Impact of Ethical Leadership on Creativity: The Mediating Role of Psychological Empowerment and Intrinsic Motivation

Published on International Journal of Economics & Business
ISSN: 2717-3151, Volume 1, Issue 1, page 128 – 139
Date: 20 September 2018
© Copyright International Journal of Zambrut

Shoaib Zubair, Luqman Mushtaq, Waleed Aamir & Sohail Ahmad

Shoaib Zubair, Luqman Mushtaq, Waleed Aamir, & Sohail Ahmad
Department of Business Administration, University of Sargodha Gujranwala Campus

This study investigates the effect of ethical leadership and creativity with mediating role of psychological empowerment and intrinsic motivation. A causal study was conducted to test the hypothesis. The data were collected from 234 employees of Pepsi and Gourmet. The results show that ethical leadership positively relate with psychological empowerment and intrinsic motivation as well as with creativity. The mediation of psychological empowerment and intrinsic motivation between ethical leadership and creativity has also been proved. Finally, based on our results, we discuss the implications which are helpful for the managers.

Keywords: Ethical Leadership, Creativity, Psychological Empowerment, Intrinsic Motivation.

1. Introduction
Creativity become an important concern in research studies (Shalley & Zhou, 2008) and become very important for any business to survive in this challenging environment (Amabile, 1996; Gourlay & McGrath, 2013; Hirst, Van Knippenberg, & Zhou, 2009; McMahon & Ford, 2012; Porter, 1998; Xia & Li-Ping Tang, 2011). Therefore, organizations should focus on developing a creative culture (George & Zhou, 2001). The majority of the existing research has found that intrinsic motivation is an important variable that stimulates creativity (Elsbach and Hargadon, 2006). Intrinsic motivation creates positive affection, cognitive flexibility, openness to risk-taking, and persistence, leading to the development of creativity (Shalley et al., 2004). Researchers have identified three possible reasons why intrinsic motivation develops creativity. First, emotion theorists have proposed that intrinsic motivation creates positive affect which stimulates creativity by increasing the volume of cognitive information available, extending the range of attention available for assimilating various ideas, and promoting cognitive flexibility for defining patterns and relations between ideas (Silvia, 2008). Second, self-determination theorists have said that intrinsically motivated employees are more likely to have a higher level of curiosity and a superior interest in learning, allowing them to develop cognitive flexibility, a willingness to take risks, and openness to density, which ultimately leads to increases in creativity (Moon Jea-Kyoon Jun, 2016). Finally, both emotion and self-determination theorists agree that determination plays a vital role in intrinsic motivation promoting creativity. From the perspective of emotion theorists, intrinsic motivation increases positive affection which in turn develops sustained emotional engagement and a greater time commitment to work (e.g., Fredrickson, 1998). From the perspective of self-determination theory, intrinsic motivation encourages confidence and interest, which allows employees to persist with challenging, complicated, and novel tasks, and provides them with greater concentration for those tasks (Gagne and Deci, 2005). Ethical leadership is the main driving force which helps in developing a culture of creativity. In current era, many researchers placed a significant contribution of leadership in developing creativity and creating new and innovative ideas. As well as many studies show a positive relationship ……..

2. Literature Review
2.1 Ethical leadership and creativity
According to Brown et al. (2005) ethical leadership is “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making”. Leaders are seen as ethical leaders if they have the following characteristics: honesty, visibility, altruism, group determination, and integrity, care others, reliability, support rights and also create well balanced judgments (Brown & Treviño, 2006). According to Oldham and Cummings (1996) employees show more creativity when they are encouraged and supported by leaders. Creativity means the generation of new and useful ideas which are related to products and services, processes, and procedures (Madjar et al., 2002; Zhou & Shalley, 2003). Creativity helps to seek out new ways of work and innovative ideas to develop new opportunities (Amabile, 1983). To find new and innovative ways of work employees have to disagree with the leaders (Cheung & Wong, 2011). So there is need of supportive behavior of leaders which also allow employees to perform non routine task of creativity (Amabile & Gryskiewicz, 1987). In this regard ethical leadership helps to develop good relationship with employees who consider leaders supportive ………

3. Research Methodology
3.1 Research design
The purpose behind the study is to test the mediating effect of intrinsic motivation between ethical leadership and creativity. For this purpose cross sectional study was conducted. We use non probability sampling technique more precisely convenience sampling technique. Employees of manufacturing company working in Gujranwala (Pepsi and Gourmet) were our targeted population. Causal study was conducted to test the hypothesis. We distribute 300 questionnaires, out of which 234 questionnaires are found complete. 66 questionnaires were found incomplete and provide unreasonable information, therefore removed from the study. The response rate is 78%. SPSS was used to find any missing value, omission and legibility in the data.

3.2 Data collection
To collect the data which is related to the variables, a structured questionnaire was used. The questionnaire consists of 37 questions. The scale items was measured on five point Likert scale (1 means strongly disagree, 2 means disagree, 3 means neutral, 4 means agree, 5 means strongly agree). First 3 items of questionnaire are related to the respondent’s demographics (gender, age and education)…….

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