MEDIATING ROLE OF ETHICAL LEADERSHIP BETWEEN EMPLOYEES EMPOWERMENT AND COMPETITIVE EDGE: A CASE OF COMMERCIAL BANKS IN PAKISTAN

Abstract

Purpose of the study: The current study aimed to examine the impact of employee empowerment on reaching a better level of competitive edge through the mediating influence of ethical leadership. Methodology: Dimensions of competitive edge were employed, including (quality, responsiveness, innovation, and efficiency). A quantitative approach was adopted to attain the main objective of the study. A questionnaire was employed to collect data from 258 individuals' of Pakistani commercial banks. SPSS/ AMOS was used to screen and analyze the gathered data. Cronbach's Alpha was used to test the reliability of the study tool. Multiple regression analysis was performed to test the hypotheses of the study. Preacher and Hayes model was deployed to test the mediation effect. Principal Findings: The study's results indicated that ethical leadership mediates the relationship between empowerment and competitive edge. Besides, the study highlighted that ethical leadership influences empowerment in a way that leads to better efficiency and service quality, launching from leaderships' role in increasing awareness of service quality importance and leading employees towards being more creative and innovative. Application of this Study: The study recommended that workers in the bank sector should submit proposals that affect skills training and the expansion of their fields of empowerment in comparison with the previous stage and offer workers with proven skills a chance to engage in decision making to strengthen their skills and provide them with the ability to learn further in the field of banking. Novelty/Originality of this study: This is the first study that has analyzed the mediating role of ethical leadership between employees' empowerment and competitive edge in the context of listed Pakistani commercial Banks.