Authentic Leadership, Organizational, Social Learning and Ethical Behavior of Employees in Commercial Banks in Kenya

Abstract

This study tested the effect of authentic leadership on ethical behavior of employees mediated and moderated by organizational identification and social learning respectively. Researchers have confirmed the effect of authentic leadership on ethical behavior of employees. However, ethical behavior has rarely been studied as a criterion variable thus hampering managers efforts to manage it. Furthermore, studies on ethical behavior both as predictor and outcome variable have found conflicting results and the variance explained has been low to moderate, suggesting the possibility of the presence of other factors in the relationship. Some scholars have argued that organizational identification may play a role in the relationship between authentic leadership and ethical behavior of employees. It is argued in this study that as employees respond positively to the admirable qualities of their leaders, the strength of their identification with their respective organizations is likely to increase. It was therefore proposed that organizational identification would mediate the relationship between authentic leadership and ethical behavior of employees. The available research evidence points to a moderating role for social learning in the relationship between authentic leadership and ethical behavior of employees. However, the evidence referred to is not conclusive. The current study, therefore, incorporates social learning as a moderating variable on the relationship between authentic leadership and ethical behavior of employees. Therefore, the overall purpose of this study was to investigate the mediating and moderation role of organizational identification and social learning in the relationship between authentic leadership and ethical behavior of employees in commercial banks in Kenya. The study was guided by positivist philosophical orientation. The conceptual model and hypotheses were drawn from the reviewed literature and related gaps in knowledge. The study was anchored on four theories namely integrity, authentic leadership, social identity and social learning theories. Descriptive cross-sectional survey design was used. Data was collected from a sample of 384 employees drawn randomly from all the commercial banks in Kenya. Structured five-point Likert scale questionnaire was used to collect the data. The study was guided by four hypotheses corresponding to the four objectives. The hypotheses were tested using descriptive and inferential statistics. The findings indicated that authentic leadership had a significant influence on ethical behavior of employees; Organizational identification partially mediated the relationship between authentic leadership and ethical behavior of employees while social learning did moderate the relationship between authentic leadership and ethical behavior of employees and the joint effect of authentic leadership, organizational identification and social learning was statistically significant. The findings have various implications for policy, practice and research. The study results will be of value to policy makers in human resource management and commercial banks in understanding the nature of leadership in influencing ethical behavior of employees in their respective banks. The findings also suggest significant contribution to knowledge by validating the propositions of the theories that informed the study as well as advancing the mediating role of organizational identification on the relationship between authentic leadership and ethical behavior of employees in commercial banks in Kenya. The study therefore recommends that the commercial banks in Kenya leadership make efforts to promote authentic leadership so as to enhance organizational identification and thus improve ethical behavior of employees in their respective banks. The study suggests that future studies consider the non-financial sector and perhaps the adoption of a longitudinal methodology for the purpose of determining causality among the variables in this study.