the mediating effect of organizational ethical...

THE MEDIATING EFFECT OF ORGANIZATIONAL ETHICAL CLIMATE ON THE

RELATIONSHIP BETWEEN ETHICAL LEADERSHIP AND WORKPLACE

DEVIANCE IN PUBLIC HEALTHCARE SECTOR OF PAKISTAN

MUHAMMAD YASIR

UNIVERSITI TEKNOLOGI MALAYSIA

THE MEDIATING EFFECT OF ORGANIZATIONAL ETHICAL CLIMATE ON THE

RELATIONSHIP BETWEEN ETHICAL LEADERSHIP AND WORKPLACE

DEVIANCE IN PUBLIC HEALTHCARE SECTOR OF PAKISTAN

MUHAMMAD YASIR

A thesis submitted in fulfilment of the

requirements for the award of the degree of

Doctor of Philosophy (Management)

Faculty of Management

Universiti Teknologi Malaysia

AUGUST 2017

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I dedicate this dissertation to my dearest and supportive parents

Hafiz Muhammad Nazir Khan and Zakia Begam

my kind-hearted siblings

Muhammad Zubair, Aliya Begam, Sadia Qasim, Muhammad Munir and Salma Saad

my caring wife

Sara Arif

and my sweet daughter

Lubna Yasir.

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ACKNOWLEDGEMENT

Alhamdulillah, first and foremost, I want to thank Almighty Allah whose

countless blessings enabled me to complete this dissertation. Further, special

appreciation goes to my academic supervisors Prof. Dr. Amran Md Rasli and Dr. Noor

Azmi Mohamad, for their constant support, guidance, and motivation during this PhD

journey. Their invaluable help of constructive comments and suggestions throughout

this dissertation have contributed to the success of this research.

I would also like to thank Prof. Dr. Rosman Bin Md Yusoff and Prof. Dr. Wan

Khairuzzaman Bin Wan Ismail for their valuable suggestions. Moreover, I am thankful

to all the doctors and nurses of the public-sector hospitals of Peshawar, Pakistan, who

took time to complete the questionnaires. I am also very grateful to all academic and

support staff of Faculty of Management, Universiti Teknologi Malaysia (UTM), that

have taken some time to discuss my work.

Many thanks to my parents and family members, as this achievement is a

testimony of the prayers and support they have put in. Lastly, I would also like to take

this opportunity to thank all my friends who have given their constant support,

encouragement and warmly contributed their experiences.

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ABSTRACT

Over the years, increased level of deviant behavior among the employees of public sector organizations has been observed. The situation is worst in the public healthcare sector of Pakistan, where numerous incidents of employee deviant behavior have been reported recently. This scenario is compelling scholars and practitioners to find appropriate solutions to address this issue. Researchers agree that establishing an organizational ethical climate can help in reducing workplace deviance. However, limited studies exist on the role of ethical leadership in establishing an organizational ethical climate in order to minimize employee deviant behavior in the public healthcare sector. Thus, to fill this gap, the current study aims to investigate the interrelationship between ethical leadership and workplace deviance with the mediating role of organizational ethical climate in the context of public healthcare sector. This research employed survey strategy, using the quantitative method with a cross-sectional research design, and with multi-stage sampling technique. 289 usable questionnaires were collected from doctors and nurses in the public healthcare sector of Pakistan. Statistical Package for Social Sciences (SPSS) was utilized to assess the data in terms of coding, missing data, outliers, normality, pilot testing and common method bias test and to compute preliminary data analysis such as mean, standard deviation and frequencies for each variable and to conduct Exploratory Factor Analysis (EFA) on ethical leadership and workplace deviance. Moreover, Structural Equation Modeling (SEM) was conducted using Analysis of Moment Structures (AMOS) in order to test the hypothesized model and determine the direct and indirect effects. Results of this research revealed that ethical leadership negatively influenced workplace deviance. Moreover, ethical leadership had a positive effect on organizational ethical climate. Results of the study showed that organizational ethical climate had a negative relationship with workplace deviance. This research also found that organizational ethical climate mediated the relationship between ethical leadership and workplace deviance. Thus, this research identified the significance of ethical leadership behavior which assists in establishing an ethical organizational climate, leading towards less likelihood of the emergence of workplace deviance. Therefore, top management of the public healthcare sector of Pakistan should seek to select and develop ethical leaders, establish an ethical organizational climate, thereby reducing the emergence of workplace deviance.

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ABSTRAK

Selama bertahun-tahun, peningkatan tingkah laku penyelewengan dalam kalangan pekerja organisasi di sektor awam telah diperhatikan. Keadaan ini lebih buruk dalam sektor penjagaan kesihatan awam Pakistan, di mana banyak insiden tingkah laku penyelewengan pekerja telah dilaporkan baru-baru ini. Situasi ini menarik perhatian para penyelidik untuk mencari penyelesaian yang sesuai bagi menangani isu tersebut. Para pengkaji bersetuju bahawa kewujudan iklim etika organisasi dapat membantu dalam mengurangkan tingkah laku penyelewengan di tempat kerja. Walau bagaimanapun, kajian hanya terhad tentang peranan kepimpinan beretika dalam mewujudkan iklim etika organisasi bagi meminimumkan tingkah laku penyelewengan pekerja dalam sektor penjagaan kesihatan awam. Oleh itu, untuk mengisi jurang ini, kajian ini bertujuan untuk mengkaji hubungan antara kepimpinan etika dan penyelewengan tempat kerja dengan perantaraan peranan iklim etika organisasi dalam konteks sektor kesihatan awam. Kajian ini menggunakan strategi tinjauan dengan penggunaan kaedah kuantitatif dengan reka bentuk penyelidikan keratan rentas dan teknik pensampelan pelbagai tahap. 289 soal selidik yang boleh digunakan diperoleh dari doktor dan jururawat di sektor penjagaan kesihatan awam Pakistan. Pakej Statistik untuk Sains Sosial (SPSS) telah digunakan untuk menilai data dari segi pengekodan, data yang hilang, data outlier, data normal, ujian rintis dan ujian bias kaedah umum dan untuk mengira analisis data awal seperti min, sisihan piawai dan frekuensi bagi setiap pembolehubah serta menjalankan Analisis Faktor Eksplorasi (EFA) terhadap kepimpinan beretika dan penyelewengan di tempat kerja. Selain itu, Pemodelan Persamaan Struktur (SEM) telah dilaksanakan menggunakan Analisis Struktur Moment (AMOS) untuk menguji model hipotesis dan menentukan kesan langsung dan tidak langsung. Keputusan kajian ini menunjukkan bahawa kepimpinan etika mempunyai pengaruh negatif terhadap penyelewengan di tempat kerja. Selain itu, kepimpinan beretika mempunyai kesan positif terhadap iklim etika organisasi. Dapatan kajian menunjukkan bahawa iklim etika organisasi mempunyai hubungan negatif dengan penyelewengan di tempat kerja. Kajian ini juga mendapati bahawa iklim etika organisasi menjadi pengantara hubungan antara kepimpinan etika dan penyelewengan tempat kerja. Oleh itu, kajian ini mengenal pasti kepentingan tingkah laku kepimpinan etika yang membantu dalam mewujudkan iklim organisasi etika, yang membawa kepada kemunculan ketidakadilan di tempat kerja. Oleh itu, pengurusan tertinggi sektor kesihatan awam di Pakistan perlu berusaha untuk memilih dan membangunkan pemimpin yang beretika, mewujudkan iklim organisasi etika, dengan itu dapat mengurangkan kemunculan penyelewengan di tempat kerja.

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TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION

DEDICATION

ACKNOWLEDGEMENT

ABSTRACT

ABSTRAK

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

LIST OF ABBREVIATIONS

LIST OF APPENDICES

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iii

iv

v

vi

vii

xii

xiv

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1 INTRODUCTION 1

1.1 Background of the Study 1

1.1.1 Public Healthcare Sector of Pakistan 3

1.2 Problem Statement 6

1.3 Research Questions 10

1.4 Research Objectives 10

1.5 Scope of the Study 11

1.6 Significance of the Study 12

1.7 Definitions of Terms 13

1.7.1 Ethical Leadership 13

1.7.2 Workplace Deviance 14

1.7.3 Organizational Ethical Climate 15

1.8 Structure of the Thesis 15

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2 LITERATURE REVIEW 17

2.1 Introduction 17

2.2 Development in Leadership Approaches 18

2.3 Ethical Leadership 24

2.3.1 Defining Ethical Leadership and Ethical

Leaders 26

2.3.1.1 Altruism 36

2.3.1.2 Courage 37

2.3.1.3 Ethical Guidance 37

2.3.1.4 Integrity 38

2.3.1.5 Fairness 38

2.3.2 Comparing Ethical Leadership with

Transformational, Servant and Authentic

Leadership Approaches 39

2.3.3 Factors affected by Ethical Leadership 40

2.4 Workplace Deviance 42

2.4.1 Defining Workplace Deviance 45

2.4.2 Factors affecting Workplace Deviance 47

2.5 Organizational Ethical Climate 49

2.5.1 Defining Organizational Ethical Climate 52

2.5.2 Factors That Affect and Get Affected by

Organizational Ethical Climate 53

2.6 Theoretical Underpinning of the Study 56

2.6.1 Social Exchange Theory 56

2.6.2 Social Learning Theory 58

2.6.3 Social Information Processing Theory 59

2.7 Hypotheses Development 60

2.7.1 Ethical Leadership and Workplace Deviance 60

2.7.2 Ethical Leadership and Organizational

Ethical Climate 61

2.7.3 Organizational Ethical Climate and

Workplace Deviance 63

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2.7.4 Organizational Ethical Climate as a

Mediator 64

2.8 Framework of the Study 66

2.9 Chapter Summary 67

3 RESEARCH METHODOLOGY 68

3.1 Introduction 68

3.2 Research Paradigms 68

3.3 Research Design 72

3.4 Sampling 74

3.4.1 Sample Frame 74

3.4.2 Sample Size 75

3.5 Data Collection 79

3.6 Measurement Instruments 80

3.6.1 Scale for Ethical Leadership 81

3.6.2 Scale for Workplace Deviance 85

3.6.3 Scale for Organizational Ethical Climate 86

3.6.4 Demographic and Control Variables 88

3.6.5 Questionnaire Layout 88

3.6.6 Pilot Study 89

3.7 Strategies for Data Analysis 90

3.7.1 Preliminary Data Analysis 90

3.7.2 Structure Equation Modeling 91

3.7.2.1 SEM Assumptions 93

3.7.2.2 Evaluating the Fit of the Model 93

3.8 Factor Analysis 94

3.9 Validity and Reliability 95

3.10 Ethical Issues 95


4 DATA ANALYSIS 98

4.1 Introduction 98

4.2 Data Editing and Coding 99

4.3 Data Screening 99

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4.4 Response Rate 105

4.5 Demographic Description 106

4.6 Descriptive Statistics 107

4.7 Common Method Bias 108

4.8 Factor Analysis 110

4.8.1 EFA for Ethical Leadership 110

4.8.2 EFA for Workplace Deviance 114

4.8.3 CFA for Ethical Leadership 117

4.8.4 CFA for Workplace Deviance 118

4.9 Analysis and Results of Measurement Model and

Structural Model 119

4.9.1 Stage One: Measurement Model 120

4.9.1.1 Validity and Reliability of the

Constructs 122

4.9.2 Stage Two: Structural Model 126

4.9.2.1 Direct Effects 128

4.9.2.2 Indirect Effects 134


5 DISCUSSION AND CONCLUSIONS 140

5.1 Introduction 140

5.2 Overview of this Research 140

5.3 Discussion of Results 143

5.3.1 Level of Workplace Deviance, Ethical

Leadership, and Ethical Climate 143

5.3.2 Ethical Leadership and Workplace Deviance 145

5.4 Ethical Leadership and Organizational Ethical

Climate 149

5.4.1 Organizational Ethical Climate and


5.4.2 Organizational Ethical Climate as a

Mediator 153

5.5 Implications of the Research 157

5.5.1 Theoretical Implications 157

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5.5.2 Practical Implications 160

5.6 Limitations of the Research 162

5.7 Future Recommendations 163

5.8 Conclusion 164

REFERENCES 166

Appendices A-F 207-226

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LIST OF TABLES

TABLE NO. TITLE PAGE

2.1 Summary of the Conceptualization of Ethical Leadership 29

2.2 Mapping of Ethical Leadership 35

2.3 Factors Affected by Ethical Leadership 41

2.4 Several Different Conceptualizations of Workplace Deviance 44

2.5 Factors Affecting Workplace Deviance 48

2.6 Review of the Factors Affecting Organizational Ethical

Climate 54

2.7 Review of the Factors Affected by Organizational Ethical

Climate 55

3.1 Location Wise Total Number of Public Hospitals in Pakistan 76

3.2 Proportionate Stratified Random Sampling on Medical Staff

of Public Hospitals in Peshawar, Pakistan 78

3.3 Number of Scale Items for Each Construct 80

3.4 Ethical Leadership Scale Items 83

3.5 Workplace Deviance Scale Items 86

3.6 Organizational Ethical Climate Scale Items 87

3.7 Pilot Study Results 90

3.8 Summary of Goodness-of-Fit Indices 94

3.9 Research Questions, Objectives, Hypotheses and Analysis

Techniques 97

4.1 Mahalanobis Distance Test 100

4.2 Multicollinearity Statistics 104

4.3 Skewness and Kurtosis of the Constructs 104

4.4 Demographic Description of Respondents 106

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4.5 Descriptive Statistics 107

4.6 One-Factor model 109

4.7 KMO and Bartlett’s Test for Ethical Leadership 110

4.8 Principal Component Analysis for Ethical Leadership 112

4.9 Rotated Component Matrixa for Ethical Leadership 113

4.10 KMO and Bartlett's Test for Workplace Deviance 114

4.11 Principal Component Analysis for Workplace Deviance 115

4.12 Rotated Component Matrixa for Workplace Deviance 116

4.13 Summary of Fitness Indexes for the Measurement Model 122

4.14 Convergent Validity 123

4.15 Discriminant Validity 125

4.16 Underlying Hypotheses of this Research 126

4.17 Hypotheses and Results of Ethical Leadership and Workplace

Deviance 130

4.18 Hypotheses and Results of Ethical Leadership and


4.19 Hypotheses and Results of Organizational Ethical Climate

and Workplace Deviance 134

4.20 Indirect Effects 138

5.1 Results of the Level of Ethical Leadership, Workplace

Deviance and Organizational Ethical Climate 144

5.2 Hypotheses and Results of Ethical Leadership and Workplace

Deviance 146

5.3 Hypotheses and Results of Ethical Leadership and


5.4 Hypotheses and Results of Organizational Ethical Climate


5.5 Hypotheses and Results of Organizational Ethical Climate as

mediator 154

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LIST OF FIGURES

FIGURE NO. TITLE PAGE

1.1 Total Public Sector Expenditure on Healthcare 4

2.1 Development in Leadership Approaches 23

2.2 Five Pillars of Ethical Leadership 36

2.3 Dimensions of Workplace Deviance 46

2.4 Framework Based on Theories 66

2.5 Framework of the Study 67

3.1 The Research ‘onion’ 73

4.1 Regression Standardized Residual of Independent and

Dependent Variables 102

4.2 Normal P-P Plot of Regression Standardized Residual of


4.3 Scatter Plot of Workplace Deviance with All Independent

Variables 103

4.4 CFA for Ethical Leadership After Modification 118

4.5 CFA for Workplace Deviance After Modification 119

4.6 Measurement Model After Modification 121

4.7 Relationship between Ethical Leadership and Workplace

Deviance 128

4.8 Relationship Between the Components of Ethical

Leadership and Workplace Deviance 129

4.9 Relationship Between Ethical Leadership and


4.10 Relationship Between Components of Ethical Leadership

and Organizational Ethical Climate 131

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4.11 Relationship Between Organizational Ethical Climate


4.12 Relationship of Organizational Ethical Climate with

Components of Workplace Deviance 133

4.13 Structural Model One 134

4.14 Structural Model Two 135

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LIST OF ABBREVIATIONS

AGFI - Adjusted Goodness-of-Fit

AMOS - Analysis of Moment Structures

AVE - Average Variance Extracted

BDS - Bachelor of Dental Surgery

BHU - Basic Health Units

BSKP - Bureau of Statistics Khyber-Pakhtunkhwa Pakistan

CB-SEM - Covariance-Based Structural Equation Modeling

CFI - Comparative Fit Index

CR - Composite Reliability

DMS - Deputy Medical Superintendent

EFA - Exploratory Factor Analysis

EL - Ethical Leadership

GDP - Gross Domestic Product

GFI - Goodness-of-Fit

HEC - Higher Education Commission

ID - Interpersonal Deviance

KMO - Kaiser-Meyer-Olkin

LCL - Lower Confidence Level

MBBS - Bachelor of Medicine and Bachelor of Surgery

MI - Modification Indices

NBC - National Bioethics Committee

NFI - Normed Fit Index

OD - Organizational Deviance

OEC - Organizational Ethical Climate

PCA - Principal Component Analysis

PES - Pakistan Economic Survey

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PMDC - Pakistan Medical and Dental Council

PNC - Pakistan Nursing Council

RMSEA - Root Mean Square Error of Approximation

SEM - Structural Equation Modeling

SET - Social Exchange Theory

SIPT - Social Information Processing Theory

SLT - Social Learning Theory

SPSS - Statistical Package for Social Sciences

UCL - Upper Confidence Level

VB-SEM - Variance-Based Structural Equation Modeling

VIF - Variance Inflation Factor

WD - Workplace Deviance

WHO - World Health Organization

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LIST OF APPENDICES

APPENDIX TITLE PAGE

A List of Public Hospitals in Peshawar, Pakistan 207

B Public Healthcare Survey Questionnaire (English

Version) 208

C Public Healthcare Survey Questionnaire (Urdu

Version) 212

D Homoscedasticity 216

E Histograms and Normal Q-Q Plot (Univariate

normality) 218

F Modification Indices 226

CHAPTER 1

1 INTRODUCTION

1.1 Background of the Study

Ethics has become an important issue because of the revelation of numerous

corporate scandals like WorldCom, Enron, Tyco, and recently Bear Stearns and

Lehman Brothers have further heightened the awareness of prevalent deviant

behaviors in organizations. According to the report of Association of Certified Fraud

Examiner (2014), organizations lose approximately 5% of their revenues each year

due to various forms of unethical practices. Only in the United States and specifically

in the healthcare sector, deviation from recognized standards of practice usually results

in penalties, totaled about $373 million in 2014 (DHHS, 2014). Thus previous

literature shows that workplace deviance is associated with significant organizational

costs (Harvey et al., 2016).

Other serious consequences of workplace deviance are augmented

psychological distress, low productivity, higher turnover rates, diminishing

psychological well-being, lower level of employees’ job satisfaction (Appelbaum et

al., 2007; Penney & Spector, 2005), increased fear and insecurity at work, damaged

self-esteem, physical pain (Griffin et al., 1998; Henle et al., 2005), and diminishing

stakeholders’ return (Lu & Lin, 2014). Moreover, according to the Ethics Resource

Center (2012) in “National Business Ethics Survey of Fortune 500 Employees”, 52%

of workers had observed workplace deviance. Furthermore, a higher level of

employee’s deviant behavior has been reported in public sector organizations as

compared to private sector counterpart (Khuntia & Suar, 2004; Nigro & Waugh Jr,

2

1996; Salin, 2001; Sardžoska & Tang, 2009), which is also reported in the Pakistani

context (Iqbal et al., 2012; Nasir & Bashir, 2012; Naz et al., 2012). With deviant

behavior prevailing in organizations, scholars are compelled to find appropriate

solutions to this problem so that to improve the existing situation (Guay et al., 2016;

Hsieh & Wang, 2016; Peng et al., 2011).

Ethical issues are being addressed both in western and non-western countries

because ethics is considered as a universal value (Schwartz, 2005). However, the

demand and importance for organizational ethics are not as strong in developing

countries as in developed ones (Blackburn et al., 2006; Lyon & Maher, 2005).

Therefore, Ahmed et al. (2012) suggest that western organizational ethical values

uniformly may apply in a non-western country like Pakistan. These scholars further

suggest top-management of the organizations to assess their work environment based

on ethical values already developed in West because several deviant workplace

behaviors like theft, abuse, falsifying documents and harassment are common practices

in workplace settings throughout the world that are damaging organizational

performance and reputation.

With growing interest in the examination of negative workplace behaviors,

several definitions and terms are used to define them in the previous literature.

However, a more comprehensive and widely used definition was advanced by

Robinson and Bennett (1995) who termed it as “workplace deviance”. They define

workplace deviance as “voluntary behavior that violates significant organizational

norms and, in so doing, threatens the well-being of the organization or its members, or

both” (p.556). This concept taps a large variety of negative behaviors that are intended

against the organization and/or its members.

Due to the severity of the nature of deviant workplace behaviors, it is important

to investigate the factors that effects the emergence of deviant behaviors in

organizations. Therefore, to explain the factors that can affect the emergence of

workplace deviance, this research intends to examine the effect of ethical leadership

and organizational ethical climate on workplace deviance. As scholars are increasingly

interested in the role of ethical leadership in order to reduce the likelihood of the

3

emergence of deviant behaviors in organizations (Bachmann, 2017; Bedi et al., 2016;

Neves & Story, 2015). Brown et al. (2005) define ethical leadership as “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” (p.120). Therefore,

scholars suggest that if a leader treats his/her followers fairly and communicates the

importance of ethical behavior, followers are less likely to engage in deviant

workplace behaviors (Bedi et al., 2016). In addition, several studies have also

identified the significance of organizational ethical climate and its negative association

with deviant workplace behaviors (Appelbaum et al., 2005; Bulutlar & Öz, 2009;

Hsieh & Wang, 2016; Mayer et al., 2010; Peterson, 2002a; Rosenblatt et al., 2010).

Victor and Cullen (1987) defined organizational ethical climate as “the shared

perception of what is ethically correct behavior and how ethical issues should be

handled” (p. 51-52).

Lastly, the purpose of this thesis is to empirically examine the effect of ethical

leadership on workplace deviance, and the mediating role of organizational ethical

climate in the relationship between ethical leadership and workplace deviance,

specifically in the context of public healthcare sector of Pakistan, thereby contributing

towards the growing body of knowledge relating to the understudy constructs. Thus,

this research assists in finding answers to the emergence of deviant behaviors in the

public healthcare sector of Pakistan and how it can be controlled and limit.

1.1.1 Public Healthcare Sector of Pakistan

The healthcare sector is an aggregation and integration of sectors within the

economic system that provides goods and services to treat patients with curative,

preventive, rehabilitative, and palliative care. As according to the report of Bureau of

Statistics Khyber-Pakhtunkhwa Pakistan (BSKP) 2014-2015, a health institution is

defined as “an institution, which provides health services, curative and preventive to

all specific class of the public as outdoor/indoor, patients” (BSKP, 2014, p. 335).

4

As better health and healthy living environment contributes to the

improvement of family life and ultimately contributes to economic growth. However,

in the developing countries like Pakistan, the healthcare sector has been mainly

ignored because of political instability, corruption, inadequate budgetary allocation,

and absence of the will of the political leadership to improve the existing condition of

public hospitals (Khan et al., 2015). According to Pakistan Economic Survey 2014-

15, there are 1142 hospitals, 5,438 basic health units, 5,499 dispensaries and 671

maternity and child health center. Whereas, there are 17, 5223 doctors, 15,106 dentists,

90,276 nurses and hospital beds are 118,041 in the country (PES, 2015). Thus, making

health facilities ratio of 1,073 persons per doctor, 12,447 persons per dentist and 1,593

persons per hospital bed.

The PES (2015) further reported that for the year 2014-15, a total of Rs. 114.22

billion (see Figure 1.1) was allocated by the government for the expenditure on the

public healthcare sector, making it 0.42% of Gross Domestic Product (GDP). Despite

funds allocation and efforts by the government, the desired health outcomes have not

been achieved in Pakistan and the gap between availability and requirements are still

at large due to several socio-economic factors like growing population, poverty,

unhygienic environmental condition and uneven distribution of health benefits.

Figure 1.1: Total Public Sector Expenditure on Healthcare

Source: Pakistan Economic Survey (2015)

Furthermore, Pakistan Nursing Council (PNC) and Pakistan Medical and

Dental Council (PMDC) are the statutory regulatory and registration authority for

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nursing and medical practitioners in Pakistan. Medical and nursing curriculum is also

revised by the Higher Education Commission (HEC), which is also responsible for the

verification of degrees and issuing licenses to educational institutions. The government

of Pakistan had also established National Bioethics Committee (NBC) in 2004, with

the aim to promote ethics in the healthcare sector of Pakistan. Despite having such

regulatory bodies in the country, Pakistan healthcare sector is hampered by the non-

existence of hospital ethics committees and absence of ethics courses in the curriculum

(Jafree et al., 2015). Furthermore, PMDC and PNC have made ethics education

compulsory but the majority of the medical and nursing institution in Pakistan do not

teach compulsory courses in ethics (Shaikh & Humayun, 2012). Therefore, a high

proportion of doctors (57%) is reported to have no knowledge of the code of ethics of

PMDC (Imran et al., 2015).

Moreover, Sheikh et al. (2012) interviewed 319 surgeons at a public hospital

in Pakistan and found that 68.7% of the respondents were oblivious of the complete

definition of malpractice. In addition, there is no monitoring of ethical compliance

during clinical practices in the country (Jafree et al., 2015), while poor governance and

corruption are prevailing in the management of equipment and drugs in the public

hospitals of Pakistan (Naz et al., 2012). Doctors, nurses, medical technicians, and

sweepers in the public hospitals of Pakistan have been reported to be absent for months

and have been referred as ghost workers (Saeed & Ibrahim, 2005). Callen et al. (2016)

found that 68.5% of doctors were absent during normal working hours in the public

hospitals of Pakistan. Thus, events of deviant behaviors are high in the public hospitals

of Pakistan, however, very few hospitals, specifically in the private sector (i.e. Agha

Khan Hospital, Karachi) follow a zero tolerance policy towards deviant workplace

behavior (Shahzad & Malik, 2014).

Hence, the current condition of almost all government hospitals is getting from

bad to worst due to the harsh attitude of the staff of public hospitals towards patients

and their attendants. Poor governance, corruption, conflicts, protests, ghost workers,

violent work environment, political interference, understaffed hospitals and lack of

proper health facilities are prevalent problems that exist in the public healthcare sector

of Pakistan (Hamid et al., 2016; Hussain et al., 2016; Jafree, 2017; Naz et al., 2012;

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Saeed & Ibrahim, 2005; Yousafzai, 2015). Thus, the overall public healthcare sector

in Pakistan presents an unimpressive picture, although some developments are taking

place during the last few years but still the situation is unsatisfactory.

1.2 Problem Statement

Some of the deviant workplace behaviors that exist in the public sector

organizations of Pakistan include, employees littering workplace (38%), leaving office

early (66%), taking longer lunch breaks (90%), stealing official belongings (45%),

using computer for games/chatting rather than duty (49%), making personal long calls

from official telephone (94%), frequent late arrival (82%), and conducting personal

business during official timings (75%) (Bashir et al., 2012). Thus, it reflects the lower

level of employee’s ethical values and a higher level of workplace deviance in public

sector organizations of Pakistan. Therefore, scholars argue that to reduce the level of

workplace deviance specifically in public sector organizations of Pakistan, it is

necessary to investigate the reasons for workplace deviance, and how it can be reduced

(Ahmed et al., 2013; Nasir & Bashir, 2012; Shahzad & Malik, 2014).

Furthermore, this research has been driven by several research gaps including

lack of non-western empirical evidence regarding the level and relationships between

ethical leadership, workplace deviance and organizational ethical climate in the

previous literature. Most of the research regarding the understudy variables have been

done in the western countries. However, very few studies have addressed the

understudy variables in a non-western country like Pakistan. Specifically, few studies

exist on the concept of ethical leadership in Pakistani context (Bouckenooghe et al.,

2015; Khalid & Bano, 2015; Sabir et al., 2012; Sheraz et al., 2012; Waheed & Banu,

2015), and very few in the public healthcare sector of Pakistan (Chughtai, 2015; Khan,

2016). Additionally, research on the concept of ethical climate in the Pakistani context

is also limited (Ahmed et al., 2012; Salman & Baig, 2014; Shah et al., 2015). Since

contextual factor may limit the generalization of the previous studies of one culture to

another dissimilar culture. As culture is known to play a central role in the

manifestation of individual’s behaviors and feelings (Hofstede & Hofstede, 2001;

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Triandis, 2004). Thus, to bridge this gap, the current study investigated the

phenomenon of workplace deviance, organizational ethical climate and ethical

leadership in Pakistani context and to assess its level specifically in the public

healthcare sector of Pakistan.

Moreover, previous literature identified several workplace deviant behaviors

that exist in the public healthcare sector of Pakistan (Ahmed et al., 2013; Faheem &

Mahmud, 2015; Somani & Khowaja, 2012). Some of the deviant workplace behaviors

reported in the public healthcare sector of Pakistan are; bullying and mobbing behavior

(Bano & Malik, 2013; Gadit & Mugford, 2008; Somani, Karmaliani, Farlane, et al.,

2015), verbal and physical violence (Jafree, 2017; Shahzad & Malik, 2014), corruption

and bribery (Haroon, 2014; Naz et al., 2012; Yousafzai, 2015), sexual harassment

(Jafree, 2017; Shaikh, 2000; Somani, Karmaliani, Mc Farlane, et al., 2015), protests

(Abbasi, 2014), absenteeism (Naz et al., 2012; Saeed & Ibrahim, 2005), student nurses

used as adjunct staff and non-reportage of errors (Jafree et al., 2015). Hence, several

forms of workplace deviant behaviors (organizational and interpersonal) exist in the

public healthcare sector of Pakistan which needs to be controlled and limit.

Thus, due to the severity of the issue, it is important to shed more light on what

makes individuals engage in deviant workplace behaviors and how it can be reduced.

For this purpose, scholars are increasingly interested to investigate the role of ethical

leadership (Avey et al., 2011; Bedi et al., 2016; Den Hartog & Belschak, 2012; Mayer

et al., 2012; Neves & Story, 2015). An ethical leader exhibits integrity, act fairly,

respect the rights of others, rewards ethical conduct and promotes ethical conduct

among employees (Brown et al., 2005; Kalshoven et al., 2011; Yukl et al., 2013).

However, Neves and Story (2015) argue that only a handful of studies have

investigated the relationship between ethical leadership and deviant workplace

behaviors. Mo and Shi (2015) also identified that less attention has been given to

examining the effects of ethical leadership on workplace deviance. Therefore, further

research is needed to shed more light on the effects of ethical leadership on workplace

deviance. Thus, this research played a pivotal role in addressing this literature gap by

examining the effect of ethical leadership on workplace deviance.

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Scholars identified that empirical evidence is needed to investigate the

relationship between distinct dimensions of ethical leadership and individuals’

attitudes and behavior (Kalshoven et al., 2011; Mo & Shi, 2015). As previously ethical

leadership is mostly conceptualized and operationalized as a unidimensional concept

using Brown and colleagues conceptualization (Brown et al., 2005). Moreover,

scholars argue that further research is needed to assess the effects of ethical leadership

in public sector organizations (Hassan et al., 2014) as there exist very few studies

assessing the effects of ethical leadership in these organizations (Hassan et al., 2013;

Heres & Lasthuizen, 2012; Huberts et al., 2007; Kaptein et al., 2005; Kolthoff et al.,

2010). Thus, this research addresses the aforementioned gaps by investigating the

association between distinct dimensions of ethical leadership and workplace deviance,

specifically in the public healthcare sector of Pakistan.

Moreover, leadership has an important role in developing ethical workplace

climate (Mulki et al., 2009; Neubert et al., 2009). An ethical climate refers to the

shared perception among employees regarding what is ethically correct behavior and

how ethical issues should be handled at the workplace (Victor & Cullen, 1987). Shin

(2012) identified that several studies exist regarding the relationship between

organizational ethical climate and various work outcomes, however, little efforts have

been directed towards the factors that foster or develop an ethical organizational

climate. Furthermore, Mayer et al. (2009) suggest that future research should examine

ethical leadership as an antecedent of organizational ethical climate. Recently, Lu and

Lin (2014) and Shin et al. (2015) also suggested to empirically investigate the

association between ethical leadership and organizational ethical climate. Hence,

further research is needed to empirically examine the association between ethical

leadership and organizational ethical climate. Therefore, this research addresses this

literature gap by investigating the effect of ethical leadership on organizational ethical

climate in the public healthcare sector of Pakistan.

Furthermore, ethical workplace climate has also been reported to have a

significant influence on employee’s behavior (Appelbaum et al., 2005; Deshpande &

Joseph, 2009; Martin & Cullen, 2006). Scholars view that the ethical climate within

an organization can improve employees’ attitude and relationships (Elçi & Alpkan,

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2009). Therefore, organizational climate having strong emphasis on ethical behavior

are more likely to encounter less workplace deviance (Litzky et al., 2006). However,

Simha and Cullen (2012) identified that few studies exist regarding the relationship

between organizational ethical climate and deviant workplace behaviors. Therefore,

further research is needed to examine the association between organizational ethical

climate and workplace deviance. To address this gap, the present study examined the

association between organizational ethical climate and workplace deviance in the

public healthcare sector of Pakistan.

Moreover, Brown and Treviño (2006a) identified that limited evidence exists

regarding the underlying mechanism to explain the effect of ethical leadership on

employees deviant behaviors. Mayer et al. (2010) argue that further research is needed

to know what ethical leaders do to influence employees’ behavior and reduce their

level of unethical behavior. Recently, Neves and Story (2015) and Mo and Shi (2015)

stressed that future research is needed to focus on the underlying mechanisms that link

ethical leadership with deviant behavior of the employees. Shin et al. (2015) identified

that organizational ethical climate mediates between the relationship of top

management ethical leadership behavior and organizational outcomes (i.e. firm

financial performance and organizational citizenship behavior). Demirtas and

Akdogan (2015) identified that organizational ethical climate mediates the relationship

between ethical leadership and individual’s outcomes (i.e. affective commitment and

turnover intention). These scholars further recommended that future research should

incorporate employees’ deviant behavior as an outcome of their research model.

Recently, Van Gils et al. (2015) investigated the relationship between ethical

leadership and organizational deviance, having moral attentiveness as a moderator for

the relationship between ethical leadership and organizational deviance, these

researchers further suggested that future research should investigate the influence of

ethical climate for their proposed model.

Thus, to address the above-mentioned literature gap (Demirtas & Akdogan,

2015; Mo & Shi, 2015; Neves & Story, 2015; Van Gils et al., 2015) this study

investigated organizational ethical climate as one of the processes through which

ethical leadership is related to workplace deviance. This research proposed that leaders

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who consistently engage in ethical leadership behaviors will create an ethical

organizational climate, which in turn, will reduce the likelihood of emergence of

deviant workplace behaviors. Thus, this research played a key role in findings answers

to the emergence and diminishing of deviant workplace behaviors, specifically in the

public healthcare sector of Pakistan.

1.3 Research Objectives

This research intends to achieve the following objectives:

1. To identify the level of workplace deviance, ethical leadership and

organizational ethical climate prevailing in the public healthcare sector of

Pakistan.

2. To examine the effect of ethical leadership on workplace deviance in the public


3. To analyze the effect of ethical leadership on organizational ethical climate in

the public healthcare sector of Pakistan.

4. To investigate the effect of organizational ethical climate on workplace

deviance in the public healthcare sector of Pakistan.

5. To examine the mediating role of organizational ethical climate in the

relationship between ethical leadership and workplace deviance in the public


1.4 Research Questions

This research formulated the following research questions:

1. What is the level of workplace deviance, ethical leadership and organizational

ethical climate prevailing in the public healthcare sector of Pakistan?

the mediating effect of organizational ethical...

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