Critical Role of Leadership on Ethical Climate and Salesperson Behavior

Introduction
The Objective of this article is to identify leadership practices that promote ethical climate perceptions
in the current sales environment. This has ample managerial implications because it taps into the
specific actions that sales leaders can undertake to help develop an ethical climate where salespeople
are happier with their jobs and willing to put forth the amount of effort needed to achieve a higher
performance. As ,Leader's actions are particularly important in defining the ethical climate of the
organization .Efforts have been made to know that how the company leaders are interested in
understanding the role they play in creating a workplace environment characterized by high levels of
satisfaction and performance without compromising ethical guidelines.
Body of the summry
Leadership styles influence the employees behavior and performance. . As, Leader's actions are
particularly important in defining the ethical climate of the organization.
Path-goal theory (PGT) posits that management is responsible of setting clear goals, clarifying paths to
achieve goals, and implementing reward systems contingent on achieving expected performance. PGT
also suggests that an employee's motivation to engage in a behavior is a function of her or his
expectation that the action will help achieve personal goals. For this we use two distinct styles to
motivate employee behaviors, initiating structure and consideration.
Initiating structure, also called instrumental leadership, characterizes leaders who employ a directive
style and offer employees guidance and directions for s job completion while the second leadership
style, consideration (also called supportive or participative leadership), describes a style in which the
leader creates an environment of psychological support and friendliness . This is achieved by
incorporating employee suggestions and ideas into the decision process.
Ethical climate contains cues that guide employee's behavior and reflects the ethical character of the
organization . It can also be described as a type of work climate that reflects organizational policies,
procedures, and practices that have moral consequences. Organizational leaders play a role in shaping
ethical climate by both stating and implementing ethical policies and practices.
Ethical climate evaluations are the result of an employee's cognitive appraisal process that involves the
objective environment and a frame of reference. Employees use their personal beliefs and values as a
frame of reference but also rely on cues received from coworkers and managers.
When leaders develop ethical guidelines, communicate expectations, and establish consequences of
violating organizational norms, employees are more likely to comply with ethical expectations. Leaders
are perceived by employees as role models who set norms and expectations for appropriate conduct.
Ahearne et al/s (2005) study shows that salespeople's behaviors are at least partially explained by the
guidance and conducted provided by managers.
when salespeople feel they can trust the organization and their supervisor, it reduces feelings of
vulnerability and increases satisfaction. In field settings, an organizational ethical climate governed by
rules and standards provides a logical avenue for the salesperson to pursue. Here company rules govern
employee behaviors and also provide a convenient exit for the salesperson when faced with ethical
dilemmas such as ethically questionable customer requests.
Job satisfaction
Job satisfaction is an attitude that reflects the extent to which people like their job. It results from an
evaluation of the job and work environment that the employee considers rewarding and fulfilling
(Spector, 1985). Brown and Peterson (1993) found that job satisfaction is central to our understanding
of sales-person's behaviors. Salespeople view a firm's climate as ethical when the organization has
explicit standards and guidelines that help them address ethical dilemmas they encounter.
Salespeople who think that the firm is ethical are likely to refrain from using deceptive or coercive
tactics to make a sale. Ultimately, this enhances salesperson's ability to develop long-term relationships
with customers. Hence, ethical climate creates a sense of job accomplishment reflected in a positive job
attitude
The quality of the manager-salesperson relationship plays a critical role in defining salesperson's overall
job attitudes. As, Salespeople see managers as having a significant impact on their well-being and
performance because sales managers are responsible for supporting, coaching, and mentoring sales
people
Effort
Sales success is also dependent on a salesperson's ability to be a solutions provider .Ethical climate
provides salespeople with ethical boundaries for customer transactions and the much-needed clarity
required to address ethical issues. The clarity and boundaries of accepted ethical behavior in turn
motivates the salesperson to devise creative ways to meet customer needs without feeling vulnerable.
In addition, customers are more open and less suspicious when dealing with an ethical firm and view
favorably new ideas and suggestions from the organization.
In view of this, salespeople will be more inclined to try new initiatives in meeting customer needs. The
increased flexibility and freedom to respond to market conditions enable salespeople to be customer
oriented and expend effort to meet customer needs
Thus, salespeople are more likely to put forth a greater amount of effort when they are satisfied with
their job.
Job performance
Job performance is often defined as employee behaviors that are consistent with and contribute to
organizational goals.so ,job performance is related with job satisfaction, organizational environment,
management style and other chunks. A well-accepted concept is that higher performance requires
higher levels of effort (Brown and Peterson, 1994). Effort can be viewed as the input to the selling job
and job performance as its output (Christen et al., 2006). The effort and job perfor-mance association is
particularly evident in sales because salespeople have greater control over job activities and outcomes
Methodology
Leadership style was measured with 13 items from the Leaders Behavior Description Questionnaire
used by House (1971) and House and Dessler (1974). Ethical climate was measured using Schwepker's
(2001) scale. Satisfaction with supervisor was measured with Churchill et al.'s scale (1974). Job
satisfaction was measured using Spector's (1985) scale for overall job satisfaction. Effort was measured
with Sujan et al.'s (1994) instrument and job performance w ith Piercy et al.'s (2001) scale.
The study was conducted using a sample of sales-people of a large multinational pharmaceutical
company operating in North America. Participants are missionary sellers responsible of persuading
physicians to prescribe their company drugs. The survey package including the questionnaire, a letter
signed by the researchers, and a postage paid return envelope was mailed to the residential address of
572 salespeople. Female representatives accounted for 65.6% of the responses while males were 34.4%.
The age of the respondents ranged from 20 to 60 years. Selling experience ranged from a few months to
34 years .
Finding
After analysis ,we came to know that there is a positive and significant relationship between
instrumental leadership style and ethical climate and between considerate leadership and satisfaction
with the supervisor. Ethical climate positively influences satisfaction with supervisor ,job satisfaction,
and employee effort. Supervisory satisfaction has a positive relationship with job satisfaction. Job
satisfaction influences job performance directly and indirectly though effort.
Conclusion
Firms have responded to increased ethical problems by establishing ethical guide lines and ensuring
strict compliance from employees. Researchers have recognized that the institutionalization of ethical
guidelines is a major challenge faced by today's manager. This is particularly critical as companies shift
from a traditional office setting to field offices where direct supervision of salespeople is not a feasible
option
Establishing ethical guidelines, demonstrating adherence to formal guidelines, and having zero
tolerance of unethical activities are all effective ways of influencing salesperson's ethical behaviors .I t
also becomes evident from our study that establishment of ethical guidelines may not necessarily be the
result of a 'consensus' team effort where everyone's views are considered and accommodated.
This empirical study shows that the directive leadership can help firms develop an ethical climate that
may help firms achieve a higher business performance by way of increased employee satisfaction, job
effort, and job performance. Practitioners believe that socially responsible behaviors of the firm result in
employees feeling proud of the organization. This helps in employee retention and contributes to long-
term benefits for the firm.
Limitation
Limitations. The first is the use of subjective scales to measure the model constructs with the associated
perception of social desirability bias. This study's design is based on a cross-sectional sample and hence
causality of relationships cannot be claimed. The study results are based on the data collected from a
single company selling pharmaceutical products in the U.S.
Finally, researchers have argued that salesperson's actions result from the interplay of factors that can
be attributed to the individual and to the firm.
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Muhammad Irfan Muneer,
IMS,B.Z.U,Multan,Pakistan.