Asian Research Thesis Index

Abstract

The turbulent economic history of Pakistan generally explains the irregular economic growth since establishment. Compared to successful industrializers such as Malaysia, China and South Korea, manufacturing industry has contributed less to GDP in Pakistan and botched to fuel per capita income growth. Any attempt to bring manufacturing out of the stagnation and to make it an engine of growth requires high level of performance from workforce employed in manufacturing organizations. One of the most significant foundation to determine development is the workforce. Mutual correlation between the organization and the employees has been recognized as the most valuable parameter for development. Commitment of employees towards the firm bring settings for the appropriate strategies and standard working for businesses. It has been widely accepted in the literature that organizational commitment and job performance has positive correlation while organizational commitment is inversely related to turnover, absenteeism and tardiness. Workers in the developing country are found to express larger commitment to those firms which pay attention to their psychological needs. Literature has identified numerous factors that affect organizational commitment. Whereas, leadership is the personal and organizational level factor which is considered as a crucial antecedent of employees‘ organizational commitment. Researches revealed the significant positive relationship of transformational style of leadership with employee commitment while inverse relationship has been observed with transactional style of leadership.Once the vision is developed by a leader, the style of continuous selling of the vision to the followers require certain leadership talents and skills to develop trust through personal integrity and ethics of leaders. For motivation of followers, inspirational and effective leadership mostly rely on persuasive communication styles and idealistic visions but the importance of ethical behavior for meaningful influence cannot be overlooked. Employees‘ perception of ethical leaders‘ integrity, shared values and fair treatment results in employee commitment and pride. Scarcity of literature regarding role of Ethical leadership in developing organizational commitment in local industry call for  xv   thorough investigation. Leadership is also a critical component of organizational ethical culture and leadership who exhibit, communicate and represent extraordinary ethical standards do create perception as originator and supporter of ethical culture. Furthermore, in Pakistan, CSR is being focused from the perspective of social investment and the local Pakistani firms are being emphasized to adopt the best CSR practices of MNCs and follow guidelines of socially responsible investment (SRI) funds to increase their economic profit. The manufacturing industry has no exception. As the manufacturing industry of Pakistan is going through a situation of uncertainty and stagnation, the upper echelon theory propose that followers use to seek more guidance from leaders in the situations of ambiguity and uncertainty. In organizations characterized by ambiguity, CEO ethical leadership may become more important and employees may be expected more to depend upon their CEO for ethical guidance. Under such scenario, top executives having additional discretionary powers have stronger influence on the firms and the followers. Hence the two managerial discretions i.e. CEO founder status and size of the firm gets critical to study in the context of Pakistan especially when the literature is rare. The core drive of this particular research is to identify those elements that influence the organizational commitment in terms of leadership behavior at CEO level, ethical culture at managerial level and ethical compliance in terms of CSR. The influence of managerial discretions is investigated as the size of the firm, the founder status of CEO and abusive supervision may create differences in results. The investigation of organizational commitment of employees in manufacturing industry of Pakistan may suggest the weak parts that need attention to stir the growth in manufacturing industry as well as to make it competitive with international markets. The study is aimed at furthering the understanding regarding leadership determinants for CSR practice and to elucidate the association among the practice of CSR, ethical culture and employee commitment in light of path-goal theory, upper echelon theory and theory of social identity. The study observed the mediating aspect of corporate social responsibility between headship and affective organizational commitment. The study also analyzed the mediating role of ethical culture between ethical & transformational leadership and affective organizational commitment. The moderating role of abusive supervision and managerial discretion (i.e. firm size and CEO founder status) was also explored in the context of Pakistan. Organizational commitment of employees is critical for achievement of overall organizational objectives and organizational effectiveness and  xvi   for the growth of the industries. This research is meant for developing & testing an integrated framework with variables of ethical leadership, transformational leadership, ethical culture, corporate social responsibility, managerial discretions, abusive supervision and affective organizational commitment to conclude fruitful findings for managers to make manufacturing industry of Pakistan an engine for rapid growth of the economy of Pakistan. A structured questionnaire was floated to the employees working in marketing departments of manufacturing industries in Pakistan using convenience sample technique. A total of 1200 questionnaires were administered in all four provinces of Pakistan. Total 897 responses were received in response. Incomplete and inadequate questionnaires were discarded and total 874 responses were used for analysis. The results of the study revealed significant relationship of CEO ethical leadership and CEO transformational leadership with corporate social responsibility and affective organizational commitment. Significant relationship of CSR and ethical culture with affective organizational commitment of employees was also found in the manufacturing industry of Pakistan. The regression results revealed that CEO ethical leadership and CEO transformational leadership have significant positive influence on affective organizational commitment in manufacturing industry of Pakistan. Furthermore, CEO ethical leadership and CEO transformational leadership have significant positive influence on organizational ethical culture. The regression results further shown that CEO ethical leadership and CEO transformational leadership has significant positive effect on corporate social responsibility in manufacturing industry of Pakistan. Significant positive effect of corporate social responsibility and organizational ethical culture was also found on affective organizational commitment. Mediation results revealed that ethical culture mediates the relationship between CEO ethical leadership and affective organizational commitment of employees. Mediation of ethical culture was not found between CEO transformational leadership and affective organizational commitment. Moreover, corporate social responsibility mediates the relationships of CEO transformational leadership and CEO ethical leadership with affective organizational commitment. The moderation results of Firm Size reveals that it moderates the relationship between CEO ethical transformational leadership and corporate social responsibility. Firm size also moderated the association of CEO ethical leadership with ethical culture. The theoretical significance of this research is to find out how the organizations in the manufacturing industry led by the leadership depicting varying features demonstrate  xvii   differences in the practice of CSR and ethical culture. The study also focuses to investigate if the companies differing in leadership behaviors, ethical culture, CSR practice levels, managerial discretions and abusive supervision exhibits differences in employee organizational commitment. The results of the study provide valuable insight to managers and practitioners in enhancing the affective organizational commitment of their followers. Findings of this research dissertation is useful and critical for the marketing managers in manufacturing industry to learn about effects of CEO leadership on ethical culture and corporate social responsibility and in turn on the affective organizational commitment. The significant moderation effect of firm size is also beneficial for the managers in designing and implementation of marketing strategies. CEO ethical leadership has proved to positively affect the affective organizational commitment, corporates social responsibility and ethical culture in manufacturing industry of Pakistan which highlights the importance of ethical leadership in enhancing the corporate social responsibility activities, improving ethical culture and increasing organizational commitment which has multiple benefits in terms of overall performance of the firm. Similarly, CEO transformational leadership has significant relationship with corporate social responsibility and affective organizational commitment in the manufacturing industry of Pakistan. These results suggest the need of a CEO with ethical and transformational leadership characteristics for better performance in corporate social responsibility, creating healthy ethical culture and to increase affective organizational commitment of employees so that industries could flourish, get out of the stagnant state and prepare themselves to compete with the international manufacturing concerns. The significant relationship of corporate social responsibility and organizational ethical culture with affective organizational commitment ask for effective utilization of spending on corporate social responsibility for satisfying the desires of external stakeholders as well as internal stakeholders i.e. employees. Hence, the research also contributes to the literature by highlighting that the execution of corporate social responsibility activities in effective manner can bring fruitful results not only from the external customers but the employees as well." xml:lang="en_US

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