Abstract

Leaders play a critical role in setting the tone for ethical climate in organizations. In recent years, there has been an increased skepticism about the role played by corporate executives in developing and implementing ethics in business practices. Sales and marketing practices of businesses, particularly in the pharmaceutical industry, have come under increased scrutiny. This study identifies a type of leadership style that can help firms develop an ethical climate. Responses from 333 salespeople working for a North American subsidiary of an international pharmaceutical company were used to analyze the impact of instrumental leadership on ethical climate. We also examined the effect of ethical climate on effort, satisfaction with the supervisor, and job satisfaction. Managerial implications are provided.