The effect of ethical values on transformational leadership and ethical climate in organisations

A S Engelbrecht,A S Van Aswegen,C C Theron

doi:10.4102/sajbm.v36i2.624

Abstract

Ethical leaders are ultimately responsible for developing a strong and sustainable ethical climate in organisations. Ethical values and the ability to influence followers to internalise these values have become prerequisites for effective leadership in modern organisations. Although ethics, leadership, and values have received much attention, there has been little coordinated effort to integrate transformational leadership with ethical climate and ethical values. The aim of this study was to develop and validate a theoretical model to explain the structural relationships between these variables in the South African business context. The results revealed that altruism influences transformational leadership positively, and that transformational leadership in turn has a positive effect on ethical climate. Some support was also found for the proposition that integrity moderates the effect of transformational leadership on ethical climate.

Highlights

Since business organisations present a principal domain for developing social norms and values, creating an ethical work climate can have broader implications for moral conduct across the social spectrum (Cohen, 1993)
The specific aim of this study was to develop and test a model that would unravel the factors that determine an ethical climate through the exploration of the ethical values of transformational leaders
The main goal of this study was to establish whether there was a relationship between transformational leadership and the development of an ethical climate in organisations

Summary

Introduction

Since business organisations present a principal domain for developing social norms and values, creating an ethical work climate can have broader implications for moral conduct across the social spectrum (Cohen, 1993). Scholars and practitioners agree that the values and practices of top management are crucial in setting the ethical climate of an organisation (Cohen, 1993). Transformational leadership, in particular, has been shown to be related to a number of positive subordinate outcomes, including trust and respect for the leader, procedural justice and unit performance (Bass & Avolio, 1994; Craig & Gustafson, 1998; Krafft, Engelbrecht & Theron, 2004). Evidence has suggested that transformational leaders adhere to high ethical standards and behave in ways that are congruent with these standards (Parry & Proctor-Thomson, 2002)

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