ABSTRACT
The pharmaceutical industry is one of the industries where the institutionalization of ethics gains importance. This study is conducted to determine the effect of transactional, transformational, and paternalist leadership styles on the direct and indirect institutionalization of ethics in businesses in the pharmaceutical industry. The employees of the pharmaceutical sector are defined as the population and pharmaceutical representatives as the sample. The data were collected between 03.10-13.12.2019 through an online questionnaire developed based on the literature. Quota sampling has been applied according to gender and whether the firm is local or foreign. The analyzes were carried out on the data from 409 questionnaires. In the analysis, factor and multiple regression analyses were used as well as descriptive statistics. It was determined that conditional rewarding, which is one of the dimensions of transactional leadership, positively affected the indirect institutionalization of ethics, and liberal leadership negatively affected. Only the negative effect of liberal leadership on the direct institutionalization of ethics has been identified. It has been demonstrated that the ideal effect and personal interest dimension of transformational leadership are not effective in the indirect institutionalization of ethics, whereas developmental motivation has a positive effect. It has been found that no dimension of transformational leadership directly impacts the institutionalization of ethics. It has been revealed that the dimensions of family atmosphere, loyalty expectation, protection of authority, and status of paternalist leadership do not affect the indirect institutionalization of ethics, whereas the dimension of individual relations with employees has a positive effect. However, it was determined that the family atmosphere dimension of paternalist leadership did not directly affect the institutionalization of ethics, while individual relations with employees were positively affected, and the dimensions of loyalty expectation and preservation of authority and status were negatively affected. The study concludes with the suggestion that local companies should consider their leadership styles and take the approach of organizational learning through benchmarking from foreign companies that set good examples.