Ethical leadership, work engagement, employees' well-being, and performance: a cross-cultural comparison

Unethical behaviours, such as blaming subordinates for their shortcomings, taking credit of others' work, favouritism, and excessive publicising of ethical leadership failures are prominent among the leaders of the organisation. Although research has been conducted on ethical culture, particularly on the causes and effects of ethical-decision, few studies emphasised on the topics outside the business ethics research, such as employee well-being. Therefore, this study focused on the mediating effects of organisational ethical culture on the relationship between ethical leadership, work engagement, employees' well-being, and performance. The data collection process involved the distribution of highly structured questionnaires to 697 employees working in Italian and Pakistani hospitality industry. This was followed by the analysis of cultural differences through measurement invariance tests and mediation techniques. As a result, it was found that ethical leadership and ethical culture have positive impact on employee wellbeing, work engagement and financial performance where ethical culture has relatively stronger influence on financial performance. The results also revealed that ethical leadership had a relatively stronger impact on the well-being of the Italian employees compared to Pakistani employees. However, the association between ethical leadership and work engagement was stronger among Pakistani employees. The study implications, limitations, and future research directions were presented hereunder.