Author(s): Oktay YANIK
In this study, the effect of transformational leadership on ethical climate and ethical culture, which are two important components of the ethical context, were questioned, taking into account the role of trust in the leader in these mediating relationships. With the help of a questionnaire, data from 221 people working in the finance sector in Ankara were collected and analyzed by means of structural equation modeling. Findings indicate that the idealized influence (charisma), which emphasizes the ethical aspect of transformational leadership, directly affects the ethical climate and indirectly affects the ethical culture through the ethical climate. It is another finding that the trust in the leader has a moderator role in the relationship between transformational leadership and ethical climate. Accordingly, when the level of trust in the leader is high, the effect of transformational leadership on the ethical climate is strengthened. When trust in the leader is low, - in comparison with the trust in the leader is high- the effect of transformational leadership on the ethical climate is weakened. The results showed that, transformational leadership can be partly effective in shaping the ethical context within the organization, and when the goal is to maximize the ethical context effectively -because the transformational leadership cannot directly affect the ethical culture-, different leadership behaviors should be exhibited, which outweigh the ethical and moral aspects and also create a high level of trust on the followers.