THE ROLE OF ETHICAL LEADERSHIP IN SHAPING EMPLOYEE ETHICAL BEHAVIOR: THE PARALLEL MEDIATING EFFECTS OF ETHICAL CLIMATE AND ISLAMIC WORK ETHICS

Authors

  • Muhammad Hamza Khan Hailey College of Commerce, University of the Punjab, Lahore, Pakistan
  • Asfar Anwar University of Glouestershire, Cheltenham, UK
  • Mohsin Tariq Business School, Ulster University, UK

DOI:

https://doi.org/10.22452/

Keywords:

Ethical leadership; Ethical climate; Islamic work ethics; Employee ethical behaviour; Parallel mediation

Abstract

This study examines how ethical leadership influences employee ethical behaviour through two distinct but complementary mechanisms: ethical climate and Islamic work ethics (IWE). A quantitative cross-sectional survey was conducted with 320 full-time employees from public and private sector organizations in Pakistan who had at least six months of organizational experience. Data were analyzed using partial least squares structural equation modelling in SmartPLS 4, with bootstrapping based on 5,000 re-samples. The findings show that ethical leadership is positively associated with employee ethical behaviour, ethical climate, and IWE, whereas both ethical climate and IWE are positively associated with employee ethical behaviour. Both mediators significantly transmitted the relationship between ethical leadership and employee ethical behaviour, while the direct relationship remained significant, indicating partial parallel mediation. This study contributes to the literature by integrating Social Learning Theory, Social Information Processing Theory, and Ethical Climate Theory to explain how ethical leadership operates through both organizational context-and individual value-based pathways. The findings suggest that organizations should combine ethical leadership development with systems that reinforce ethical standards and support relevant work-related ethical values. The cross-sectional, self-reported design limits causal inference and generalizability.

Author Biographies

  • Muhammad Hamza Khan, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan

    Hailey College of Commerce, University of the Punjab, Lahore, Pakistan

  • Asfar Anwar, University of Glouestershire, Cheltenham, UK

    University of Glouestershire, Cheltenham, UK

  • Mohsin Tariq, Business School, Ulster University, UK

    Business School, Ulster University, UK

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Published

2026-10-09

Issue

Vol. 6 No. 2 (2026): Vol. 6 No. 2 (2026): Online Journal of Islamic Management and Finance

Section

Islamic Management

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How to Cite

THE ROLE OF ETHICAL LEADERSHIP IN SHAPING EMPLOYEE ETHICAL BEHAVIOR: THE PARALLEL MEDIATING EFFECTS OF ETHICAL CLIMATE AND ISLAMIC WORK ETHICS. (2026). Online Journal of Islamic Management and Finance (OJIMF), 6(2), 36-53. https://doi.org/10.22452/