MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY -------------------------------- MAI TRUONG AN THE DUAL PATHS THAT ETHICAL LEADERSHIP DRIVES EMPLOYEES’ SUSTAINABILITY BEHAVIORS DISSERTATION Ho Chi Minh City – 2022 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY -------------------------------- MAI TRUONG AN THE DUAL PATHS THAT ETHICAL LEADERSHIP DRIVES EMPLOYEES’ SUSTAINABILITY BEHAVIORS Major: Business administration Code: 9340101 DISSERTATION Academic advisors: 1. TRAN MAI DONG 2. LE NHAT HANH Ho Chi Minh City – 2022 STATEMENT OF AUTHENTICITY I hereby certify that this thesis was written independently without any aid from unnamed sources. In addition, I also declare that all secondary materials used in this thesis are fully referenced.
Mai Truong An I am incredibly thankful to my supervisors, Associate Professor Tran Mai Dong and Associate Professor Le Nhat Hanh, School of Management, University of Economics Ho Chi Minh City (UEH), for their tremendous support and help during my doctoral study. This thesis could not be possible without their guidance and assistance. Further, I want to express my gratitude to my friends, who work in manufacturing companies in Vietnam, for helping me collect the data. I would also like to thank my colleagues, the Faculty of Business Administration, Ho Chi Minh City College of Economics, for assisting me with teaching duties.
Lastly, I am grateful to my family for their endless support, both in financial and spiritual aspects. TABLE OF CONTENT STATEMENT OF AUTHENTICITY. ii TABLE OF CONTENT. iii LIST OF ABBREVIATIONS.
ix LIST OF TABLES .x LIST OF FIGURES AND DIAGRAMS. xiii CHAPTER 1: INTRODUCTION. Ethical leadership and employees’ sustainability behaviors. The context of Vietnam.
Research purposes and questions. Research object and scope .18 CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT. The study constructs. Organizational citizenship behavior toward the environment (OCB-E)….
A review of the literature on the relationship between ethical leadership and OCB-E ……………………………………………………………………………. Corporate environmental strategy. Green psychological climate. Social learning theory.
Social identity theory. Self-consistency theory. Upper echelons theory. Substitutes for leadership theory.
Hypotheses developments and proposed model. The role of ethical leadership in driving OCB-E. The mediating role of moral identity. The mediating role of corporate environmental strategy and green psychological climate.
The moderating role of agreeableness .60 CHAPTER 3: RESEARCH METHODOLOGY. Scale and questionnaire. Organizational citizenship behavior toward the environment (OCB- E)………. Corporate environmental strategy.
Green psychological climate. Pilot test’s process. Pilot test’s results. Common method bias .91 CHAPTER 4: RESEARCH RESULTS AND DISCUSSIONS.
Testing for common method bias. Assessment of the measurement model. The scale reliability. The convergence validity.
The discriminant validity. Assessment of the structural model. The variance inflation factor (VIF). The direct effect.
The indirect effects. The moderating effects. The coefficient of determination adjusted (R2). The Stone-Geisser Indicator values (Q2).
The effect size (f2). CTA-PLS application for the measurement model’s robustness check121 4. Robustness check for the structural model. Assessment of the endogeneity.
Assessment of the unobserved heterogeneity. Hypotheses testing summary .135 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS. Theoretical contributions and practical implications. Limitations and directions for future research .143 REFERENCES APPENDICES Appendix 1: Vietnamese research questionnaire Appendix 2: Pilot test Appendix 3: Focus group participants Appendix 4: Eight manufacturing companies in Vietnam Appendix 5: Sample profile of respondents Appendix 6: Common method bias testing Appendix 7: Measurement models Appendix 7.1: Factor loadings Appendix 7.2: The scale’s Cronbach’s Alpha, CR and AVE Appendix 7.3: Discriminant validity Appendix 8: Structural models Appendix 8.1: The variance inflation factor (VIF) Appendix 8.2: Hypotheses testing Appendix 8.
The direct effect Appendix 8. The indirect effect Appendix 8. The moderating effect Appendix 8. The coefficient of determination adjusted (R2) Appendix 8.
The Stone-Geisser Indicator values (Q2) Appendix 8. The effect size (f2) Appendix 8. Model comparisons Appendix 9: Robustness checks Appendix 9.1: CTA-PLS Appendix 9.2: Nonlinear effects Appendix 9.3: Unobserved heterogeneity LIST OF ABBREVIATIONS AG Agreeableness CEO Chief executive officer CS Corporate environmental strategy EFA Exploratory factor analysis EL Ethical leadership ELS Ethical leadership single scale ELW Ethical leadership at work questionnaire GC Green psychological climate IM Internalization KMO Kaiser-Meyer-Olkin Measure of Sampling Adequacy OCB Organizational citizenship behavior OCB-E Organizational citizenship behavior toward the environment OE OCB-E PLS-SEM Partial least square structural equation modeling SM Symbolization VIF Variance inflation factor LIST OF TABLES Table 1.1: The study main constructs.2: Definitions of the key constructs .1: Comparison of ethical leadership and other types of leadership .2: Literature on empirical research between ethical leadership and employees’ favorable behaviors in the .3: Literature on the empirical research between ethical leadership and OCB/OCB-E .1: Ethical leadership scale .3: Moral identity scale .4: Corporate environmental strategy scale .5: Green psychological climate scale .7: The results of Cronbach’s Alpha testing .8: The ethical leadership scale when removing EL2 .9: The organizational citizenship behavior toward the environment – OCB-E scale when removing OE8.10: The summarization of the scale items after the pilot test.11: Sample profile of respondents .2: The constructs’ Cronbach’s Alpha, CR, and AVE .3: Fornell-Larcker criteria .4: Heterotrait-Monotrait ratio .5: The VIF values .6: The direct effect testing results .7: The indirect effect testing results .8: The moderating effects testing results .11: The effect size .14: Confirmatory tetrad testing .15: Testing results for the potential nonlinearity .16: FIMIX-PLS results.18: The summarization of hypotheses testing results .131 LIST OF FIGURES AND DIAGRAMS Figure 2.1: The direct effect analysis results .2: The indirect effects analysis results .3: The moderating effects analysis results .4: The relationship between ethical leadership and internalization moderated by agreeableness .5: The original model.6: The first alternative mode .7: The second alternative mode .119 ABSTRACT Ethical leadership has attracted enormous interest in recent years. Nevertheless, in spite of all this extensive writing, the nexus between ethical leadership and subordinate outcomes is still an interesting topic.
Based on social learning theory, social identity theory, upper echelons theory, and substitutes for leadership theory, this study investigates the direct, indirect effects of ethical leadership on employees’ sustainability behaviors such as organizational citizenship behavior toward the environment (OCB-E) and the moderating role of agreeableness on the ethical leadership – moral identity relationship. The current study utilized partial least square structural equation modeling to test the proposed hypotheses using a data set of 406 full-time employees working in manufacturing companies in Vietnam. The testing results reveal that ethical leadership is positively related to OCB-E. This relationship could be mediated by two mechanisms suggesting the dual pathways that ethical leaders could motivate followers’ OCB-E: (1) by enhancing employees’ moral identity internalization and symbolization, and (2) by issuing and publishing corporate environmental strategy, which forms the organization’s green psychological climate.
Regarding the moderating roles of agreeableness, the research findings highlight that this kind of personality lessens the motivational efforts of ethical leaders by impairing their direct effects on followers’ moral identity internalization. However, unexpectedly, agreeableness does not play a significant role in moderating the link between ethical leadership and moral identity symbolization. The results, which in large part validate the theoretical framework, make contributions and implications to research as well as practice. Keywords: Ethical leadership, employees’ sustainability behavior, OCB-E, moral identity, corporate environmental strategy, and green psychological climate.
CHAPTER 1: INTRODUCTION Chapter 1 introduces an overview of the study’s background, purposes, questions, object, and scope. Moreover, this chapter also provides the research methodology and contributions. The end of this chapter will present the chapter outline. Ethical leadership and employees’ sustainability behaviors Corporate scandals have currently been the subject of considerable media attention (Kuenzi et al.
Some have ruined the company’s reputation or business. Take Facebook as an example. Tuttle (2018) claimed that Facebook app developer, Aleksandr Kogan, collected 50 million Facebook users’ information and then handed it to Cambridge Analytica Company to help Donald Trump in the presidential campaign. The company CEO, Mark Zuckerberg, then has to testify in front of Congress.
Three days after this scandal (the scandal broke out on March 16, 2018), Facebook shares dropped 7%, nearly $40 billion of the company value had been wiped, and this figure increased to over $60 billion by the end of March (Tuttle, 2018). For another example, according to Epstein and Buhovac (2010), about 11 platform workers died, and nearly 17 people were injured in the drilling rig Deepwater Horizon explosion in 2010. The offshore oil then spilled over the Gulf of Mexico, making this the worst environmental disaster in U. British Petroleum has received extensive criticism for the lack of responsibility in their management control systems to prevent and respond to the disaster.
A series of significant ethics scandals have called for a lot of studies relating to the critical role of ethical leaders (Brown and Treviño, 2006; Neubert et al., 2009; Mayer, Kuenzi and Greenbaum, 2010; Lee, Woo and Kim, 2018; Zheng et al., 2021) as leaders play a vital role in inspiring ethical results and deciding the failure or success of a corporation (Yang, 2014). Responding to this call, both practitioners and scholars have attempted to comprehend the role of ethical leadership, which is conceptualized as “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” (Brown, Treviño and Harrison, 2005), in nurturing and developing the organizational ethical actions, particularly the followers’ moral behaviors (Mayer et al., 2012; Eva et al., 2020) due to the fact that by breaching or bending ethics rules, followers also contribute to corporate ethical scandals (Shum et al. Compared to other moral-based leadership (e., spiritual, authentic, or transformational leadership), ethical leadership is expected to drive moral consequences by fostering appropriate behaviors, setting ground rules for followers' ethical conduct, and creating moral standards (Brown, Treviño and Harrison, 2005; Brown and Treviño, 2014). Despite the significant studies conducted, the relationships between ethical leadership and its outcomes have been underexplored (Lee, Woo and Kim, 2018; Velez and Neves, 2018; Gerpott et al., 2019; Kim and Vandenberghe, 2020); particularly, employee ethical behaviors (Paterson and Huang, 2019).
Given those mentioned above, this research keeps contributing to the line of ethical leadership literature by investigating how ethical leaders could alter employee moral behaviors such as sustainability behaviors. According to Reynolds and Ceranic (2007), the term “moral behavior” or “ethical behavior” can apply to a broad variety of actions that must adhere to established moral principles; thus, they are used interchangeably in this study. Moreover, “moral action” and “moral behavior” are similar. In addition, sustainability behaviors could be seen as a kind of moral behavior toward the environment (Bhattacharya et al.
According to Wesselink, Blok and Ringersma (2017), organizations, scholars, and practitioners increasingly recognize the significance of corporate sustainability. Sustainable development is a worldwide challenge (Zuindeau, 2007). Sustainable development means that the development should meet the needs of the current generation without compromising the ability of future generations to satisfy their own (Salvia et al. The world is currently experiencing a rise in both the frequency and severity of natural disasters (storms, droughts, earthquakes, tsunamis, and floods) and it is believed that they indicate the rapid acceleration of climate change (Mosneaga, 2022).
These problems are caused by our unsustainable and/or irresponsible development practices (Mosneaga, 2022). Thus, sustainable development is a top priority for every organization and everyone, not just one country (Montiel et al. Organizations and managers are under pressure to find a new, sustainable method to deal with climate change and the depletion of scarce resources (Rezapouraghdam, Alipour and Arasli, 2019). However, such sustainability policies or climate issues could not be implemented successfully without employee buy-in because pro-environmental activities must be applied throughout the company (Tosti- Kharas, Lamm and Thomas, 2017).
Rezapouraghdam, Alipour and Arasli (2019) mentioned that encouraging employees to engage in organizational sustainability activities and practice is the most pressing challenge.