants factorial, employing four versions of scenarios. All the dependent variables were measured through standard scales and they showed high reliability coefficients. ANOVA tests indicated that not only ethics-related behaviours but work-related behaviours of the subordinates too were predicted by ethical leader behaviour which shows the functional significance of ethical leader behaviour. The results are discussed for their theoretical and practical implications while mentioning the limitations of the study.