Ethical Leadership and Deviant Workplace Behaviour: The Role Ethical Reasoning, LMX, Distributive Justice, and Psychological Safety and Attachment in a Moderated Mediation Framework

Abstract

The article aims to analyse and explain the relationship between ethical leadership, organisational deviance. We proposed a theoretical framework arguing a mediatory role of situational factors including psychological safety, psychological attachment, distributive justice, and Leader-Member Exchange (LMX). We also argue that utilitarian based ethical reasoning make employees more responsive towards the ethical decision by the leadership making them less deviant. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 254employees and analysed using confirmatory factor analysis and structured equation modelling. The measurement and structure model were assessed using AVE (average variance extracted), Composite Reliability (CR), Cronbach’s alpha, discriminant validity through the Fornell-Larcker Criterion, and Collinearity methods in PLS-SEM. The results suggested a significant and positive effect of ethical leadership on Leader-member-exchange, psychological attachment, distributive justice, and psychological safety. Moreover, apart from distributive justice, all other factors seem to decrease Organisational Deviance, however, their effect remained insignificant. Surprisingly, ethical leadership (EL) seems to be directly instigating Organisational Deviance (OD), as well as through the mediation of distributive justice. However, EL seems to significantly reduce deviance through including Utilitarianism ethical reasoning amongst its followers, as EL seems to positively affect utilitarianism, which in turn negatively affects deviance. Utilitarianism also seems to complement EL in reducing OD directly as the result showed significant and negative complementarities amongst EL and Utilitarianism in explaining OD. The results imply that EL and OD nexus is more affected by ethical reasoning rather than situational factors.