Recent ethical challenges and unethical actions have raised significant concerns, compelling organizations to emphasize ethical practices within their operations. This study aims to explore how ethical leadership influences behavior in the workplace, particularly by examining the role played by an ethical atmosphere as a mediator.
To achieve the study’s objectives, data were collected from 150 employees across various Indian organizations, such as banking, information technology, legal, finance, telecommunications and manufacturing, using a structured questionnaire. The collected data were subsequently analyzed using partial least squares structural equation modeling.
The findings revealed that ethical leadership serves as a role model for subordinates; however, in the absence of an ethical climate, ethical leadership has a statistically insignificant impact on ethical behavior within the Indian context. Moreover, the study demonstrates that the ethical climate plays a mediating role in influencing employees’ ethical behavior.
The current study was conducted across various companies operating in India. Future research could adopt a longitudinal design to focus on specific sectors in emerging economies, particularly in India. Additionally, while the study used two predictors of ethical behavior, future research may consider incorporating potential indicators into the proposed model.
Given the erosion of ethical principles and the rise of corporate dishonor, organizations in India should prioritize ethical training and the implementation of ethical programs for their senior officials, while also cultivating a moral organizational climate. By promoting ethical behavior, Indian corporations can lay the foundation for sustainable practices in the workplace.
This study addresses critical gaps in the existing literature by examining the ethical leadership – ethical behavior relationship within the underexplored context of a developing country, specifically India. Prior research on ethical leadership has predominantly focused on Western or specific regional contexts, with limited attention to culturally diverse and hierarchical environments like India. Moreover, much of the existing literature is industry-specific, lacking cross-sectoral insights into how ethical leadership operates across varied organizational settings. This study contributes by offering a cross-industry analysis, thereby enhancing the generalizability of ethical leadership research.
