Responsible Leadership and Employee Turnover Intentions: Unveiling the Mediating Role of Ethical Climate

Abstract

This paper investigates the effect of responsible leadership on employee’s turnover intention and ethical climate is used as a mediator variable in the telecom industry in Pakistan. The study is based on the Social Exchange Theory that suggests that ethical conduct, stakeholder orientation, and transparency result in a positive reciprocal relationship between the leader and the stakeholders that impacts on the employee attitude and retention rates. Quantitative and cross-sectional study design was utilized and 365 employees were required to complete measurement scales that were validated. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to perform the analysis and applied to SmartPLS 4. The results show that responsible leadership has a great impact in preventing employee turnover intention, and has also a huge positive impact on ethical climate. Also, the ethical climate was identified to have a negative effect on the turnover intention; indicating that organizations with ethical norms, integrity and fairness will maintain more employees. Mediation analysis also supports the fact that ethical climate mediates the relationship between responsible leadership and turnover intention, which is an important factor as a mediating mechanism. The study has research implications in that it empirically establishes the relationship between responsible leadership and employee retention outcomes and indicates the presence of ethical climate as an important explanatory variable in a developing country setting. The results provide practical implications to the organization since they highlight the need to develop responsible leadership behaviors and build strong ethical climates to increase employee commitment and organizational sustainability.

 Keywords: Responsible Leadership, Ethical Climate, Employee Turnover Intention, Social Exchange Theory, Pakistan Telecom Sector.