Academy of Strategic Management Journal Volume 19, Issue 4, 2020 1 1939-6104-19-4-572 EXAMINING THE INFLUENCE OF ETHICAL LEADERSHIP ON EMPLOYEE OUTCOMES: MEDIATING ROLE OF PSYCHOLOGICAL EMPOWERMENT Noreen Sattar, University of the Punjab Muhammad Ali, University of the Punjab Muhammad Ali Hamza, UVAS Hina Saleem, University of the Punjab Hafiz Fawad Ali, University of Punjab Basharat Raza, NCBA &E ABSTRACT This study aims to investigate the association of ethical leadership (EL) and employee outcomes, i.e., organizational citizenship behaviour (OCB) and innovative work behaviour (IWB). The study also examines the mediating role of psychological empowerment (PE) between EL and employee outcomes: OCB and IWB. Through convenience sampling, the data have been collected using a self-administered questionnaire from 382 employees working in different branches of various banks located in Lahore, Pakistan. Results reveal that ethical leadership has a significant and positive influence on psychological empowerment: organizational citizenship behaviour, and innovative work behaviour of employees. However, psychological empowerment partially mediates the association of EL with OCB and IWB. Thus, ethical leadership is a powerful tool that helps employees to improve themselves and consequently elevates the organizations. The practical implications, study limitations, and future directions have also been included. Keywords: Ethical Leadership, Innovative Work Behaviour, Organizational Citizenship Behaviour, Psychological Empowerment. INTRODUCTION Due to ethical blunders by the top-level executives of the organizations, the topic of ethical leadership, has been investigated by the various scholars to analyze the impact on employees and organizations (Carson, 2003; Cappelli, 2009; Zona et al., 2013). Trevino et al. (2000) explain the term ethical leadership as “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct among followers through two-way communication, reinforcement, and decision- making”. Ethical leadership signifies to become a moral and ethical person because ethical leaders are fair, self-disciplined, and trustworthy (Zhu et al., 2010). Ethical behaviours of leaders positively influence the workplace outcomes of the followers. Employees' work-related attitudes are affected through ethical leadership, just like well-being, creativity, and job satisfaction (Lindblom et al., 2015; Brown et al., 2005; Walumbwa et al., 2011; Ali et al., 2019). Offering