Achieving transparency in business processes by developing and implementing ethical climate: an integrated model of ethical leadership and engagement

The current research aims to investigate the role of ethical leadership in improving business processes and the impact of ethical leadership on employee engagement with mediating role of relational identification and ethical climate. Although ethical leadership displays and promotes morality in their followers, current literature is silent about the inclusion of relational identification and ethical climate. The present study intends to develop and test a model with the chain of mediation in the relationship between ethical leadership and employee engagement.

A total of237 responses were collected from the banking sector using quantitative research techniques, and data were gathered through a self-administrated questionnaire. Exploratory and confirmatory factor analyses were used through SEM- MPLUS to generate the results and test hypotheses.

The results suggested a significant impact of ethical leadership on employee engagement through relational identification and ethical climate (moral obligations, moral convictions and elevation). By using the results, practical and theoretical implications are discussed.

Besides all the proposed hypotheses that have been accepted, there are some limitations associated with this study. One limitation is usage of single source information, as the data were collected only from the banking sector employees. Moreover, only three variables are taken in the context of ethical climate (moral obligations, moral convictions and elevation). However, some other variables could also be included under the umbrella of ethical climate, e.g. moral virtue. Future researchers should also add different employee attitudes, such as job involvement, job satisfaction and organizational commitment, other than employee engagement.

An abundance of research is conducted on ethical leadership; however, with the development of knowledge and new thoughts related to identification and ethical climate, there is a strong need to conduct the research by including other overlooked possible paths.