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Ethical Leadership Behaviour and Employee Satisfaction
Kooskora, Mari
Kooskora, Mari
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Mägi, Priit
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Abstract
In our modern business world corporations have significantly broadened their role in the society and this role impacts many both inside and outside the organization. There is much evidence of the growing demand for businesses to conduct themselves with a greater regard for moral and ethical considerations (e.g. Werhane and Freeman, 1999; Paine 1997; 2003; Freeman, 2000; Goodpaster, 2004; Gini, 2004, etc) and the responsibility to respond to these growing demands has largely been put on the organizational leaders (Mendonca and Kanungo, 2007). The behaviour of organizational leaders has strong impact on others and it is strongest on the employees. It is indicated that there is a direct relation between ethical leadership behaviour and employee job satisfaction and outcomes (Zhu et al, 2004); however empirical research in this field is still lacking (Toor and Ofori, 2009). Our study investigates the association between ethical leadership behaviour and employee satisfaction. The attempt is made to explore the impact of ethical leadership behaviour on employee satisfaction expressed in the dimensions such as employee trust, loyalty towards organization and leaders, pride about the company, organizational commitment, workplace environment and organizational climate, employee recognition and empowerment, awareness of the organizational activities, and participation in decision-making. A total of 175 employees from Estonian financial and telecommunication companies took part in the study. The results indicated a strong relation between the components of ethical leadership and the components of employees’ job satisfaction. However it was found that the relation of ethical leadership between employee trust, loyalty, pride and commitment was slightly weaker among male respondents than among female respondents, whereas the association of pride about the organization and participation in decision-making was not revealed among female respondents. Clear differences were found in the answers of respondents from different age groups, for example, young employees (under 25 years) did not value recognition and awareness of the organizational activities as highly as other 2 groups, however they considered the importance of participation in decision making higher than employees from other age groups. The results of this study further strengthen the argument about positive impact of ethical leadership behaviour on employee satisfaction. Differences in respondents’ answers from different age groups and gender indicate to the need for further studies in this area.
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2010
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With permission of the license/copyright holder