Responsible leadership and triple-bottom-line performance—do corporate reputation and innovation mediate this relationship?

Abstract

PurposeDrawing on stakeholder theory and contingency theory, this study empirically investigates the relationship between responsible leadership (RL) and each dimension of triple-bottom-line (TBL) performance. Moreover, we tested the mediating effect of corporate reputation (CR) and innovation between RL and TBL performance.Design/methodology/approachPerceptual data were collected from 227 senior-level Pakistani managers using a questionnaire survey. Structural equation modeling (SEM) was used to test the direct and mediating effect hypotheses.FindingsThe results revealed that RL significantly and positively affects each dimension of TBL performance. Further, innovation mediated the relationship between RL and each dimension of TBL performance. However, CR did not mediate the relationship between RL and environmental performance.Originality/valueThis is maiden study to empirically investigate the effect of RL on meso-level outcome. Further, this study would be among the few ones to use TBL as a measure of corporate performance. Moreover, it will be the first study to test the mediating role of CR and innovation in the above-mentioned relationship and will also validate contingency theory.

Responsibility beyond the Board Room? A Systematic Review of Responsible Leadership: Operationalizations, Antecedents and Outcomes

“…RL is positively associated with corporate reputation [86], corporate sustainability performance, and financial [85,86], environmental, and social performance [85]. The positive relations between RL and all units of the triple bottom line suggest that RL does not induce trade-offs between financial and environmental performance.…”

“…In addition to psychological frameworks, some of the studies took on business theoretical perspectives. Considering the close theoretical tie between RL and stakeholder theory it is no surprise that several studies applied this theoretical framework [74,83,85], which includes a strategic perspective lacking from social psychological approaches. Upper echelons theory was also applied in the empirical studies [60] and centred on leaders' personal experiences, attitudes and values and how it influences decision-making within the boundaries of organizational decision latitude.…”

“…The relationship between RL and meso-level variables are mediated by employee involvement in sustainability activities [87], innovation and (employees' perceived) corporate reputation [85].…”

“Being true to oneself”: the interplay of responsible leadership and authenticity on multi-level outcomes

“…In Asian context, specific research investigates RL's effect on micro, meso and macro-level outcomes like unethical pro-organizational behaviour, talent retention, organizational citizenship behaviour, environmental performance, job performance and pandemic management (Yasin et al, 2020;Javed et al, 2020a;Afsar et al, 2020;Zhao and Zhou, 2019;Haque et al, 2019aHaque et al, , 2019bHan et al, 2019;Mehta et al, 2020;Lin et al, 2020). While exploring the Western developed notion of RL in the Asian context, Koh et al (2018) observed that Asian leaders possessed values and traits accordant with the Western concept of RL.…”

“…While exploring the Western developed notion of RL in the Asian context, Koh et al (2018) observed that Asian leaders possessed values and traits accordant with the Western concept of RL. Further, the construct of RL has already been studied in Pakistani context (Javed et al, 2020a(Javed et al, , 2020bAfsar et al, 2020) which addresses and dispels the apprehensions regarding the contextual factors.…”