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J Bus Ethics

DOI 10.1007/s10551-014-2196-6

The Effect of Ethical Leadership Behavior on Ethical Climate,


Turnover Intention, and Affective Commitment
Ozgur Demirtas A. Asuman Akdogan

Received: 30 December 2013 / Accepted: 20 April 2014


Springer Science+Business Media Dordrecht 2014

Abstract This study examines a mediated model of eth- ethical climate as a critical antecedent of organizational
ical leadership on ethical climate, turnover intention, and outcomes.
affective commitment. It is suggested that managers are Today, the corporate social responsibility is more
role models in their organizations. Specifically, through essential, and the corporate image becomes crucial
ethical leadership behavior, managers can influence per- according to the transparent management viewpoint.
ceptions of ethical climate, which in turn will positively Therefore, the managers values are so important in influ-
influence organizational members turnover intention, and encing the working environment. The role of managers and
affective commitment. The results indicate that ethical their ethical behavior play a critical role in providing a
leadership has both direct and indirect effect on affective moral framework for organizational members (Grojean
commitment and turnover intention. The indirect effect of et al. 2004; Mendonca 2001) and in building the collective
ethical leadership involves shaping perceptions of ethical character of the organization (Moore 2005; Wright and
climate, which in turn, engenders greater affective orga- Goodstein 2007). So, ethical leaders are fundamental fac-
nizational commitment and less turnover intention. tors in shaping the moral framework for an organization.
Ethical leadership refers to the display of behaviors
Keywords Ethical leadership behavior  Ethical climate  consistent with appropriate norms, which are visible
Affective commitment  Turnover intention  Role model through leaders actions and relationships (Brown et al.
2005). Scholars have mostly discussed ethical leadership
Over the years, several attempts have been made in the with theoretical and conceptual terms. Brown et al. (2005)
ethics literature to explain and understand ethical decision- carried out field investigations to test and validate the
making and ethical behavior (Berkman and Arslan 2009; construct of ethical leadership within organizations. Some
Callan 1992; Dubinsky and Ingram 1984; Dubinsky and researches focusing on ethical leadership have demon-
Levy 1985; Drucker 1981; Harris 1990; Simpson 1982; strated its positive effects on prosocial behaviors (Mayer
Mathison 1988; Nyaw and Ng 1994; Ozgener 2009). In et al. 2010; Piccolo et al. 2010; Walumbwa and Schau-
accordance with this global trend, a vast amount of broeck 2009).
research has explored the relationship between organiza- However, the majority of the studies on ethical leader-
tional ethics and its outcomes. A majority of corporate ship have not been done in industries such as manufac-
ethics researches have focused on ethical leadership, and turing, logistics, or in other major parts of the countries.
These studies generally used university students as
subjects.
O. Demirtas (&) Ethical leadership is the demonstration of normatively
Turkish Air Force, Kayseri, Turkey appropriate conduct through personal actions and inter-
e-mail: ozgurdemirtas@hvkk.tsk.tr personal relationships, and it emphasizes the promotion of
such conduct to followers through two-way communica-
A. A. Akdogan
Erciyes University, Kayseri, Turkey tion, reinforcement, and decision-making (Brown et al.
e-mail: akdogana@erciyes.edu.tr 2005; Neubert et al. 2009). Besides, ethical leadership

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O. Demirtas, A. A. Akdogan

Affective rewarded, and punished through role modeling. Leaders are


Commitment
important sources for such modeling because of their role.
Previous researches have also demonstrated that role
Ethical Leadership Ethical Climate
models in an organization influence prosocial behaviors
Turnover
Intention
(Bryan and Test 1967; Mayer et al. 2010; Piccolo et al.
2010). In the following sections, ethical leadership
behavior and its effects on perceptions of ethical climate,
Fig. 1 Model of the study
affective organizational commitment, and turnover inten-
tion are defined.

behavior promotes organizational members attitudes to Ethical Leadership


everyday work and their attachments to the organization
(i.e. affective organizational commitment) (Brown and Leaders behaviors are very important in order to have
Trevino 2006; Schminke et al. 2005). efficient work conditions and organizational culture. In this
The relationship between leadership styles and its out- era, the new leadership style highlights the importance of
comes have been studied by many scholars in the organi- virtue and morality. Many scholars mainly emphasize
zational behavior field. However, there are limited truthfulness and honesty in the leadership style (Brown
researches on ethical leadership styles and behavioral et al. 2005). According to Brown and Trevino (2006),
outcomes in Turkey. As a role model in an organization, ethical scandals in work environment (i.e., in nonprofit
the ethical leadership behavior is an essential issue in organizations, sports, and religious institutions) point out
aviation industry, because commitment and work engage- the importance of ethical issues and leadership behaviors
ment are so important in aviation industry. Thus, it can be that have ethical content (Waddock 2004).
said that leaders ethical judgments influence their Ethical leadership is defined as the demonstration of
followers. normatively conduct behavior through personal actions and
This study focused on ethical leadership behavior to interpersonal relationships (Brown et al. 2005). It empha-
fulfill these needs, especially for Turkish literature. In sizes the promotion of such conduct to followers through
that regard, the purpose in this study is to examine the two-way communication, reinforcement, and decision-
effect of ethical leadership behavior on perceptions of making (Neubert et al. 2009). In the literature, ethical
ethical climate and, in turn, on the turnover intention and leadership is mostly emphasized on integrity and honesty
affective commitment of organizational members (see (Eubanks et al. 2012; Kuntz et al. 2013), and ethical leaders
Fig. 1). The article is organized as four main sections. were seen as fair, and principled decision-makers. The
First, a review of the literature on ethical leadership, researchers characterized these characteristics as the moral
ethical climate, affective commitment, and turnover aspect of ethical leadership.
intention is presented, and then the hypotheses were In todays changing conditions, if organizations aim to
developed. Second, the research methodology is given. have a sustainable growth, strategic superiority, and cor-
Afterwards, the field study analyses were given com- porate image, then they have to establish a culture that
paratively with the results in the literature. Finally, the supports and encourages the ethical behaviors. While
results of the study, strengths and weakness, research establishing the ethical working condition as a role model,
implications, and future research recommendations are leaders behaviors influence the other behaviors in the
mentioned. organizations, and their behaviors become the most
important factor in this process. In this context, ethical
leadership can be defined as the demonstration of norma-
Theoretical Frameworks and Hypotheses tively appropriate conduct through personal actions and
interpersonal relationships (Brown et al. 2005).
Social learning theory suggests that individuals learn by A number of studies on ethical content examined the
focusing their attentions on role models and learn appro- leadership style and their ethical behaviors (Alzola 2008;
priate behavior through witnessing what is rewarded and Kahai et al. 2003; Neubert et al. 2009; Trevino 1986).
what is punished or which actions attract attention and Researchers emphasized that the ethical climate of the
which do not (Bandura 1986). Leadership involves influ- work context is generally shaped by organizational man-
ence to others (Yukl 2002). Managers exhibiting ethical agers (Schein 1985; Schminke et al. 2005; Trevino et al.
leadership influence organizational members through per- 2000). Furthermore, ethical leadership behavior reduces
sonal actions and interpersonal relations (Brown et al. peoples anxiety about the uncertainty of the jobs or
2005). Employees can learn what behavior is expected, behaviors in the organizations by being considerate, open,

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Effect of Ethical Leadership Behavior

trustworthy, and honest, and by stressing the importance of Procedures), instrumental (Self-Interest and Company
adherence to high ethical principles (Trevino et al. 2003). Profit), and independence (Personal Morality) climate
In todays world, organizations implement some sys- types. This ethical climate typology and questionnaire were
tems that indicate the ethical codes, corporate ethics, used later in different studies (Cullen et al. 2003; Mayer
standardized procedures, and ethics training programs. et al. 2009; Neubaum et al. 2004; Webber 2007; Wimbush
However, it is a fact that ethical principles need action et al. 1997).
rather than words. Therefore, the managers attitudes When behaviors in an organization are perceived to be
toward the jobs are more important than the established ethical, these perceptions influence ethical decision-making
systems. At all levels in the organizations, managers have a and the behaviors of organizational members as well as
primary role in shaping ethical climate. Constituting this their attitudes toward individual jobs (Brown and Trevino
climate, managers exemplify what is appropriate through 2006). The collective effect of multiple organizational
their behavior (Dickson et al. 2001). By modeling appro- members ethical perceptions creates a work environment
priate behavior, managers provide justice and trust (Brown characterized by shared ethical work norms (Davidovitz
et al. 2005; Brown and Trevino 2006). et al. 2007; Dickson et al. 2001). An ethical climate affects
The integration of social-cognitive theories and virtue individuals attitudes toward their jobs and the organization
theory essentially point out the potential of managers, who (Cullen et al. 2003). The influence of ethical leadership
model ethical leadership behavior and create relational extends to influence organizational members turnover
attachments in order to exert moral authority that contrib- intention and organizational commitment through an ethi-
utes to an environment conducive, and the flourishing of cal climate (Brown et al. 2005). From this point, it is
organizational members (Neubert et al. 2009). In the fol- hypothesized as
lowing section, it is argued that this influence occurs by
Hypothesis 1 Ethical leadership will positively related to
means of creating and perpetuating an ethical climate.
the perceptions of ethical climate
Mediator: Ethical Climate
Affective Commitment
A work climate can be defined as the perceptions of psy-
chologically meaningful moral attitudes in a work envi- Many scholars have defined the concept of organizational
ronment (Schneider 1975). There are various kinds of work commitment in different ways. Porter et al. (1974) defined
climates. One of them is ethical work climate that can be organizational commitment as a belief and acceptance of
defined as the predominant perceptions about the proce- organizational goals and values, the willingness to exert
dures and practices of the organization that has ethical effort toward organizational goals, accomplishments, and a
content or the prevailing perceptions of typical organiza- strong desire to maintain organizational membership.
tional practices and procedures that have ethical content Basically, it is individuals affective binding with his/her
(Victor and Cullen 1988). Ethical behavior of the leader is organization as a consequence of accepting organizational
a necessary condition to establish an ethical organization, values, and the willingness to keep working within the
but this is not sufficient. The managers who engage in organization. Meyer and Allen (1984, 1991) mentioned
ethical leadership behavior must also act as virtuous agents three types of commitment, including commitment from
in promoting an ethical climate (Flynn 2008). necessity (continuous commitment), commitment from
The socio-cultural environment, organizational form, obligation (normative commitment), and the affective
and organization-specific history are identified as deter- organizational commitment which is studied extensively
minants of the ethical climates. Victor and Cullen (1988) and the most relevant form compared to the organizational
composed a chart showing possible ethical climates based identification (Gautam et al. 2004). Meyer and Allen
on philosophical, sociological, and psychological theory. (1991) defined affective commitment as an emotional
The chart has two axes representing how the ethical sys- attachment, identification, and involvement in the organi-
tems are derived from and to whom they are applied. This zation. Affective commitment refers to the feelings of
matrix forms nine theoretical dimensions of ethical climate belonging and the sense of attachment to the organization.
typology. The typology served as the basis for the creation It has been related to the personal characteristics, leader-
of the Ethical Climate Questionnaire. ship behaviors, and the organizational structures (Hart-
As a result of a series of survey studies, Victor and mann 2000).
Cullen (1988) approved the existence of five out of nine All of the definitions concerning affective organizational
climate types (Cullen et al. 1993) which emphasized caring commitment emphasize the employees bond with the
(Friendship and Team Interest), law and code (Laws and organization, captured by the characteristics such as
Professional Codes), rules (Company Rules and acceptance of organizational goals, values, and a strong

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O. Demirtas, A. A. Akdogan

desire to associate with the organization (Perry 2004). it will inspire a behavioral intention for quitting the job
According to the studies, there are some variables related which is followed by actual withdrawal.
to the affective commitment, the structure, and the envi- Aviation needs high education standards, employees
ronment of the organization. The characteristics of the job, caution, and especially work experience which explains the
interesting work, job security, opportunities for advance- long-term working. Since less turnover is important for
ment, development, organizational support, supervisory aviation industry, ethical leadership behavior and ethical
support, fair treatment (distributional justice, formal pro- climate perception become more important. So, the ethical
cedural justice, and interactional justice), participatory leadershipturnover intention relationship and the mediat-
management, openness to new ideas, change, satisfaction ing effect of the ethical climate are hypothesized as
with salary, the employees job experience, mismatch in follows;
working hours (negatively correlated), and downsizing are
Hypothesis 3 Ethical climate will mediate the relation-
some of these variables. (Lee and Corbett 2006; VanEm-
ship between ethical leadership and turnover intention
merik and Sanders 2005; Yew 2005). As the affective
commitment is more important than the other commitment
types, affective commitment and its relations with the
Methodology
ethical leadership and ethical climate are discussed in this
study. Therefore, the hypothesis is established as
In this study, several precautions are taken to minimize
Hypothesis 2 Ethical climate will mediate the relation- common method biases (Podsakoff et al. 2012). For
ship between ethical leadership and affective commitment. example, the data collection procedure was designed, and
our independent and dependent variables were collected in
Turnover Intention different times (in May, and July 2013) in order to mini-
mize the common method variance. Detailed information
Employee turnover is defined as the cessation of mem- was also given to ensure the confidentiality of our
bership in an organization by an individual who received respondents and to decrease social desirability. Finally, in
monetary compensation from the organization (Mobley order to decrease the evaluation apprehension, it was
1982). The causes of employee turnover in the organiza- stressed that there were no correct or incorrect answers for
tions are generally because of the external factors (i.e. the given items in the survey. In this study, a 5-point Likert
availability of jobs and unemployment levels), organiza- scale in which 1 = strongly disagree and 5 = strongly
tional factors (i.e., leadership style, work environment, and agree was conducted. Items are averaged within the scales
reward system), and individual factors (i.e., dissatisfaction to create composite measures for each variable. Items were
of the work and another persons performance) (Mobley coded in a way that high scores equate to high levels of the
1982; Vandenberg and Nelson 1999). construct of interest.
Many studies have been conducted to understand turn-
over intention of the employees, reasons behind the turn- Sample
over, and its consequences. Mobley (1977) pioneered a
comprehensive explanation of the psychological process The participants who are working as middle-level manag-
underlying withdrawal. According to his formulation of the ers, engineers, chiefs of the maintenance shops, and blue-
withdrawal decision process, individuals first evaluate their collar members are chosen from three aviation mainte-
existing jobs, and experience satisfaction or dissatisfaction nance centers. 500 employees were chosen randomly from
based on their jobs. If dissatisfaction is experienced, then it these facilities in which 2.000 (N) member are still work-
leads to thoughts about quitting. There are number of ing. From the missing or incorrect coding, 447 (n) ques-
possible mediating steps between dissatisfaction and actual tionnaires are taken to the survey. This sample size is
quitting. First, one of the consequences of dissatisfaction is sufficient according to the Kishs (1980) methodology. The
the thoughts about leaving. These thoughts, in turn, stim- final sample consists of 68 % male and 32 % female par-
ulate consideration of the expected utility of a job research ticipants. The average of their age is 40.32 years, and they
and the costs of quitting. The next step would be the spent average 7.4 years in their current job. All participants
behavioral intent to search for an alternative. The intention have a direct contact with their leaders and they work in a
to search is followed by an actual research. If alternatives full-time job in aviation industry. Also, the sample is dis-
are available, then an evaluation process of the alternatives tributed according to theirs department. 41 % of the sample
is initiated. The evaluation process of the alternatives is is in the manufacturing; 22 % is in the quality manage-
followed by a comparison of the present job with the ment; 19 % is in the technical (R&D); 10 % is in the
alternatives. If the comparison favors the alternatives, then programming; and 8 % in the budgeting department.

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Effect of Ethical Leadership Behavior

Table 1 Descriptive statistics for dependent and independent Table 3 Regression analyses for mediation
variables
Variables Dependent variable: ethical climate
Scale Mean SD Skewness Kurtosis (EC)

Ethical leadership 3.29 .81 -.41 -.44 Model 2 Model 1 Model 3


(b) (b) (b)
Ethical climate 3.26 .48 -.727 1.97
ELEC ELAC EL/ACEC
Affective commitment 3.27 1.16 -.28 -.85
Turnover intention 2.94 1.02 .03 -.78 Ethical leadership (EL) .507* .634* .385*
Affective commitment .177**
(AC)
Table 2 Mean, standard deviations, and correlations Adjusted R2 .253 .536 .256
F change 151.012* 779.078* 76.190*
Variable Mean SD 1 2 3
DurbinWatson 1.746 1.757 1.754
1. Ethical leadership 3.29 .81
Standardized betas are shown
2. Ethical climate 3.26 .48 .51**
* p \ 0.01
3. Affective 3.27 1.16 .63** .37**
** p \ 0.05
commitment
4. Turnover 2.94 1.02 -.43** -.30** -.38**
intention
** p \ 0.05
members perceive the organizational climate and act ethi-
cally, and they are committed to their organizations. Con-
sequently, they do not think of leaving their organizations.
Measures
Hypotheses Testing
Brown et al. (2005) developed and validated the 10-item
ethical leadership scale, which is used in this study. An The correlations between and descriptive statistics for the
example item is My supervisor listens to what employees variables in the study is shown in Table 2. As expected,
have to say. The Cronbachs alpha for this scale was 0.93. ethical leadership is significantly correlated with the ethical
The ethical climate scale which was developed by climate, affective commitment, and turnover intention.
Victor and Cullen (1988) is used in this survey. The scale
consists of 10 items. An example item is The most effi- Hypothesis 1
cient way is always the right way in this company. The
Cronbachs alpha for this scale was 0.88. To test the hypotheses, we first entered the mediator (eth-
Affective organizational commitment scale which was ical climate) variable on the independent variable (ethical
developed by Meyer and Allen (1991) is used. The scale leadership). As shown in Table 3, the beta weight for
consists of 8 items. An example item is I would be very ethical leadership was significant and in the direction pre-
happy to continue my career in this organization. The dicted. Thus, with Hypothesis 1, the positive relationship
Cronbachs alpha for this scale was 0.85. between ethical leadership and ethical climate was sup-
For the last variable, turnover intention scale which was ported, and the first requirement for mediation was
developed by Rosin and Korabik (1991) is used. The scale satisfied.
consists of 4 items. An example item is I am thinking of
changing my job. The Cronbachs alpha for this scale was 0.91. Hypothesis 2

Baron and Kennys (1986) procedure for assessing the


Results mediating role of the affective commitment is used. First,
the independent variable should be significantly related to
Initial Analysis the mediator variable. Second, the independent variable
should be related to the dependent variable. Third, the
To evaluate the distribution of the sample, Durbin-Watson mediating variable should be related to the dependent
(skewness and kurtosis) values are observed in Table 1. variable and the independent variable included in the
Tabachnick and Fidell (2001) stated that the values of the equation. If the first three conditions hold, then at least
skewness and kurtosis must be between -2 and ?2 for a partial mediation is present. If the independent variable has
normal distribution. As seen from the table, the sample in a non-significant beta weight in the third step, then com-
this survey has a normal distribution. From the given values, plete mediation is present (MacKinnon et al. 2002).

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O. Demirtas, A. A. Akdogan

Table 4 Regression analyses for mediation z-distribution to determine the statistical significance of the
Variables Dependent variable: turnover intention (TI)
indirect effect. Supporting hypotheses 2 and 3, the Sobel
test results indicated that the indirect effects of ethical
Model 1 (b) Model 2 (b) Model 3 (b) leadership on affective commitment for ethical climate
ELEC ELTI EL/ECTI
(z = (a*b)/sab = -6.75 for 95 % confidence level) and
Ethical leadership (EL) .507* -.428* -.467** ethical leadership on turnover intention for ethical climate
Ethical climate (EC) -.218* (z = 2.27 for 95 % confidence level) were in the antici-
Adjusted R2 .253 .183 .189 pated direction and statistically significant.
F change 151.012* 99.532 53.139 To evaluate the confidence levels, we tested the upper
DurbinWatson 1.746 1.940 1.914 and the lower confidence levels (MacKinnon and Luecken
2011). For hypothesis 2, these values were UCL = -.076
Standardized betas are shown
and LCL = -.139. For hypothesis 3, they were
* p \ 0.01
UCL = .216 and LCL = .016. The results were not
** p \ 0.05
included zero value. So, our model was in the confidence
levels (MacKinnon and Luecken 2011).
Hypothesis 2 asserts the mediating effect of ethical From the above results, we can say that ethical leader-
climate on the ethical leadership and affective commitment ship is positively related to ethical climate. Mediation
relationship. First, ethical leadership and ethical climate analyses show that ethical climate partially mediates the
were entered in step 1. The results from this step demon- relationship between ethical leadership and affective
strated the significance of dependent variable. In step 2, the commitment. In addition, it was found that ethical climate
ethical leadership and affective commitment relationship also partially mediates the relationship between ethical
was searched. The beta weight was also significant in this leadership and turnover intention. Therefore, our hypoth-
step. Thus, second requirement of the mediation was sat- eses were supported parallel to the literature findings.
isfied. In order to test the third step of mediation, we
regressed the dependent variables on the mediating vari-
able with the independent variable included in the equa- Conclusion
tion. The results, shown in Table 3, indicate that the ethical
climate partially mediated the relationship of between Managers are important sources for organizational success
ethical leadership and affective commitment, as the beta and unethical behavior. This study examined a mediating
for ethical leadership decreased after adding ethical climate model about the effect of managers ethical leadership
but it remained significant. Thus, it can be said that behavior on organizational members. In this study, it is
Hypothesis 2 was supported. argued that as role models in their organizations, and by
modeling ethical leadership behavior and engendering
Hypothesis 3 relational attachments, managers achieve moral authority
that has a virtuous influence on organizational members.
Similarly, Hypothesis 3 searched the mediating effect of Furthermore, it is argued that the influence of ethical
ethical climate between ethical leadership and turnover leadership behavior spreads through the work context and
intention. the process of social contagion in order to shape the ethical
The results, shown in Table 4, indicate that ethical cli- climate, which, in turn, contributes to organizational
mate partially mediated the relationship between ethical members commitments to their organizations and less
leadership and turnover intention, as the beta for ethical turnover intention as a whole. In other words, if managers
leadership decreased after adding ethical climate but it act in an honest and trustworthy way, these behaviors then
remained significant. create a virtuous cycle in which ethical leadership behavior
perpetuates an ethical work climate that allows flourishing.
Sobel Test The results are similar with those which assert that
managers displaying ethical leadership behavior play a
Finally, to support our mediational hypotheses, Sobel tests critical role in shaping perceptions of ethical climate
were used to assess the significance of the indirect effects (Brown and Trevino 2006; Dickson et al. 2001; Schminke
(MacKinnon 2008; Sobel 1982). These tests involve cal- et al. 2005; Trevino et al. 2003; Trevino et al. 2000).
culating the magnitude of the unstandardized indirect effect Besides, in this study, these existing researches are exten-
(a and b), and its accompanying standard error (sa and sb). ded by demonstrating the diverse samples of people. It is
The ratio of the indirect effect over its standard error, concluded that the ethical leadership behavior is related to
referred to the Sobel statistic, is then compared to a the perceptions of ethical climate, and the ethical climate

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Effect of Ethical Leadership Behavior

mediates the influence of the manager who performs ethi- cannot be generalized compared to the other industries or
cal leadership on individuals outcomes. The results also cultures. So, future researchers should consider the weak-
affirm that the prominence of ethical leadership behavior nesses outlined above, and they could extend the given
among many factors may influence the attitudes and results by including additional outcome variables such as
attachments of organizational members, (Brown and Tre- political, counterproductive, or deviant behaviors. Future
vino 2006) and contribute to individual flourishing (Wright research could also use a multi-level approach to theorize
and Goodstein 2007). and analyze the effects of ethical leadership. In this study,
This study emphasizes that organizations would benefit we were interested in the individual level effects of ethical
from their employees who perceive high ethical working leadership on perceptions of climate and individual out-
environment. Such perceptions can be enhanced via diverse comes. Future research could gather data from work groups
management techniques, practices such as maintaining so that the data could be aggregated to assess the impact of
open channels of communications and interactions. Results ethical leadership on group level climate and behavioral
of this study also point to the need for additional research variables.
that examines the role of potential mediators of relations In conclusion, this study examined the ways in which
between ethical leadership and employee outcomes (e.g., managers perform ethical leadership behavior contribute to
organizational identification, engagement, task, and con- individuals flourishing. It is a fact that ethical leadership
textual performance). It may follow a variety of interesting behavior influence affective commitment and turnover
directions. As a predictor, ethical leadership is gaining intention directly and indirectly through shaping ethical
more importance in the organizational behavior field. So, it climate.
may help the organizations to arrange and establish an
ethical framework in their environment working. In addi-
tion, managers should include communication and inter-
action in their managerial values in order to lessen negative References
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