The Effect of Ethical Leadership on Organization Ethical Climate

Organizational environment is one of the influent factors on employees’ behavior and attitude in the workplace. Thus, today, with increasing importance of ethics in business, attention to creating factors of organization's ethical climate becomes important. Previous studies show that managers play a vital role in providing an ethical framework for organization’s members. The aim of this study is research about ethical leadership effect on organization ethical climate. So, after introducing two variables, ethical leadership and organization's ethical climate, based on literature about this matter, relationship between these variables was investigated and research hypotheses were formulated. This research is application based on aim and survey based on methodology. Statistical society was employees of governmental banks in South Khorasan so that sample was selected from 120 persons of them randomly. Data were gathered by two questionnaires, ethical leadership and ethical climate, and analyzed by regression analysis and structural equations model. Results of main hypothesis analysis showed that ethical leadership has significant and strong effect on organizational ethical climate (γ= 4.79; ρ= 0.000). Results of analyzing Sub-hypotheses confirmed significant effect between interpersonal interactions (R2= 0.169; ρ= 0/000), modeling (R2= 0.452; ρ= 0/000) and action oriented behavior (R2=0.364; ρ= 0/000) of ethical leader on organization ethical climate. Ethical leadership with establishing ethical interactions (interpersonal interactions), playing ethical model role for staff (modeling) and significant attention to ethics in organization, using improving ethical behavior methods and decreasing non-ethical behavior (action oriented behavior) can be effective on organization ethical climate.