Linking Ethical Leadership to Employee Creativity: A Moderated Mediation Model of Organizational Commitment and Leader–Member Exchange

Abstract

This paper undertakes an investigation of the role of an ethical leadership in encouraging employee creativity by using the mediating effect of organizational commitment and the moderator effect of leader member exchange (LMX). Based on the Social Exchange Theory (SET), the study explains ethical leadership as an agent that incubates ethical concepts of justice, honesty, and psychological safety, which reinforces employees with affective commitment, as well as prompts them to innovate. The research employed a quantitative cross-sectional survey design in which 234 employees working in both the public and the private sectors in Lahore city, Pakistan were surveyed using face-validated questionnaires. Data analysis was done using the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique. The results indicate that ethical leadership has a prominent impact on the strength of organizational commitment and, increased organizational commitment is linked with employee creativity in a positive manner. Further, the findings also support mediation in a moderated framework whereby LMX influences the amplitude of such a relationship to demonstrate that when LMX is of good quality, it can transform the translation of organizational commitment into the creative performance. This paper makes a contribution to the body of knowledge by synthesizing ethical, relational and psychological mechanisms to formulate a complete theory and offers practical advice to an organization interested in developing sustainable creativity via ethics and positive leader-member relationships.

Keywords:  Ethical Leadership, Employee Creativity, Organizational Commitment, Leader-Member Exchange. Social Exchange Theory