Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-25T06:12:12.745Z Has data issue: false hasContentIssue false
  • English
  • Français

CEO ethical leadership and corporate social responsibility: Examining the mediating role of organizational ethical culture and intellectual capital

Published online by Cambridge University Press:  09 July 2019

Irfan Ullah Open the ORCID record for Irfan Ullah [Opens in a new window] ,
Raja Mazhar Hameed ,
Nida Zahid Kayani  and
Yasir Fazal
Irfan Ullah*
Affiliation:
Department of Business Administration, Iqra University, Islamabad, Pakistan
Raja Mazhar Hameed
Affiliation:
Department of Business Administration, Iqra University, Islamabad, Pakistan
Nida Zahid Kayani
Affiliation:
Department of Management Sciences, Bahria University, Islamabad, Pakistan
Yasir Fazal
Affiliation:
Department of Business Administration, Iqra University, Islamabad, Pakistan
*
*Corresponding author. Email: irfanullahtarar1979@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

Recent studies have increasingly suggested leadership as a major antecedent to corporate social responsibility (CSR), empirical studies, which investigated the influence of various leadership aspects such as style and ethics on CSR and unraveled the mechanism through which leadership exerts its impact on CSR were restricted. Thus, the purpose of this research was to study the relationship between CEO ethical leadership and CSR by focusing on the mediating role of ethical culture and the intellectual capital facets (human capital and social capital) of the organization. Data for current research were collected through personally administered questionnaire through survey. Based on a sample of 250 respondents, the current study instituted that CEO ethical leadership positively affected CSR. Intellectual capital facets (human and social) and organizational ethical culture were observed to have a mediating effect on CEO ethical leadership and CSR relationship. Practical implications of the results are also given in the current study. Moreover, study limitations and directions for future study have also been presented.

Keywords

CEO ethical leadershipintellectual capitalhuman capitalsocial capitalethical cultureCSR
Type
Research Article
Information
Journal of Management & Organization , Volume 28 , Issue 1 , January 2022 , pp. 99 - 119
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Act II, S. M. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions.Google Scholar
Aguinis, H., & Glavas, A. (2012). What we know and don't know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968.CrossRefGoogle Scholar
Ahmed, F., Shahzad, K., Aslam, H., Bajwa, S. U., & Bahoo, R. (2016). The role of collaborative culture in knowledge sharing and creativity among employees. Pakistan Journal of Commerce and Social Sciences (PJCSS), 10(2), 335–358.Google Scholar
Ali Chughtai, A. (2016). Can ethical leaders enhance their followers’ creativity? Leadership, 12(2), 230–249.CrossRefGoogle Scholar
Ali, G. (2015). Factors affecting public investment in manufacturing sector of Pakistan. European Journal of Economic Studies 13(3), 122–130.CrossRefGoogle Scholar
Angus-Leppan, T., Metcalf, L., & Benn, S. (2010). Leadership styles and CSR practice: An examination of sensemaking, institutional drivers and CSR leadership. Journal of Business Ethics, 93(2), 189–213.CrossRefGoogle Scholar
Babalola, M. T., Stouten, J., & Euwema, M. (2016). Frequent change and turnover intention: The moderating role of ethical leadership. Journal of Business Ethics, 134(2), 311–322.CrossRefGoogle Scholar
Becchetti, L., & Trovato, G. (2011). Corporate social responsibility and firm efficiency: A latent class stochastic frontier analysis. Journal of Productivity Analysis, 36(3), 231–246.CrossRefGoogle Scholar
Berson, Y., Oreg, S., & Dvir, T. (2008). CEO values, organizational culture and firm outcomes. Journal of Organizational Behavior, 29(5), 615–633.CrossRefGoogle Scholar
Brown, M. E., & Mitchell, M. S. (2010). Ethical and unethical leadership: Exploring new avenues for future research. Business Ethics Quarterly, 20(4), 583–616.CrossRefGoogle Scholar
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117–134.CrossRefGoogle Scholar
Brunold, J., & Durst, S. (2012). Intellectual capital risks and job rotation. Journal of Intellectual Capital, 13(2), 178–195.CrossRefGoogle Scholar
Buckler, S. (2017). Imagined communities incorporated: Corporate social responsibility and value creation in a globalised world. In Corporate social responsibility (pp. 3–22): Cham: Springer.CrossRefGoogle Scholar
Cambra-Fierro, J., Hart, S., & Polo-Redondo, Y. (2008). Environmental respect: Ethics or simply business? A study in the small and medium enterprise (SME) context. Journal of Business Ethics, 82(3), 645–656.CrossRefGoogle Scholar
Chaudary, S., & Ali, M. (2016). The spillover effect of CSR initiatives on consumer attitude and purchase intent: The role of customer-company identification with the moderating effect of awareness. Pakistan Journal of Commerce and Social Sciences (PJCSS), 10(2), 368–387.Google Scholar
Christensen, L. J., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspectives, 28(2), 164–178.CrossRefGoogle Scholar
Ciulla, J. B. (1995). Leadership ethics: Mapping the territory. Business Ethics Quarterly, 5(1), 5–28.CrossRefGoogle Scholar
Ciulla, J. B. (2005). The state of leadership ethics and the work that lies before us. Business Ethics: A European Review, 14(4), 323–335.CrossRefGoogle Scholar
Cooke, M. (2017). Is technological change threatening the very existence of ‘traditional’ survey research and, if so, what should we do about it? International Journal of Market Research, 59(2), 153–155.CrossRefGoogle Scholar
Craighead, C. W., Ketchen, D. J., Dunn, K. S., & Hult, G. T. M. (2011). Addressing common method variance: Guidelines for survey research on information technology, operations, and supply chain management. IEEE Transactions on Engineering Management, 58(3), 578–588.CrossRefGoogle Scholar
Crane, A., McWilliams, A., Matten, D., Moon, J., & Siegel, D. (2008). Conclusion. In Crane, A., McWilliams, A., Matten, D., Moon, J., & Siegel, D. (Eds.), The Oxford handbook of corporate social responsibility (pp. 532–542). New York: Oxford University Press.Google Scholar
Crane, A., Matten, D., & Spence, L. (Eds.). (2019). Corporate social responsibility: Readings and cases in a global context. Routledge.CrossRefGoogle Scholar
Davis, K. (1973). The case for and against business assumption of social responsibilities. Academy of Management Journal, 16(2), 312–322.Google Scholar
De Hoogh, A. H., & Den Hartog, D. N. (2008). Ethical and despotic leadership, relationships with leader's social responsibility, top management team effectiveness and subordinates’ optimism: A multi-method study. The Leadership Quarterly, 19(3), 297–311.CrossRefGoogle Scholar
Dillman, D. A. (2011). Mail and internet surveys: The tailored design method—2007 update with new internet, visual, and mixed-mode guide. Denver, CO: John Wiley & Sons.Google Scholar
Donker, H., Poff, D., & Zahir, S. (2008). Corporate values, codes of ethics, and firm performance: A look at the Canadian context. Journal of Business Ethics, 82(3), 527–537.CrossRefGoogle Scholar
Ehsan, S., Nazir, M., Nurunnabi, M., Raza Khan, Q., Tahir, S., & Ahmed, I. (2018). A multimethod approach to assess and measure corporate social responsibility disclosure and practices in a developing economy. Sustainability, 10(8), 2955.CrossRefGoogle Scholar
Epstein, M. J., & Buhovac, A. R. (2014). A new day for sustainability: Is your company ready to take on increased responsibility for its activities throughout the globe? Strategic Finance, 96(1), 25–34.Google Scholar
Farooq, O., Rupp, D. E., & Farooq, M. (2017). The multiple pathways through which internal and external corporate social responsibility influence organizational identification and multifoci outcomes: The moderating role of cultural and social orientations. Academy of Management Journal, 60(3), 954–985.CrossRefGoogle Scholar
Flint, D., Maher, E., & Wielemaker, M. (2012). Downsizing decisions, intellectual capital, and accounting information. Journal of Human Resource Costing & Accounting, 16(3), 168–183.CrossRefGoogle Scholar
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.CrossRefGoogle Scholar
Friedman, M. (1970). A theoretical framework for monetary analysis. Journal of Political Economy, 78(2), 193–238.CrossRefGoogle Scholar
Gibson, A. M., & Frakes, A. H. (1997). Truth or consequences: A study of critical issues and decision making in accounting. Journal of Business Ethics, 16(2), 161–171.CrossRefGoogle Scholar
González-Rodríguez, M. R., Díaz-Fernández, M. C., & Simonetti, B. (2015). The social, economic and environmental dimensions of corporate social responsibility: The role played by consumers and potential entrepreneurs. International Business Review, 24(5), 836–848.CrossRefGoogle Scholar
Grabo, A., Spisak, B. R., & van Vugt, M. (2017). Charisma as signal: An evolutionary perspective on charismatic leadership. The Leadership Quarterly, 28(4), 473–485.CrossRefGoogle Scholar
Grojean, M. W., Resick, C. J., Dickson, M. W., & Smith, D. B. (2004). Leaders, values, and organizational climate: Examining leadership strategies for establishing an organizational climate regarding ethics. Journal of Business Ethics, 55(3), 223–241.CrossRefGoogle Scholar
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data analysis (Vol. 5). Upper Saddle River, NJ: Prentice Hall.Google Scholar
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.CrossRefGoogle Scholar
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391–430.CrossRefGoogle Scholar
Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55.CrossRefGoogle Scholar
Huang, X., Hsieh, J., & He, W. (2014). Expertise dissimilarity and creativity: The contingent roles of tacit and explicit knowledge sharing. Journal of Applied Psychology, 99(5), 816.CrossRefGoogle ScholarPubMed
Jolibert, A., & Jourdan, P. (2006). Marketing Reseach: Research Methods and Marketing Studies (No. halshs-00132470).Google Scholar
Joshi, M., Cahill, D., Sidhu, J., & Kansal, M. (2013). Intellectual capital and financial performance: An evaluation of the Australian financial sector. Journal of Intellectual Capital, 14(2), 264–285.CrossRefGoogle Scholar
Kalshoven, K., Den Hartog, D. N., & De Hoogh, A. H. (2013). Ethical leadership and follower helping and courtesy: Moral awareness and empathic concern as moderators. Applied Psychology, 62(2), 211–235.CrossRefGoogle Scholar
Kerse, G. (2019). A leader indeed is a leader in deed: The relationship of ethical leadership, person–organization fit, organizational trust, and extra-role service behavior. Journal of Management & Organization, 1–20.Google Scholar
Key, S. (1999). Organizational ethical culture: Real or imagined? Journal of Business Ethics, 20(3), 217–225.CrossRefGoogle Scholar
Khuntia, R., & Suar, D. (2004). A scale to assess ethical leadership of Indian private and public sector managers. Journal of Business Ethics, 49(1), 13–26.CrossRefGoogle Scholar
Kianto, A., Hurmelinna-Laukkanen, P., & Ritala, P. (2010). Intellectual capital in service- and product-oriented companies. Journal of Intellectual Capital, 11(3), 305–325.CrossRefGoogle Scholar
Kline, R. (2005). Methodology in the social sciences: Principles and practice of structural equation modeling (2nd ed.) New York: Guilford Press.Google Scholar
Komnenic, B., & Pokrajčić, D. (2012). Intellectual capital and corporate performance of MNCs in Serbia. Journal of Intellectual Capital, 13(1), 106–119.CrossRefGoogle Scholar
Kong, E. (2010). Innovation processes in social enterprises: An IC perspective. Journal of Intellectual Capital, 11(2), 158–178.CrossRefGoogle Scholar
Koonmee, K., Singhapakdi, A., Virakul, B., & Lee, D.-J. (2010). Ethics institutionalization, quality of work life, and employee job-related outcomes: A survey of human resource managers in Thailand. Journal of Business Research, 63(1), 20–26.CrossRefGoogle Scholar
Kumar, R., & Uzkurt, C. (2011). Investigating the effects of self efficacy on innovativeness and the moderating impact of cultural dimensions. Journal of International Business and Cultural Studies, 4, 1.Google Scholar
Kuvaas, B., Buch, R., Dysvik, A., & Haerem, T. (2012). Economic and social leader–member exchange relationships and follower performance. The Leadership Quarterly, 23(5), 756–765.CrossRefGoogle Scholar
Lönnqvist, A., Kianto, A., & Sillanpää, V. (2009). Using intellectual capital management for facilitating organizational change. Journal of Intellectual Capital, 10(4), 559–572.CrossRefGoogle Scholar
Lu, X., & Guy, M. E. (2014). How emotional labor and ethical leadership affect job engagement for Chinese public servants. Public Personnel Management, 43(1), 3–24.CrossRefGoogle Scholar
Maletič, M., Maletič, D., & Gomišček, B. (2018). The role of contingency factors on the relationship between sustainability practices and organizational performance. Journal of Cleaner Production, 171, 423–433.CrossRefGoogle Scholar
Manning, L. (2018). Corporate social responsibility. In Food ethics education (pp. 121–146). Cham: Springer.CrossRefGoogle Scholar
Mayer, D. M., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. B. (2009). How low does ethical leadership flow? Test of a trickle-down model. Organizational Behavior and Human Decision Processes, 108(1), 1–13.CrossRefGoogle Scholar
Mention, A.-L., & Bontis, N. (2013). Intellectual capital and performance within the banking sector of Luxembourg and Belgium. Journal of Intellectual Capital, 14(2), 286–309.CrossRefGoogle Scholar
Metwally, E., & Punnett, B. J. (2017). Leadership in Egypt. In LEAD: Leadership effectiveness in Africa and the African diaspora (pp. 53–70). New York: Palgrave Macmillan.CrossRefGoogle Scholar
Minbaeva, D. (2016). Contextualising the individual in international management research: Black boxes, comfort zones and a future research agenda. European Journal of International Management, 10(1), 95–104.Google Scholar
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886.CrossRefGoogle Scholar
Moore, C., Mayer, D. M., Chiang, F. F., Crossley, C., Karlesky, M. J., & Birtch, T. A. (2019). Leaders matter morally: The role of ethical leadership in shaping employee moral cognition and misconduct. Journal of Applied Psychology, 104(1), 123.CrossRefGoogle ScholarPubMed
Morgeson, F. P., Aguinis, H., Waldman, D. A., & Siegel, D. S. (2013). Extending corporate social responsibility research to the human resource management and organizational behavior domains: A look to the future. Personnel Psychology, 66(4), 805–824.CrossRefGoogle Scholar
Muchiri, M., Shahid, S., & Ayoko, O. (2019). And now for something completely different: Reframing social processes of leadership theory using positive organisational behaviour. Journal of Management & Organization, 1–5.Google Scholar
Muller, A., & Kolk, A. (2010). Extrinsic and intrinsic drivers of corporate social performance: Evidence from foreign and domestic firms in Mexico. Journal of Management Studies, 47(1), 1–26.CrossRefGoogle Scholar
Namvar, M., Fathian, M., Akhavan, P., & Reza Gholamian, M. (2010). Exploring the impacts of intellectual property on intellectual capital and company performance: The case of Iranian computer and electronic organizations. Management Decision, 48(5), 676–697.CrossRefGoogle Scholar
Ngo, L. V., & O'Cass, A. (2012). In search of innovation and customer-related performance superiority: The role of market orientation, marketing capability, and innovation capability interactions. Journal of Product Innovation Management, 29(5), 861–877.CrossRefGoogle Scholar
Nygaard, A., & Biong, H. (2010). The influence of retail management's use of social power on corporate ethical values, employee commitment, and performance. Journal of Business Ethics, 97(1), 87–108.CrossRefGoogle Scholar
Obeidat, B. Y., Al-Suradi, M. M., Masa'deh, R. E., & Tarhini, A. (2016). The impact of knowledge management on innovation: An empirical study on Jordanian consultancy firms. Management Research Review, 39(10), 1214–1238.CrossRefGoogle Scholar
Ong, M., Mayer, D. M., Tost, L. P., & Wellman, N. (2018). When corporate social responsibility motivates employee citizenship behavior: The sensitizing role of task significance. Organizational Behavior and Human Decision Processes, 144, 44–59.CrossRefGoogle Scholar
Padgett, R. C., & Galan, J. I. (2010). The effect of R&D intensity on corporate social responsibility. Journal of Business Ethics, 93(3), 407–418.CrossRefGoogle Scholar
Piccolo, R. F., Greenbaum, R., Hartog, D. N. D., & Folger, R. (2010). The relationship between ethical leadership and core job characteristics. Journal of Organizational Behavior, 31(2–3), 259–278.CrossRefGoogle Scholar
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879.CrossRefGoogle ScholarPubMed
Polo, F. C., & Vázquez, D. G. (2008). Social information within the intellectual capital report. Journal of International Management, 14(4), 353–363.CrossRefGoogle Scholar
Prieto-Carrón, M., Lund-Thomsen, P., Chan, A., Muro, A., & Bhushan, C. (2006). Critical perspectives on CSR and development: What we know, what we don't know, and what we need to know. International Affairs, 82(5), 977–987.CrossRefGoogle Scholar
Rao, M. (2018). A blueprint to build ethical leadership globally: Examples and illustrations. The Journal of Values-Based Leadership, 11(1), 4.CrossRefGoogle Scholar
Rego, A., Sousa, F., Marques, C., & e Cunha, M. P. (2014). Hope and positive affect mediating the authentic leadership and creativity relationship. Journal of Business Research, 67(2), 200–210.CrossRefGoogle Scholar
Resick, C. J., Martin, G. S., Keating, M. A., Dickson, M. W., Kwan, H. K., & Peng, C. (2011). What ethical leadership means to me: Asian, American, and European perspectives. Journal of Business Ethics, 101(3), 435–457.CrossRefGoogle Scholar
Robertson, G. (2008). GS+: Geostatistics for the environmental sciences. Gamma Design Software, Plainwell, Michigan USA, 165.Google Scholar
Roscoe, J. T. (1975). Percentile ranks. Fundamental research statistics for the behavioral sciences, 34–38.Google Scholar
Rupp, D. E., Shao, R., Thornton, M. A., & Skarlicki, D. P. (2013). Applicants’ and employees’ reactions to corporate social responsibility: The moderating effects of first-party justice perceptions and moral identity. Personnel Psychology, 66(4), 895–933.CrossRefGoogle Scholar
Scott, S. (2007). Corporate social responsibility and the fetter of profitability. Social Responsibility Journal, 3(4), 31–39.CrossRefGoogle Scholar
Stewart, T., & Capital, I. (1997). The new wealth of organizations. London: Nicholas Brealey.Google Scholar
Stubbs, W., Higgins, C., & Milne, M. (2013). Why do companies not produce sustainability reports? Business Strategy and the Environment, 22(7), 456–470.CrossRefGoogle Scholar
Subramaniam, M., & Youndt, M. A. (2005). The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal, 48(3), 450–463.CrossRefGoogle Scholar
Tepper, B. J., Duffy, M. K., Henle, C. A., & Lambert, L. S. (2006). Procedural injustice, victim precipitation, and abusive supervision. Personnel Psychology, 59(1), 101–123.CrossRefGoogle Scholar
Times, F. (2014). Fortune 500 companies spend more than $15bn on corporate responsibility. Retrieved from: http://www.ft.com/intl/cms/s/0/95239a6e-4fe0-11e4-a0a4-00144feab7de.html#axzz42NpThj7d>..>Google Scholar
Toor, S. U. R., & Ofori, G. (2009). Authenticity and its influence on psychological well-being and contingent self-esteem of leaders in Singapore construction sector. Construction Management and Economics, 27(3), 299–313.CrossRefGoogle Scholar
Torugsa, N. A., O'Donohue, W., & Hecker, R. (2012). Capabilities, proactive CSR and financial performance in SMEs: Empirical evidence from an Australian manufacturing industry sector. Journal of Business Ethics, 109(4), 483–500.CrossRefGoogle Scholar
Tovstiga, G., & Tulugurova, E. (2009). Intellectual capital practices: A four-region comparative study. Journal of Intellectual Capital, 10(1), 70–80.CrossRefGoogle Scholar
Treviño, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. London: John Wiley & Sons.Google Scholar
Turker, D. (2009). Measuring corporate social responsibility: A scale development study. Journal of Business Ethics, 85(4), 411–427.CrossRefGoogle Scholar
Union, I. (2014). Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions. Brussels. http://www.xploit-eu.com/pdfs/Europe, 202020, 20.Google Scholar
Waldman, D. A., De Luque, M. S., Washburn, N., House, R. J., Adetoun, B., Barrasa, A., & Debbarma, S. (2006). Cultural and leadership predictors of corporate social responsibility values of top management: A GLOBE study of 15 countries. Journal of International Business Studies, 37(6), 823–837.CrossRefGoogle Scholar
Wang, X. (2015). On moral capital. Verlag Berlin Heidelberg: Yilin Press, Ltd. and Springer.CrossRefGoogle Scholar
Wei Kiong Ting, I., & Hooi Lean, H. (2009). Intellectual capital performance of financial institutions in Malaysia. Journal of Intellectual Capital, 10(4), 588–599.CrossRefGoogle Scholar
Wu, L.-Z., Kwan, H. K., Yim, F. H.-K., Chiu, R. K., & He, X. (2015). CEO ethical leadership and corporate social responsibility: A moderated mediation model. Journal of Business Ethics, 130(4), 819–831.CrossRefGoogle Scholar
Yaoming, G. (2012). Questioning the concept of moral capital. Philosophical Trends, 11.Google Scholar
Yi-Ching Chen, M., Shui Wang, Y., & Sun, V. (2012). Intellectual capital and organizational commitment: Evidence from cultural creative industries in Taiwan. Personnel Review, 41(3), 321–339.CrossRefGoogle Scholar
Yin, J., & Zhang, Y. (2012). Institutional dynamics and corporate social responsibility (CSR) in an emerging country context: Evidence from China. Journal of Business Ethics, 111(2), 301–316.CrossRefGoogle Scholar
Youndt, M. A., Subramaniam, M., & Snell, S. A. (2004). Intellectual capital profiles: An examination of investments and returns. Journal of Management Studies, 41(2), 335–361.CrossRefGoogle Scholar
Zafar, T. (2017). Taxation System of Pakistan and its Impact on Economy. Punjab Economic Research Institute, Planning and Development Department. Lahore: Government of Punjab, Pakistan.Google Scholar
Zoghbi-Manrique-de-Lara, P., & Viera-Armas, M. (2019). Does ethical leadership motivate followers to participate in delivering compassion? Journal of Business Ethics, 1–16.Google Scholar