The moderating effect of Transformational Leadership on the Relationship between Ethical Organizational Climate and Job Satisfaction

Matilda Isaac Mustapha and Sahil Koul
Professor In quantitative systems, School of Business Madonna University
Ph. D. Candidate, College of Technology Eastern Michigan University

Abstract: The context of ethical organizational climate refers to an organizational construct on how ethically employees perceive the policies, practices, and procedure within an organization. This perception if negative stems from a breach of psychological contract between the employee and leadership. Several studies postulate that employees were more dissatisfied when their ethical values were incongruent with an organizational ethical climate, and this metamorphosed into job dissatisfaction. Using these dimensions, the relationship between the two constructs would become the foundation of our study. After establishing through literature the strength of the relationship between job satisfaction and ethical organizational climate, a quantitative correlational research design was utilized to draw generalized inferences about the selected study population. The study further investigated the moderating effects of transformational leadership on both job satisfaction and ethical organizational climate. The test of correlation indicated a statistically significant positive correlation between the ethical organizational climate and job satisfaction. In predicting interactive effects of transformational leadership on the strength of the relationships between the constructs, the findings were statistically significant inferring that transformational leadership does moderate the relationship between ethical organizational climate and job satisfaction.

Keywords: Ethical Climate, Transformational Leadership, Job satisfaction