THE MODERATED MEDIATION OF TRUST: THE IMPACT OF ETHICAL LEADERSHIP ON EMPLOYEES WORK BEHAVIOURS OF MANUFACTURING INDUSTRY IN GUANGDONG, CHINA

Abstract

The purpose of the study is to investigate the impact of ethical leadership on work behaviors (innovation work behavior, job performance, and work engagement). Moreover, this study examines trust as a vital catalyst in strengthening ethical conduct and affecting positive work behaviors.This study postulates that psychological empowerment and self-efficacy serve as vehicles in the relationship between ethical leadership and employees' work behaviors. Furthermore, this study investigates the moderated mediation effect of trust, psychological empowerment, and self-efficacy in the direct link between ethical leadership and employees' work behaviors. This study adopts quantitative methods by employing a statistical package for social sciences and structural equation modeling partial least squaring method including Smart PLS3.0 and SPSS26.0, PROCESS 3.4 to validate the test hypotheses. The study uses 384 questionnaires collected from five manufacturing companies among Guangdong’s top 500 manufacturing enterprises in Guangdong, China. This research measures the model assessment through reliability testing, convergent validity testing, discriminant validity testing, and goodness of model fit analysis respectively. Ethical leadership is significantly associated with three employees' work behaviors.Also, trust is a significant moderator in the relationship between ethical leadership with psychological empowerment and self-efficacy. Psychological empowerment mediates the relationship between ethical leadership and working behaviors. Moreover, self-efficacy mediates the relationship between ethical leadership and innovative work behavior and work engagement, but not job performance. Trust has moderated mediation in the relationship between ethical leadership and work behaviors, except the case of self-efficacy in the relationship between ethical leadership and job performance.The findings of this study contribute a holistic perspective of ethical leadership and the determinants that affect work behaviours. This study also demonstrates that improving employee work behavior is of great significance to Chinese manufacturing companies and achieving the “Made in China 2025” plan.