The Explorer Islamabad: Journal of Social Sciences

ISSN: 2411-0132(E), 2411-5487(P)

Vol-2, Issue (6): 132-139
www.theexplorerpak.org

ETHICS DETERMINANT OF COMMITMENT: AN IMPACTS OF ORGANIZATIONAL CULTURE AND

ETHOS BASED LEADERSHIP
Sania Noreen, Sonaina Saif, Shahbaz Haider
MS Scholar, Department of Management Sciences, University of Sargodha Gujranwala

Corresponding Author
Shahbaz Haider
Department of Management Sciences, University of Sargodha
shahbazhaider199@gmail.com

Abstract: Now a days organizations are encountering a challenge of turnover due to leadership style, work settings etc.
These particular problems have given rise to the employee organizational commitment. Organizations are striving to retain
employees but they are failing. Intention of this paper is to examine the influence of ethical leadership and organizational
culture on employee organizational commitment. The association is being facilitated by employee sociability. It is a
quantitative study. With regard to ethics, this study is conducted in pharmaceuticals industry in Gujranwala city. AMOS used
to run inferential statistical analysis. Sample size was 290 employees. Thumb rule used to determine sample size and simple
random sampling used to select respondents. Results indicated that ethical leadership positively and significantly impacts
employee organizational commitment (β= .659). Furthermore results enlightened that organizational culture has positive and
significant impact on employee organizational commitment (β=.687). Moreover, results proved the considerable positive
mediation of employee sociability. Limitations and future research areas are provided at the end.

Key Words: Ethical Leadership, Organizational Culture, Employee Sociability, Employee organizational
Commitment, Pharmaceuticals
INTRODUCTION
In 21st century, human capital or personnel are utmost
valuable intangible asset (Scullion, et al. 2007). It was
explored that employees are one of the important
assets of organization, many risk attached with human
capital similarly to other asset classification.
Furthermore Companies can gain competitive edge
and significant advantage through employee
involvement and commitment so, organization must
give attention on employees (Guest 1991). To increase
the employee’s attachment to their job managing and
leading persons in association would be more
enthused to exploit attributive facet of employees
(TürkayNur 2013). Moreover, employees enhance
their performance and devote more time in
organization who is more dedicated (Mayer et al.,
2002). Similarly, success factor in organization at the
time of work was not resolute by level of education,
ability or the intelligence (Symsudin and Winarno
2008). Emotional intelligence was the prevalent
involvement to upkeep a person. Sociability was
explicit characteristic of employees in research arena
(Khoung and Nhu 2015). Furthermore, it was explored
that emotion and commitment of employees are
affected by the organization culture and leadership
style (Lok and Crawford 2004).
Previously mostly studies regarding ethical leadership
have not been carried out in businesses like logistics,
manufacturing, or some further main sectors of
countries etc. However, they were focused on
university students (Demirtas and Akdogan 2014). In
addition, it was argued that majority of researchers
discussed ethical leadership in theoretical and
conceptual terms. In a study (Khoung and Nhu 2015)
which examined impact of ethical leadership and
organizational culture on employee organizational
commitment, authors suggested that this research
must be carried out in other business sectors and
countries to generalize the findings. Since (Brown, et
al. 2005) paper scholars have started their research in
ethical leadership, although there is lot more research
has been carried out but researchers have identified a
need to conduct research in this area (Mayer, et al.
2012; Newman, et al. 2014).

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Study is marked at exploring association concerning
ethical leadership, organizational culture, and
employee organizational commitment. Furthermore,
it will analyze the employee sociality role as mediator.
However, this study will strive to achieve the following
objectives: 1) determine the impact of ethical
leadership on employee organizational commitment;
2) determining intensity of organizational culture’s
impact on employee organizational commitment; 3)
exploring how much sociability trait of employee
impacts the relationship of ethical leadership,
organizational culture, and employee organizational
commitment.
LITERATURE REVIEW
Ethical leadership
In previous research, the expression leadership has
been explored diversely in literature (Keller 2006).
Moreover, leader’s ethical actions effect the
employee’s commitment towards organization there
was a positive relationship between ethical actions of
leader and commitment of employees (Ponnu and
Tennakoon 2009). In addition, another research
purported that majestic level of professed ethical
leadership conduct associated to majestic level of
employee organization commitment (Bellow 2012).
Similarly ethical issues and organization commitment
deliberated with number of studies that show the
relationship between them (Cullen, et al. 2003). It was
markedly facilitated that organization commitment,
job satisfaction, turnover intentions, and employee
behavior was directly affected by employer ethical
values (Herrbach, et al., 2009). It was examined that
morale and loyalty of employees could affected by
ethical leadership the intentions behind this leaders
always consider the representative of organization
thus leaders impact the employee commitment as
well as their perception (Khoung and Nhu 2015).
Therefore, leaders’ attention, unbiased interactions,
trustworthiness, and perfect inspiration were
affiliated with ethical leadership (Brown, et al. 2005).
In addition ethical leaders set clear standards with
appropriate rewards along with punishments they
were good at communication with their followers
trust worthy and fair in their decisions (Khoung and
Nhu 2015). Ethical leadership was irrelative to
demographic similarity between leaders and
subordinate similarly it was acknowledged that ethical
leadership was adversely linked with abusive
supervision and positively related with affective trust
(Brown, et al. 2005).
Organizational culture
Organizational culture escorts the member of
organization about apt behavioral norms and he was
also phrased as the pattern of shared values and
beliefs (Deshpande and Webster 1989). It was one the
multifaceted phenomenon (Khoung and Nhu 2015).
Moreover, it could be known as important aspect and
organization culture was defined by many researchers.
Employees and organizations values, norms, ritual,
and beliefs were included in organization culture that
leaded toward behavioral set of standards and
activities. Organization effectiveness and quality of its
product and services was significantly affected by the
organization culture, it was core organization function
(Khoung and Nhu 2015). Furthermore, Organization
culture was not only related with day to day activities
and planned goals of employees it was related to deal
and adapt the rapid changes of external environment
(Marcic, 1996). Similarly, organization culture depends
upon the perception of human interaction (Goldstein,
et al. 2006).
Employee sociability
The foundation of emotional intelligence was
described as Individual’s propensity to realize and
managing other and right behavior in human relations
(Thorndike 1920). Therefore, the capability to detect,
cognize, and mange one’s own and others’ feelings
was termed as emotional intelligence (Seyal and
Afzaal 2013). Furthermore, Emotional intelligence
described as the being aware about our own and
others emotions affectively in a manner to effectively
perceive and adapt the environment to strengthen
constructive relationship with others (Bar-On 2006).
One of the factors of emotional intelligence was
sociability. Study demonstrated that highly emotional
intelligent employees showed positive organizational
outcomes (Khoung and Yen 2014). Therefore,
employees with high commitment lead to high
organizations. Wherefore, employee’s commitment
was likely associated with employee emotional
intelligence and employee sociability. Furthermore,
organizational culture and leadership might have
influence on emotional intelligence (Khoung and Nhu
2015).
Employee organizational commitment
The employee’s loyalty toward the organization was
termed as employee organizational commitment
(Bateman and Strasser 1984). Employee’s eagerness
to work for an organization and tendency of equaling
between employee’s and organization’s values and
goals that triggers employee’s readiness to accomplish
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desired organizational goals (Sharma and Bajpai 2010).
Numerous evaluative statements that were define
organizational commitment. However, some writers
proposed the notion of organizational commitment in
the light of three factors comprising of; 1) a vigorous
wish to continue the relationship with particular
organization; 2) firm desire to take part in
organization’s success; 3) holding trust and positive
attitude towards the goals and values of organization
(Becker, et al. 1996).
Meyer Allen developed the model of organizational
commitment (Mayer, et al. 2002). In addition, they
explored three elements named as affective factor,
normative factor, continuity factor (Mayer and Allen
1991; 1993).
The relationship between Ethical Leadership,
organizational Culture, and Employee organizational
Commitment
Studies proposed that the essential duty of a leader is
developing an ethical environment in the organization
(Ponnu and Teenakoon 2009). Some previous
researchers examined that a leaders’ ethical conduct
associated with high-level of satisfaction and lesser
role conflicts, consequently impel commitment to
organization and reduces employees’ intent to
turnover (Jaramillo, et al. 2006). Similarly, another
study explored that there were significant association
between ethical climate and high- level of
commitment and lesser turnover intentions (Sims and
Kroeck 1994). One of the major components of any
organization was organizational culture that acts as
mediation among employees and organization,
promote trust and positive expectation, and boost
organizational commitment. Therefore, it was
considered important to influence employees and
utilize their capacities to achieve desired objectives
(Khoung and Nhu 2015). Latest studies has been
examined the organizational culture played important
role on employees’ intention to leave and as well on
satisfaction (MachIntosh and Doherty 2010). Many
researchers argued that the organizational culture and
organizational commitment were likely related with
each other. Furthermore, employee’s efforts in
performing organizational tasks along with commit
were directly powered by organizational culture. Thus,
the good compatibility between organization’s culture
and individual tends to longer relationship and the
commitment was stronger in case of employee’s
working in strong organizational culture (O'Reilly, et
al. 1991). Similar results were evident in numerous
previous studies that attempted to examine the
relationship between organizational culture and
employee’s organizational commitment.
RESEARCH MODEL
Ethical
Leadership Employee
Employee
Organizational
Sociability
Commitment
Organizational
Culture
HYPOTHESIS
H1: There is considerable and positive association of
ethical leadership and employee organizational
commitment
H2: There is considerable and positive association of
organizational culture and employee
organizational commitment
H3: Employee sociability significantly mediates
association of ethical leadership and employee
organizational commitment
H4: Employee sociability significantly mediates
association of organizational culture and
employee organizational commitment
METHODOLOGY
Study is intended to enlighten the relationship of
ethical leadership and culture of organization on
organizational commitment being mediated by
employee sociability.
Questionnaire
In order to explore the relationship of understudy
variables (Ethical leadership, organizational culture,
organizational commitment, employee sociability)
survey method is adopted. To collect the responses
questionnaire is used. There are two sections of
questionnaire: Personal details and questions about
variables understudy. All the questions were adopted
from prior studies. 5 items scale to measure
organizational commitment was .For the
measurement of organizational culture 4 item scale
used (Khan, et al. 2011), ethical leadership measured
by using 15 item scale and employee sociability
measured by using 10 items scale (Kreijns, et al. 2007).
5 point Likert scale has been adopted for responses
ranging from 1 “Strongly disagree to 5 “Strongly
agree”
Data collection
By using thumb rule (heir et al., 2010) we selected our
sample size. In accordance with thumb, rule questions
are multiplied by 10 then you will get your sample
size. Our sample size is 290 employees of
pharmaceuticals in Gujranwala. Initially list of pharma
companies obtained from internet then we contacted
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their HR mangers. After knowing number of Ethical 10 .783, .525,
employees by using simple random sampling, we Leadership .783, .741,
selected 290 employees. Questionnaires were .709, .846,
dropped to employees and after 1 and half week, .716, .817,
questionnaires were collected. .865, .872
Demographics Organizational 5 .732, .888,
Study conducted in Pharmaceutical sector. Commitment .833, .756,
Questionnaires were distributed in pharmaceuticals .789
employees, out of 290 questionnaires, 250 .765, .825,
Employee 10
questionnaires were valid. Out of 250 responses, .788, .729,
Sociability
there were 203 men and 87 women 70% and 30% .757, .855,
respectively. Most of the respondents were belong to .731, .715,
age group 26-45 and their percentage is 44%. .895, .892
Remaining respondents belong to age group of up to Employee 4
25, 46 to 55, and 55+ their percentages are 20%, 25%, .782, .852,
Organizational
and 11% respectively. Furthermore, most of the .789, .785
Culture
respondents hold Bachelors’ degree and their Above mentioned table 2 is describing factor loadings.
percentage is 55%. Remaining respondents belong to It is obvious in the table that all factor loadings are
masters’ degree and other educational degrees’ their greater than 0.7. Most of the values are reliable.
percentages are 30% and 15% respectively. 50%, 33%, Table. 3: Psychometric Analysis (Reliability and
and 17% of the respondents were doing their job as Validity)
permanent, contractual, and other categories of job.
CR AVE EL OC ES EOC
18% of the respondents have up to 1 year of
0.88 0.55 0.80
experience, 48% have 2 to 5 years of experience, 20 %
EL 2 1 1
have 5 to 10 year of experience and 14 % have more
0.85 0.65 0.22 0.73
than 10 year of experience.
OC 5 4 5 1
RESULTS
0.87 0.68 0.25 0.33 0.82
Table.1: Descriptive and Correlations
ES 0 0 0 5 1
Constru Mea SD α 1 2 3 4
EO 0.88 0.66 0.45 0.22 0.32 0.81
ct n
C 3 3 0 7 2 1
EL 3.7 .6 .7 --
8 0 2 Table 3 is describing psychometric analysis.
OC 3.9 .6 .7 .540 -- Psychometric analysis confirms the convergent and
**
0 5 0 discriminant validity. As composite reliability is more
ES 3.8 .5 .7 .580 .529 -- - than 0.8 and AVE is more than 0.5 ensures that model
** **
2 5 8 - has convergent validity. Square root values of AVE are
EOC 4.0 .7 .7 .603 .538 .620 - greater than the correlational values ensures that
** * *
2 2 3 - model has discriminant validity.
Table 1 is representing Mean, standard deviation, Table.4: Fit Indices for CFA & SEM
alpha values, and correlational values for the variables Fit Indices CFA SEM
under study. Ethical leadership is positively and Chi-square/df 2.98 2.88
considerably linked with organizational culture,
employee sociability and employee organizational
commitment valued at .540, .580, and .603
respectively. All other variables are correlated with GFI 0.90 0.92
each other. Highest correlation is found between AGFI 0.89 0.895
employee sociability and organizational commitment CFI 0.90 0.92
which is valued at .620. RMSEA 0.05 0.058
Table. 2: Factor loadings
Constructs Items Factor
Loadings
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Table 3 showing fit indices for CFA and SEM. Value of
GFI is more than 0.9, AGFI is more than 0.8, CFI is
more than 0.9 and RMSEA is less than 0.1 both for CFA
and SEM. As all the values are under the acceptable
range both for CFA and SEM. Values of confirmatory
factor, analysis (CFA) provided support for
measurement model.
Table.5: SEM regression analysis
Estimate S.E. C.R. P relationship strength after mediation. Statistical
EOC <--- EL .659 .080 .007 .000
EOC <--- OC .687 .076 .315 .000
EOC <--- ES .745 .067 .325 .000
Table 5 is describing the Regression estimates,
standard error, critical ratio, and p values for
independent variables impact on dependent variable.
Results indicated that ethical leadership is positively
and considerably (p< 0.05) linked with employee
organizational commitment (β= .659). Thus, it
provided support for H1. Furthermore results
enlightened that organizational culture positively and
significantly (p< 0.05) impacts employee
organizational commitment (β= .687). Thus, it
provided support for H2. Furthermore, strong impact
of employee sociability on employee organizational
commitment is found valued at .745.
Table.6: Path analysis
Relation Direct Indirect Total
Effect Effects Effects
EOC <-- ES <-- EL .19* .31* .45*
EOC <-- ES <-- .25* .29* .40*
OC
*p<0.05, **p<0.01, ***p<0.001
Table 6 is representing path analysis of variables
under study (Ethical leadership, Organizational
culture, Employee sociability, employee organizational
commitment). Direct, indirect, and total effects are
there to elaborate the relationship directions. Direct
impact of ethical leadership on employee
organizational commitment is valued at .19 (p< 0.05),
while total impact is valued at .45 (p< 0.05) which
greater. It is indicating that impact of ethical
leadership on employee organizational commitment
became stronger after mediation of employee
sociability. Thus, it supported hypothesis H3. Direct
impact of organizational culture on employee
organizational commitment is valued at .25 (p< 0.05),
while total impact is valued at .40 (p< 0.05) which
greater. It is indicating that impact of organizational
culture on employee organizational commitment
became stronger after mediation of employee
sociability. Thus, it supported hypothesis H4.
DISCUSSION
Purpose of current study is to examine intensity and
direction of how ethical leadership and organizational
culture impacts employee organizational
commitment. Furthermore, employee sociability is
considered as the mediator to observe the
analysis of the study pointed out that ethical
leadership significantly and positively effects
employee organizational commitment. Results also
enlightened that organizational culture also impacts
employee organizational commitment. With regard to
mediation, it is proved by statistical analysis of current
study that employee sociability is significant mediator
between relationship of ethical leadership,
organizational culture, and employee organizational
commitment. Our results are in consistency with
previous studies (khoung and nhu 2015; jaramillo, et
al. 2006; O'reilly, et al. 1991). Values of employee
sociability and employee organizational culture are
higher which enlightened strong relationship and in
line with previous study which argued, that
organizational commitment is effected by person-
organization fit (kreijns, et al. 2007).
Results of current study enlightened a need to
understand the ethical leadership in every aspects of
life either social or professional. It is known fact that
leader is role model for its followers they look toward
him they believe him what he says. If leaders is
adhering the norms and standards followers will pay
their full attention to him, they will devote their selves
toward him. Moreover followers’ extraversion,
creativity will be enriched. When adhering to norms,
in case if leader himself violates he must held him
accountable. In an organizational perspective author
(khoung and nhu 2015) suggested that negative
behaviors must be punished while the positive ethical
behaviors must be rewarded.
CONCLUSION
All stated objectives of study have been achieved.
Somehow, there are some limitations and future areas
for further consideration. In future comparative study
of different working conditions and different cultures
could be conducted, that will provide in depth
understanding about how much ethical leadership
influences employee organizational commitment.
Other leadership style like authentic leadership which
is inclusive of ethical leaderships’ dimensions
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(walumbwa, et al. 2008) that may provide better Goldstein, Ellie JC, Diane M. Citron, C. Vreni Merriam,
results. Yumi A. Warren, Kerin L. Tyrrell, and Helen T.
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Publication Date: Jun-30 -2016

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