Study of Pakistan consumer goods company shows positive effect of managers' ethical behaviour

Abstract

Purpose The authors wanted to analyze their belief that an ethical leadership style in managers would improve both organizational citizenship behaviors (OCBs) and creative performance (CP) in their employees. Design/methodology/approach To test their hypotheses, the authors collected data from a large multinational company in Pakistan in the consumer goods sector. The HR department allowed the authors to approach the staff directly and ask them to participate. Employees were asked to fill in a questionnaire containing statements about demographics, ELS and PCF. All questionnaires were submitted in English. A total of 500 questionnaires were administered and 248 were completed. Findings The research demonstrated the effect on both organizational citizenship behaviors (OCBs) and creative performance (CP). The authors showed how psychological contract fulfilment (PCF) was the mediating mechanism that explained the link. Originality/value Managers should pay close attention to the practical implications. It was clear employees paid close attention to their leaders’ attitudes so managers needed to set the right tone. If they showed good behaviour, it encouraged followers to do the same. The research also showed that ethical leaders were better at fulfilling the “psychological contract” of employees. When this was the case, an employee’s sense of commitment was enhanced as they expected their needs to be met in the future.