The dual paths that ethical leadership drives employees'' sustainability behaviors.pdf

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. ASSOC. PROF. TRAN MAI DONG

2. ASSOC. PROF. 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
Mai Truong An


ACKNOWLEDGEMENTS
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 ........................................................................ i
ACKNOWLEDGEMENTS ....................................................................................... ii
TABLE OF CONTENT ............................................................................................ iii
LIST OF ABBREVIATIONS ................................................................................... ix
LIST OF TABLES ......................................................................................................x
LIST OF FIGURES AND DIAGRAMS ................................................................. xii
ABSTRACT ............................................................................................................ xiii
CHAPTER 1: INTRODUCTION ...............................................................................1
1.1. Research background .......................................................................................1
1.1.1. Ethical leadership and employees’ sustainability behaviors .....................1
1.1.2. Research gaps ............................................................................................6
1.1.3. The context of Vietnam...........................................................................13
1.2. Research purposes and questions ...................................................................15
1.3. Research object and scope .............................................................................16
1.4. Research methodology ...................................................................................16
1.5. Research contributions ...................................................................................17
1.5.1. Theoretical contributions ........................................................................17
1.5.2. Practical contributions .............................................................................18
1.6. Chapter outline ...............................................................................................18
CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT
...................................................................................................................................20
2.1. The study constructs .......................................................................................20
2.1.1. Ethical leadership ....................................................................................20


2.1.2. Organizational citizenship behavior toward the environment (OCB-E) 25
2.1.3. A review of the literature on the relationship between ethical leadership
and OCB-E ........................................................................................................26
2.1.3.1. Moral identity ...................................................................................37

2.1.3.2. Corporate environmental strategy ....................................................38
2.1.3.3. Green psychological climate ............................................................39
2.1.3.4. Agreeableness ..................................................................................39
2.2. Background theory .........................................................................................41
2.2.1. Social learning theory .............................................................................42
2.2.2. Social identity theory ..............................................................................44
2.2.3. Self-consistency theory ...........................................................................44
2.2.4. Upper echelons theory ............................................................................45
2.2.5. Substitutes for leadership theory .............................................................46
2.3. Hypotheses developments and proposed model ............................................47
2.3.1. The role of ethical leadership in driving OCB-E ....................................47
2.3.2. The mediating role of moral identity ......................................................49
2.3.3. The mediating role of corporate environmental strategy and green
psychological climate ........................................................................................54
2.3.4. The moderating role of agreeableness ....................................................57
2.3.5. Proposed model .......................................................................................60
CHAPTER 3: RESEARCH METHODOLOGY ......................................................62
3.1. Research design ..............................................................................................62
3.2. Scale and questionnaire ..................................................................................63
3.2.1. Variable measurements ...........................................................................63


3.2.1.1. Ethical leadership .............................................................................63
3.2.1.2. Organizational citizenship behavior toward the environment (OCBE) ...................................................................................................................65
3.2.1.3. Moral identity ...................................................................................67
3.2.1.4. Corporate environmental strategy ....................................................69
3.2.1.5. Green psychological climate ............................................................70
3.2.1.6. Agreeableness ..................................................................................71
3.2.1.7. Control variables ..............................................................................72
3.2.2. Questionnaire development .....................................................................72

3.3. Pilot test ..........................................................................................................73
3.3.1. Pilot test’s process ...................................................................................73
3.3.2. Pilot test’s results ....................................................................................75
3.4. Main study ......................................................................................................86
3.4.1. Data collection ........................................................................................86
3.4.2. Data analysis ...........................................................................................88
3.4.2.1. Common method bias ......................................................................89
3.4.2.2. Measurement model .........................................................................89
3.4.2.3. Structural model ...............................................................................90
3.4.2.4. Robustness checks ............................................................................91
CHAPTER 4: RESEARCH RESULTS AND DISCUSSIONS ................................92
4.1. Testing for common method bias ...................................................................92
4.2. Assessment of the measurement model .........................................................93
4.2.1. Factor loadings ........................................................................................93
4.2.2. The scale reliability .................................................................................99


4.2.3. The convergence validity ......................................................................100
4.2.4. The discriminant validity ......................................................................101
4.3. Assessment of the structural model .............................................................103
4.3.1. The variance inflation factor (VIF) .......................................................103
4.3.2. Hypotheses testing ................................................................................103
4.3.2.1. The direct effect .............................................................................104
4.3.2.2. The indirect effects.........................................................................105
4.3.2.3. The moderating effects...................................................................108
4.3.3. The coefficient of determination adjusted (R2) .....................................110
4.3.4. The Stone-Geisser Indicator values (Q2) ..............................................111
4.3.5. The effect size (f2) .................................................................................112
4.3.6. PLSpredict .............................................................................................113
4.3.7. Model comparisons ...............................................................................116

4.4. Robustness checks ........................................................................................121
4.4.1. CTA-PLS application for the measurement model’s robustness check121
4.4.2. Robustness check for the structural model ...........................................127
4.4.2.1. Nonlinear effects ...........................................................................127
4.4.2.2. Assessment of the endogeneity ......................................................128
4.4.2.3. Assessment of the unobserved heterogeneity ................................128
4.5. Discussions ...................................................................................................130
4.5.1. Hypotheses testing summary ................................................................130
4.5.2. Main effects ...........................................................................................132
4.5.3. Moderating effects ................................................................................135
CHAPTER 5: CONCLUSIONS AND IMPLICATIONS ..................................138


5.1. Conclusions ..................................................................................................138
5.2. Theoretical contributions and practical implications ...................................139
5.2.1. Theoretical contributions ......................................................................139
5.2.2. Practical implications ............................................................................141
5.3. 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 8.2.1. The direct effect
Appendix 8.2.2. The indirect effect
Appendix 8.2.3. The moderating effect
Appendix 8.3. The coefficient of determination adjusted (R2)


Appendix 8.4. The Stone-Geisser Indicator values (Q2)
Appendix 8.5. The effect size (f2)
Appendix 8.6. PLSpredict
Appendix 8.7. 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 .......................................................................11
Table 1.2: Definitions of the key constructs .............................................................12
Table 2.1: Comparison of ethical leadership and other types of leadership .............21
Table 2.2: Literature on empirical research between ethical leadership and

employees’ favorable behaviors in the .....................................................................29
Table 2.3: Literature on the empirical research between ethical leadership and
OCB/OCB-E .............................................................................................................33
Table 3.1: Ethical leadership scale ............................................................................65
Table 3.2: OCB-E scale.............................................................................................66
Table 3.3: Moral identity scale..................................................................................68
Table 3.4: Corporate environmental strategy scale ...................................................70
Table 3.5: Green psychological climate scale ...........................................................71
Table 3.6: Agreeableness scale .................................................................................72
Table 3.7: The results of Cronbach’s Alpha testing..................................................76
Table 3.8: The ethical leadership scale when removing EL2 ...................................82
Table 3.9: The organizational citizenship behavior toward the environment – OCB-E
scale when removing OE8 ........................................................................................83
Table 3.10: The summarization of the scale items after the pilot test ......................85
Table 3.11: Sample profile of respondents ...............................................................88
Table 4.1: Factor loadings .........................................................................................94
Table 4.2: The constructs’ Cronbach’s Alpha, CR, and AVE ................................100
Table 4.3: Fornell-Larcker criteria ..........................................................................102
Table 4.4: Heterotrait-Monotrait ratio ....................................................................102


Table 4.5: The VIF values .......................................................................................103
Table 4.6: The direct effect testing results ..............................................................104
Table 4.7: The indirect effect testing results ...........................................................107
Table 4.8: The moderating effects testing results ...................................................109
Table 4.9: The R2 values .........................................................................................111
Table 4.10: The Q2 values .......................................................................................112
Table 4.11: The effect size ......................................................................................113
Table 4.12: PLSpredict assessment .........................................................................115
Table 4.13: Model comparisons ..............................................................................120

Table 4.14: Confirmatory tetrad testing ..................................................................122
Table 4.15: Testing results for the potential nonlinearity .......................................128
Table 4.16: FIMIX-PLS results...............................................................................130
Table 4.17: Segment size ........................................................................................130
Table 4.18: The summarization of hypotheses testing results ................................131


LIST OF FIGURES AND DIAGRAMS
Figure 2.1: Proposed model ......................................................................................60
Diagram 3.1. Research process .................................................................................63
Figure 4.1: The direct effect analysis results ..........................................................105
Figure 4.2: The indirect effects analysis results ......................................................108
Figure 4.3: The moderating effects analysis results ................................................109
Figure 4.4: The relationship between ethical leadership and internalization moderated
by agreeableness ......................................................................................................110
Figure 4.5: The original model................................................................................117
Figure 4.6: The first alternative mode .....................................................................118
Figure 4.7: 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.


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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.
1.1. Research background
1.1.1. Ethical leadership and employees’ sustainability behaviors
Corporate scandals have currently been the subject of considerable media
attention (Kuenzi et al., 2020). 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.S. history (Epstein and
Buhovac, 2010). 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


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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., 2017).
Compared to other moral-based leadership (e.g., 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., 2022).
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


3

generation without compromising the ability of future generations to satisfy their own
(Salvia et al., 2019). 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., 2021).
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 (TostiKharas, 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. The process of driving and
improving sustainability is a complicated endeavor that calls for the concerted effort
of all organizational actors; especially, the discretionary efforts of employees
(Carmeli et al., 2017).
The behavior could be seen as “ a sustainability behavior” when it meets three
main objectives: (1) Environmental protection (relating to reducing impacts of the
greenhouse effects, lessening resource consumption, and pollution), (2) Social
development (in terms of human development, equity, and healthy), and (3)
Economic development (in terms of growth and profitable increase) (Wiiliams and
Dair, 2007). In the working context, activities that promote sustainability could be
interpreted as ethical behaviors (Bhattacharya et al., 2022), which determine the
success of significant organizational goals (Carmeli et al., 2017). Employee
participation in sustainable behaviors and activities is an organization's dedication to
sustainable development (Galpin, Whittington and Bell, 2015). In this study, the


4

conceptualization of “sustainability behavior” is considered in line with the definition
of organizational citizenship behavior toward the environment (OCB-E).
OCB-E is defined as “voluntary behavior not specified in official job

descriptions that, through the combined efforts of individual employees, help make
the organization and/or society more sustainable” (Lamm, Tosti-Kharas and
Williams, 2013, p. 165; Lamm, Tosti-Kharas and King, 2015). In this definition,
Lamm, Tosti-Kharas and Williams (2013) highlighted three main things. The first
one draws on the difference between general sustainability behavior and OCB-E.
While the general sustainability behavior is proactive environmental behaviors that
individual performs to reach climate change strategies and protect the environment
in the long term (e.g., recycling household waste, taking actions to protect forests or
local watersheds), OCB-E is proactive environmental behavior. It promotes
sustainability in general also but is performed in the organizational context. Second,
OCB-E is an extra-role behavior not forced by the organization’s formal policies and
procedures. The last one is that the primary purpose of OCB-E is to protect the
environment, such as recycling paper, plastic, and reducing electronic waste and
energy. These actions make the long-term good for the organization in terms of saving
resources. It can be seen that three main aspects of OCB-E (helping the environment,
other people, and organizations) meet three main subjects of sustainability behavior
– environmental, social, and economic development. Thus, in this study, employee
sustainability behavior is conceptualized in line with OCB-E. This argument is also
supported by Lamm, Tosti-Kharas and King (2015) when the authors highlighted that
OCB-Es reflect employees’ sustainability behaviors in the workplace. In addition,
Bhattacharya et al. (2022) also states that, among employee’s extraordinary ethical
behaviors, OCB-E is a sustainability-oriented behavior that benefits both
the social and environmental domains.
According to Boiral and Paillé

(2012), “the success of important

environmental programs may hinge on employee behavior beyond the scope of formal
reward and performance evaluation systems.” Many organizations and companies

5

have had inconsistent success by encouraging employees to minimize water, paper,
waste, and energy in products or operations (Galpin, Whittington and Bell, 2015).
Despite its importance, employee voluntary behavior has not been empirically
examined much in the environmental management literature (Boiral and Paillé, 2012;
Temminck, Mearns and Fruhen, 2015; Rezapouraghdam, Alipour and Arasli, 2019).
Moreover, most environmental management research does not differentiate between
employees’

environmental voluntary involvement behavior

(OCB-E) and

involvement behavior (Boiral and Paillé, 2012). As noted by Lamm, Tosti-Kharas
and Williams (2013) and Lamm, Tosti-Kharas and King (2015), the distinction is that
OCB-E is not rewarded as well as taken into account by the firm’s environmental
standards, policies, and procedures, while formal management systems support
involvement behaviors (Boiral and Paillé, 2012; Lamm, Tosti-Kharas and Williams,
2013; Lamm, Tosti-Kharas and King, 2015). When employees conduct OCB-E, they
consume fewer resources at the workplace, which helps save financial, time, and
labor expenses (Tosti-Kharas, Lamm and Thomas, 2017). Thus, inspiring this
behavior is the firm’s vital strategy (Rezapouraghdam, Alipour and Arasli, 2019),
particularly with the driving role of leadership (Lamm, Tosti-Kharas and Williams,
2013; Lamm, Tosti-Kharas and King, 2015). In addition, Paterson and Huang (2019)
and Kuenzi et al. (2020) also suggested that future research in ethical leadership
should focus more on predicting ethical behaviors (e.g., OCB-E) since such actions
will benefit the firm and the others in the organization. Addressing the calls of Lamm,
Tosti-Kharas and Williams (2013), Lamm, Tosti-Kharas and King (2015),

Rezapouraghdam, Alipour and Arasli (2019), Paterson and Huang (2019), and
Kuenzi et al. (2020), the relationship between ethical leadership and OCB-Es is
investigated in this study.


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1.1.2. Research gaps
As ethical leaders are considered the organization’s essential elements to set a
moral tone for formal control systems through practices, policies, and procedures;
which decline corporate misconduct and boost staff members’ ethical activities
(Brown, Treviño and Harrison, 2005; Brown and Treviño, 2014; Kuenzi et al., 2020).
Ethical leadership is still an intriguing topic for both practitioners and researchers.
Although many studies were conducted to seek a connection between ethical
leadership and its potential outcomes, the literature relating to ethical leadership is
underexplored (Bavik et al., 2018). In line with the idea that perceived ethical
leadership could enhance adorable employee behaviors, some studies suggested that
further research should investigate the driving role of ethical leadership on employee
ethical actions (Paterson and Huang, 2019); particularly pro-social behaviors (Kuenzi
et al., 2020) such as employee organizational citizenship behavior (OCB) (Gerpott et
al., 2019; Tourigny et al., 2019; Kim and Vandenberghe, 2020; Huang et al., 2021;
Nemr and liu, 2021). Because employees play a vital role in originating and
implementing their leaders' ideas and principles, as well as corporate purposes, and
thus have the potential to impact the organizational performance (Dey et al., 2022).
Although a majority of previous research demonstrated the important role of
ethical leadership and favorable employee attitudes and behaviors, including OCB;
there is still a scarce of research on how ethical leadership can drive employees' OCBE, the third type of OCB, except for the study by Khan et al. (2019) and Dey et al.
(2022). In the context of sustainability, the effect of ethical leadership on promoting
employees’ voluntary environmental behaviors could make the organization achieve
long-term sustainable performance (Dey et al., 2022).

Thus, this study firstly contributes to the existing literature by examining the
nexus between ethical leadership and OCB-E. This current work explains such a
relationship based on social learning theory (Bandura, 1977; 1986). This theory stated
that individuals could learn and imitate the attitudes, decisions, and actions of those
they consider credible, attractive, and legitimate models (Bandura, 1977; 1986).


7

Therefore, ethical leaders, as attractive and credible models, will enhance their
followers’ effective and positive actions such as citizenship behaviors (Kalshoven,
Den Hartog and de Hoogh, 2013; Gerpott et al., 2019; Kim and Vandenberghe, 2020)
and organizational citizenship behavior toward the environment (Khan et al., 2019;
Ahmad et al., 2021).
Moreover, the mechanism from which ethical leaders encourage their
followers’ OCB-E is still limited. When it comes to the effect of ethical leadership
on employee voluntary behaviors toward the environment, most studies investigated
the mechanisms from which ethical leadership impacts OCB-E ignored the mediating
roles of employee moral identity and corporate environmental strategy as these
studies focus on the linking part of green human resource management (Islam et al.,
2020; Ahmad et al., 2021), green psychological climate (Khan et al., 2019), and
ethical climate (Dey et al., 2022). As argued by Bavik et al. (2018), employees’ moral
identity, which is conceptualized as “a self-conception organized around a set of
moral traits” (Aquino and Reed, 2002), is influenced by their moral managers could
enhance their appropriate behaviors in the workplace. In addition, according to
Kuenzi et al. (2020), regarding the operation of an organization, top managers will
set strategic policies relating to the company’s goals and install procedures that could
be seen as guidelines for employees to practice. The implementation of practices was
perceived and shared among employees; that is how the organizational psychological
climate was shaped (Norton et al., 2017). Thus, this study proposes that besides

altering employee moral identity, ethical leaders, who pay attention to the
environment’s sustainable development, will set corporate environmental strategies
that create a green psychological climate and then influences OCB-E. In this study,
while corporate environmental strategy is understood as “employees’ awareness and
knowledge of their organization’s corporate environmental strategy relates positively
to green psychological climate”, green psychological climate stands for “employees’
perceptions and interpretations of their organization’s policies, procedures, and
practices regarding environmental sustainability” (Norton et al., 2017).


8

Furthermore, the dual paths that ethical leadership could motivate employee
organizational citizenship behavior toward the environment is an unrevealed theme.
In the ethical leadership literature, a few studies consider the different roles of two
pillars of this type of leadership (the moral person and the moral manager) in
predicting employees’ favorable behaviors (Bavik et al., 2018). In other words, there
is not enough clue to determine whether the influences of two sub-dimensions of
ethical leadership on OCB-E are channeled through the different mechanisms.
According to Brown and Treviño (2006), Huang and Paterson (2017), Kim
and Vandenberghe (2020), and Kuenzi et al. (2020), in the organizational context,
there are two control systems (informal and formal) that promote ethical or unethical
behavior. The informal systems involve myths, norms, stories, and role models;
whereas the formal systems include climates reflecting the perceptions of structures,
policies, reward systems, authority, and ethics training programs (Schaubroeck et al.,
2012; Huang and Paterson, 2017; Kim and Vandenberghe, 2020; Kuenzi et al., 2020).
As claimed by Brown, Treviño and Harrison (2005) and Brown and Treviño (2006;
2014), to be perceived as an ethical leader, the manager must perform two aspects: a
moral person and a moral manager. The first aspect, a moral leader, means that this
leader will own appropriate characteristics such as trustworthiness, fairness, integrity,

and honesty (Brown and Treviño, 2006; Lee et al., 2017). The ethical leader can
motivate employee moral behavior by being a role model and communicating about
ethical values (Brown, Treviño and Harrison, 2005; Brown and Treviño, 2006).
Gerpott et al. (2019) admitted that this aspect of ethical leadership could be seen as
“the informal characteristics” of the workplace that shapes the employee perceptions
of what is right or wrong. The second aspect, as a moral manager, the ethical leader
can nurture followers’ morally desirable actions by issuing and enforcing codes of
ethics such as policies, strategies, practices, and procedures (Brown, Treviño and
Harrison, 2005; Brown and Treviño, 2006; Bavik et al., 2018). Based on the
arguments mentioned above, this research suggests two paths that ethical leadership


9

could drive OCB-E: (1) the informal path, the ethical leader as a moral person; and
(2) the formal path, the ethical leader as a moral manager.
Regarding the first pathway, the mechanisms connecting ethical leadership
and followers’ behavior miss the role of moral identity. As claimed by Bavik et al.
(2018), the ethical leaders could encourage subordinates’ moral conduct through
enhancing their moral cognitions. Therefore, the first route through which ethical
leadership boosts OCB-E that is taken into account in this research is the development
of moral identity. This study relies on social identity theory (Tajfel and Turner, 1979;
Tajfel, 1982), which highlights that individual social identity mediates the
relationship between social structure and their behaviors, to explain this pathway.
The formal pathway that ethical leadership could boost OCB-E relates to the
second pillar of ethical leadership, as a moral manager. This study, distinguishing
from prior research which investigates the mediating roles of green psychological
climate (Khan et al., 2019), green human resource management (Islam et al., 2020),
and ethical climate (Dey et al., 2022), suggests two controlled tools (including
corporate environmental strategy and green psychological climate) that a moral

manager can apply to encourage their staff’s ethical behaviors (e.g., OCB-E).
According to Banks et al. (2021), ethical leaders would raise and reinforce followers’
ethical concerns and actions via moral decision-making, rewards, and punishments.
As emphasized by upper echelons theory (Hambrick and Mason, 1984; Hambrick,
2007), the organization’s strategies reflect top executives’ leadership styles. This
study is based on this theory to suggest that ethical leaders can create this environment
by publishing corporate environmental strategies, which shape the organization’s
green psychological climate. This kind of climate will enhance OCB-E as stated by
social learning theory (Bandura, 1977; 1986); individuals can learn value, knowledge,
and behaviors from their surrounding environment, such as the organization’s climate
(Birtch and Chiang, 2014).
Last but not least, this study investigates the moderating role of agreeableness
in moderating the relationship between ethical leadership and moral identity.


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Substitutes for leadership theory (Podsakoff, MacKenzie and Fetter, 1993)
suggested that individuals’ characteristics could lessen or substitute for the effects of
leadership. Among the Big Five personalities, agreeableness is considered as a "trait
morality" (McFerran, Aquino and Duffy, 2010). Agreeableness is “a major
dimension of personality characterized by the motivation to have positive and
harmonious interpersonal relationships” (McCarthy, Wood and Holmes, 2017). This
personality is a significant dimension of individual characteristics that encourage
people to get along with each other in a good and adorable way (McCarthy, Wood
and Holmes, 2017), such as the relationship between ethical leaders and their staff.
Despite that, most previous studies (Brown, Treviño and Harrison, 2005; Brown and
Treviño, 2006; Walumbwa and Schaubroeck, 2009) focus on this strait as the
antecedent of ethical leadership instead of investigating agreeableness as the
“moderating factor” that regulates the effect of ethical leaders on their followers’

cognition (e.g., moral identity). Thus, in the concept of substitutes for leadership
theory (Podsakoff, MacKenzie and Fetter, 1993), this study examines the role of
employees’ moral personalities (e.g., agreeableness) in moderating the bond between
ethical leadership and employee moral identity.
To recap, this study investigates the effect of ethical leadership on OCB-E
through two mechanisms: (1) Through employee moral identity (internalization and
symbolization) and (2) through corporate environmental strategy and green
psychological climate. In addition, the current study also examines the moderating
roles of agreeableness in the nexus between ethical leadership and the two dimensions
of moral identity. The study’s main constructs and the constructs’ definitions are
presented in Table 1.1 and Table 1.2.