IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i2p447-d130900.html
   My bibliography  Save this article

Relationship of Ethical Leadership, Corporate Social Responsibility and Organizational Performance

Author

Listed:
  • Min-Seong Kim

    (Department of Tourism, Recreation & Sport Management, University of Florida, Gainesville, FL 32611-8208, USA)

  • Brijesh Thapa

    (Department of Tourism, Recreation & Sport Management, University of Florida, Gainesville, FL 32611-8208, USA)

Abstract

Corporate social responsibility (CSR) has become a major part of the foodservice industry due to external forces which encourage enterprises’ responsiveness. In reality, consumers’ social concern influences their attitudes towards foodservice firms’ socially responsible practices and purchase decisions, thereby influencing senior management to react. Considering this issue, this study examines the impact of senior management’s ethical leadership in evaluating operational, commercial, and economic performances along with the mediating role of CSR in the foodservice industry. A conceptual model was formulated and empirically tested based on responses from 196 foodservice franchise firms in South Korea. The results indicated ethical leadership significantly influenced CSR and operational performance, while CSR also had a positive effect on operational and commercial performances. Additionally, operational performance had a significantly positive influence on commercial performance, which subsequently enhanced economic performance. Overall, the findings highlight the role that ethical leadership exhibited by senior management of foodservice franchises influenced initiation of CSR activities, which provide implications for research and industry practice and is outlined.

Suggested Citation

  • Min-Seong Kim & Brijesh Thapa, 2018. "Relationship of Ethical Leadership, Corporate Social Responsibility and Organizational Performance," Sustainability, MDPI, vol. 10(2), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:2:p:447-:d:130900
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/2/447/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/2/447/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Font, Xavier & Guix, Mireia & Bonilla-Priego, Ma Jesús, 2016. "Corporate social responsibility in cruising: Using materiality analysis to create shared value," Tourism Management, Elsevier, vol. 53(C), pages 175-186.
    2. Menguc, Bulent & Ozanne, Lucie K., 2005. "Challenges of the "green imperative": a natural resource-based approach to the environmental orientation-business performance relationship," Journal of Business Research, Elsevier, vol. 58(4), pages 430-438, April.
    3. James Avey & Michael Palanski & Fred Walumbwa, 2011. "When Leadership Goes Unnoticed: The Moderating Role of Follower Self-Esteem on the Relationship Between Ethical Leadership and Follower Behavior," Journal of Business Ethics, Springer, vol. 98(4), pages 573-582, February.
    4. Yu-Shan Chen, 2008. "The Driver of Green Innovation and Green Image – Green Core Competence," Journal of Business Ethics, Springer, vol. 81(3), pages 531-543, September.
    5. Silke Eisenbeiss & Daan Knippenberg & Clemens Fahrbach, 2015. "Doing Well by Doing Good? Analyzing the Relationship Between CEO Ethical Leadership and Firm Performance," Journal of Business Ethics, Springer, vol. 128(3), pages 635-651, May.
    6. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    7. Ozgur Demirtas & A. Akdogan, 2015. "The Effect of Ethical Leadership Behavior on Ethical Climate, Turnover Intention, and Affective Commitment," Journal of Business Ethics, Springer, vol. 130(1), pages 59-67, August.
    8. Kevin Groves & Michael LaRocca, 2011. "Responsible Leadership Outcomes Via Stakeholder CSR Values: Testing a Values-Centered Model of Transformational Leadership," Journal of Business Ethics, Springer, vol. 98(1), pages 37-55, January.
    9. Brown, Michael E. & Trevino, Linda K. & Harrison, David A., 2005. "Ethical leadership: A social learning perspective for construct development and testing," Organizational Behavior and Human Decision Processes, Elsevier, vol. 97(2), pages 117-134, July.
    10. Yan Zhu & Li-Yun Sun & Alicia Leung, 2014. "Corporate social responsibility, firm reputation, and firm performance: The role of ethical leadership," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 925-947, December.
    11. Cristian Carini & Nicola Comincioli & Laura Poddi & Sergio Vergalli, 2017. "Measure the Performance with the Market Value Added: Evidence from CSR Companies," Sustainability, MDPI, vol. 9(12), pages 1-19, November.
    12. Elena Fraj-Andrés & Eva Martinez-Salinas & Jorge Matute-Vallejo, 2009. "A Multidimensional Approach to the Influence of Environmental Marketing and Orientation on the Firm’s Organizational Performance," Journal of Business Ethics, Springer, vol. 88(2), pages 263-286, August.
    13. Shuili Du & C. B. Bhattacharya & Sankar Sen, 2011. "Corporate Social Responsibility and Competitive Advantage: Overcoming the Trust Barrier," Management Science, INFORMS, vol. 57(9), pages 1528-1545, March.
    14. Dongyong Zhang & Qiaoyun Ma & Stephen Morse, 2018. "Motives for Corporate Social Responsibility in Chinese Food Companies," Sustainability, MDPI, vol. 10(1), pages 1-15, January.
    15. François Maon & Adam Lindgreen & Valérie Swaen, 2009. "Designing and Implementing Corporate Social Responsibility: An Integrative Framework Grounded in Theory and Practice," Journal of Business Ethics, Springer, vol. 87(1), pages 71-89, April.
    16. Muhammad Ibrahim Abdullah & Samra Ashraf & Muddassar Sarfraz, 2017. "The Organizational Identification Perspective of CSR on Creative Performance: The Moderating Role of Creative Self-Efficacy," Sustainability, MDPI, vol. 9(11), pages 1-21, November.
    17. Zhi Tang & Clyde Eiríkur Hull & Sandra Rothenberg, 2012. "How Corporate Social Responsibility Engagement Strategy Moderates the CSR–Financial Performance Relationship," Journal of Management Studies, Wiley Blackwell, vol. 49(7), pages 1274-1303, November.
    18. Chi-Shiun Lai & Chih-Jen Chiu & Chin-Fang Yang & Da-Chang Pai, 2010. "The Effects of Corporate Social Responsibility on Brand Performance: The Mediating Effect of Industrial Brand Equity and Corporate Reputation," Journal of Business Ethics, Springer, vol. 95(3), pages 457-469, September.
    19. Lee, Eun Mi & Park, Seong-Yeon & Lee, Hyun Jung, 2013. "Employee perception of CSR activities: Its antecedents and consequences," Journal of Business Research, Elsevier, vol. 66(10), pages 1716-1724.
    20. Badrinarayanan, Vishag & Suh, Taewon & Kim, Kyung-Min, 2016. "Brand resonance in franchising relationships: A franchisee-based perspective," Journal of Business Research, Elsevier, vol. 69(10), pages 3943-3950.
    21. Christine Ye & J. Cronin & John Peloza, 2015. "The Role of Corporate Social Responsibility in Consumer Evaluation of Nutrition Information Disclosure by Retail Restaurants," Journal of Business Ethics, Springer, vol. 130(2), pages 313-326, August.
    22. Mittal, Swati & Dhar, Rajib Lochan, 2016. "Effect of green transformational leadership on green creativity: A study of tourist hotels," Tourism Management, Elsevier, vol. 57(C), pages 118-127.
    23. Shuili Du & Valérie Swaen & Adam Lindgreen & Sankar Sen, 2013. "The Roles of Leadership Styles in Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 114(1), pages 155-169, April.
    24. Thomas Maak & Nicola M. Pless, 2006. "Responsible Leadership in a Stakeholder Society – A Relational Perspective," Journal of Business Ethics, Springer, vol. 66(1), pages 99-115, June.
    25. Guido Palazzo & Andreas Scherer, 2006. "Corporate Legitimacy as Deliberation: A Communicative Framework," Journal of Business Ethics, Springer, vol. 66(1), pages 71-88, June.
    26. Graham Hubbard, 2009. "Measuring organizational performance: beyond the triple bottom line," Business Strategy and the Environment, Wiley Blackwell, vol. 18(3), pages 177-191, March.
    27. Mikko Manner, 2010. "The Impact of CEO Characteristics on Corporate Social Performance," Journal of Business Ethics, Springer, vol. 93(1), pages 53-72, June.
    28. Walumbwa, Fred O. & Mayer, David M. & Wang, Peng & Wang, Hui & Workman, Kristina & Christensen, Amanda L., 2011. "Linking ethical leadership to employee performance: The roles of leader-member exchange, self-efficacy, and organizational identification," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(2), pages 204-213, July.
    29. David A. Waldman & Donald S. Siegel & Mansour Javidan, 2006. "Components of CEO Transformational Leadership and Corporate Social Responsibility," Journal of Management Studies, Wiley Blackwell, vol. 43(8), pages 1703-1725, December.
    30. Tamsin Angus-Leppan & Louise Metcalf & Sue Benn, 2010. "Leadership Styles and CSR Practice: An Examination of Sensemaking, Institutional Drivers and CSR Leadership," Journal of Business Ethics, Springer, vol. 93(2), pages 189-213, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Palvi Pasricha & Bindu Singh & Pratibha Verma, 2018. "Ethical Leadership, Organic Organizational Cultures and Corporate Social Responsibility: An Empirical Study in Social Enterprises," Journal of Business Ethics, Springer, vol. 151(4), pages 941-958, September.
    2. Raiswa Saha & Shashi & Roberto Cerchione & Rajwinder Singh & Richa Dahiya, 2020. "Effect of ethical leadership and corporate social responsibility on firm performance: A systematic review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 409-429, March.
    3. Shuili Du & Valérie Swaen & Adam Lindgreen & Sankar Sen, 2013. "The Roles of Leadership Styles in Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 114(1), pages 155-169, April.
    4. Christof Miska & Mark E. Mendenhall, 2018. "Responsible Leadership: A Mapping of Extant Research and Future Directions," Journal of Business Ethics, Springer, vol. 148(1), pages 117-134, March.
    5. Mustafa Changar & Tarik Atan, 2021. "The Role of Transformational and Transactional Leadership Approaches on Environmental and Ethical Aspects of CSR," Sustainability, MDPI, vol. 13(3), pages 1-23, January.
    6. Bhaskar, Ratikant & Li, Peigong & Bansal, Shashank & Kumar, Satish, 2023. "A new insight on CEO characteristics and corporate social responsibility (CSR): A meta-analytical review," International Review of Financial Analysis, Elsevier, vol. 89(C).
    7. Niels Van Quaquebeke & Jan U. Becker & Niko Goretzki & Christian Barrot, 2019. "Perceived Ethical Leadership Affects Customer Purchasing Intentions Beyond Ethical Marketing in Advertising Due to Moral Identity Self-Congruence Concerns," Journal of Business Ethics, Springer, vol. 156(2), pages 357-376, May.
    8. Dan Wang & Taiwen Feng & Alan Lawton, 2017. "Linking Ethical Leadership with Firm Performance: A Multi-dimensional Perspective," Journal of Business Ethics, Springer, vol. 145(1), pages 95-109, September.
    9. Rama Shankar Yadav & Sanket Sunand Dash & Shreyashi Chakraborty & Manoj Kumar, 2018. "Perceived CSR and Corporate Reputation: The Mediating Role of Employee Trust," Vikalpa: The Journal for Decision Makers, , vol. 43(3), pages 139-151, September.
    10. K. V. James & R. G. Priyadarshini, 2021. "Responsible Leadership: A New Paradigm for Organizational Sustainability," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 46(4), pages 452-470, November.
    11. Yasemin Bal & Serdar Bozkurt & Pinar Buyukbalci, 2014. "Improving Social Responsibility Through Ethical Leadership: A Perceptions Based View," Proceedings of International Academic Conferences 0701667, International Institute of Social and Economic Sciences.
    12. Christian Voegtlin, 2016. "What does it mean to be responsible? Addressing the missing responsibility dimension in ethical leadership research," Post-Print hal-01481471, HAL.
    13. WenChi Zou & BaoWen Lin & Ling Su & Jeffery D. Houghton, 2023. "Spiritual Leadership and Employee CSR Participation: A Probe from a Sensemaking Perspective," Journal of Business Ethics, Springer, vol. 186(3), pages 695-709, September.
    14. Rafael García Martín & Alfonso Duran-Heras & Karen Reina Sánchez, 2023. "Influence of Leadership Styles on Sustainable Development for Social Reconstruction: Current Outcomes and Advisable Reorientation for Two Aerospace Multinationals—Airbus and TASL," Sustainability, MDPI, vol. 15(19), pages 1-29, September.
    15. Tajneen Affnaan Saleh & Abdullah Sarwar & Md. Amirul Islam & Muhammad Mohiuddin & Zhan Su, 2022. "Effects of Leader Conscientiousness and Ethical Leadership on Employee Turnover Intention: The Mediating Role of Individual Ethical Climate and Emotional Exhaustion," IJERPH, MDPI, vol. 19(15), pages 1-17, July.
    16. Yan Zhu & Li-Yun Sun & Alicia Leung, 2014. "Corporate social responsibility, firm reputation, and firm performance: The role of ethical leadership," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 925-947, December.
    17. Christian Voegtlin & Moritz Patzer & Andreas Scherer, 2012. "Responsible Leadership in Global Business: A New Approach to Leadership and Its Multi-Level Outcomes," Journal of Business Ethics, Springer, vol. 105(1), pages 1-16, January.
    18. Andersen, Sophie Esmann & Johansen, Trine Susanne, 2021. "Corporate citizenship: Challenging the corporate centricity in corporate marketing," Journal of Business Research, Elsevier, vol. 131(C), pages 686-699.
    19. Yuan-Shuh Lii & May-Ching Ding & Chih-Huang Lin, 2018. "Fair or Unfair: The Moderating Effect of Sustainable CSR Practices on Anticipatory Justice Following Service Failure Recovery," Sustainability, MDPI, vol. 10(12), pages 1-21, December.
    20. Nematollah Shiri & Vahid Jafari‐Sadeghi, 2023. "Corporate social responsibility and green behaviour: Towards sustainable food‐business development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(2), pages 605-620, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:10:y:2018:i:2:p:447-:d:130900. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.