Sustainable Influence of Ethical Leadership on Work Performance: Empirical Study of Multinational Enterprise in South Korea

Abstract

This study empirically examines the route by which managers' sustainable ethical leadership influences employees' work performance. The study examines the relationships of four variables: ethical leadership, perceived salience of an ethics code, work performance, and leader-follower distance, operationalized as the frequency of leader-follower interaction. Data were obtained from a large multinational enterprise in South Korea and the questionnaires responses of 196 leader-follower pairs (196 team leaders, 196 employees) were analyzed. The results found that the managers' ethical leadership positively influenced the employees' perceived salience of the ethics code of the organization, which, in turn, positively mediated the relationship of ethical leadership to work performance. Furthermore, a conditional indirect effect was found in which the frequency of leader-follower interaction positively moderated the indirect effect of ethical leadership on work performance via perceived salience of the ethics code; specifically, the strength of the indirect effect increased as the frequency of leader-follower interaction increased. The theoretical and practical implications of the results are offered and limitations with suggestions for future study are discussed.