LITERATURE REVIEW 1
Abstract
The ability to set a good example is a valuable trait in a leader. Ethical leaders should understand
that their actions will speak volumes about their credibility as ethical leaders. A person’s actions
speak louder than words when it comes to making an impression. Ethical leaders may start to
gain the respect of colleagues and followers, modeling honest, ethical, and selfless conduct for
their subordinates. A leader who treats people with dignity and honesty may inspire stronger
loyalty from their followers. Ethical leaders, among other things, are responsible for emphasizing
the significance of ethics in the larger context of society, not just organizations.
LITERATURE REVIEW 2
Literature Review: Ethical Leadership
A leader is a crucial part of the management function since they direct the organization to
achieve its goals and realize its mission. Therefore, an organization would not achieve its
objectives and targets without ethical leadership. An effective leader is vital in human resources
since they link management and workers (Le & Lei, 2018). Hence, as a bridge, they must ensure
the working surroundings are favorable by communicating the needs of the workforce with top
management. Additionally, they should be role models to subordinates by practicing what they
preach and expect. Ethical leadership is crucial in an organization since it ensures that it has the
right and ethical personnel suitable to its mission and objectives.
The success or failure of a business depends on the leadership. In this case, the leadership
style and traits of the leader are vital in ensuring that the organization will succeed. According to
Potipiroon & Faerman (2016), ethical leadership “the demonstration of normatively appropriate
conduct through personal actions and interpersonal relationships, and the promotion of such
conduct to followers through two-way communication, reinforcement, and decision-making.”
Ashfaq, Abid, & Ilyas (2021) and Alshehhi et al. (2021) agree that ethical leaders have a
significant influence on employee performance. Thus, personal actions are crucial determinants
of ethical leadership. A leader is key in the creation of an organization’s vision. Vision is crucial
since it acts like a roadmap charting what the business will do in order to achieve its objectives
and targets. In addition, ethical leadership requires a vision to identify the resources needed by
the company to reach its desired state. Generally, organizations need a uniform source of
information to remove ambiguity and confusion. Thus, the role of the leader is to communicate
the organization’s vision, mission, and other things (Ashfaq, Abid, & Ilyas, 2021). Clear
communication is of paramount importance to the successful implementation of the mission and
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vision statements (Huang & Paterson, 2017). Therefore, leaders initiate action when they
communicate policies and plans to the workforce. Leadership is essential since they create
confidence and motivate subordinates. Leaders enhance motivation through positive or negative
reinforcements. As AlShehhi et al. (2021) point out, positive reinforcement rewards foster
positive behavior among employees and improve overall performance. Ethical leadership creates
a work environment that promotes personal and organizational growth.
Positive workplace culture plays a substantial part in the ability of a firm to attract and
retain employees. Integrity has been found to contribute positively to employee performance
(Wahyuni & Syamsir, 2020). The surroundings should be conducive to employees and ensure
they work in the best possible conditions that encourage them to commit to the company. An
ethical leader promotes this by leading with integrity. In addition, it increases productivity and
lowers turnover. This is because workers feel happy and excited to report to work. Happy
employees create a contagious culture that helps position the organization positively in the eyes
of its customers (Gaji, Kassim, & Raju, 2017; Engelbrecht, Heine, & Mahembe, 2017). In
contrast, a negative work environment is toxic and lowers productivity. The atmosphere of the
working environment affects the stakeholders of the organization. The attitude of the workers
can easily be picked up by buyers through verbal and nonverbal cues. Therefore, leaders should
ensure that the working environment is positive since it has a direct and indirect impact on the
stakeholders of the business (Le & Lei, 2018). A leader can achieve this environment through
approaches such as teaching ethical values. If all the employees are aware and abide by ethical
values, the organization can eliminate a hostile working environment.
A conducive work environment contributes significantly to the company’s ability to
appeal to and keep quality staff. An organization can create a friendly environment through its
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leadership style and approach to issues. Halbusi, Ismail, & Omar (2021), in their study, showed
that attitude in the workplace could be directly or indirectly attributed to leadership. Leaders
should demonstrate humility in the workplace to ensure that it is conducive. A leader should
always learn to be humble and give credit to people responsible for their success. In their study,
Gaji, Kassim, & Raju (2017) argued for the importance of integrity. An ethical leader leads with
integrity and humility. However, applying arrogance and thinking of themselves as untouchable
would be the beginning of their downfall. Humility is an essential trait for all leaders, especially
during periods of success.
The ethical leader can create and maintain a positive organizational culture through
selflessness. However, this is often hard in contemporary organizations since most people pursue
their self-interest. A selfless leader motivates similar patterns among the subordinate staff (Gaji,
Kassim, & Raju, 2017; Halbusi, Ismail, & Omar, 2021). Trust and selflessness in leadership are
crucial in creating a positive workplace environment. Leadership can create a hospitable
environment through their selfless acts and other attitudes that subordinates can emulate (Huang
& Paterson, 2017). A leader can demonstrate selflessness and trust through decision-making. In
most cases, leaders lack trust in the abilities and contributions of subordinates regarding the
decisions of the organization. Thus, they do not pay due attention to the contribution of the other
employees. If the boss calls all the shots, the subordinates may pick up on the attitude and apply
it to other decisions regarding the organization. The ethical leader should try as much as possible
to include others in decision-making. The inclusion makes the employees feel valued and
recognized, increasing their cooperation and commitment to the process.
An ethical leader has the responsibility to train and empower the workers. Training is
about encouraging employees to fill their knowledge and skills gaps in readiness for future
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opportunities. In such a case, the leader can maximize the productivity of the workforce by
offering them training opportunities. The training opportunities should fill the skills gap and
prepare the identified persons for a future leadership position. According to Viitala, Kultalahti, &
Kangas (2017), ethical leaders should prepare for the future by ensuring that they identify future
leaders. The authors argue that it is possible to recognize employees with leadership potential by
creating effective systems internally. If an employee has a skills gap in areas such as processes,
customers, and markets, the leader should present them with training opportunities (Huang &
Paterson, 2017). A study by Engelbrecht, Heine, & Mahembe (2017) affirms, “Because
employees are more likely to engage in their work if they are drawn upon themselves to perform
their roles, trust on the part of management is essential. Excessive monitoring and enforcement
from management can hamper employees’ tendency to engage in their work.” According to their
argument, leaders should train and develop their employees to prevent micromanagement.
Excessive monitoring of employees originates from a lack of trust in their abilities. Ethical
leadership avoids such occurrences by ensuring that employees are ready to handle
responsibilities independently or with minimal supervision. This is a continuous learning process
actualized through the creation of development programs to empower workers.
The work of Engelbrecht et al. (2017) explored work engagement and trust as part of
ethical leadership. As stated above, employers can develop leaders internally by empowering
employees through training and developing teamwork and decision-making capabilities. The
human resource department should increase the value and contribution of an employee by
empowering their ability to work in a team and make decisions. It is of paramount importance
that a leader should demonstrate skills in teamwork (Wahyuni & Syamsir, 2020). This is because
leaders generally lead teams such as departments comprised of individuals with different
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attitudes, personalities, and cultures. Therefore, teamwork is a necessity for leaders. A leader
should have decision-making capabilities independently but often in consultation with others.
For this reason, they should empower future leaders with the ability to choose the best course of
action for the organization. Generally, major decisions require input from the departmental or
organization’s leader. In addition, such a leader should be able to solve problems by creating
thoughtful solutions.
In most cases, organizations look for employees with technical and leadership skills.
Generally, promotional opportunities come with increased responsibility for decision-making
and problem-solving. All these are trainable. Despite such training, Chughtai, Byrne, & Flood
(2015) argue that trust plays a crucial role in ethical leadership. Trust improves the well-being of
employees and how they relate to the organization. Strategic human resource management is
vital in employee promotion since it is their responsibility to ensure that the individual receives
suitable training and support for the position (Viitala, Kultalahti, & Kangas, 2017). Leadership
positions come with certain expectations and responsibilities that can dictate the success or
failure of the business. The department provides support to ensure a smooth transition into the
new management level for the employee. In this case, support can be in the form of training in
people or interpersonal skills to empower the promoted worker with skills to communicate and
interact with others at their level or lower levels. Therefore, the promotion system can help
develop leaders internally since it is competitive, and the management makes the process open
and fair to all parties.
Justice is a crucial element in ethical leadership. Generally, leaders should always ensure
that they act according to the mandates of the government. The government is a key player in the
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employer-employee relationship. Therefore, they must always demonstrate mastery of laws and
regulations related to the industry and employees during development and other opportunities.
Leaders are obligated to offer promotion and training programs equally regardless of perceived
differences. According to Potipiroon & Faerman (2016), “Organizational justice is generally
concerned with perceptions related to three types of fairness: fairness related to outcomes
(distributive justice), fairness related to formal procedures used to derive the outcome
(procedural justice), and fairness related to interpersonal treatment from organizational
authorities (interactional justice).” Interpersonal justice is key in ethical leadership. This is
because it entails treating others with respect and dignity (Potipiroon & Faerman, (2016).
Employees who feel they have been unfairly overlooked for training and promotion can be less
engaged and committed to the organization. Leaders should make the process fair and public to
reduce resentment and dissatisfaction in the workplace. Although an employee can choose to
seek a legal course of action, the outcome would make the workplace hostile. Anti-
discrimination laws are part of the knowledge essential to ethical leadership.
Conclusion
The success or failure of an organization depends on its leadership. The leader
communicates the vision and directs the subordinate employees toward the mission and vision of
the organization. As a result, it is crucial for them to be ethical. Ethical leaders should empower
employees, which can be achieved through training and development. As a result, this enables
the organization to save on costs that could have been used to recruit and train newbies.
Knowledge of anti-discrimination laws and affirmative action plans ensures a leader provides
equal opportunities for all, regardless of group affiliations. Discrimination leads to an increase in
turnover rate and lowers retention of top talented employees. Therefore, ethical leaders should
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aim to create and sustain a great work environment attitude by empowerment and leadership
development in the organization. Ethical leadership would immensely help shareholders. The
moral climate of a business cannot become better without strong leaders. A leader has the ability
to comfort interested parties that the enterprise is a good performer and deserves to receive
substantial investment. A customer is likelier to develop and maintain loyalty to the corporation
if they see ethical managers. As with employees, partners and suppliers will feel more
comfortable working with a company if they see it display ethical leadership. Thus, this can help
avoid scandals just like Enron.
LITERATURE REVIEW 9
References
AlShehhi, H., Alshurideh, M., Kurdi, B. A., & Salloum, S. A. (2021). The impact of ethical
leadership on employees performance: A systematic review. In Proceedings of the
International Conference on Advanced Intelligent Systems and Informatics 2020 (pp.
417-426). Springer International Publishing.
Ashfaq, F., Abid, G., & Ilyas, S. (2021). Impact of ethical leadership on employee engagement:
role of self-efficacy and organizational commitment. European Journal of Investigation
in Health, Psychology and Education, 11(3), 962-974.
Chughtai, A., Byrne, M., & Flood, B. (2015). Linking ethical leadership to employee well-being:
The role of trust in supervisor. Journal of Business Ethics, 128(3), 653-663.
Engelbrecht, A. S., Heine, G., & Mahembe, B. (2017). Integrity, ethical leadership, trust and
work engagement. Leadership & Organization Development Journal, 38(3), 368-379.
Gaji, M. B., Kassim, R. N. M., & Raju, V. (2017). Integrity, Trust and Nigerian Banks’
Employee Engagement. International Journal of Business Management and Economic
Research, 8(4), 982-986.
Halbusi, H. A., Ismail, M. N., & Omar, S. B. (2021). Ethical leadership and employee ethical
behaviour: exploring dual-mediation paths of ethical climate and organisational justice:
empirical study on Iraqi organisations. International Journal of Business Governance and
Ethics, 15(3), 303-325.
Huang, L., & Paterson, T. A. (2017). Group ethical voice: Influence of ethical leadership and
impact on ethical performance. Journal of Management, 43(4), 1157-1184.
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Le, P. B., & Lei, H. (2018). Fostering knowledge sharing behaviours through ethical leadership
practice: the mediating roles of disclosure-based trust and reliance-based trust in
leadership. Knowledge Management Research & Practice, 16(2), 183-195.
Potipiroon, W., & Faerman, S. (2016). What difference do ethical leaders make? Exploring the
mediating role of interpersonal justice and the moderating role of public service
motivation. International Public Management Journal, 19(2), 171-207.
Viitala, R., Kultalahti, S., & Kangas, H. (2017). Does strategic leadership development feature in
managers’ responses to future HRM challenges? Leadership & Organization
Development Journal.
Wahyuni, R. S., & Syamsir, S. (2020). The Influence of Integrity and Human Resource
Management towards Employee Performance. International Journal of Research and
Analytical Reviews (IJRAR), 7(1), 780-785.
