Abstract

1. Introduction

2. Literature review

3. Method

4. Results

5. Discussion

6. Conclusions and managerial implications

Declaration of Competing Interest

References

Abstract

     This study examines how the combined effects of work environmental factors and leadership behaviours lead to the presence (or absence) of industrial employees job performance by applying fuzzy-set qualitative comparative analysis (fsQCA). A sample composed of supervisor-subordinate dyads was used to test the propositions of this study. The results show that the most important variables are transformational leadership and social support. Employee empowerment and task significance seem to play a secondary role in leading to employee job performance. These findings support the need for managers to use positive leadership to manage human resources. This paper contributes to the advancement of the knowledge of employee job performance through the identification of the combinations of conditions that can lead to the presence or absence of this important organizational outcome. Directions for future studies are commented on at the end of the paper.

Introduction

     Job performance is probably the most important and studied variable in industrial management and organizational behaviour (Carpini, Parker, & Griffin, 2017). It can be defined as individual behaviour-something that people do and can be observed-that generates value for the organization (Campbell, McCloy, Oppler, & Sager, 1993) and contributes to the organization’s goals (Campbell & Wiernik, 2015). Job performance can also be understood as an achievement-related behaviour with some evaluative component (Motowildo, Borman, & Schmit, 1997), that is, the extent to which an employee meets general organizational performance expectations (Afzali, Arash-Motahari, & Hatami-Shirkouhi, 2014).

     Over the last decades, the meaning of job performance has varied considerably, from the more traditional view focused on employment and fixed tasks to a broader understanding of work roles in dynamic organizational contexts (Ilgen & Hollenbeck, 1991). The fundamental reason for this focus shift is to the highly competitive and global work environment, where all organizations must be oriented to respond to dynamic and changing situations (Baard, Rench, & Kozlowski, 2014). This new context requires a broader conceptualization of job performance that brings together all the potential behaviours that positively contribute to the achievement of organizational goals (Griffin, Neal, & Parker, 2007). The new conceptualization of individual performance includes in-role performance (e.g., Williams & Anderson, 1991), adaptative performance (e.g., Berg, Wrzesniewski, & Dutton, 2010), proactive performance (e.g., Parker, Williams, & Turner, 2006) and citizenship behaviours (e.g., Podsakoff, Whiting, Podsakoff, & Blume, 2009). Delving into this new conceptualization of job performance, Griffin et al. (2007) developed an integrative performance model that cross-classifies ‘the three levels at which role behaviours can contribute to effectiveness (individual, team, and organization) and the three different forms of behaviour (proficiency, adaptivity, and proactivity) into subdimensions of work role performance’ (p. 330). Although previous research recommends taking advantage of the existing commonalities between the different job performance constructs (Carpini & Parker, 2017), this study is limited to the individual-level behaviours that generate value for organizations.

Results

     The outcome of the model was the presence of employees’ job performance. The five conditions were task significance, coworker social support, supervisor social support, transformational leadership, and empowerment. To conduct a more thorough analysis and provide greater insight into the proposed model, the analysis was conducted considering both the presence and absence of employee job performance. Table 1 shows the results of the analysis of necessary conditions for the presence (and absence) of job performance among industrial workers.

Abstract

Keywords

Introduction

Business model innovation, leadership, and SME internationalization

Business models, business model innovation, and SMEs

SME leadership styles

Method and data

Internationalization in SMEs: BMI and CEO leadership

Pattern 1. Large-scale BMI led by empowering leadership of the CEO: the case of Alpha

Pattern 2. Small-scale BMI led by directive leadership: the case of Beta

Peripheral patterns

Discussion

Conclusion

Acknowledgements

References

Vitae

Abstract

Drawing on the distinction between small-scale and large-scale business model innovation, and between directive and empowering leadership, we examine how CEOs in SMEs lead business model innovation during the process of internationalization. Building on eight cases of Japanese manufacturing SMEs, we develop a theoretical framework pointing to two different patterns in the articulation between CEO leadership style and business model innovation. We show that small-scale business model innovation led by directive leadership results in a timelier foreign market entry. However, in order to increase international sales, large-scale business model innovation is required. This is facilitated by an empowering leadership style of the CEO.

Introduction

Business model innovation (BMI), which Amit and Zott (2010, p. 2) define as the process of “designing a new, or modifying the firm’s extant activity system”, is considered a positive contribution to performance (Zott and Amit, 2007). Recognising BMI’s distinctiveness when compared with product or process innovation (Bucherer et al., 2012; Damanpour, 2010; Teece, 2010), scholars have investigated how established firms reconfigure their business models (Bocken and Geradts, 2020; Snihur and Wiklund, 2019), or how new ventures and start-ups develop innovative business models from the outset (Bocken and Snihur, 2020; Colovic and Schruoffeneger, 2021; Thompson and McMillan, 2010; Zott and Amit, 2007). Research has pointed to contingencies and factors leading to BMI, which can be external, such as environmental turbulence or technological evolution (Teece, 2018), or internal, such as institutional, organizational, or strategic (Bocken and Geradts, 2020). Because it involves dealing with different customers and different institutional conditions, as well as complying with different sets of rules and regulations, internationalization has arguably been identified as a critical moment in a firm’s existence, prompting firms to engage in BMI (Onetti et al., 2012; Rask, 2014). According to Bohnsack et al. (2020), the internationalization decision itself might depend on whether a firm can leverage advantages related to its business model to create and capture value in foreign markets.

Through their empathy, care and nurturance, benevolent leaders can help employees with disabilities surmount their disability stigma and smile at their work and work environment. The primary aim of our research is to examine how benevolent leadership contributes to the well-being of employees with disabilities. The participants in our study comprised employees with disabilities from firms located in Ho Chi Minh City, Vietnam. Our results revealed the relationships between benevolent leadership and the three components of the well-being among employees with disabilities including perceived discrimination, job satisfaction and need for recovery. Disability inclusive climate was also found to mediate these relationships. Moreover, attachment anxiety acted as an enhancer for the effects of disability inclusive climate on the well-being while attachment avoidance was found to attenuate these effects except for the impact on need for recovery.

Introduction

Employees with disabilities are a ‘largely untapped human resource’ for organizations (Lengnick-Hall et al., 2008, p. 256) albeit the evidence demonstrates no significant performance and productivity differences between people with disabilities and those without disabilities (Lengnick-Hall et al., 2008). People with disabilities still have on average lower levels of employment, job security, income, pay satisfaction, job satisfaction, and overall quality of work life than people without disabilities (Konrad, Moore, Ng, Doherty, & Breward, 2013; Schur et al., 2017; Schur, Kruse, & Blanck, 2013; Shantz, Wang, & Malik, 2018; Wubulihasimu, Brouwer, & Van Baal, 2015). In the Vietnamese context, Disabilities Law 2010 and its clauses on benefits for organizations that hire people with disabilities have had some influence on human resources (HR) policies of organizations (Nguyen, 2016). However, there still have been challenges for many of them to socially include and foster the well-being among employees with disabilities (Nguyen & Thu, 2015; Voice of Vietnam (VOV), 2016). Work-related well-being alludes to “the overall quality of an employee’s experience and functioning at work” (Grant et al., 2007, p. 52). Since well-being is a crucial indicator of the effective social inclusion of employees with disabilities into an organization and its work activities (Cavanagh et al., 2017), there is a need for scholars and practitioners to decipher more antecedents behind the well-being of employees with disabilities (Ababneh, 2016; Cavanagh et al., 2017; Dwertmann & Boehm, 2016).

Abstract

Employee pilferage – the unauthorized taking of work property or the means of production on a relatively small scale – is extremely costly. However, very little is known about what psychologically drives frontline retail workers to pilfer. Drawing upon the social cognitive theory of self-regulation, we argue that moral disengagement is the key psychological mechanism that frees retail employees to pilfer in the workplace without experiencing feelings of guilt or self-censure. We further develop and test a conceptual framework that depicts the causes of pilferage moral disengagement by customer-contact retail employees. We find that both moral identity centrality and ethical leadership inhibit pilferage moral disengagement, while cynicism and pilferage norms enhance it. Moreover, moral identity centrality can also alleviate the positive effects of both cynicism and pilferage norms on pilferage moral disengagement. We discuss the theoretical implications of these findings and the implications for practice.

Introduction

Studies of ancient Egypt have found that tomb-makers literally risked their necks pilfering from their employers. Closer to home, just a few generations ago, pilfering a loaf of bread from an employer could find the perpetrator forcibly deported thousands of miles to a foreign continent. Today, contemporary studies suggest that employee pilferage costs retailers billions of dollars every day. As such, pilferage is a persistent and pervasive phenomenon. Employee pilferage is a salient issue, particularly in the retail sector. In the retail sector alone, the costs were recently estimated as $32 billion per year. A recent report showed that employee theft has been identified as the single biggest cause of loss to retailers in the US, more than customer theft (Retail Knowledge, 2015). A similar picture can be obtained in the UK, as it has been found that each employee theft costs four times that of customer theft (British Retail Consortium, 2015). Pilferage, particularly time theft, can potentially have a significant negative impact on the quality of customer service and the customer experience in the retailing environment.

In recent times, there has been an increasing emphasis on the importance of effective leadership in the hospitality industry due to its rapidly changing and highly competitive environment (Kim and Brymer, 2011). Of the various approaches to leadership, ethical leadership in particular, has been shown to be highly relevant because of the numerous ethical challenges (e.g., the need to strike a balance between doing well in terms of financial performance and doing good) faced in the hospitality industry (Kincaid et al., 2008). In this regard, ethical leaders provide rich benefits in that such leaders make fair and balanced decisions and treat people around them in an ethical manner (cf. Brown et al., 2005). In the general management literature, research indicates that when leaders demonstrate ethical leadership behaviors, employees experience increased job satisfaction (Neubert et al., 2009), display extra effort towards the organization (Babalola et al., 2017a; Mayer et al., 2009; Ogunfowora, 2014), and perform their job better (Piccolo et al., 2010). A meta-analytical review of these findings shows that, above and beyond related leadership approaches, ethical leadership is strongly linked with employee outcomes (see Ng and Feldman, 2015, for a review), providing strong empirical evidence for its relevance as a viable a form of leadership. Although much is known about the benefits of ethical leadership in traditional organizations, it is not until recently that scholars have begun to investigate its effectiveness in the hospitality context (Celik et al., 2015; Dhar, 2016; Kim and Brymer, 2011; Qin et al., 2014; Zoghbi-Manrique-de-Lara and Suárez-Acosta, 2014). With the exception of Qin et al. (2014) that explored the link between ethical leadership and customer-oriented behavior, what is quite notable about most of these studies is that they tend to overlook ethical leadership’s influence on people in the external organizational environment such as, customers. Even though they have generally provided insights into utility of ethical leaders in the hospitality context, a critical question for hospitality scholars remain: Are there actual benefits associated with ethical leadership in the hospitality context beyond outcomes associated with organizations’ internal aspects, especially on important behaviors needed for the long-term survival of the industry such as, service employees’ citizenship behaviors directed toward customers (i.e., customer-oriented citizenship behavior; CCB; Qin et al., 2014)? And more importantly, when and why are employees of ethical leaders more likely to engage in CCB? Addressing such questions is important because CCB not only affects customer satisfaction but also contributes to the success of service organizations (Tang and Tang, 2012). While we acknowledge research showing that ethical leaders can motivate customer-oriented behaviors by increasing job satisfaction and work engagement (Qin et al., 2014), we believe that it is crucial to further expand this line of inquiry for two reasons. First, prior work has yet to fully tap into the social exchange framework (Blau, 1964) in which citizenship behaviors are embedded, thus limiting the extent to which unique boundary conditions and mechanisms of the ethical leadership CCB link can be sufficiently captured. Second, citizenship behaviors are by nature not mandatory (Organ, 1988; Podsakoff et al., 2009) and their relations with leadership are generally more complex. Thus, understanding when and why employees would engage in CCB is crucial for advancing our theoretical insights about the complex link between ethical leadership and CCB and for helping practitioners improve CCB in the hospitality industry.

Introduction

Approach

Theoretical foundation

Research approach

Results

Discussion

References

Abstract

How do top representatives exercise ethical leadership in the context of public apologies? This paper examines public apologies made by corporate and government leaders for organizational wrongdoing. Conducting qualitative case-research, our deductive inquiry demonstrates that ethical leadership strategies that have been formulated for organizational contexts are utilized in the public arena and adapted to meet the particular demands of this context. We also inductively derive four aggregate strategies that leaders employ: “articulating values in relation to past and future”; “defining the wrongdoing”; “constructing moral communities” and “differentiating responsibilities”. We discuss the findings vis-à-vis the body of literature on ethical leadership, and identify some thorny ethical issues for further investigation.

Introduction

A decade ago, Brown and Treviño (2006, p. 595) argued that the field of “ethical leadership remains largely unexplored, offering researchers opportunities for new discoveries and leaders opportunities to improve their effectiveness.” Since then, much scholarship has sought to understand the notion of ethical leadership and unravel its workings, whether through efforts to conceptualize the phenomenon or empirical explorations of its manifestations. Underlying many studies, including this one, are the assumptions that norms and values guide actions and that we can study leaders’ actions in order to identify and reveal these norms and values—for example, by investigating the decisions that they make in stressful situations (Selart & Johansen, 2011) or the way they deal with potential conflicts of interest (Ritvo, Ohlsen, & Holland, 2004). Public apologies—those instances when leaders, on behalf of the organizations that they represent, acknowledge responsibility for violating a moral norm and express regret—are particularly revealing actions. Yet, such apologies have received surprisingly little attention in the field of ethical leadership, despite their increasing frequency over the last decades (Gibney, Howard-Hassmann, Coicaud, & Steiner, 2008; Maclachan, 2010). Most news consumers could easily cite a few examples in recent memory. In 2009, for example, Toyota’s president apologized in the Japanese National Press Club for a fatal crash that led to the recall of close to 4 million cars (Tabichi & Maynard, 2009). In 2010, British Petroleum (BP) CEO Tony Hayward apologized for the Gulf oil spill in a video advertisement. He referred to it as “a tragedy that never should have happened” and said that he was “deeply sorry” (BP, 2010). In 2008, Australian Prime Minister Kevin Rudd apologized in Parliament for laws and policies that inflicted “profound grief, suffering, and loss” to Aboriginal peoples (Australian Government, 2008). His successor offered government apologies in 2013 for past policies that encouraged unwed mothers to give up their babies for adoption to married couples. In 2015, in a video statement on YouTube, the CEO of Volkswagen said he was sorry for cheating to evade emissions compliance standards for some diesel-fueled car models (Volkswagen, 2015). Apologies are relevant to the study of ethical leadership for at least three reasons. First, they are moral acts in the sense that they intend “to restore conflicts and somehow restore an antecedent moral order” of which both offender and victims are part, but which has been violated (Tavuchis, 1991, p. 113). (The terms ethical and moral are interchangeable in this paper.) Through apologies, leaders publicly re-subscribe to the moral principles that have been violated. In doing so, they have to make judgments about the nature and scope of the violation and the exact principles underlying the wrong, while considering the political, legal, and financial consequences of those judgments. For example, does a Dutch government representative apologizing for postcolonial misdeeds express regret for all the postcolonial atrocities that the Dutch army committed in Indonesia, or does he single out a few especially violent excesses? While the first option might inspire moral praise from Indonesian addressees the latter might be a prudent hedge against a massive number of potential claims for financial compensation.

Today, the issue of ethics in organizations is an interesting topic to be discussed especially for the issue of unethical or deviant behavior. Therefore, this issue becomes a major concern in an organization and business field. Unethical or deviant behavior will produce a negative implication on individuals, groups, and organization in which it encourages practitioners and academicians to give more attention to the ethical management (Brown et al., 2005). Deviant behavior has a negative influence on an organization as stated by some researchers; unethical behavior seems to have a further impact on the evasion of customers (Babin et al., 2000; Gilbert, 2003). Thomas et al. (2004) explained that unethical behavior will increase the financial risks and costs as well as decrease the value of the company which in turn will lower the return to the stakeholders. On the other hand, Henle (2005) in his research believed that unethical or deviant behavior has influenced the decrease of productivity and performance in an organization. In the long-term period, negative implications caused by this behavior will affect the competitive strength of the organization. This also affected the performance of the individual significantly and negatively (Muafi, 2011). Moreover, there is a surcharge that came up due to the negative effect on performance and productivity (Dunlop and Lee, 2004). Low quality of work, lost working time, high legal and health costs as well as the negative effect on public perception (Litzky et al., 2006). The researchers have a different term of deviant behavior such as workplace deviance (Robinson and Bennett, 1995), counterproductive behavior (Mangione and Quinn in Vardi and Weitz, 2004), antisocial behavior (Giacalone and Greenberg, 1997), misbehavior (Vardi and Weitz, 2004), and organizational misbehavior (Vardi and Weitz, 2004). Counterproductive work behavior and antisocial behavior are a different terminology which is also used for unethical work behavior. However, the point is that these activities have a common sense which is a significant violation of organizations or social norms. Thus, it has negative implications for the organization and its members (Robinson and Bennett, 1995). Deviant behavior is caused by many things as it is in accordance with the research of Bamikole (2012). He showed that there is an extensive ground in deviant behavior which includes negative working cognition (Lee and Allen, 2002), acceptable injustice (Aquino et al., 1999; Elias, 2013), anger, hostility, and revenge (Douglas and Martinko, 2001). In addition to that, Muafi (2011) revealed that deviant behavior in the workplace is caused by resign intention (intent to quit), dissatisfaction, and lack of appreciation. Nasir and Bashir (2012) also confirmed that the factors responsible for deviant behavior consist of financial pressure, low job satisfaction, inequality, working environment issue, and workers’ perception. While according to Appelbaum et al. (2005), there are four main factors which could cause deviant behavior, namely, organizational issue, behavioral model, operational environment, and individual perspective.

Various instances in which leaders have behaved unethically have resulted in a series of negative impacts on their respective firms and stakeholders. Varying from large corporate scandals to the less-sensational withholding behaviors of employees, these impacts reduce productivity and result in financial losses to firms (Bello, 2012). Beyond these direct harms (Kacmar, Bachrach, Harris, & Zivnuska, 2011), the proliferation of unethical behaviors in one organization can, like a proverbial “rotten apple,” potentially spread to other organizations and then into society as a whole (Treviño & Youngblood, 1990). For this reason, ethical leadership, which is conceptualized as a leader’s display of normatively appropriate conduct and the promotion of such conduct among his or her followers (Brown, Treviño, & Harrison, 2005), has become an increasingly important and popular topic in both the media and academia (Treviño, Weaver, & Reynolds, 2006). Over the past decade, the study of ethical leadership has grown rapidly (cf., Ng & Feldman, 2015), with one research branch focusing on the effects of ethical leadership on the positive or negative organizational behaviors of followers. According to a recent meta-analysis by Hoch, Bommer, Dulebohn, and Wu (2018), ethical leadership improves desirable employee outcomes, such as organizational citizenship behaviors, job satisfaction, employee engagement, and organizational commitment, and also reduces employee deviance and turnover intentions. Although these studies contribute to our understanding of the significance of ethical leadership for achieving desirable performance outcomes, much less is known about the specific processes through which ethical leadership elicits these effects. Researchers have only developed a preliminary understanding of how the influence of ethical leadership trickles down through the organizational hierarchy to in- fluence performance outcomes. Indeed, many researchers have called for studies along this developing line of inquiry (Bedi, Alpaslan, & Green, 2016; Brown & Treviño, 2006a; Ng & Feldman, 2015). According to social learning theory (Bandura, 1977), individuals learn norms and appropriate behaviors by observing the behaviors of others who are credible and attractive. Several researchers have suggested that the ethical behaviors of leaders play a key role in efforts to foster positive, value-driven behaviors in employees (Bedi et al., 2016; Bums, 1978). A number of leadership constructs, such as transformational leadership (Bass, 1985; Bums, 1978), servant leadership (Greenleaf, 1977), and authentic leadership (Avolio & Gardner, 2005), contain elements of ethics. However, these constructs focus on a range of leadership behaviors that do not categorically include clear ethical components, and that therefore may not fully explain the effects of the ethical behaviors and choices of leaders and how those behaviors in- fluence employees (Brown & Treviño, 2006a).

For decades, management researchers have argued that organizational leaders promote a competitive advantage for their organizations by not only managing financial performance, but also by instilling ethical principles into the workplace (Barnard, 1938; Baumhart, 1961; Hitt & Ireland, 1999; Mautz & Sharaf, 1961). However, in an era demanding immediate financial returns (Knights & O’Leary, 2006), there are a remarkable number of high profile cases that demonstrate a “profit at any cost” mentality whereby leading ethically is of secondary concern to leading profitably (Greenbaum, Mawritz, & Eissa, 2012; Wolfe, 1988). In contrast to this mentality, Brown and colleagues proposed that ethical leadership, defined 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, & Harrison, 2005; p. 120), is an integrity-based, transactional approach to leadership that not only promotes ethical accountability, but also motivates employees to engage in behaviors that drive long-term organizational success (Brown et al., 2005; Brown & Treviño, 2006). Despite the notion that ethical leaders model behaviors that are valued in the organization and champion the interests of their employees, extant research on the linkages with employee success has primarily focused on current in-role performance (i.e., completing assigned duties: Williams & Anderson, 1991) (e.g., Piccolo, Greenbaum, Hartog, & Folger, 2010; Walumbwa et al., 2011), ignoring the employee’s potential to achieve future success. This oversight is important as ethical leaders are thought to take a genuine interest in the potential of their employees (Kalshoven, Den Hartog, & De Hoogh, 2011). Likewise, their integrity-based, transactional approach to leadership encourages employees to be responsible stewards of the organization who consider the longer-term implications of how they conduct business, not just the bottom-line results of their efforts (Brown & Treviño, 2006; Den Hartog, 2015; Thomas, Schermerhorn, & Dienhart, 2004). Therefore, in the current study we examine employee success not only through the lens of current in-role performance but also future success potential. Prior studies have illustrated that employee motivation in the form of perceived meaning and task significance, self-efficacy, identification, effort, and initiative play a role in understanding the performance-related effects of ethical leaders (Den Hartog, 2015; Den Hartog & Belschak, 2012a; Piccolo et al., 2010; Walumbwa et al., 2011). However, these mechanisms provide a narrow perspective on the motivational effects of ethical leaders by focusing on specific cognitions targeted at the employee’s current role. In contrast, by encompassing cognitions regarding personal competence, determination, and the meaning and impact of work (Spreitzer, 1995; Thomas & Velthouse, 1990), psychological empowerment is an integrative, active-oriented form of motivation that is a key driver of employees’ immediate success and longer-term impact (Maynard, Gilson, & Mathieu, 2012; Seibert, Wang, & Courtright, 2011; Zhang & Bartol, 2010). As explained by Spreitzer (1995), psychological empowerment entails “an active, rather than a passive, orientation to a work role…an orientation in which an individual wishes and feels able to shape his or her work role and context” (p. 1444). Therefore, the first aim of the current study is to examine the role of psychological empowerment as a comprehensive motivational mechanism linking ethical leadership with employee inrole performance and future success.

Workplace bullying commonly refers to a situation in which one or more employees of weaker power are regularly and repeatedly exposed to unethical and unreasonable behaviours at work which they find difficult to escape or defend themselves against (Branch, Ramsay, & Barker, 2013; Einarsen, Hoel, Zapf, & Cooper, 2011; Harvey, Treadway, Heames, & Duke, 2009). According to reliable international estimates, up to 18% of the global workforce is exposed to bullying at work (see Nielsen, Matthiesen, & Einarsen, 2010 for a review). Research has also shown detrimental implications of workplace bullying on those exposed to it, in the form of elevated stress levels and increased sickness absenteeism, leading to a decline in organisational productivity and, ultimately, economic output (Bonde et al., 2016; Nielsen & Einarsen, 2012; Samnani & Singh, 2012). The prevalent nature and serious implications of workplace bullying warrant research that advances understanding of the management of such behaviour (Matthiesen & Einarsen, 2010; Nielsen, 2014; Nielsen et al., 2010). A recent study observed: “Such persistence and harm suggests a challenge for organisational leadership to tackle the issue proactively and initiate a cultural change driven by moral norms and enforcement of ethical standards” (Ahmad & Sheehan, 2017, p. 21). Knowledge on the prevention and management of workplace bullying is recognised as a ‘black box’ in the literature (Einarsen, Skogstad, Rørvik, Lande, & Nielsen, 2016, Nielsen, 2014); however, specifically in regard to leadership, ethical leadership style has emerged as a critical inhibiting factor (Stouten et al., 2010; Yamada, 2008). Ethical leadership is defined 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, Trevino, ~ & Harrison, 2005, p. 120). This leadership style is particularly associated with the regulation of moral norms and enforcement of ethical standards at work (Brown & Trevino, 2006; Mayer, Aquino, Greenbaum, ~ & Kuenzi, 2012). Furthermore, Einarsen et al. (2016, p. 8) have emphasised that “it is of the upmost importance for both exposed individuals and organisations that we seek knowledge on preventive measures against bullying and how the effectiveness of these measures may, or may not, vary between national cultures”. The purpose of this paper is therefore to advance the understanding of why and how workplace bullying can be effectively addressed across cultures through ethical leadership. While considerable progress has been made in understanding the role of leadership in workplace bullying, research has maintained a primary focus on those leadership styles that trigger and escalate this behaviour (Einarsen, Skogstad, & Glasø, 2013, pp. 129e154; Nielsen, 2013). This has been restated by WarszewskaMakuch, Bedynska, and _ Zołnierczyk-Zreda (2015, p. 130): “there is little research into the positive role of leadership in reducing pathological phenomena such as workplace bullying in organisations.” Moreover, extant research has been predominantly conducted in Western countries (Francioli et al., 2015; Nielsen, 2013), where cultures drastically differ from those in Eastern countries; a notable example of these differences is the higher individualistic values prevailing in the West (Hofstede, 2001; House, Hanges, Javidan, Dorfman, & Gupta, 2004). Viewing such cultural differences in the light of contemporary trends towards internationally connected workplaces, the significance of research that examines the effectiveness of leadership style(s) in managing employee behaviour across Eastern and Western contexts becomes apparent (see House et al., 2004). Workplace bullying is internationally recognised as representing unacceptable conduct, because it violates moral norms of respect and dignity at work (Bolton, 2007; Harvey et al., 2009; Samnani & Singh, 2012). Yet it is prevalent across cultures around the world (Nielsen et al., 2010; Power et al., 2013). This is because, beyond socio-cultural contexts, a negative work environment is identified as a major cause of workplace bullying (Einarsen, 1999; Hauge, Skogstad, & Einarsen, 2007; Leymann, 1996; Salin, 2008).

Nowadays the leadership topic is a major challenge for today’s organizations. Based on the leadership literature in Malaysia [1-3], it shows that research on the leadership topic is not a wide phenomenon in Malaysia as it is in Western countries. However, to improve the understanding of leadership performs in Malaysia some challenges made by local and international academic researchers to address the importance of leadership in Malaysia context. Furthermore, those literatures show that very little attempt conducted to examine leaders concerning ethical leadership and effectiveness behavior adopted in Malaysia context [4]. According to Hazlina, Azlan [5] and Madanchian, Hussein [4], there is lack of studies on ethical leadership issues among small firms in Malaysia and to date, work on ethics has been largely concentrated on large firms [6-8]. Therefore, there is an increasing awareness about ethical leadership among SMEs in Malaysia, thereby leading societies to object firms that are found to be ethically ill and irresponsible. Therefore, the main focus of this study is to find the impact of ethical leadership on leadership effectiveness among SMEs in Malaysia context. Specifically, this study examines the relationships between ethical leadership and leadership effectiveness.

2. Role of SMEs in Malaysia

Through the establishment of the National SME Development Council (NSDC) in 2004, the importance of SMEs as the main engine growth of the country’s economy was recognized [9, 10]. There is no doubt of the SMEs’ contribution to the country growth and economy development which is a crucial feature of economic growth in Malaysia [10-13]. In 2010, SMEs represented about 99.2% of total business establishments and contributed 39.1% of the country’s GDP. SMEs provided 59.5% of total employment and contributed 28.4% to the exports of the country in 2010 (NSDC 2015). One of the main purpose of the Eleven Malaysian Plan (11MP) for the period 2015 to 2020 is to organize and equip SMEs in the country with the required capability and capacity to meet the challenges of an increasingly competitive business environment [14].