The Relationship of Leadership Style and CEO Values to Ethical Practices in Organizations

This study analyzes the relationship between CEO values, leadership style and ethical practices in organizations. The ethical practices of formal statement of ethics and diversity training are included in the study, as well as four categories of values based on Rokeach's (1973) typology including personal, social, competency-based and morality-based. Results indicate that all four types of values are positively and significantly related to transformational leadership, with transactional leadership positively related to morality-based and personal values, and laissez-faire leadership negatively related to competency-based values. When size of company and values are controlled, transformational leadership explains a significant amount of change in formal statement of ethics, and transactional leadership explains a significant amount of change in diversity training.