31 Journal of Knowledge Globalization, Vol. 4, No. 2 Developing Ethics at the Workplace through Transformational Leadership: A Study of Business Organizations in India Kavita Singh University of Delhi Delhi, India Abstract In order to effectively respond to the age of rapid changes in the environment, a new kind of leaders hip is needed that enables organizations to transform themselves and to cope with the changes . This new brand of leaders must have the ability to help the organization develop a vision of the full potential , to mobilize the organization to accept and work towards achie ving the new vision, and to institutionalize the changes that must last over time. These new leaders are called transformational leaders as they create something new out of something old. A transformational leader is expected to exhibit a high level of eth ics that raises the followers’ trust and commitment and thus result in increased level of performance. With these considerations, the current paper sets out to examine the relationship between the dimensions of transformational leadership and ethics at workplace in India n business organizations. The results suggest that transformational leadership and its dimensions are significantly related to ethics at workplace. We find that in order to raise the level of ethics at workplace, the leaders of organizations need to practi ce and apply the dimensions of transformational leadership -especially by developing and articulating a vision, providing individualized support, and acting as role models. Keywords: Transformational leadership, ethics, Indian business organizations Int roduction A large number of business scandals in major businesses in the last few years have become a matter of serious concern for government and business leaders and also for private citizens. The spread of the ethical problems is wider than it is comm only perceived. Problems have arisen every where, whether it is in the family, the government, the workplace or the society at large ( Ethics 32 Singh : Develop ing Ethics at the Workplace through Transformational Leadership Education in Business Schools , 2004). This has led to the realization that effective changes are needed for value b ased ethics in business in the world . Aronson (2001) discusses the requirements of the business leaders to demonstrate ethical behavior which he says “may essentially be described as behavior which is good as opposed to bad or right as opposed to wrong.” It is also suggested that organizational effectiveness is enhanced in the presence of a transformational leader who can lead the organization to follow ethical behavior (Mendonca, 2001). The need for ethics at workplace in business has become mandatory a nd an effective leader can facilitate it more effectively. Kouzes and Posner (2002) argues , “To effectively model the behavior they expect of others, leaders must first be clear about their guiding principle….
leaders are supposed to stand up for their beliefs, so they’d better have some beliefs to stand up for .” In the context of this statement, the present paper seeks out to examine the predictive relationship between transformational leadership and ethics at workplace in the business organizations in India. Transformational Leadership In order to effectively respond to the age of rapid changes in the environment, a new kind of leadership is needed that enables organizations to transform themselves and to cope with the changes (Tichy and Ulrich, 1984). This new brand of leaders must have the ability to help the organization develop a vision of what it can be, to mobilize the organization to accept and work towards achieving the new vision, and to institutionalize the changes that may last over tim e. These new leaders are called transformational leaders as they must create something new out of something old i.e. out of an old vision, they must develop and communicate a new vision and get others not only to see the vision but also to commit themselve s to it. Therefore the demands of this changing environment present a complex set of challenges and requires a shift in focus and emphasis for organizational leaders (Dess and Picken, 2000). The role of transformational leaders, therefore, is vital in the current environment where the rules of the game are rapidly evolving. In their study of the light infantry rifle platoon leaders of the U.S army, Bass (2003) showed that in an environment where knowing what to do, when to do it, and with whom, transaction al leadership predicts performance, whereas in an environment where responding creatively to unique and unexpected contingencies, knowing what its members’ strengths and weakness are, and sustaining performance by inspiring higher levels of motivation, tra nsformational leadership predicts performance. 33 Journal of Knowledge Globalization, Vol. 4, No. 2 Effective leadership requires the members to know how well they are doing, thereby determining a vision for the future which constitutes strategic thinking to develop the ability to focus on external factors and the people served (Stanley, 2004). Boverie and Kroth (2001) suggest that there are three keys to creating passion in the workplace and thereby stimulating transformational leadership . T hey are a) love of work, b) meaningful work and c) a nurturing workplace. Burns (1978) defined transformational leadership as the process of pursuing collective goals through the mutual achievement of the leaders’ and followers’ motives. Therefore both the leader and the followers raise one another to higher levels of morality and motivation. Bennis and Nanus (1985) define transformational leaders as those who are able to achieve significant change by their capacity to understand the aspiration of the followers and encourage them to achieve the common goal by raising the level of motivation of both leaders and followers. Bass (1985) defines them as leaders who motivate followers to perform beyond their current level of performance for the achievement of higher level needs. Dvir et al. (2002) define it as influencing followers by “broadening and elevating followers’ goals and providing them with confidence to perform beyond the expectation specified in the implicit or explicit exchange agreement.” Tichy and Ulrich (1984) define transformational leadership from the change perspec tive and describe it as involving dramatic organizational changes including the development and implementation of a vision. Transformational leaders help to realign the values and norms of their organization, and when necessary, to accommodate and promote both internal and external change. All the authors agree that transformational leaders are able to derive commitment, loyalty and involvement from the followers and motivate them to a higher level of performance and the achievement of higher level goals by connecting individual and collective needs. In this manner transformational leaders are able to achieve a positive transformation of both the organization and organizational members. They encourage followers to believe in themselves and in their mission and to accomplish goals that followers would not have normally accomplished. Transformational leadership has a significant impact of the behaviors of the members of the organization. In the presence of transformational leaders, the team members are empo wered and they develop the ability to think and act 34 Singh : Develop ing Ethics at the Workplace through Transformational Leadership independently. This process helps to reduce the barriers to the sharing and utilization of knowledge across organizations (Garcia -Morales et al., 2007). Transformational leaders also establish a clear un derstanding of the link between the tasks and values of the team members with the vision and values of the organization that helps to enhance the motivation of the individual members (Wolfram and Mohr, 2009). Ayoko & Callan (2010) suggest that an inspirat ional, enthusiastic, and animated communication of organizational vision by the transformational leaders enhances the cohesion of the team. The ability of these leaders to use image -based messages as well as the ability to incorporate organizational goals into a compelling vision of the future has an apparent connection with team performance (Colbert et al., 2008). Rafferty and Griffin (2006) propose that a transformational leader exhibits a high level of ethics and act accordingly which raises the follower s trust and commitment resulting in increasing the level of performance. Successful Transformational Leaders Although the concept of transformational leadership has come into discussion recently, individuals have demonstrated the characteristics of this form of leadership for many years. According to Yates (2002), during the late 12 th and early 13 th centuries one transformational leader who united fiercely independent Mongol tribes and ultimately created one of the largest land empires ever seen was Genghis Khan. In the business world, Lou Gerstner of IBM, Iacocca of Chrysler, and Ratan Tata of the Tata Group have also been mentioned as successful transformational leaders. Benefits of transformational leadership According to Berson and Avolio (2004 ) transformational leaders are able to implement strategies more effectively. Since these leaders are able to communicate effectively, the subordinates are more aware of the goals and objectives of the organizations. Transformational leadership has a posit ive impact on the perception of effective communication. This relationship applies to all three facets of communication i.e., listening carefully, speaking precisely, and seeking contributions (Berson & Avolio, 2004).
Transformational leadership is also as sumed to elevate the self -efficacy of employees’ i.e., employees are more inclined to feel that their efforts will translate into improvements or changes in performance (Shamir, House, & Arthur, 1993). Lyons and Schneider (2009) discuss that self -efficacy to complete a task did increase if the leader demonstrated a transformational style. Kara et al. (2007) showed that transformational leadership is related to a sense that work is meaningful which brings about the positive affective state.
Further, transfo rmational leadership assumes that work activities and roles are 35 Journal of Knowledge Globalization, Vol. 4, No. 2 congruent with personal values and this sense of congruence directly brings about the high performance of the followers (Jung & Avolio, 2000). Pillai et al . (1999) contend that trust and procedural justice affect the relationship between transformational leadership and organizational citizenship. Transformational leadership also represents sensitivity to values and emotions and this sensitivity could manifest as an index of trust. Followers who trust leaders become more engaged in their work, applying their intuition and values rather than vigilantly monitoring the responses of leaders. Transformational leadership is positively associated with a sense of em powerment, and this empowerment is related to commitment (Avolio et al, 2004). Transformational leaders are able to present inspiring and distinct opportunities for the followers. As these opportunities are specific and thus processed clearly, they are per ceived as more plausible thus increasing confidence of the followers. The benefits of transformational leadership can partly be ascribed to improvements in human resource management. Human resources are found to have profound impact on the relationship b etween transformational leadership and measures of workplace performance (Zhu et al , 2005 ). These human resource practices include performance appraisal, staffing, training, and compensation. For example, when transformational leadership was elevated, init iatives such as documentation of plans as well as coordination of recruitment criteria or training programs with workplace strategies were more prevalent. Transformational leadership has been also found to have significant and positive impact on diverse teams. Kearney & Gebert, (2009) illustrated that transformational leadership might be especially effective when teams are diverse. Transformational leadership might inhibit the drawbacks of diversity and instead enable the benefits to surface. It has been found that when leaders engaged in transformational behaviors, diversity was increasingly likely to enhance, rather than impede, team performance. Specifically, diversity was related to a sense of identity with the team and elaboration of information, but only when levels of transformational leadership were elevated (Kearney & Gebert, 2009). Transformational leaders raise the performance expectations of their followers (Bass, 1995) and “seek to transform followers’ personal values and self – concepts, and m ove them to higher level of needs and aspirations” (Jung, 2001). The determinants of innovation and creativity like vision, autonomy, encouragement, recognition and challenge have compatibility with the traits of effective transformational leader (Elkins and Keller, 2003). Transformational 36 Singh : Develop ing Ethics at the Workplace through Transformational Leadership leaders also help the followers develop a high level of self -efficacy thereby leading to high creative performance (Mumford and Gustafson, 1988; Redmond et al., 1993). Employees with enhanced self -efficacy are more likel y to be motivated to generate novel ideas and solutions. Emotional attachment with the followers (Bass, 1990) may also act as creativity enhancing force which is likely to lead to higher levels of creativity (Hunt et al., 2004). Organizational innovation is the creation of valuable and useful new products or services within an organizational context (Woodman et al., 1993). Leaders’ use of inspirational motivation and intellectual stimulation is critical for organizational innovation (Elkins and Keller, 200 3). Transformational leaders have a vision that motivates their followers, increases their willingness to perform beyond expectations, and challenges them to adopt innovative approaches in their work. The resulting heightened level of motivation is likely to enhance organizational innovation (Mumford et al., 2002). These are positive examples of transformational leaders but critics (Yukl, 1989) point out that the transformational leadership is not without its dark side and other flaws. Criticisms of Transf ormational Leadership Transformational leaders tend to present a picture of larger -than -life heroes – dynamic forces for change and improvement and celebrated for turning around ailing companies and launching new enterprises. However, such individuals may use their charisma to promote dangerous values, building blind fanaticism to serve their passions for power. The morality of transformational leadership has been questioned, especially by libertarians and organizational development consultants (Griffin, 2 003). One of the criticisms is that transformational leadership has the potential for the abuse of power (Hall, Johnson, Wysocki & Kepner, 2002). Sometimes transformational leaders appeal to their followers through strong emotions without taking into con sideration the effects on the followers and may not attend to positive moral values. Stone, Russell and Patterson (2003) observe that transformational leaders can exert a very powerful influence over followers, who offer them trust and respect, thereby imp acting their behaviors. Bass (1997) observes that in the absence of moral rectitude it is self -evident then that transformational leadership might be applied for less -than -desirable social ends. Yukl (1989) proposes that for every example of a positive transformational leader dem onstrating charismatic qualities (e.g., Mohandas Gandhi); there is an equally negative example (e.g., Charles Manson). It is suggested that to be truly transformational leaders must have strong moral 37 Journal of Knowledge Globalization, Vol. 4, No. 2 foundations (Griffin, 2003). Thus: “To bring about chang e, authentic transformational leadership fosters the moral values of honesty, loyalty, and fairness, as well as the end values of justice, equality, and human rights”(Griffin, 2003). Ethics at Workplace The word Ethics comes from the Greek word ethos mea ning “character or custom,” writes the philosopher Robert C. Solomon (1992). Today we use the word ethos to refer to the distinguishing disposition, character or attitude of a specific people, culture or group. One of the preferred definitions of ethics is given by Connock and Johns (1995) . “Ethics is about fairness, and deciding what is right or wrong, about defining the practices and rules which underpin responsible conduct between individuals and groups.” Therefore, “Being ethical involves taking action to ensure that these practices and rules are applied consistently in all day -to-day business situations.” So, the word “ethics” is fundamental to the very essence of who we are, burying itself deeply within our sense of values. In the Indian ethos, ethics and other values such as purity of mind, forbearance, faith, etc. are often referred to daiva sampati , or divine qualities. When they are manifested in human thought, speech and action, then that person is considered to be noble and enlightened. The term ‘Work Ethics’ is primarily used to refer to ethical attitude towards work done in the context of employment. Every employer expects efficient and diligent performance of duties assigned to the employees. Similarly employees also have rightful expec tations from the employer regarding their service conditions, their avenues for career advancement and recognition and reward for their work. Meeting these valid expectations is an ethical demand on the employer. Ethics and organizational effectiveness ar e inextricably linked. There are dramatic examples of organizations that ignore their ethical responsibilities to various stakeholders and suffer serious consequences from their failure to address ethical issues. These consequences include high (and often unexplained) turnover, poor reputations in the local communities and the inability to provide and sell products that are well respected in the market place. Attention to making ethics as a regular part of the organizational discourse can be of tangible ben efits to organization. Certainly not every company is operating far -out on the edge or beyond what would be considered proper. 38 Singh : Develop ing Ethics at the Workplace through Transformational Leadership One may question why ethics in business is becoming so important. The workplace is a collection of many different experiences a nd therefore maybe of differing ethics. Many people join a company without investigating the ethics of their employing organization closely and often find themselves at variance and out of balance when those ethics are tested. For instance, someone who bel ieves in “equality and justice for all” may have a problem working for a business whose board earns vast salaries and does not practice the values of the company. Ethics need a structure, they need a policy, a code of practice, or a cultural understanding of the rules, but this alone is not enough. They also need individuals who can differentiate between right and wrong, people who can make difficult decisions and are assertive enough to stand by the decisions they make. This often includes standing up for both themselves and others. These testing times are often the points at which company values become “flexible” and separate themselves from what may be a more transcendental approach by the individual. Other important questions are a) what role do organ izational values play b) can individuals be expected to follow “ethical” rules if they do not believe or understand them i.e. if they are not part of their own value system, or if they change from day -to-day? d) how many organizations would put ethics a bove profit e) how many companies include issues of ethics in their recruitment process or, include ethics in the training plans of their employees? It appears that having leaders who value ethical behavior as much as profit will achieve the greatest imp act on a company’s ethical standards. Businesses need to develop the kind of environment that promotes ethical development and they can only do that from the top down. A transformational leader definitely can play a significant role in enhancing ethics at workplace. Transformational Leadership and Ethics at workplace The research in the area of leadership has been going on for hundreds of years including the area of transformational leadership (Humphreys & Einstein, 2003). The concept of transformational leadership has become more important today because of its inherent focus on morality. The study of ethics and leadership can be traced back to Aristotle and the ancient Greeks. In the present context trans formational leadership has been researched extensively as compared to any other paradigm of leadership (Sivanathan & Fekken, 2002). Ciulla (2004) states that a gainst the backdrop of corporate, political, and religious scandal, a contemporary examination o f the complex and subtle relationships between ethics and leadership could not be timelier. Hood (2003) 39 Journal of Knowledge Globalization, Vol. 4, No. 2 explored a tie between leadership and values. Mendonca (2001) is of the opinion that effective leadership behavior requires the leaders to follow techn iques and processes that reflect ethical and moral values. Burns (1978) suggested that under transformational leadership, leaders “raise one another to higher levels of motivation and morality. This leadership heightens the level of human conduct and ethi cal aspiration of both the leader and the led, and thus it has a transforming effect on both”. Charnonneau (2004) suggests that transformational leaders help the followers to align their attitudes,values and beliefs with that of the organization which resu lts in improvement of performance. Krishnan (2002) opines that a transformational leader helps to uncover the contradiction among values and between values and practice, and the realigning of values in followers. Hood (2003) suggests that leaders with t heir ethical behavior contribute significantly in shaping the ethical behavior of individuals in the organization. Van der Colff (2004) suggests that transformational leadership is one of the competencies required for the leaders of the 21st century. Che n (2004) concluded that leaders affect their subordinates both directly through their interactions and also through the organization’s culture. According to Mendonca, (2001) “leaders are responsible for the organization’s moral climate Through the use of m orally appropriate influence strategies and tactics that are motivated and guided by moral intent, leaders can facilitate the moral development of followers”. This goes on to establish that transformational leadership can have significant impact on the ethics at workplace. The leader is required to intentionally take action to bring ethics to bear on followers. Ethical behavior on the part of the leader would appear to be a necessary condition for the establishment of an ethical organization, but this a lone is not sufficient. Aronson (2001) proposes that the top management of the organizations is expected to set moral examples for the members of the organization and to delineate the striving for profit from maintaining the values and ethics of the organ ization in specific and society in general. Carlson & Perrewe (1995) suggest that in order to remain competitive, many organizational leaders are faced with the challenge of creating an ethical environment within their organization. Their model discusse s the elements that are necessary for the institutionalization of ethics at workplace. The transformational leadership aids in the creation of an ethical environment and is a means to facilitate the institutionalization of corporate ethics. The benefits of transformational leadership can be understood through the components of a psychological contract, organizational commitment, and ethical culture to institutionalize organizational ethics. 40 Singh : Develop ing Ethics at the Workplace through Transformational Leadership Podsakoff, McKenzie, Moorman, and Fetter (1990), following a liter ature review concluded that TL can be summarized by six behaviors: Identifying and articulating a vision, providing an appropriate model, fostering the acceptance of group goals, high performance expectations, providing individualized support to staff, and intellectual stimulation . They concluded that a transformational leader communicates a vision, develops staff, provides support, empowers staff, is innovative, leads by example, and is charismatic.
Some companies simply go through the notions regarding bu siness ethics haphazard ly or at best by developing superficial codes of conduct (that may not apply to top management) and strategic corporate philanthropy which can result in a bottom line approach (Milton -Smith, 1995). However, some large companies have moved ahead with developing business ethics in their organizations including codes of ethics, ethics committees, and communication systems for employees to report abuses or seek guidance, ethics training programs, ethics officers and disciplinary processe s (Mendonca, 2001). A transformational leader motivates people to go above and beyond what is expected of them. He challenges the e xisting structure and helps the organization move to a future that is different from the past. Transformational leaders ar e made up of a combination of intrinsic attributes, such as charisma and drive, and social skills that are honed through life experiences. To believe and expect that the transformational leadership exists only at the level of top management is proving to b e a myth. In fact transformational leadership can be found at any level in organizations. Transformational leadership has been impressively supported at various job levels and in variety of occupations (principals, teachers, ministers, MBA Associations, un ion shop stewards, sales representatives (Shin & Zhou, 2003. One study of Canadian bank managers found that the branch managed by those who underwent transformational leadership training performed significantly better than branches whose mangers did not re ceive training (Barling, Weber and Kelloway, 1996). Since this type of leadership exists at all levels in organizations, it is likely to have impact on the overall ethical values of employees in an organization. Research Design The present study aims to investigate the relationship between the elements of transformational leadership (as suggested by Podsakoff et.al, 1990 ) and the ethical behavior at workplace in business organizations in India. 41 Journal of Knowledge Globalization, Vol. 4, No. 2 Research Hypotheses The following hypotheses have been proposed to diagnose the relationship between dimensions of transformational leadership (TL) and ethics at workplace. Hypothesis 1 : There is a positive relationship between the vision of transformational leadership and the e thics at workplace in business organization in India. Hypothesis 2 : The transformational leadership subscales, role model is significantly related to ethics at workplace in business organization in India. Hypothesis 3 : There is a positive relationship b etween the transformational leadership construct, foster acceptance of goals and ethics at workplace in business organization in India. Hypothesis 4 : There is a positive relationship between the construct high performance expectations of transformational leadership and ethics at workplace in business organization in India. Hypothesis 5 : There is a positive relationship between the TL construct individualized support and ethics at workplace. Hypothesis 6 : There is a positive relationship between the T L subscale of intellectual stimulation and ethics at workplace in business organization in India. The expected linkage between the dimensions of transformational leadership and ethics at workplace are presented in Figure 1 . In this theoretical construct the dimensions of transformational leadership are the independent variables and ethics at workplace is the dependent variable. The model proposes that for an ethical environment at workplace to evolve and prosper; transforma tional leadership has to be nurtured in the organizations. 42 Singh : Develop ing Ethics at the Workplace through Transformational Leadership Figure1: Relationship between Transformational Leadership and Ethics at the Workplace 43 Journal of Knowledge Globalization, Vol. 4, No. 2 Methodology This section discusses sample size, data collection and statistical tests used for evaluating research hypotheses. Sample A total of 500 self -administered questionnaires were distributed at managerial level in different business organizations in and aro und Delhi, India. The distribution of the questionnaire was done on the basis of suitability mostly by personal contact, e -mail and use of postal services. The concerned person was contacted through phone or email before sending the questionnaire. The resp ondents were assured of their confidentiality and were asked to respond as per the instructions given in the questionnaire. A total of 378 correctly completed questionnaire were returned The sample consisted of 102 (27%) females and 276 (73%) males. About a quarter -26% respondents were in the age group of 21 -25 years. 32 % were in the 26 -30 years age category and 22% were in 31 -35 years of age. The rest of the respondents were more than 35 years of age. About half of the respondents (53 %) were married . While drawing on the experience profile of the respondents it was observed that 5% had an experience of 5 -15 years, followed by 25% with an experience of less than 5 years , while 70 % had an experience of 15 -25 years. Procedure The present study used s tandardized scales or survey instruments to collect primary data. These scales were adapted and customized to suit the study undertaken. In order to customize the measurement instrument, a pilot survey of 32 respondents was conducted in the initial phase. The sample was chosen on the basis of convenience sampling and represented managers working in various departments of different organizations. The responses were carefully reviewed and analyzed and as per the results subsequent changes were made in the que stionnaire so as to adapt them to the present study. The final questionnaire consisted of three parts: A demographic section for personal information, measurement of transformational leadership, and ethics at workplace. Transformational Leadership Transformational leadership was measured using a twenty three item questionnaire (Podsakoff et.al. , 1990 ). Six basic dimensions of the 44 Singh : Develop ing Ethics at the Workplace through Transformational Leadership transformational leader are profiled by this self -assessment instrument e.g. articulate vision, provide appropriate model , foster acceptance of goals, high performance expectations, individual support, and intellectual stimulation. A high score reflects a relatively high behavioral orientation of each of these behaviors. On the basis of a pilot survey , the final questionnaire consisted of 23 items. The remaining items were considered redundant for the present study and hence were not included in the final questionnaire. The dimensions of transformational leadership assessed by this scale were as follows: 1. Identif ying and Articulating a Vision (5 Items): The items in this category related to behavior on the part of the leader aimed at identifying new opportunities for his or her unit/division/company, and developing, articulating and inspiring others with his or he r vision of the future. The items include: I have a clear understanding of where we are going; I inspire others with my plans for the future; I paint an interesting picture of the future for my group; I am always seeking new opportunities for the organizat ion or group; and I am able to get others to be committed to my dream. ( Cronbach Alpha of 0.83.) 2. Providing an Appropriate Model (3 Items): The items in this category related to the behavior on the part of the leader aimed at promoting cooperation among em ployees and getting them to work together toward a common goal. The items include: I lead by “doing,” rather than simply by “telling; I provide a good model for others to follow; and I lead by example. (Cronbach Alpha of 0.79.) 3. Fostering the Acceptance of Group Goals (4 Items): The items in this category related to the behavior on the part of the leader aimed at promoting cooperation among employees and getting them to work together toward a common goal. Examples of items are: I foster collaboration among group members; I encourage employees to be “team players”; I get the group to work together for the same goal; and I develop a team attitude and spirit among employees. (Cronbach Alpha of 0.79.) 4. High Performance Expectations (3 Items): The items in catego ry relate to the behavior that demonstrates the leader’s expectation for excellence, quality, and/or high performance on the part of followers.
Examples of items are: I expect a lot from my subordinates; I insist on only the best performance; and I will no t settle for second best. (Cronbach Alpha of 0.77). 45 Journal of Knowledge Globalization, Vol. 4, No. 2 5. Providing Individualized Support (4 Items): The items in this category relate to the behavior on the part of the leader that indicates that he/she respects followers and is concerned about their personal feelings and needs. The items include: I act after considering the feelings of others; I show respect for the personal feelings of others; I behave in a manner which is thoughtful of the personal needs of others; and I provide unconditional support to my subordinates. (Cronbach Alpha of 0.84). 6. Intellectual Stimulation (4 Items): The items in this category relate to the behavior on the part of the leader that challenges followers to re – examine some of their assumptions about their work and rethink how it can be performed. The items include: I challenge others to think about old problems in new ways; I ask questions that prompt others to think; I stimulate others to rethink the way they do things; and I provide ideas that challenge others to reexamine some of their basic assumptions about work. ( Cronbach Alpha of 0.72.) The 5 -point Likert scale (1 – Strongly Disagree, 2 – Disagree, 3 – Undecided, 4 – Agree, 5 – Strongly Agree) was used as the response category of the items. The reliability statistics Cronba ch Alpha was calculated to be 0.81 for the scale. Ethics at workplace Ethics at workplace was measured by a twenty item scale which was developed using the Charlotte McDaniel (1997) scale. All items were rated using a 5 -point scale ranging from 1 to 5, where 1 indicates ‘Strongly Disagree’ and 5 indicates ‘Strongly Agree’, with the highest score being 100 and the lowest 20. Some of the sample items of the instruments are: Equity and fairness are applied to all in my organization regardless of status or standing; Performance is assessed against objectives and standards declared upfront; My organization has a written ethical policy; The behavior of my team leader is consistent with the stated ethics and values of the organization; and My team leader balanc es the needs of business with ethical issues appropriately (Cronbach Alpha , 0.73 .). Data Analysis Pearson’s correlation was used to find the relationship between the variables. Multiple regression analysis was used to test the hypotheses. While collecting the data it was observed that there was non -willingness on the part of the executives to participate in the study for the fear of being quoted and 46 Singh : Develop ing Ethics at the Workplace through Transformational Leadership identified. Since the study was based on self -reported data, so the findings may be biased b y common method variance and spurious cause/effect inferences. The generalizations occurring from the study are more conducive and limited to a particular group of employees who participated in the study. It other words, the limitations come from the sampl ing techniques used, which is non – probability based convenience sampling. Results Relationship between the variables The correlation matrix in Table 1 shows all the dimensions of transformational leadership have a significant positive relationship with each other as well as with ethics at workplace. Articulate vision has the highest correlation with ethics at workplace f ollowed by individualized support and role model indicating that they have a strong association with ethics at workplace. The next highest is foster acceptance of goals followed by high performance expectations and intellectual stimulation . The above findi ngs can help us to conclude that among managers in Indian organizations an aptitude for transformational leadership is associated with the development and sustenance of ethics at workplace. Table 1: Pearson’s Correlation between Dimensions of Transforma tional Leadership and the Ethics at Workplace Variables Mean S.D. 1 2 3 4 5 6 7 Articulate vision 15.25 2.14 Role Model 12.00 1.55 .352** Foster acceptance of goals 12.60 1.37 .152** .222** High performance expectations 10.55 2.05 .197** .278** .387** Individualized support 12.06 1.77 .318** .282** .388** .260** Intellectual stimulation 15.28 2.25 .265** .239** .118* .397** .221** Transformational leadership 77.76 6.94 .623** .602** .543** .687** .636** .652** Ethics at work place 71.28 13.76 .469** .386** .285** .237** ..450** .152** .513** ** Correlation is significant at the 0.01 level * Correlation is significant at the 0.05 level 47 Journal of Knowledge Globalization, Vol. 4, No. 2 Multiple Regression Analysis In order to gain an insight into the relationships further between the independent and dependent variables and to identify the predictive relationships between the two sets of variables, if any, multiple regression analysis was done. From the correlation tables it can be seen that there are many significa nt linear correlation between the dimensions of transformational leadership ethics at workplace. The dimensions of transformational leadership were entered in the model as independent variables, while the ethics at workplace was the dependent variable. Th e results are depicted in Table 2. Table 2: Results of Regression Analysis Independent Variables Coefficient Std.
Error t-statistics Prob. C (Constant) -14.144 7.135 -1.982 0.048** Articulate vision 2.165 0.318 6.803 0.000** Role Model 1.620 0.409 3.956 0.001** Foster acceptance of goals 0.814 0.478 1.702 0.089* High performance expectations 0.321 0.329 0.973 0.330 Individualized support 2.085 0.369 5.637 0.000** Intellectual stimulation -0.383 0.284 -1.347 0.1785 Dependent Variable: Ethics at Workplace (N = 378) **Significant at 1%, * Significant at 5% R – Squared: 0.364; Adjusted R -squared: 0.353 F – Statistics: 35.430; Prob. (F statistics): 0.0000 Independent variables explained 36.4% of the variance of ethics at work place (F statistics = 35.430, p <.01). The contribution made by transformational leadership to ethics at workplace is not very high indicating that there may be several extraneous fact ors impacting the ethics at workplace which are not a part of the study. The result indicates that there are three dimensions of transformational leadership namely, articulate vision (p< .01), role model (p< .01), and individualized support (p< .01) which are positively associated with ethics at workplace. One of the dimensions of transformational leadership, foster acceptance of goals is also associated with ethics at workplace (p< .05). 48 Singh : Develop ing Ethics at the Workplace through Transformational Leadership The other two dimensions namely high performance expectations and int ellectual stimulation were not associated with ethics at workplace. It can be therefore proposed that out of six dimensions of transformational leadership four are directly responsible for development and sustenance of ethics at workplace in Indian busin ess organizations. Moreover the findings suggest that articulate vision and individualized support of leaders are the most important variables that explain the variance in ethics at workplace followed by role model and foster acceptance of goals. Thus hyp othesis H1, H2, H3, and H5 were confirmed. Other dimensions of transformational leadership namely high performance expectations and intellectual stimulation, however, are not significantly related to ethics at workplace. Though these are important variables of transformational leadership but the co ntributions made by them to ethics at workplace is not significant. Thus hypothesis H4 and H6, are not confirmed as their significance level is > than .05. Discussion Richard Sennett (1998) argues that the era of post -Ford flexible workplace has led to a shift in the outlook and approach of the employees. Today the culture focuses more on short -term gains which leads to the corrosion of ethics, trust, loyalty, and genuine commitment. Social relationships are more guided in terms of their utility and not the bondage. This character is ‘flexible’, ‘adaptable’, ‘open to individual nuance’ and to the ever -present change of the global market place. It is proposed that a good and a competent leader will be able to handle the nuances of the workplace in an effe ctive manner. Though the results of this study are valid for the Indian context but they need to be supported by the findings of other authors who have worked in similar areas in other parts of the world. The validation by similar type of findings will m ake the results more valid and authentic. The results of the study indicate that articulate vision is one of the important constructs of transformational leadership and is strongly related to ethics at workplace. An effective and meaningful vision create d by the leader for the employees in organizations can go a long way in enhancing ethics at workplace. Mendonca (2001) has proposed that leaders are responsible for the organization’s moral climate. A leader guided by moral vision can facilitate the moral growth and development of the subordinates and therefore the organization. Kelloway, Barling and Helleur (2000) emphasize the need to inject transformational leadership principles into training. Leaders inspire followers but the leader’s moral actions gi ve creditability to the vision. Hood 49 Journal of Knowledge Globalization, Vol. 4, No. 2 (2003) reviews that a transformational leadership style tends to encourage ethical practices in organizations but skills in defining values -based vision, communicating the vision to followers, and using power effective ly to implement the ideal , are also critical to creating ethical organizations The study also indicates that individualized support – another dimension of transformational leadership is a significant predictor of ethics at workplace.
Pounder (2003) summari zes several benefits of transformational leadership, particularly to learning including gaining of confidence, coping with stress among teams, and enhanced individual commitment to the group or organization. Transformational leadership occurs when, in the ir interactions, people “raise one another to higher levels of motivation and morality. Transforming leadership ultimately becomes moral in that it raises the level of human conduct and ethical aspiration of both the leader and the led, and thus it has a transforming effect on both” (Burns, 1978), thereby providing support to the individual members of the organization. Leaders transform and motivate followers by (1) making them more aware of the importance of task outcomes, (2) inducing them to transcend their own self -interest for the sake of the organization or team, and (3) inducing their higher -order needs (Burns, 1978; Bass, 1985). Charnonneau (2004) suggests that transformational leaders help align attitudes, values, and beliefs of followers with tho se of the organization and guide them to better their expected performance. Besides th e role model, another dimension of transformational leadership also is significantly related to ethics at workplace. Hood (2003) suggests that top managers, particular ly their ethical traits, play a key role shaping ethical behavior with individuals in the organization. Leaders use appropriate influence strategies and tactics for the moral development of their subordinates by acting as role models for them (Bass & Stei dlmeier, 1999). The CEOs should act as a moral example for the members of the organization (Aronson, 2001). Another dimension of transformational leadership – foster acceptance of goals is also a significant predictor of ethics at workplace. Mendonca (200 1) concurs that effective leadership necessitates that leader’s behavior and influence techniques reflect ethical and moral values. Charnonneau (2004) suggests that transformational leaders help align attitudes, values, and beliefs of followers with those of the organization and help them set appropriate goals to enhance theIr performance. However, other dimensions of transformational leadership were not found to be significant predictors of ethics at workplace. The variables high performance expectations a nd intellectual stimulation did not contribute significantly in the prediction of ethics at workplace. 50 Singh : Develop ing Ethics at the Workplace through Transformational Leadership Overall, the study provides evidence for the presence of transformational leadership amongst the managers in the business organization is likely to imp rove the level of ethics at workplace. Managers in organization have to acquire the abilities and aptitude to develop articulat ing vision for the employees of their organization in addition to providing them with necessary support whenever required. Furthe r they have to act as a role model and practice ethical and moral values as employees look up to their leaders and follow their behaviors to promote ethical behavior at the workplace. Moreover, leaders should be able to set high moral and ethical goals for their subordinates and foster acceptance to these goals if they want to create and maintain ethical behaviors at the workplace. All these efforts on the part of the management will help in creating an organization which is ethical and add to the human cap ital of the organization. Leaders can exert influence on followers with the help of positional or personal powers that they possess. Perhaps one of the most important effects of organizational power is that it invites corruption. The more power an individual has at his or her disposal, the more tempted the person is to use that power towards some immoral or unethical purpose. Political uses of power demand explicit consideration of ethical restraints, in part because current management theory focus es on the value of outcomes rather than on the value of the means chosen. Cavanaghet.al. (1981) developed a normative model of ethical analysis that can be helpful in determining what these restraints are. The model integrates three kinds of ethical theori es: utilitarianism, theories of moral rights, and theories of justice. As a part of utilitarianism the question asked is “Will the political tactics promote purely selfish interest (as opposed to also promoting organization goals?” Under theories of moral right the issue is “Does the political activity respect the rights of the individuals affected?” For theories of justice the issue raised is “Does the activity conform to standard of equity and justice; is it fair?” Conclusions It has been found and sug gested through the study that to raise the ethics at workplace organizations will have to make attempts to practice and apply the dimensions of transformational leadership specially with the help of articulat ing vision, providing individualized support, a cting as a role model and fostering acceptance of goals. One of the main emerging issues pertaining to the study is how morals and values relate to transformational leadership i.e. is transformational leadership morally neutral, or does it have any inte ractive relation with the ethical 51 Journal of Knowledge Globalization, Vol. 4, No. 2 dimension of the organization? In the available literature ethics and morality are treated as an orthogonal, independent dimension, in a domain beyond the concerns at hand. It has been suggested that leaders in organizatio ns are obliged to set moral examples for organizational members and to demarcate the constant striving for increased profits from those activities which may be detrimental to the values of society in general (Aronson, 2001). Corporate leaders are critical for not only talking about ethics but making them work so that their behavior sets the tone for ethics at the workplace. If the CEOs are shown to be critical to business ethics knowledge and practice, if educators say it is important, if leaders in busine ss organizations advocate it, surely we must consider using the transformational leadership approach in developing an ethical workplace. Then one of the primary goals of business organizations is to help create such leadership and let the employees figure out their foundation for ethics. Organizational values need to be widely shared if there is to be a consistent organizational profile (Krishnan, 2002). The onus is on managers to make ethical decisions and create an ethical work environment. Organizations require transformational leaders who set high standards by example. Alloway and Barling (2000) suggested a number of ways a manager can bring transformational changes in his or her leadership pattern ( see Appendix 1). Effective l eadership in the organiza tion can play a major role in developing a way for ethics at workplace. The leaders have to keep their employees in high self -esteem and create an environment of openness and authenticity. Employees have to be encouraged to develop their personal and socia l skills leading to greater awareness of self as well as others in the organization (Singh, 2010). Irrespective of the national boundaries, the outcome of this study can be universally employed to the employees of any organization for the purpose of enha ncing their transformational leadership so that their competence and effectiveness at the job is s enhanced and work ethics is promoted . Scope for Further Research The present study leaves considerable scope for further research in the area of transformational leadership and ethics at workplace. A comparison between leadership style in the developed and the developing economies can help us achieve an understanding of the transition occurring in the domain of transformational leadership at the global level. A comparative analysis of the presence of transformational leadership and ethics in public and private companies can provide a wider understanding of the concepts. Further research can also focus on studies to investigate the relationship between other variables like political behavior, creativity and innovation and corporate social responsibility, which are related to transformational leadership and have a direct relationship with the performance and produc tivity of pres ent day 52 Singh : Develop ing Ethics at the Workplace through Transformational Leadership business organizations’. Another limitation of this study is that the data for the transformational leadership and ethical values have been collected from the same sample and therefore the findings may suffer from the same source bias . 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strategies by which managers can start behaving more transformational. They propose that: a) Leaders/Managers can make their decisions more transparent by exhibiting consistency i n their logic and reasoning. By being consistent in using the same or similar criteria for decision making they are able to instill trust and respect in the minds of the employees as they know what to expect from the leader. b) Leaders/Managers can display m ore enthusiasm and optimism amongst the employees. The belief in employees that ‘they can do it’ helps them realize their potential with more confidence and inspires them to try harder. c) Leaders/Managers can involve employees in decision making process more vigorously by giving them the options to come out with new solutions to the problems rather than accepting readymade answers.
Such behavior would lead to higher employee engagement and also involve them more in decision making. d) They should also pay person al attention to individual efforts in employee contributions in organizations. As far as possible employees should be thanked personally for their contributions either thorough verbal means or by written mode. Copyright of Journal of Knowledge Globalization is the property of Knowledge Globalization Institute and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.