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Effect of CEO transformational leadership on organizational ethical culture and firm performance: the moderating effect of competitive intensity

Effect of CEO transformational leadership on organizational ethical culture and firm performance:... The purpose of this study is to adopt the upper echelon theory to analyze the effect of chief executive officer (CEO) transformational leadership on organizational ethical culture and its subsequent impact on firm performance. The study also integrates the knowledge from the structure–conduct–performance paradigm to test whether the high degree of competitive intensity that firms experience could weaken the effect of organizational ethical culture on firm performance.Design/methodology/approachOnline survey data were obtained from firms in Thailand that were randomly selected from the directory provided by the Department of Business Development (n = 200). Partial least squares structural equation modeling was used to analyze the data.FindingsOrganizational ethical culture significantly meditates the effect of CEO transformational leadership on firm performance. Moreover, the moderating effect analysis illustrates that the positive effect of organizational ethical culture on firm performance tends to be lower when firms have a high level of competitive intensity in the market.Originality/valueOverall, this study adds new knowledge to the literature by showing that, although ethical culture created by transformational leaders can lead to high firm performance, the market environment in terms of competitive intensity could mitigate this benefit. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Asia Business Studies Emerald Publishing

Effect of CEO transformational leadership on organizational ethical culture and firm performance: the moderating effect of competitive intensity

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References (70)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1558-7894
eISSN
1558-7894
DOI
10.1108/jabs-12-2021-0513
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to adopt the upper echelon theory to analyze the effect of chief executive officer (CEO) transformational leadership on organizational ethical culture and its subsequent impact on firm performance. The study also integrates the knowledge from the structure–conduct–performance paradigm to test whether the high degree of competitive intensity that firms experience could weaken the effect of organizational ethical culture on firm performance.Design/methodology/approachOnline survey data were obtained from firms in Thailand that were randomly selected from the directory provided by the Department of Business Development (n = 200). Partial least squares structural equation modeling was used to analyze the data.FindingsOrganizational ethical culture significantly meditates the effect of CEO transformational leadership on firm performance. Moreover, the moderating effect analysis illustrates that the positive effect of organizational ethical culture on firm performance tends to be lower when firms have a high level of competitive intensity in the market.Originality/valueOverall, this study adds new knowledge to the literature by showing that, although ethical culture created by transformational leaders can lead to high firm performance, the market environment in terms of competitive intensity could mitigate this benefit.

Journal

Journal of Asia Business StudiesEmerald Publishing

Published: Apr 26, 2023

Keywords: Developing countries; Entrepreneurship; Leadership theories; Survey method

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