How Ethics and Benevolence in Leadership Inspires Creativity: The Mediating Role of LMX and Motivation, Complemented by Culture with Greater Power Distance.

Abstract

Ethical leadership is expected to communicate, promote, and reinforce the ethical behaviors of the followers. Ethical leadership has not fully considered the nature of the leader-follower exchange, and, in addition, few studies have considered the impact of follower individual differences in reactions to ethical leadership. However, virtuous leader behavior in the form of benevolent leadership has a considerable impact on employee creativity. Evans et. al. (2016) predicted that the impact of ethical leadership on organizational commitment, job satisfaction, and organizational identification is greater for individuals with a more benevolent orientation. However, little is know if it also results in employees’ creativity. More importantly, how benevolence and ethics in leadership affect creativity. For this, we proposed a theoretical framework merging Lin et. al. (2018) model of Benevolent Leadership, with Feng et. al. (2018) ethical leadership framework. More specifically, we proposed and tested a moderated mediation model positing leader-member exchange (LMX) as well as intrinsic motivation as a mediator, and employee power-distance orientation as a moderator in the relationship of ethical and benevolent leadership with employees and team creativity. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 300+ employees working in different sectors in Pakistan and analyzed using confirmatory factor analysis and structured equation modeling. As proposed in our theory, the results indicate a significant positive impact of Top Management Ethical and Benevolent Leadership on both intrinsic motivations, as well as Leader-Member Exchange (LMX). Moreover, both motivation and LMX positively impact both team and employees Creativity. However, LMX doesn’t seem to impact the employee’s creativity. Hence, overall all results indicated a positive indirect effect of both forms of leadership on creativity. Understandably, Power distance doesn’t seem to affect LMX but does impact motivation. Interestingly, the effect of Ethical leadership on both motivation and LMX is significantly weakened in cases of higher power distance. Whereas, the same power distance seems to strengthen benevolent leadership and motivation nexus. The findings imply that ethical leadership is not enough to induce creativity in a culture of higher power distance as it develops a gulf between followers and leaders, and it is needed to be complemented by benevolence.