The influence of ethical climate and leadership on basic psychological needs within the construction industry

Abstract: During the last decades, the construction industry has struggled with negative press concerning an unethical work environment and inadequate management. The unethical work environment leads to unsatisfied employees, and both internal and external activities are rising to solve this problem. There are limited research understanding of how an ethical climate and ethical leadership are associated to the satisfaction of the basic psychological needs within self- determination theory. Therefore, the aim of this study was to examine the association between these variables and further examine if ethical leadership had a mediating effect on the associations between the criteria of ethical climate and the three basic psychological needs. With a cross-sectional design the data was collected from employees within an organization in the construction industry in Sweden. A digital survey was used as measurement and 171 employees participated in the study. The results indicated significant associations between ethical climate, ethical leadership and the basic psychological needs; autonomy, competence and relatedness. Of the ethical climate criteria, principle climate was not a significant predictor of the basic needs. Ethical leadership had a significant mediating effect on ethical climate and autonomy, and ethical climate and relatedness. The study contributes to the understanding of how ethical climate and ethical leadership are associated to our basic psychological needs and how organizations should give priority to ethical standards in the work environment to satisfy their employees.