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ABSTRACT. Three hundred forty middle-level Every organization has short- and long-term
managers from two private and two public sector goals. Achievement of such goals efficiently
manufacturing companies in India rated their supe- creates the need for leadership. Without acts of
riors on 22 items of ethical leadership. Factor analysis leadership, the organization is much like an
of the scores on such items yielded two dimensions orchestra without a bandmaster or a ship without
of ethical leadership: (a) empowerment, and (b)
a rudder. What would have happened to Chrysler
motive and character. Items of the scale had high
reliability, validity, and discriminative power. On
Corporation without Lee Iacocca? Probably,
two dimensions of ethical leadership, the superiors Chrysler would have gone bankrupt (Iacocca and
self-rated themselves more favorably than their sub- Novak, 1985). Production in a manufacturing
ordinates rated them. This justified the proposal to sector may advance or recede depending on lead-
consider the subordinates’ ratings to their superiors in ership without any change in operating and other
assessing ethical leadership. Subordinates perceived conditions. The leader’s way of functioning or
their superiors more ethical in private sector than in leading can enhance or diminish the followers’
public sector. Subordinates’ manipulative behavior, commitment, job performance, satisfaction and
and cheating in performance and misuse of finance ethical behavior.
were less frequent in the presence of ethical superiors. Leadership relies more on personal power than
Also, ethical superiors enhanced the job performance, positional power. Its central concern is coping
job involvement and affective commitment of their
with change, inspiring and motivating followers
subordinates but not their continuance commitment.
to realize the organization’s vision. It operates on
KEY WORDS: commitment, empowerment, ethical the emotional and spiritual resources (values,
leadership, job performance, motive and character, commitment, aspirations) of subordinates (Kotter,
unethical practices 1990). Contrarily, management rests more on
positional than personal power and deals with
organizing, budgeting, time scheduling, resource
allocating and controlling. It predominantly
operates on physical resources (capital, human
skills, raw materials and technology). Despite this
conceptual difference, a manager or an adminis-
trator in an organization is a formal leader.
Rooplekha Khuntia, M.A. (Psychology), is Research Considering this, leadership has two aspects.
Scholar in the Department of Humanities and Social First, it is a set of role behaviors needed to
Sciences at Indian Institute of Technology, Kharagpur,
accomplish the task and maintain cohesion in the
India. Her current research interest is in managerial and
business ethics. organization. Second, it is also an influential
Damodar Suar, Ph.D. (Social Science), is Associate process, a set of strategies and tactics intended
Professor in the Department of Humanities and Social to influence the followers’ values, behaviors and
Sciences at Indian Institute of Technology, Kharagpur, beliefs to realize the near and distant goals in
India. His research interests focus on business ethics and terms of organization’s vision (Kanungo and
organizational behavior. Mendonca, 1996, 1998; Sinha, 1995).
Leadership styles vary according to the type of depends on organizational hierarchy, the last
organization (Stogdill, 1974) and level of orga- three styles mentioned above are found to be
nizational hierarchy (Katz and Kahn, 1978; Sinha, effective at the top level. At the core of effective
1995). In India, public sector organizations leadership is adherence to ethics because public
nurture high relationship and low task-orienta- concern and awareness demand greater account-
tion leadership (Dwivedi, 1983). Contrarily, ability of business leaders for their decisions. A
private and multi-national companies being seemingly immoral decision can harm the orga-
profit-oriented, they adopt high-task, high-rela- nization, consumers, stakeholders, and suppliers.
tionship and participative leadership ( Jaggi, Also, the ethical leader influences and changes
1978). the followers through idealized behavior
Leadership at the top, middle, and lower levels (charisma), inspiration, intellectual stimulation,
differs because of the differentiated roles, author- individualized consideration, service and looking
ities, and skill demands (Katz, 1974). First-line into their development. Thus, EL incorporates
leaders need more technical than human and the dimensions of transformational, charismatic
conceptual skills to handle day-to-day operations and service styles.
on the shop floor. The role of these leaders is All theories of leadership emphasize three con-
confined to implementing the decisions that are structs separately or jointly: (a) leaders’ person-
taken at the highest level. At the middle level, ality, behavior and rationality, (b) followers’
top management policies and strategies are personality, behavior and rationality, and (c) the
further concretized for action. Jobs of middle- contextual factors such as nature of task, organi-
level executives are low on choice and high on zational climate and cultural context. But, why
demands, and work is generally a “fix-it” type do followers trust and freely adhere to leaders?
of activity, trying to deal with systems and EL answers this question. First, followers freely
processes that are not working, and managing adhere to and trust the leader because they realize
breakdowns in the normal routine flow of work that the vision of the organization vis-à-vis
(Nilakantha and Ramnarayan, 1990). Middle- satisfaction of their needs can be achieved
level managers are the bridge between the top through the activities of the leader. Second, the
and the bottom and they need more human skills leader looks after followers’ personal and profes-
than other skills. At the top level, leaders prepare sional development. Third, the moral virtues,
the overall plan of the business and coordinate personal traits and social skills of the leader are
resources. Their jobs demand more conceptual exemplary and worthy of emulation (Guillen and
than other skills. As skills, roles, and responsibil- Gonzalez, 2001).
ities differ at different levels, so also do the lead- In line with these discussions, Kanungo and
ership styles. It is a well-known fact in India that Mendonca (1996, 1998) have conceptualized
Russi Modi was most successful as a leader in three dimensions of EL – (a) leader’s motivation,
Tata Steel but he could not succeed in Indian (b) leader’s influence strategies, and (c) leader’s
Airlines because of the differences in work character. Each of the three motives of
culture of the two organizations. Hence, for the affiliation, power and achievement (McClelland
style of the leader to be effective it must be and Burnham, 1995) is further categorized on
appropriate to the type of an organization, to the the basis of intent to benefit others and intent
level of hierarchy, and to the work culture of the to benefit self. Ethical leaders are primarily moti-
firm. vated by the criteria to benefit others even if it
Leadership theories from trait to servant, trans- results in some personal cost to self.
formational vs. transactional, charismatic, and Need for affiliation has two manifestations: (a)
ethical leadership (EL) are discussed elsewhere “affiliative assurance” and (b) “affiliative interest”.
(Bass, 1985, 1996; Conger and Kanungo, 1987; Leaders who are guided by affiliative assurance,
Greenleaf, 1977; Guillen and Gonzalez, 2001; experience personal insecurity, cultivate rela-
Kanungo and Mendonca, 1996, 1998; Sinha, tionships to protect themselves, and do not
1980, 1995; Spears, 1995). Because leadership provide negative feedback on performance of
Ethical Leadership 15
subordinates. This would make the subordinates 1995) has proved the nurturant-task (NT) style
dependent, discouraged, irresponsible and to be effective in Indian organizations. A leader’s
demoralized. On the other hand, ethical leaders’ nurturance is expressed in terms of care, consid-
affiliative interest manifests itself in task-oriented eration, warmth, support and affection with
interventions, providing information on efficacy, regard to the subordinates, and deep interest in
and recognizing subordinates’ ability to solve their growth and well-being. Nurturance facili-
problems. Similarly, there are two types power tates task achievement and the latter creates
one might seek: (a) “personal power” or (b) conditions for more nurturance. An NT leader
“institutional power”. Leaders high on personal wants the subordinates to understand the nor-
power use power excessively, rely on their posi- mative goal of the organization, shows concern
tions in office, exploit others, become insensitive for productivity, subordinates’ need for depen-
to followers’ needs, and expect followers’ dency and personalized relationships and yet,
unquestioning compliance. Contrarily, ethical makes them develop positive work values. As the
leaders governed by institutional power display leader guides, monitors, and assigns responsibility
self-discipline, emotional maturity, and arrange to the subordinates, they gain experience, exper-
tasks so that followers accomplish organizational tise and develop self-confidence. Though the
objectives. They reward followers impartially and leader is primarily task-oriented, in the process
are open to criticism and disagreement. Where of influencing subordinates, the NT leader
need for achievement is concerned, ethical empowers the subordinates. So the empower-
leaders motivated by “social achievement” rather ment strategy of the ethical leader parallels the
than “personal achievement” engage in collec- NT style.
tive activities that benefit the organization and its Ethical leaders make efforts habitually to
members. incorporate moral principles in their beliefs,
The leader can influence the followers in two values and behavior. Their characters exhibit
ways, through the (a) transactional, and (b) commitment to higher purpose, prudence, pride,
transformational mode. In transactional mode, patience, and persistence. Researchers mention
leaders and followers are viewed as parties to an other virtues of ethical leaders such as integrity,
economic transaction. The leaders’ rewards and determination, fairness, honesty, humility, toler-
sanctions ensure that the followers perform the ance, enthusiasm, courage and responsibility
required behavior. The leaders use control (Guillen and Gonzalez, 2001; Solomon, 1999).
strategies to elicit the followers’ compliance. By Such attributes of their character become worthy
contrast, in transformational mode, leaders of emulation by followers.
change the beliefs, values and behaviors of Keeping the dimensions of ethical leadership
followers so that they are consistent with the in the forefront, this study aims to develop a scale
vision of the organization. The leader influences to assess EL of Indian managers. To our knowl-
the followers through empowerment rather edge, no such scale is available in the Indian
than control strategies. In such strategies, the culture. In scale development, leaders are asked
leader inculcates self-efficacy beliefs by seeking to evaluate their own characteristics. The items
followers’ participation in goal-setting, problem in such scales embody positive characteristics.
solving and decision making, providing helpful First, empirical evidence suggests that the indi-
feedback on task performance, and taking steps vidual has a tendency to overevaluate himself/
to remove deficiencies through coaching, coun- herself compared to his peers on positive attrib-
seling, training, guidance and monitoring the utes and undervalue himself/herself on negative
assigned tasks. Gradually followers develop and attributes (Brenner and Molander, 1977; Perloff
function as autonomous persons. and Fetzer, 1986). If the leaders rated themselves,
Mapping the characteristics of Indian they would overestimate themselves on positive
employees – dependency, preference for hier- attributes. Using followers’ ratings of their leader
archy, personalized relationships, familial ethos, can minimize this. Second, Johari Window has
rest and leisure, and show-off – Sinha (1980, found that in the interpersonal context, some of
16 Rooplekha Khuntia and Damodar Suar
sector (M age = 47.63 years, SD = 7.21; M years sary to do a job” and “Padding an expense
of service = 19.51 years, SD = 8.73; M monthly account”. The third factor, containing three
salary = Rs.18, 985, SD = 3330.13; M years of negatively keyed items, was “violation of orga-
formal study = 17.40, SD = 1.19) and 36 top- nizational norms”. Sample items include, “Being
level managers from public sector companies (M very secretive about organization’s sensitive infor-
age = 48.20 years, SD = 4.71; M years of service mation” and “Sticking to organization’s rules and
= 22.31 years, SD = 7.00; M monthly salary = policies”. The alpha reliability for manipulative
Rs.12, 735, SD = 3822.65; M years of formal and expedient behavior was 0.89, for cheating
study = 17.74, SD = 1.56) returned the filled- in performance and misuse of financial resource
in questionnaires. was 0.82, and for violation of organizational
norms was 0.51. Higher scores indicated high
value for each variable.
Measures
Job performance. Job performance was measured
Ethical leadership. EL was assessed on 22 items. It through seven items – taking decisions, meeting
included four items from the multifactor leader- deadlines, producing satisfactory quality of work,
ship questionnaire (Bass and Avolio, 1996), five producing satisfactory quantity of work, planning
items from the leader’s style scale (Sihna, 1987) and organizing work, facing conflict situations,
and the rest were developed. All items were pos- and feeling confident enough to handle the job
itively keyed. Response descriptions against items – of Abrainis’s (1985) job performance scale. The
were given on a five-point Likert-type scale – response categories against each item were given
“never” (1), “rarely” (2), “sometimes” (3), on a five-point Likert-type scale – very poor (1),
“usually” (4), and “always” (5). Middle-level poor (2), neither poor nor well (3), well (4), very
executives were asked to indicate to what extent well (5). When scores on the scale were factor
each statement was true regarding their imme- analyzed using principal component method, one
diate superior. The same questionnaire was also factor emerged that explained 49.77% of total
administered to top-level executives. Each exec- variance. The alpha reliability of the scale was
utive was asked to indicate to what extent each 0.82. High scores indicated high performance.
statement was true about himself/herself.
Job involvement. Six items were taken from Lodhal
Unethical practices. Fourteen items were taken from and Kejner’s (1965) job involvement scale.
Newstorm and Ruch (1975), and Jones (1990) Response descriptions against each item were
scales and three items were developed to assess given on a four-point Likert-type scale ranging
unfair and wrong practices. Response categories from “strongly disagree” (1) to “strongly agree”
against each item were on a six-point Likert-type (4). All the items were positively keyed. Sample
scale ranging from “not at all acceptable” (1) to items include, “Most of my interests are centered
“all the time acceptable” (6). The scores on around my job”, and “I like to be absorbed in
the items were factor-analyzed using principal my job most of the time”. When scores on the
component method and rotated through varimax items were factor analyzed using principal com-
procedure. Three factors were extracted that ponent method, one factor emerged that
explained 56.85% of total variance. The first explained 46.16% of total variance. The alpha
factor loaded significantly on nine items and reliability of the scale was 0.76. High scores indi-
was “manipulative and expedient behavior”. cated more involvement.
Sample items include, “Giving/accepting gifts
in exchange for preferential treatment” and Organizational commitment. Eight items were taken
“Falsifying time/quality reports”. The second from Mowday et al.’s (1979) scale to measure
factor, containing five items, was “cheating in organizational commitment. Response categories
performance and misuse of finance”. Sample against each item were on a five-point Likert-
items include, “Taking longer time than neces- type scale ranging from “strongly disagree” (1)
18 Rooplekha Khuntia and Damodar Suar
to “strongly agree” (5). When scores on the items The second factor explained the leader’s
were factor-analyzed using principal component motive and character. The leader’s altruistic affil-
method and rotated through varimax procedure, iation, power and achievement motives were
two extracted factors explained 48.60% of total clubbed with character. On the affiliative needs,
variance. The first factor named “affective com- the top-level leader helped the subordinates and
mitment” contained five items and its alpha reli- fostered team orientations that were consistent
ability was 0.66. Sample items include, “I am with the objective of realizing organizational
proud to tell that I am a part of this organiza- goals. On institutional power, the leader was
tion” and “I really care about the fate of this motivated to serve the organization and its con-
organization”. The second factor containing stituents, and provided rewards and sanctions
three negatively keyed items was “continuance for worthwhile contributions by subordinates.
commitment” with alpha reliability 0.53. Sample Guided by social achievement, the leader height-
items include, “There is not too much to be ened the desire of subordinates to succeed and
gained by sticking with this organization encouraged them to take risks to achieve orga-
indefinitely” and “Deciding to work for this nizational goals. Embedded in this dimension
organization was a definite mistake on my part”. were traits that were explicitly expressed as the
High scores indicated more affective and con- leader’s character. Those traits were commitment
tinuance commitment. to organizational goals, integrity or consistency
between preaching and practising, perseverance
to move ahead amidst difficulties, and openness
Results to criticisms and disagreements.
The factor structures obtained in exploratory
The ratings of middle-level managers on 22 factor analysis were further tested in confirma-
items of EL were subjected to exploratory factor tory factor analysis (CFA) to see whether the two
analysis using principal component analysis dimensions of EL were different factors. CFA
(Table I). Two factors emerged that had eigen- tests a priori factor structure and goodness of fit
values more than one. These two factors jointly of the resulting solution (Kline, 1998). CFA was
explained 58.68% of the total variance of the carried out using Amos 4.0 (Arbuckle and
scale. To provide a meaningful interpretation of Wothke, 1999). The correlation between two
the factor loadings, they were rotated using dimensions of EL (r = 0.83) was slightly less than
varimax procedure. The first factor loaded the deciding limit (r > 0.85) of single dimension
significantly on 12 items and the second factor (Kline, 1998, p. 190). In CFA, the two (oblique)
on 10 items. The total scores of the two factors factors model of EL included items for each
correlated significantly (r = 0.83). factor obtained in exploratory factor analysis and
Observation of the item contents of the first was compared with the baseline or one factor
factor unfolded the “empowering” dimension of model of 22-items. The one factor model was
EL. Empowerment contained item-themes to actually a constrained version of the two factors
enhance subordinate’s self-efficacy. The superior model.
removed the powerlessness of subordinates or The obtained chi-squares were significant for
increased subordinates’ self-efficacy by involving both the models. Because of the sensitivity of
them in goal setting and decision making, chi-square to large sample size (N = 340), relative
guiding and counseling, and encouraging to try chi-square (χ2/df ) was considered. Chi-square to
out innovative methods for job accomplishment. degrees of freedom ratio was below 5 (3.99 for
Empowerment strategy of the leader responded one factor model and 3.57 for two factors model)
to subordinates’ needs to be nurtured, protected, that indicated “reasonable fit” of both the models
and appreciated for greater responsibility and (Marsh and Hocevar, 1985). Chi-square differ-
good performance. The ethical leader commu- ence (χ2difference (1) = 92.22, p < 0.001) statistic
nicated to subordinates in simple ways to achieve further indicated that the fit of the two (oblique)
the organization’s vision. factors model was significantly better than that
Ethical Leadership 19
TABLE I
Item contents and factor structure of EL
I II UNSTD STD
My Superior . . .
0(8) Protects subordinates from external criticisms. 00.64 00.38 1.00 0.72
0(9) Involves subordinates in goal setting and
decision making. 00.72 00.34 0.96 0.76
(10) Gladly guides and directs those subordinates
who work hard. 00.73 00.38 0.98 0.81
(11) Coaches and counsels the subordinate whenever
required. 00.76 00.30 0.93 0.78
(12) Works with subordinates in a satisfactory way. 00.71 00.42 1.02 0.82
(13) Appreciates those subordinates who want to
perform better. 00.61 00.50 0.99 0.78
(16) Is affectionate to hard working subordinates. 00.57 00.52 0.90 0.76
(17) Encourages subordinates to take greater
responsibility. 00.77 00.31 0.97 0.79
(18) Identifies the deficiency of each subordinate and
provides opportunity to remove the deficiency. 00.75 00.30 0.96 0.78
(19) Gives subordinates the opportunity to try out
innovative methods. 00.78 00.29 1.03 0.78
(20) Communicates and specifies in simple ways what
the organization aims to achieve in future. 00.69 00.26 0.77 0.68
(21) Suggests new ways of looking at how we do
our jobs. 00.57 00.55 0.90 0.78
0(1) Goes out of his way to help subordinates. 00.30 00.64 1.00 0.64
0(2) Moves ahead with determination amidst
difficulties. 00.45 00.64 1.09 0.75
0(3) Coordinates the activities of different departments
to achieve organizational goals. 00.49 00.54 1.13 0.73
0(4) Provides rewards and sanctions for worthwhile
contribution of subordinates. 00.55 00.60 1.09 0.83
0(5) Goes beyond self interest for the good of the
organization. 00.39 00.60 1.01 0.68
0(6) Encourages to take risk to achieve goals. 00.28 00.60 0.95 0.60
0(7) Does what he/she says. 00.10 00.67 0.70 0.50
(14) Is open to criticisms and disagreements. 00.34 00.57 0.91 0.62
(15) Heightens subordinates desire to succeed. 00.54 00.57 1.14 0.79
(22) Pursues the organizational goals with
single-minded devotion. 00.32 00.68 0.99 0.69
Eigenvalues 07.36 05.55
Percentage of variance 33.45 25.23
a
The serial number of the items in the questionnaire is put in parenthesis. The first 12 items measure
‘empowerment’ and last 10 items ‘motive and character’.
b
UNSTD = Unstandardized, STD = Standardized.
20 Rooplekha Khuntia and Damodar Suar
of the one factor model. Akaike information very significantly (p < 0.001) with the total score
criterion (AIC) and Bayes information criterion of the scale that indicated consistency of items to
(BIC) confirmed the same because the two measure EL. Alpha reliabilities of “empower-
factors model had smaller AIC and BIC ment” and of “motive and character” were much
compared to one factor model (Table II). greater than 0.60 benchmarked by Nunnally
Comparison of other goodness of fit measures (1967, p. 226). Items had high internal consis-
(CFI, IFI, and RMSEA) and parsimonious fit tency to measure each dimension of EL.
indices (PNFI, PCFI, and PGFI), which were less A technique of item analysis to yield an inter-
sensitive to sample size, favored the two factors nally consistent scale was the discriminative
model consistently over the one factor model. power of the item – the ability of an item to
The CFI and IFI reached 0.90 for the two factors separate the “highs” from the “lows”. This was
model, the recommended cut-off criterion estimated by arranging the scores on each item
(Bentler, 1990; Bollen, 1989). The RMSEA and in an ascending order. The scores falling above
parsimonious fit to the data were slightly better the upper quartile (Q3) and those falling below
for the two factors model compared to one factor the lower quartile (Q1) were compared. The
model. However, the superiority of two factors mean difference (t) ranged from as low as 25.58
over the one factor model was not persuasive to as high as 40.56 and was highly significant (p
because the differences were not highly apart on < 0.000) for all the items. Thus, each item of
these fit measures (Table II). Thus, the most that EL scale had high discriminative power.
could be concluded from these results was that We mentioned that the self-ratings of superiors
the two-factors model provided a better fit than on dimensions of EL would be more than the
did the rival one-factor specification. The subordinates’ ratings to same superiors. Self-
unstandardized and standardized factor loadings ratings of superiors on “empowerment” (M =
(direct effects) of the two factors model are pre- 51.30, SD = 7.14) and on “motive and char-
sented in Table I. All the direct effects were acter” (M = 41.57, SD = 5.56) dimensions were
highly significant beyond 0.001 and their critical significantly higher than subordinates’ ratings to
ratios ranged from as low as 8.45 to as high as same superiors on two dimensions (M = 43.74,
14.85. SD = 9.92; M = 34.49, SD = 7.97) respectively
Construct validity and internal consistency of (Figure 1). The mean differences were highly sig-
the two factors model of EL were assured in nificant for empowerment, t (338) = 5.47, p <
CFA. But no single method provides a defini- 0.001, and for motive and character, t (388) =
tive test of the reliability and validity (Kline, 6.40, p < 0.001, dimensions. This confirmed
1998, p. 198) of the measure. Therefore, descrip- the inflated self-ratings on items of EL that con-
tive statistics, item-total correlation, alpha relia- tained positive characteristics, and justified our
bility and discriminative power of each item were argument in developing the scale based on ratings
further tested (Table III). of subordinates to their superior.
Each item of two dimensions of EL correlated The top-level managers were perceived by
TABLE II
Comparison of overall fit measures between one factor and two factors model
One factor 834.42* 209 922.42 1226.90 0.88 0.88 0.095 0.76 0.79 0.67
Two factors 742.20* 208 832.20 1143.60 0.90 0.90 0.087 0.78 0.81 0.69
* p < 0.001.
Ethical Leadership 21
TABLE III
Descriptive statistics, item-total correlation, alpha coefficients, and discriminative power of EL items
Empowerment (E)
08 03.46 01.19 0.74* 0.95 1.84 0.69 4.81 0.39
09 03.60 01.07 0.76* 2.18 0.73 4.81 0.39
10 03.81 01.03 0.79* 2.44 0.76 5.00 0.00
11 03.50 01.02 0.77* 2.24 0.65 4.68 0.47
12 03.64 01.07 0.80* 2.22 0.79 4.81 0.39
13 03.85 01.01 0.78* 2.48 0.67 5.00 0.00
16 03.79 01.00 0.77* 2.49 0.73 5.00 0.00
17 03.81 01.04 0.78* 2.38 0.74 5.00 0.00
18 03.39 01.05 0.76* 2.04 0.68 4.55 0.50
19 03.61 01.11 0.78* 2.15 0.76 4.93 0.26
20 03.55 00.97 0.69* 2.32 0.66 4.60 0.49
21 03.74 00.98 0.78* 2.47 0.67 4.92 0.28
Total(E) 43.74 09.93 0.97*
their subordinates to be more ethical in the with unethical practices, job performance, job
private sector than in the public sector. Private- involvement and organizational commitment
sector superiors empowered their subordinates (Table V). In accordance with our assumption,
more, possessed more altruistic motives and moral when the subordinates perceived their immediate
virtues than their counterparts in public sector superior to be ethical, their unethical practices
(Table IV). reduced considerably. In both the sectors,
subordinates’ “manipulative and expedient
behavior”, and “cheating in performance and
EL, unethical practices and work behavior misuse of finance” declined in the presence of
ethical superiors. However, ethical superiors
To ensure criterion-related validity, each dimen- could not reduce the subordinates’ “violation of
sion and total scores of EL scale were correlated organizational norms”, albeit the trend was there.
22 Rooplekha Khuntia and Damodar Suar
TABLE IV
EL in private and public sector companies
M SD M SD
* p < 0.001.
TABLE V
Criterion-related validity of EL dimensions in private and public sector companies
Dimension Correlation
of ELa
Manipulation Cheating Norm Performance Involvement Affective Continuance
violation commitment commitment
Private
E –0.32*** –0.29*** –0.08 00.33*** 00.27*** 00.37*** 00.02
MC –0.22*** –0.21*** –0.03 00.22*** 00.31*** 00.38*** –0.03
Total –0.29*** –0.27*** –0.04 00.30*** 00.30*** 00.40*** 00.01
M 14.87*** 09.59*** 06.69 29.13*** 18.32*** 21.38*** 10.38
SD 07.90*** 04.96*** 02.76 03.09*** 02.99*** 02.86*** 03.12
Public
E –0.26*** –0.19*** –0.04 00.29*** 00.34*** 00.33*** –0.09
MC –0.25*** –0.20*** –0.13 00.21*** 00.27*** 00.27*** –0.05
Total –0.26*** –0.20*** –0.08 00.26*** 00.32*** 00.31*** –0.08
M 15.72*** 09.27*** 07.71 27.51*** 17.12*** 19.95*** 10.16
SD 07.80*** 04.57*** 03.05 04.01*** 02.93*** 02.99*** 02.66
uate themselves on positive attributes. That is nurturance, cooperation and interpersonal sen-
why the leaders self-rated themselves more favor- sitivity. Employees feel threatened by uncertain
ably on dimensions of EL than subordinates rated and ambiguous situations. They lean on their
the same leaders. It is suggestive that taking the superior for advice, support, guidance, and help.
ratings of subordinates of their leader can check They expect the superior to nurture them, take
the inflated self-rating of the leader on positive care of the uncertain situations, and tend to their
attributes and incorporate the assessment of atti- growth needs in return for absolute loyalty
tudes and behavior of the leader unknown to (Kanungo and Jaeger, 1990; Sinha and Sinha,
himself/herself but known to his/her subordi- 1974; Triandis, 1996, 1999). In tune with the
nates. attributes of employees, the superior’s empow-
Our inference at the conceptual stage was erment strategies emerged as the most impor-
that EL expressed itself in three dimensions. tant dimension of EL. Through empowerment
However, analysis confirmed two dimensions. strategies – training, coaching, counseling,
Transformational influence strategy, renamed as seeking participation, providing efficacy infor-
empowerment, emerged in one dimension, and mation, encouraging greater responsibility, appre-
motive and character clubbed together in another ciating hard work, inspiring for innovation and
dimension. attainment of organizational vision –, the
In the vertical collectivist culture of India, superior granted power to subordinates and
employees are fatalistic or inclined to have an enhanced their feelings of competency or self-
external locus of control – belief that fate, efficacy. Congruent with a recent literature,
chance, and external forces determine their ethical leaders were primarily people-focused.
behavior and outcomes in life. Employees do not They cared about and developed their subordi-
feel committed to work and do the work as part nates (Trevino et al., 2003).
of a positive relationship with the leader. Power The moral virtues or character of the ethical
distance coexists with the collectivists’ values of leader were reflective of his/her altruistic affilia-
24 Rooplekha Khuntia and Damodar Suar
in self-development, desire for challenge, and Bollen, K. A.: 1989, Structural Equations with Latent
planning for career may drive them to switch Variables ( John Wiley and Sons, NY).
over to presumably better organizations. Second, Brenner, S. N. and E. A. Molander: 1977, ‘Is the
discussion with the managers during data col- Ethics of Business Changing?’, Harvard Business
lection revealed that the studied companies were Review 55(1), 57–71.
Conger, J. A. and R. N. Kanungo: 1987, ‘Towards a
restructuring their organizations. Managers were
Behavioral Theory of Charismatic Leadership in
apprehensive of losing jobs. With the advent of Organizational Settings’, Academy of Management
economic reforms in India since 1991, measures Review 12(4), 637–647.
like adoption of laborsaving technology, privati- Dwivedi, R. S.: 1983, ‘A Comparative Study of
zation, disinvestment in public sector units, and Managerial Styles, Leadership and Trust among
organizational restructuring have resulted in Indian Managers’, Lok Udyog 27(1), 7–17.
shrinking of job opportunities in organizations. Greenleaf, R. K.: 1977, Servant Leadership (Paulist
This has diminished the middle-level managers’ Press, New York).
desire for reemployment. The two opposing ten- Guillen, M. and T. F. Gonzalez: 2001, ‘The Ethical
dencies – desire for reemployment in better orga- Dimension of Managerial Leadership: Two
nizations and shrinkage in job opportunities – Illustrative Case Studies in TQM’, Journal of
created mental conflicts and can substantiate the Business Ethics 34(3–4), 175–189.
Iacocca, L. and W. Novak: 1985, Iacocca: An
above findings.
Autobiography (Bantam Books, NY).
The study, developing and validating a scale of Jaggi, B. L.: 1978, ‘Management Leadership Styles
EL, provides evidence that the leader can be in Indian Organizations’, Indian Manager 9(2),
more ethical in the competitive business envi- 139–156.
ronment of private sector companies than in the Jones, W. A., Jr.: 1990, ‘Student Views of “Ethical”
protected environment of public sector compa- Issues: A Situational Analysis’, Journal of Business
nies. He/she can cognitively mobilize the sub- Ethics 9(3), 201–205.
ordinates within the context of business reality, Kanungo, R. N. and A. M. Jaeger: 1990,
reduce their unethical practices and enhance ‘Introduction: Need for Indigenous Management
work attitudes and performance. in Developing countries’, in A. M. Jaeger and R.
N. Kanungo (eds.), Management in Developing
Countries (Routledge, London), pp. 1–19.
Kanungo, R. N. and M. Mendonca: 1996,
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