The role of authentic leadership and ethical leadership in an organisational setting - predictors for ethical climate, organisational citizenship behaviour, affective organisational commitment and in-role performance

The purpose of this study was to investigate the direct and indirect effects of leadership behaviours on organisational outcomes within the context of organisations from the private industry sector in Australia. Specifically, this study was interested in examining the influence of authentic leadership and ethical leadership on perceived ethical climate, subordinates’ organisational citizenship behaviours, affective organisational commitment, and in-role performance. A conceptual research framework was developed and several hypotheses were postulated and tested. Potential moderating and mediating relationships that could explicate the relationship between authentic leadership and organisational outcomes were assessed.

This thesis applied a survey methodology to gather quantitative data from medium to large size organisations in the private sector in Australia. These organisations were identified as workplaces that are committed to delivering an ethical and innovative work environment, good leadership practices and good culture according to an annual industry survey conducted by the Business Review Weekly. The sample comprised a total of 112 fulltime employees from various job levels. The questionnaire comprised of Authentic Leadership Questionnaire, Ethical Leadership Scale, Ethical Climate Questionnaire, Organisational Citizenship Behaviour Questionnaire, Affective Organisational Commitment Questionnaire, and In-role Performance Questionnaire.

The thesis revealed several substantive findings. First, the study found that each leadership construct, authentic leadership and ethical leadership, had unique and positive effects on follower criterion variables. Authentic leadership was significantly and positively related to ethical climate, organisational citizenship behaviours, affective organisational commitment and in-role performance. Ethical leadership was also significantly and positively related to ethical climate, organisational citizenship behaviour, affective organisational commitment and in-role performance. Second, this study revealed that ethical climate mediated the relationship between authentic leadership and organisational citizenship behaviour. Subordinates demonstrated higher levels of organisational citizenship behaviours when authentic leadership was supported by a perceived ethical climate. In addition, this study showed that ethical climate mediated the relationship between authentic leadership and in-role performance. Subordinates exhibited higher levels of in-role performance when authentic leadership was supported by a perceived ethical climate. Third, this study demonstrated that ethical leadership moderated the relationship between authentic leadership and organisational citizenship behaviour and the relationship between authentic leadership and subordinates’ performance.

This thesis proposes several theoretical and managerial implications. First, the study expands our understanding of the unique and direct effects of both authentic leadership and ethical leadership, examined through an integrative model of both leader behaviours in explaining various organisational outcomes. Second, the integrative examination of both leadership constructs advances our theoretical understanding of the ability of ethical leadership to complement authentic leadership behaviours in impacting organisational outcomes. Third, this study adds to our theoretical understanding of the mediation mechanisms of ethical climate in the explanation of the effectiveness of authentic leadership behaviour. Finally, and relating to managerial implications, the study highlights the importance of developing and cultivating authentic leadership behaviours and ethical leadership behaviours in the workplace to attain positive organisational outcomes.