Analysis of the Effect of Ethical and Moral Leadership on Loyalty to

the Superior of Mediated Interactional Justice: Moderated

Collectivistic Orientation

Melia Dianingrum

and Arief Adhy Kurniawan

STMIK Amikom Purwokerto, Jl.Letjend.Pol.Sumarto, Purwokerto, Indonesia

Keyword: Ethical, Moral, Leadership, Loyalty, Interactional Justice, Collectivistic Orientation

Abstract: Currently the existence of human resources is no longer just as human resources but has become a human

critical asset. One of the important objectives in this research is to identify the influence of ethical and moral

leadership on interactional fairness of followers, and collectivistic orientation towards loyalty to superiors.

Sample used were as many as 60 employees from 3 companies operating in Purwokerto. Analytical method

used SEM PLS. The results stated that there is a significant influence of ethical leadership on interactional

justice, there is a significant influence of moral leadership on interactional justice; there is no significant

influence of moderate variables of ethical leadership (collectivistic orientation) on interactional justice; there

is no significant influence of ethical leadership on loyalty to superior, there is no significant influence of moral

leadership on loyalty to supervisor, there is a significant influence of interactional justice on loyalty to

supervisor.

1 INTRODUCTION

Currently the existence of human resources is no

longer just as human resources but has become a

human critical asset. Human resources that exist

within the organization consisting of superiors and

subordinates. The existence of superiors and

subordinates are interrelated and influencing. The

success of a superior can not be separated from the

success of subordinates in the work and the way they

lead. The nature and attitudes of employers in the

work can affect employee loyalty to the boss (leader).

In recent years, loyalty to superiors, which is one of

the most important objects of loyalty, has been

investigated by many Chinese researchers (Chen,

Tsui, & Farh, 2002; Jiang & Cheng, 2008; T.-Y. Wu,

Hu, & Jiang, 2012; Yu, 2010).

According to (Gillet, Fouquereau, Bonnaud-

Antignac, Mokounkolo, & Colombat, 2013; C. Wu,

Neubert, & Yi, 2007) leadership styles (eg,

transformational leadership, paternalistic leadership)

have an indirect effect on employee quality,

supervisory trust and loyalty to the organization

through interactional justice, but previous studies in

China that leadership is an important predictor of

loyalty to superiors (Chen et al., 2002; Ding, Lu,

Song, & Lu, 2012).

Chinese researchers have noticed the effects of

transformational leadership (Yu, 2010), servant

leadership (Ding et al., 2012), full of leadership

virtues (T.-Y. Wu et al., 2012), charismatic leadership

(M. Wu & Wang, 2012) , paternalistic leadership

(Jiang & Cheng, 2008) about loyalty to superiors.

This raises a research gap.

Over the past few decades, ethical leadership has

become an important theme in both managerial and

academic worlds (Brown & Treviño, 2006; Farh,

Liang, Chou, & Cheng, 2008; Kovjanic, Schuh, &

Jonas, 2013; Li, Xu, Tu, & Lu, 2014; Neubert, Wu, &

Roberts, 2013; Y. Zhu, Sun, & Leung, 2014) because

it has a significant correlation with the trust of

supervisors and organizational justice (T.-Y. Wu et

al., 2012), affective commitment (Philipp & Lopez,

2013) psychological empowerment (W. Zhu, May, &

Avolio, 2004), and organizational citizenship

behavior (Shin, 2012). However, most studies on

ethical leadership are based on western culture.

Previous research has recognized the influence of

national culture on the attributes and effectiveness of

leadership (House et al 2002, Chuang, 2013 in Wang,

Lu, Liu, 2015), but no explicit research explores the

Dianingrum, M. and Adhy Kurniawan, A.

Analysis of the Effect of Ethical and Moral Leadership on Loyalty to the Superior of Mediated Interactional Justice: Moderated Collectivistic Orientation.

DOI: 10.5220/0009948025672575

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 2567-2575

ISBN: 978-989-758-458-9

2567

impact of ethical leadership on loyalty to superiors in

East Asian cultures .

Based on the theory of social exchange (Blau,

1964), the reason why ethical leadership predicts

loyalty to supervisors or superiors is that when

subordinates are treated ethically and respectfully by

their leaders (ethical leadership), they are more likely

to be fair during interactions with their bosses

interactional justice), so subordinates are expected to

provide something instead, for example showing

loyalty to the boss. Thus, it is hoped that interactional

justice can mediate the relationship between ethical

leadership and loyalty to superiors. According to

(Brown & Treviño, 2006) review of the ethical

leadership literature, previous research is limited to

their focus on the United States and western culture,

which may lead to a 'false explanation' when we apply

these findings to other cultural contexts.

In this study, the proposed collectivist orientation,

defined as the tendency of individuals to view

themselves as interdependent with others in society

(Earley, 1989). Previous research has found that there

is considerable variability across countries along the

dimensions of individualism / collectivism

(Francesco & Chen, 2004; M. Wu & Wang, 2012)

Selection to investigate collectivist orientation has

two reasons. First, past theoretical models and

empirical findings support the argument that

collectivist orientation is an important cultural value,

which provides boundary conditions for leadership

effects in eastern cultures (Wang, Lu, & Liu, 2017).

Second, collectivist orientation is an individual-level

value derived from their unique beliefs (Wang et al.,

2017). One of the important objectives in this study is

to identify the ethical and moral boundary conditions

of leadership influence on interactional justice of

followers and loyalty to superiors.

The purpose of this study was to examine whether

ethical leadership and moral leadership, interactional

justice can predict subordinate loyalty to superiors

and collectivist orientation as a moderating variable.

2 THEORY AND HYPOTHESES

Ethical leadership is the 'demonstration' of

appropriate normative actions through personal

action and interpersonal relationships, promotion and

subordinates through two-way communication,

reinforcement, and decision making "(Brown,

Treviño, & Harrison, 2005). Moral leadership is a part

(dimension) of paternalistic leadership. Paternalistic

leadership consists of 3 leadership: authoritarian

leadership (authoritarian leadership), benevolent

leadership, and moral leadership (morality / moral

leadership). Regarding the dimensions of

paternalistic leadership, there are essentially two

theories of Yuan, the three-Yuan theory and the four-

dimensional theory (Zeng et al., 2009 in (Fu, Li, & Si,

2013). Fan and Zheng (2000) in (Fu et al., 2013) think

that (for the three-element theory) the three elements

of paternalistic leadership should not be linked

together and can not be divided, on the contrary, the

three elements can be separated into independent

studies. Morality is described largely as a leader's

behavior that emphasizes the search for superior

personal superiority (eg, moral character and

integrity) through selfless actions, self-discipline, and

lead by example.

Interactional Justice is defined by sociologist John

R. Schermerhorn as the rate at which people affected

by decisions are treated with dignity and respect.

Justice explains how leaders treat people who are

subject to their authority, decisions and actions

(Cruceru & Macarescu, 2009). Interactional justice

involves the perception of reasonableness of

communication involved in organizational justice

(Hubbell & Chory-Assad, 2005). Interactional justice

stresses the fairness of the interaction process, not the

effectiveness or outcome of communication or

information sharing (Luo, 2007).

Collectivism relates to societies in which people

from birth onwards are integrated into powerful and

cohesive groups, which throughout human life

continue to protect them in exchange for

unquestionable loyalty, while individualism is

concerned with society in the relationship between

individuals is loose; everyone is expected to care for

himself and his immediate family (Hofstede 1991, p.

51).

The prepared hypothesis is as follows:

a. Ethical leadership and Interactional Justice

Although leadership styles (eg, transformational

leadership, paternalistic leadership) have an indirect

effect on the quality of employee work, supervisory

trust and loyalty to the organization through

interactional justice (Gillet et al., 2013; C. Wu et al.,

2007), studies have not documented the relationship

between ethical leadership , interactional justice, and

loyalty to superiors (Wang et al., 2017). The ethical

leader treats subordinates with respect, keeps

promises, lets subordinates participate in making

decisions, and clarifies expectations and

responsibilities (Kalshoven, Den Hartog, & de

Hoogh, 2013). Ethical leadership must encourage the

perception of interional justice, from the perspective

of social exchange (Blau, 1964), ethical leaders tend

to make fair and balanced decisions and complete

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tasks based on 'means' rather than 'end' perspectives

(Brown & Treviño, 2006). Then the hypothesis is

composed of:

H1: Is there any ethical leadership influence on

interactional justice?

b. Moral leadership and interacational justice

In a recent study, (M. Wu, Huang, Li, & Liu, 2012)

explores the relationship of moral leadership with

psychological empowerment (ie, competence, self-

determination, and impact), and the mediation role of

interactional justice in this relationship. The results

show that interactional justice mediates the

relationship between moral leadership and self-

determination. Then the hypothesis is composed of:

H2: Is there any influence of moral leadership on

interacational justice?

c. Ethical leadership, collectivistic orientation, and

interactional justice,

Based on the theory of social exchange, ethical

leadership has a positive effect on subordinate

interactional justice. Compared with collective

subordinates, high collective subordinates pay more

attention to the outcomes and processes of social

exchange, and care about their relationship with

superiors ((Jackson, Colquitt, Wesson, & Zapata-

Phelan, 2006). In other words, ethical leadership is

closely related to interactional justice for high

collective subordinates.

Although different degrees of collectivist

orientation are attributed to the power of ethical

leadership influence on interactional justice, we argue

that the indirect effect of ethical leadership on loyalty

to supervisors through interactional justice is much

stronger for higher subordinate collectivists (Wang et

al., 2017). Ethical leaders treat subordinates with

respect and courtesy. They listen to their subordinates

and encourage two-way communication (Brown et

al., 2005), then the process of social exchange

between employees and leaders is strengthened,

subordinates experience a greater degree of

interaction in response to ethical leadership, which in

turn ultimately increases subordinate loyalty to

superiors. Then the hypothesis is composed of:

H3: Is there any influence of ethical leadership

moderated by collectivistic orientation towards

interactional justice?

d. Ethical Leadership and loyalty to supervisor

A large number of previous studies have linked

leadership ethics to employee work ((Brown et al.,

2005), (Detert & Burris, 2007), more research has

shown that ethical leadership is positively correlated

with subordinate roles in performance (Piccolo et al.

2010 in (Walumbwa et al., 2011), assisting

(Kalshoven et al., 2013) (Mayer, Kuenzi, Greenbaum,

Bardes, & Salvador, 2009), and loyalty / commitment

to the organization (Tupper, 2012; Yates, 2014).

(Tupper, 2012) found that ethical leadership is

positively correlated with employee's cognitive and

emotional loyalty to the organization. Similarly,

(Yates, 2014) reveals that ethical leadership can

predict followers' loyalty to the organization.

(Neubert, Carlson, Kacmar, Roberts, & Chonko,

2009) The empirical findings suggest that ethical

leadership is directly and indirectly linked to

subordinate loyalty to the organization. It should be

noted that loyalty to the organization is positively

associated with loyalty to superiors in Chinese culture

(Zhang, Huai, & Xie, 2015).

Then the hypothesis is composed of:

H4: Is there any ethical leadership influences on

loyalty to supervisor?

e. Moral leadership and loyalty to supervisor

Moral leadership will increase identification by

being an example for subordinates; this leader will

keep his promise, be fair to all subordinates and will

not take advantage of his subordinates. Previous

studies for a positive relationship between the virtue

leader and the work of the employees, and between

the morality of the leader and the work of the

employees. The morality of leaders is expected to

promote the respect and identification of

subordinates; The three dimensions of paternalistic

leadership are expected to increase the motivation of

subordinate work (Farh et al., 2008). Then the

hypothesis is composed of:

H5: Does moral leadership (Moral leadership) relate

positively to loyalty to supervisor (loyalty to

supervisor)?

f. Interactional justice, and loyalty to

supervisors,

In a recent study, (M. Wu et al., 2012) explores

the relationship of moral leadership with

psychological empowerment (ie, competence, self-

determination, and impact), and the mediation role of

interactional justice in this relationship. The results

show that interactional justice mediates the

relationship between moral leadership and self-

determination. Then the hypothesis is composed of:

H6: Is there an influence of interactional justice

mediating between moral leadership and loyalty to

supervisor?

3 METHODOLOGY

The framework of this research is based on the theory

and principles of research design.

Analysis of the Effect of Ethical and Moral Leadership on Loyalty to the Superior of Mediated Interactional Justice: Moderated

Collectivistic Orientation

2569

a. Population and Sample

The population in this study are employees

(superiors and subordinates) in 3 companies

operating in Purwokerto. The selected sample is

the superior and the subordinate who have had

the service period. Greater than 2 (two) years (≥

2 years). The sample size is 60 people.

b. Methods of data collection with interviews with

representatives in 3 companies, questionnaires

distributed to employees in 3 companies.

Table 1. Respondent

Number of

Respondents

Length of

work (in

Month)

Point

22 6 – 24 0

13 25 – 48 1

8 49 – 72 2

17 > 72 3

Total = 60

c. Data analysis method used is Structural

Equation Modeling (SEM) PLS (Ferdinand,

2014).

d. Measure

All item were assesed on a Likert type-scale

with 1=strongly disagree and 7=strongly agree

d.1. Ethical Leadership

We adopted the 9-item version scale

developed by (Brown et al., 2005) to

measure ethical leadership. One item

example is “My supervisor listen to what

employees have to say”.

d.2. Loyalty to supervisor

We adopted the 8 item version scale

developed by (Jiang & Cheng, 2008) to

measure loyalty to supervisor. One item

example is “Being a subordinate, I have an

obligation to perform well and let my

supervisor be free of worries”.

d.3. Interactional Justice

We adopted the 6 item version scale

developed by (Moorman, 1991) to measure

interactional justice. One item example is

“Your

supervisor treated you with kindness and

consideration”.

d.4. Collectivistic Orientation

We adopted the 10 item version scale

developed by (Earley, 1993) to measure

collectivistic orientation. One item exaample is

“Employees like to work in a group rather than

by themselves”.

d.5. Moraly Leadership

We adopted the 6 item version scale

developed by (Cheng and colleagues, 2004) to

measure moraly leadership. One item example

is “My supervisor doesn’t take the credit for my

achievements and contributions for

himself/herself”.

4 RESEARCH RESULT

This study used a sample of 60 employees from

3 companies operating in Purwokerto. Data analysis

used is structural equation modeling (SEM) PLS.

Stages:

1. Test validity

2. Test reliability

3. Test the relationship between variables

4. Interpretation and Modification of Models

5. Hypothesis Testing

Here are the results of data analysis:

Table 2 Value factor loading for vallidity test

No Variable Indic

ator

Factor

Descri

ption

1 Ethical

leadership

EL1 0,766 Valid

2 EL2 0,789 Valid

3 EL3 0,798 Valid

4 EL4 0,911 Valid

5 EL5 0,903 Valid

6 EL6 0,831 Valid

7 EL7 0,795 Valid

8 EL8 0,889 Valid

9 EL9 0,874 Valid

10 Moral

leadership

ML2 0,822 Valid

11 ML5 0,952 Valid

12 ML6 0,894 Valid

13 Interactional

justice

IJ1 0,695 Valid

14 IJ2 0,770 Valid

15 IJ3 0,805 Valid

16 IJ4 0,649 Valid

17 IJ5 0,858 Valid

18 IJ6 0,871 Valid

19 Collectivistic

orientation

CO6 0,835 Valid

20 CO7 0,799 Valid

21 CO8 0,754 Valid

22 CO9 0,847 Valid

23 CO10 0,844 Valid

24 Loyalty to

supervisor

LS1 0,794 Valid

25 LS2 0,624 Valid

26 LS3 0,790 Valid

27 LS4 0,709 Valid

28 LS5 0,800 Valid

29 LS6 0,647 Valid

30 LS7 0,623 Valid

31 LS8 0,695 Valid

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Based on Table 2 can be seen the results of the

validity test after the removal of invalid indicators,

indicating the loading factor value is more than 0.5,

so indicating the results of validity test indicator is left

all valid indicators. Furthermore, reliability test,

reliability test results can be seen in table 2.

Table 3. Reliability test results

Cronbachs

Alpha

Composite

Reliability

Collect

0,874994 0,908528

Collect * EthicLea

0,994505 0,994669

EthicLea

0,947718 0,955912

InterJus

0,893948 0,919423

Loyalty

0,855645 0,887048

MoraLe

0,868379 0,920344

Relationship between variables after the reduction of

indicators can be seen in Table 2, Figure 1 and Figure

Table 4. Results of SEM PLS analysis

No Variabel

eksogen

Variabel

Endogen

Path

coefficient

t count

1 Ethical

leadership

Interactional

justice

0,5210

5,6135

2 Moral

Leadership

Interactional

justice

0,1627 1,9426

3 Ethical

leadership*

collectivistic

orientation

Interactional

justice

0,1430 1,2260

4 Ethical

leadership

Loyalty to

supervisor

0,0274

0,1905

5 Moral

Leadership

Loyalty to

supervisor

0,0737

0,6751

6 Interactional

justice

Loyalty to

supervisor

0,7444

7,7388

Based on table 3 above the results of data

analysis using SEM PLS:

a. The influence of ethical leadership on

interactional justice

Based on table 3 can be known the value of path

coefficient and t value of each relationship between

variables .. The path coefficient value of ethical

leadership to interactional justice of 0.5210. This

means that there is a positive influence of ethical

leadership on interactional justice. The value of t

count amounted to 5.6135. t value is more than t table

1.6725, meaning there is significant influence from

ethical leadership to interactional justice.

b. The influence of moral leadership on

interactional justice

Based on table 6 can be seen the value of path

coefficient and t value of each relationship between

variables. The value of path coefficient of leadership

moral to interactional justice is 0.1627. This means

that there is a positive influence of moral leadership

on interactional justice. The value of t count

amounted to 1.9406. t value is more than t table

1.6725, meaning there is a significant influence of

moral leadership on interactional justice.

c. Influence of moderation variable (Ethical

leadership * collectivistic orientation) to

interactional justice

Based on table 6 can be seen the value of path

coefficient and t value of each relationship between

variables. The value of the coefficient of the variables

of moderation (Ethical leadership * collectivistic

orientation) toward interactional justice is 0.1430.

This means that there is a positive influence of

moderate variables Ethical leadership * collectivistic

orientation towards interactional justice. The value of

t count is 1.2260. The value of t is less than t table

1.6725, meaning there is no significant influence

from the moderation variable (Ethical leadership *

collectivistic orientation) to interactional justice.

d. The influence of ethical leadership on loyalty to

supervisor

Based on table 6 can be seen the value of path

coefficient and t value of each relationship between

variables. The coefficient value of ethical leadership

path to loyalty supervisor is 0.0274. This means that

there is a positive influence of ethical leadership on

Loyalty supervisor. The value of t count is 0.1905. T

value is less than t table 1.6725, meaning there is no

significant influence from ethical leadership to

Loyalty to supervisor.

e. The influence of moral leadership on loyalty to

supervisor

Based on table 6 can be seen the value of path

coefficient and t value of each relationship between

variables. The path coefficient value of moral

leadership to loyalty supervisor is 0.0737. This means

there is a positive influence of moral leadership on

Loyalty supervisor. The value of t count is 0.6751.

The value of t is less than t table 1.6725, meaning

there is no significant influence of moral leadership

on Loyalty to supervisor.

f. The effect of interactional justice on loyalty to

supervisor

Based on table 6 can be seen the value of path

coefficient and t value of each relationship between

variables. The path coefficient value of leadership

moral to loyalty supervisor is 0.7444. This means that

there is a positive influence of interactional justice on

loyalty supervisor. The value of t count amounted to

7.7388. Value of t is more than t table 1.6725,

meaning there is significant influence from

interactional justice to loyalty to supervisor.

Analysis of the Effect of Ethical and Moral Leadership on Loyalty to the Superior of Mediated Interactional Justice: Moderated

Collectivistic Orientation

2571

Figure 1. Sem analysis results (Path coefficient)

Figure 2. Sem analysis result of phase 2 (t test)

5 DISCUSSION

The results showed that there is a significant

influence between ethical leadership and interactional

justice. This result is consistent with the results of the

Jackson et al 2006; Triandis & Bhawuk, 1997 which

states that based on the theory of social exchange,

ethical leadership has a positive effect on subordinate

interactional justice. Compared with collective

subordinates, high collective subordinates pay more

attention to the outcomes and processes of social

exchange, and care about their relationship with

superiors. In other words, ethical leadership is closely

related to interactional justice for high collective

subordinates.

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2572

There is a significant influence between moral

leadership on interactional justice. These results are

consistent with these results in accordance with the

research of (M. Wu et al., 2012) to explore the

relationship of moral leadership with psychological

empowerment (ie, competence, self-determination

and impact), and the mediation role of interactional

justice in this relationship.

There is no significant influence between ethical

leadership moderated by collectivistic orientation

towards interactional justice, the results of this study

are inconsistent with the results of the Wang, Lu, Liu,

2015 study which states that although different

degrees of collectivist orientation are associated with

the power of ethical leadership influence on

interactional justice, we argue that the indirect effect

of ethical leadership on loyalty to supervisors through

interactional justice is much stronger for high

collectivist subordinates.

There is no significant influence of ethical

leadership on loyalty to supervisor. The results of this

study are not in accordance with the results of

research Piccolo et al. 2010; Walumbwa et al. 2011

stating that ethical leadership is positively correlated

with subordinate roles in performance.

There is no significant influence between moral

leadership on loyalty to supervisor, this is in Farh &

Cheng, 2000 which states moral leadership will

increase identification by being an example for

subordinates; this leader will keep his promise, be fair

to all subordinates and will not take advantage of his

subordinates. Previous studies for a positive

relationship between the virtue leader and the work of

the employees, and between the morality of the leader

and the work of the employees. The morality of

leaders is expected to promote the respect and

identification of subordinates; The three dimensions

of paternalistic leadership are expected to increase the

work motivation of subordinates.

There is a significant influence between

interactional justice on loyalty to supervisor,

according to Cruceru and Macarescu, 2009 which

states that Justice explains how leaders treat people

who are subject to their authority, decisions and

actions.

6 LIMITATION AND FUTURE

RESEARCH

Some limitations in our research effort must be

acknowledged. This study have several limitations

that should be the sample of employee not generalize,

it is not longitudinal design, and is not able to draw

definitive causal conclusions. In this study we did not

examine other leadership

style an example authentic

leadership, transactional leadership, transformational

leadership. Therefore, we encourage other research to

conduct future research in more leadership style and

longitudinal design.

7 CONCLUSIONS

The results of the study found evidence that there is a

significant influence between ethical and moral

leadership on interactional justice. This positive

influence will strengthen the interaction between

ethical and moral leadership and interactional justice.

When the ethical and moral leadership conditions are

better then it will strengthen the interactional justice

behavior in the organization. The result showed that

there was significant influence between interactional

justice to loyality to supervisor.

The results of the study found no significant

influence between ethical leadership moderated by

colectivistic orientation towards loyality to

supervisor. So this research is not able to prove the

influence of ethical leadership that is moderated by

collectivitstic orientation able to make subordinate

loyal to superiors.

The result of research shows that there is no

significant influence between ethical and moral

leadership toward loyality to supervisor, hence this

research can not prove that there is significant

influence between ethical and moral leadership

toward loyality to supervisor.

Future research can add other paternalistic

leadership variables such as authorithianism

leadership that can affect loyalty to superiors. In

addition it is necessary to add the number of samples

used for more varied results.

ACKNOWLEDGEMENT

The author would like to acknowledge the STMIK

Amikom Purwokerto for their financial support for

this research.

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Collectivistic Orientation

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Analysis of the Effect of Ethical and Moral Leadership on Loyalty to the Superior of Mediated Interactional Justice: Moderated

Collectivistic Orientation

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