Linking Ethical Leadership with Firm Performance: A Multi-dimensional Perspective

Dan Wang (), Taiwen Feng () and Alan Lawton ()
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Dan Wang: Monash University
Taiwen Feng: Northwestern Polytechnical University
Alan Lawton: Federation University

Journal of Business Ethics, 2017, vol. 145, issue 1, No 7, 95-109

Abstract: Abstract Despite the importance of ethical leadership, the impacts of its different facets on firm-level performance are unclear. Drawing on the resource-based view of the firm and the group engagement model, we propose that ethical leadership consisting of leader humane orientation, leader responsibility and sustainability orientation and leader moderation orientation are beneficial to firm performance, and leader justice orientation plays moderating roles. We empirically tested this theoretical framework employing multi-source survey data collected from 264 Chinese firms. The findings reveal that both leader humane orientation and leader responsibility and sustainability orientation have positive influences on both firm financial and social performance, while leader moderation orientation only has positive influence on firm financial performance. In addition, leader justice orientation positively moderates the relationship between leader humane orientation and leader responsibility and sustainability orientation and financial performance as well as the relationship between leader moderation orientation and social performance. These findings provide theoretical and practical implications for understanding how different facets of ethical leadership jointly function to influence firm performance.

Keywords: Ethical leadership; Leader humane orientation; Leader responsibility and sustainability orientation; Leader moderation orientation; Leader justice orientation; Firm performance (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (15)

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DOI: 10.1007/s10551-015-2905-9

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