Ethical leadership in multinational companies’ control practices: culture as a moderating factor

Abstract

PurposeDetermining the role of ethical leadership in the multinational companies’ (MNCs) control practices, the purpose of this paper is to extend Eisenbeiss’ (2012) four central ethical leadership orientations into multinational companies’ control contexts – the culturally diversified environment.Design/methodology/approachAdopting a multiple-case research design, the authors gather qualitative data from four MNC subsidiaries located in China, that connects three potentially diverse cultural contexts: German, Japanese and Chinese.FindingsThe findings of this paper confirm that ethical leadership compliance (or violation) positively (or negatively) contributes to the internalization of organizational practice transfer, moderated by cultural distance between foreign managers and subsidiaries’ employees. The results reveal that informal control and trust act as lubricants in the internalization process.Originality/valueThis paper evidences the connections between ethical leadership, organizational practice transfer and subsequent performance, along with inclusive cultural moderating factors.