The Integrity Advantage: Exploring the effect of Ethical Leadership on Innovative behavior in manufacturing industries: A moderated Mediation Analysis

Abstract

This study investigates the effect of ethical leadership on employee innovative behavior in manufacturing industries. This study also examined the mediating effect of self-efficacy, and moderating effect of harmonious passion. The hypotheses were tested by mediation, moderation, and moderated-mediation analyses using regression analysis, and PROCESS Macro. Present study also checks the reliability and validity of scale than were used to gather data from 297 employees working in manufacturing organizations in Khyber Pakhtunkhwa, Pakistan. The research results indicate that ethical leadership influences significantly employee innovative behavior and that self-efficacy partially mediates this effect. Additionally, the harmonious passion moderates the direct and indirect relations in such a way that the positive influence of ethical leadership on self-efficacy and innovative behavior has a greater impact on employees with a high harmonious passion. These findings help to emphasize the significance of ethical leaders in systematic manufacturing settings and show that innovation is best facilitated in the context of ethical leadership that is paired with the psychological competence of the employees and intrinsic motivation. The research has a contribution to the body of literature on leadership and innovation since it is a context-specific, mechanism-based view of innovation in manufacturing sectors and offers practical implications to managers who have to implement sustainable innovation in the framework of ethical and empowering leadership styles.