Do Business Ethics Pay Off? The Influence of Ethical Leadership on Organizational Attractiveness

Journal of Psychology/Zeitschrift für Psychologie, Vol. 218, No. 4, pp. 213-224

41 Pages Posted: 13 May 2011 Last revised: 21 Mar 2012

See all articles by Maria Strobel

Maria Strobel

Technische Universität München - TUM School of Management

Andranik Tumasjan

Technische Universität München - TUM School of Management

Isabell M. Welpe

Technische Universität München (TUM) - School of Management

Date Written: June 29, 2010

Abstract

The ability to attract highly qualified employees constitutes a significant competitive advantage, and is ultimately linked to an organization’s economic success. Creating and maintaining organizational attractiveness is therefore crucial to organizations. While previous research has demonstrated that an organization’s ethical conduct (e.g., corporate social responsibility) enhances its attractiveness for potential employees, there is no empirical evidence on whether the ethical behavior of an organization’s leaders can also affect organizational attractiveness. Using both experimental and correlational data we investigate the influence of leader ethical behavior on organizational attractiveness and examine the underlying mechanisms behind this relationship. In line with our hypotheses, ethical leader behavior leads to significantly higher ethical leadership ratings and to significantly higher ratings of organizational attractiveness. Furthermore, higher ethical leadership ratings were associated with stronger intentions to pursue employment with the respective organization. This effect was simultaneously mediated by organizational prestige and the general attractiveness of the organization.

Keywords: Ethical Leadership, Organizational Attractiveness, Organizational Attraction, Employer Brand, Recruitment

JEL Classification: M10, M12

Suggested Citation

Strobel, Maria and Tumasjan, Andranik and Welpe, Isabell M., Do Business Ethics Pay Off? The Influence of Ethical Leadership on Organizational Attractiveness (June 29, 2010). Journal of Psychology/Zeitschrift für Psychologie, Vol. 218, No. 4, pp. 213-224, Available at SSRN: https://ssrn.com/abstract=1833407 or http://dx.doi.org/10.2139/ssrn.1833407

Maria Strobel

Technische Universität München - TUM School of Management ( email )

Leopoldstr. 139
Munich, 80804
Germany

Andranik Tumasjan (Contact Author)

Technische Universität München - TUM School of Management ( email )

Leopoldstr. 139
Munich, D-80804
Germany

HOME PAGE: http://www.strategie.wi.tum.de/index.php?id=20

Isabell M. Welpe

Technische Universität München (TUM) - School of Management ( email )

Leopoldstrasse 139
Munich, 80804
Germany
++49/89/289-24800 (Phone)
++49/89/289-24805 (Fax)

HOME PAGE: http://www.strategie.wi.tum.de

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