The Study of Ethical Leadership and Employee Organisational Citizenship Behaviour towards Organisational Success : the Lens of Corporate Governance

Teoh, Chia Wen (2021) The Study of Ethical Leadership and Employee Organisational Citizenship Behaviour towards Organisational Success : the Lens of Corporate Governance. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

The concept of ethics and corporate governance has grown in international interest since the late 1990s. Specifically in Malaysia, the financial crisis in 1997 placed a great concern and has recognised and necessitates the concept of corporate governance in the public and private sector. In light of the economic downturn and practice of new norms as a result of the Covid-19 pandemic crisis, organisations have to enhance their productivity and reduce costs of control mechanisms and operations. This has shed light to the importance of Employee Organisational Citizenship Behaviour (EOCB) where such extra-miles behaviour is likely to promote overall organisational effectiveness at a relatively low cost. In brief, this leads to present study centring ethical leadership and corporate governance, and study their impact on EOCB and organisational success. This study examines the impact of ethical leadership, ethical climate, and corporate governance towards EOCB and, subsequently towards organisational success by employing the theories of sociology and psychology. To achieve the objectives of this research, a quantitative with cross-sectional study has been carried out by surveying 300 employees who are currently working in the companies’ accounting and finance department. The data obtained are then analysed via Statistical Package for Social Sciences (SPSS) and Partial Least Square – Structural Equation Modelling (PLS-SEM a.k.a. SmartPLS). The research findings reveal that ethical leadership builds strong ethical climate and corporate governance in the organisation which subsequently result in EOCB. Interestingly, corporate governance of an organisation is found to be one of the predictors which contributes small and large effect on the EOCB and success of the organisation respectively. This study contributes to the literature of EOCB by providing the initial evidence on the role of corporate governance as an antecedent towards EOCB and organisational success. Besides, this research demonstrates further insights by evincing the importance of EOCB and its contribution towards organisational success. From a practical perspective, the research findings have highlighted the importance of corporate governance, specifically transparency, accountability and independence, and ethics in the workplace that will encourage employees’ citizenship behaviour and foster the success of an organisation.