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Ethical and
Ethical and empowering empowering
leadership and leader leadership
effectiveness
133
Shahidul Hassan
John Glenn School of Public Affairs, The Ohio State University, Columbus, Received July 2012
Ohio, USA Revised September 2012
Revised September 2012
Rubiná Mahsud Accepted October 2012
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Abstract
Purpose – The purpose of this paper is to examine how ethical leadership and empowering
leadership are related to leader-member exchange relations (LMX), affective commitment, and leader
effectiveness.
Design/methodology/approach – Data were collected using questionnaires filled out by 259
subordinates of public and private sector managers. Relationships among variables were analyzed
using structural equation modeling.
Findings – The results indicated that ethical leadership and empowering leadership have positive
associations with LMX, subordinate affective commitment, and perception of leader effectiveness.
Originality/value – This study is the first to examine the independent and joint relationships of
empowering leadership and ethical leadership with leadership effectiveness and the mediating role of
LMX.
Keywords Leadership, Ethics, Empowerment, Ethical leadership, Affective commitment,
Empowering leadership, Leader effectiveness
Paper type Research paper
The financial crisis, economic downturn and repeated scandals involving leaders from
business and government organizations have led organizational researchers to
re-examine how leaders can enhance employee loyalty and commitment to the
organization (De Cremer et al., 2011). Increasing attention now is being paid to the role
of ethical leadership (Brown and Treviño, 2006; Treviño and Brown, 2004) and Journal of Managerial Psychology
Vol. 28 No. 2, 2013
empowering leadership (Arnold et al., 2000; Huang et al., 2010; Konczak et al., 2000) in pp. 133-146
fostering cooperative attitudes and behaviors among employees. Recent research q Emerald Group Publishing Limited
0268-3946
indicates that ethical leadership and empowering leadership are each associated with a DOI 10.1108/02683941311300252
JMP variety of important outcomes, including subordinate motivation, satisfaction,
28,2 performance, pro-social behaviors, and deviant or counter-productive behaviors
(Chen et al., 2011; Den Hartog and De Hoogh, 2009; Huang et al., 2010; Kim and Brymer,
2011; Konczak et al., 2000; Mayer et al., 2012; Mayer et al., 2009; Piccolo et al., 2010;
Walumbwa et al., 2011; Walumbwa and Schaubroeck, 2009).
Ethical and empowering leader behaviors are likely to be associated with
134 high-quality leader-member exchange (LMX) relationships based on trust, mutual
liking, and respect (Brown and Treviño, 2006; Graen and Scandura, 1987; Liden et al.,
1997). Research on the correlates of LMX found that leaders with favorable exchange
relationships are more likely to be perceived to be effective and induce affective
subordinate commitment than leaders with unfavorable exchange relationships
(Gerstner and Day, 1997). However, previous studies did not examine ethical and
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2000; Yukl and Becker, 2006) and involving subordinates in making decisions about
the work (Chen et al., 2011; Huang et al., 2010; Kirkman and Rosen, 1999; Konczak et al.,
2000). Other research found that leaders who develop high-quality exchange relations
consult more with their subordinates about important decisions and use their ideas and
suggestions (Yukl and Fu, 1999; Yukl et al., 2009). Such behavior signals that the leader
has confidence and trust in the subordinate’s skills and motivation to accomplish a
difficult task or project (Dirks and Ferrin, 2002; Yukl, 2009). Research on the
relationship between empowering leadership and LMX is limited, but several studies
found a positive relationship between consultation and LMX (Yukl et al., 2009; Yukl
and Fu, 1999), and a number of studies found a significant positive relationship
between delegation and LMX (O’Donnell et al., 2012; Yukl et al., 2009; Yukl and Fu,
1999; Schriesheim et al., 1998). Therefore, the following hypothesis is proposed and
tested in the current study:
H2. Empowering leadership is related positively to LMX.
that the relationship between ethical leaders and their followers is likely to be
characterized by social rather than economic exchanges. Economic exchanges are
largely impersonal, whereas social exchanges depend on mutual affection, trust, and
respect (Blau, 1964; Gouldner, 1960). Because ethical leaders are altruistic, trustworthy,
fair decision makers, and care for the personal well-being of others, they are likely to be
involved in high quality social exchanges with subordinates, which in turn are
expected to be positively related to loyalty for the leader and commitment to the work
unit and organization. Thus, we propose the following hypothesis:
H3. LMX mediates the relationship between ethical leadership and subordinate
affective commitment.
Empowering leaders share decision-making authority with their subordinates, consult
with subordinates regarding important decisions that may relate to their work, allow
subordinates more autonomy, and remove unnecessary bureaucratic constraints (Arnold
et al., 2000; Chen et al., 2011; Kirkman and Rosen, 1999; Konczak et al., 2000; Yukl and
Becker, 2006; Zhang and Bartol, 2010). These empowering behaviors have beneficial
outcomes, and a positive association between participative leadership and affective
commitment has consistently been shown in previous research (Chen et al., 2007, 2011;
Konczak et al., 2000; Den Hartog and De Hoogh, 2009; Kirkman and Rosen, 1999).
However, possible mediators of this relationship have not been investigated thoroughly
in previous studies. As mentioned earlier, empowering leader behaviors provide
subordinates with important cues about the extent to which their ideas are valued and
respected by the leader. This feedback is likely to relate positively to the quality of
exchange relationship between leaders and their subordinates, which in turn may
enhance subordinate affective commitment. Thus, we propose the following hypothesis:
H4. LMX mediates the relationship between empowering leadership and
subordinate affective commitment.
Method
Participants
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The sample for this study were 259 graduate students who were enrolled in the evening
MBA program of a private university in the US Northwest and in the evening MPA
program of a large public university in the Midwest. The respondents were from a large
variety of private and public sector organizations; 132 of the respondents (51 percent)
worked for medium to large corporations and small businesses, 95 (37 percent) worked
for state government agencies, and 32 (12 percent) worked for nonprofit organizations.
The respondents had full-time jobs during the day. Almost half of them were between 25
and 30 years old, and 65 percent of them had worked for their current manager for more
than one year. The gender composition of the respondent sample was 45 percent male
and 47 percent of the supervisors rated by respondents were female. More than half of
the respondents (52 percent) held professional/technical jobs, 26 percent held first-level
management positions (team leader, supervisor, or section head), 14 percent held
middle-management positions, and 4 percent were upper-level managers.
Procedure
Data for this study were collected in two time periods to reduce common biases when
same source data are used to assess both the predictors and the criteria (Podsakoff et al.,
2003). In the first wave of data collection, respondents completed questionnaires
measuring ethical and empowering leadership. Two weeks later, respondents
completed another questionnaire in which they rated the quality of their exchange
relationship with their manager, affective commitment towards their work unit, and
the overall effectiveness of their manager. A vast majority of the respondents (more
than 80 percent) who completed the first questionnaire also completed the second,
resulting in the matched sample of 259.
Measures
Ethical leadership was measured with ten items from the Ethical Leadership
Questionnaire (ELQ) developed by Yukl et al. (2012). The ELQ items capture different
aspects of ethical leadership and contain both traits and behaviors including honesty,
integrity, accountability, consistency of actions with values, and providing ethical
guidance. All of the ELQ items have a six-point Likert-style response format
(1 ¼ strongly disagree, 6 ¼ strongly agree). Sample items included:
.
“Holds members accountable for using ethical practices in their work”;
.
“Communicates clear ethical standards for members”; and
.
“Insists on doing what is fair and ethical even when it is not easy”.
JMP Empowering leadership was measured with six items from the Managerial Practices
Survey (MPS) developed by Yukl and colleagues (Kim and Yukl, 1995; Yukl et al., 2002)
28,2 that involve two key components of empowering leadership, namely consultation and
delegation. Each item has a five-point response format with an anchor for each choice
indicating how much the behavior described by the item is used by the focal manager
(1 ¼ not at all, 5 ¼ to a very great extent). Each item also has a “don’t know or not
138 applicable” option that was scored the same way as the “not at all” response. Sample
items included:
.
“Trusts you to make an important decision without getting prior approval”; and
.
“Consults with you before making important decisions that will affect you”.
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LMX was measured with the LMX-7 instrument developed by Scandura and Graen
(1984). The questionnaire has seven items, and each item has five anchored response
choices with unique anchors that are appropriate for the item. The wording for the
response choices in a few items was changed slightly to reduce ambiguity. Sample
items were:
.
“How willing are you to do extra work to help your boss deal with a difficult
problem?”;
.
“How would you describe the relationship between you and your boss”; and
.
“How much are you willing to defend the decisions and actions of your boss to
other people?”.
Affective commitment was assessed with five items adapted from the Organizational
Commitment Scale developed by Meyer and Allen (1991). These five items measure a
subordinate’s emotional attachment toward the work unit. Each item has a six-point
Likert type response format (1 ¼ strongly disagree, 6 ¼ strongly agree). Sample items
included:
.
“I really feel as if my work unit’s problems are my own”;
.
“I feel a strong sense of belonging to my work unit”; and
. “I feel emotionally attached to my work unit”.
Leader effectiveness was measured with two items that have been used successfully in
several earlier studies (Kim and Yukl, 1995; Mahsud et al., 2010; Yukl et al., 2012). The
first item asked subordinates to rate the overall effectiveness of their manager in
carrying out his/her job responsibilities and it had a nine-point response format
(1 ¼ the least effective manager I have known; 9 ¼ the most effective manager I have
known). The second item asked subordinates to rate the overall effectiveness of their
manager (1 ¼ ineffective; 9 ¼ very effective). The scale score for all multi-item scales
was the mean item score.
Results
Preliminary analysis and descriptive statistics
Table I presents the means, standard deviations, reliability coefficients (a values) and
correlation coefficients for all five measures included in the study. Prior to testing the
hypotheses, confirmatory factor analysis (CFA) was conducted to assess convergent and
discriminant validity of the five measures. The CFA results showed that all scale items
had statistically significant factor loadings (p , 0:01) for their respective latent Ethical and
constructs (l values ranged from 0.62 to 0.97; only three items had l values below 0.70). empowering
Following recommendations provided by Kline (2005), we relied on multiple indices to
assess the fit of the measurement model. Kline (2005) suggested that a satisfactory model leadership
fit can be inferred when the x 2/df ratio is below 3.00 and values for the comparative fit
index (CFI) and incremental fit index (IFI) are above 0.90 and the value for the
standardized root mean square residual (SMSR) is below 0.10. In addition to these fit 139
indexes, the root mean square error of approximation (RMSEA; Browne and Cudeck,
1992) assessed model lack of fit. For the RMSEA, values of 0.05 or less indicate close fit,
values between 0.05 and 0.08 indicate reasonable fit, and values between 0.08 and 0.10
indicate marginal fit (Browne and Cudeck, 1992). The values obtained for the CFI, IFI
and RMSEA from the CFA results were 0.94, 0.94, and 0.06, respectively. Additionally,
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the value for the x 2/df ratio was 1.98. These results suggested that the measurement
model had a satisfactory fit to the data. Additionally, we compared the fit of the
measurement model with alternative one-factor and four-factor models. The one-factor
model fitted the data significantly worse than the proposed five-factor model
(Dx 2 ¼ 1; 485:20 (9), p , 0:01, CFI ¼ 0:69, IFI ¼ 0:70, and RMSEA ¼ 0.14). The
five-factor model also fitted the data significantly better than an alternative four-factor
model in which the correlation between ethical and empowering leadership was set equal
to one (Dx 2 ¼ 466:60 (4), p , 0:05, CFI ¼ 0:86, TLI ¼ 0:86, and RMSEA ¼ 0:10).
Measures Mean SD 1 2 3 4 5
140
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Figure 1.
Partial mediation model
Discussion
Implications for theory
The results are consistent with social exchange theory predictions (Blau, 1964;
Homans, 1961). Specifically, findings indicate that the quality of the social exchange
between leader and subordinate is critical to the relationship between leader behaviors
and important outcomes. The findings also support the notion that the relationship
between ethical leaders and their followers is a social one rather than one dependent on
economic exchange (Brown and Treviño, 2006). The findings are consistent with the
Indirect relationships/paths b
results from the current study show that ethical and empowering leadership have
separate and significant positive associations with LMX. These findings support the
conceptual distinction of ethical and empowering leadership and highlight the
importance of maintaining their independence for training and development purposes.
The third limitation pertains to the use of cross-sectional data. The use of
cross-sectional data limits the extent to which causality can be inferred. While our
research results suggest that ethical and empowering leadership relate positively with
LMX, which subsequently relates to the two outcomes, the direction of causality
between these variables cannot be determined in a survey study such as ours.
Based in part on these limitations, the proposed model should be tested in future
research using stronger methods. Survey studies in an organizational setting should
collect data from multiple sources in order to avoid common method bias. To assess
causal relationships a good research method is a longitudinal experiment using real
groups or students in a multi-week group simulation. The two types of leadership
behavior could be manipulated independently in a crossed design, and LMX and
commitment could be measured at an intermediate time as well as in the final time
period, along with objective measures of group performance. Finally, despite the focus
on LMX in this research, subsequent studies might examine mediators other than LMX
in the model. For example, the relationships between leadership behavior and
indicators of subordinate commitment and leader effectiveness may be mediated by
other perceptual variables such as psychological empowerment, personal identification
with the leader, acceptance of decisions, quality of decisions, and internalization of
ethical values.
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Further reading
Huang, X., Iun, J., Liu, A. and Gong, Y. (2010), “Does participative leadership enhance work
146 performance by inducing empowerment or trust? The differential effects on managerial
and non-managerial subordinates”, Journal of Organizational Behavior, Vol. 31, pp. 122-43.
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