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Linking responsible leadership with financial and environmental performance: determining mediation and moderation

Zia Ur Rehman (Department of Management Sciences, Bahria University, Islamabad, Pakistan)
Imran Shafique (Department of Management Sciences, COMSATS University Islamabad, Lahore Campus, Lahore, Pakistan)
Kausar Fiaz Khawaja (Faculty of Management Sciences, International Islamic University, Islamabad, Pakistan)
Munazza Saeed (FAST School of Management, National University of Computer and Emerging Sciences, Chiniot-Faisalabad Campus, Faisalabad, Pakistan)
Masood Nawaz Kalyar (Lyallpur Business School, Government College University Faisalabad, Faisalabad, Pakistan)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 7 June 2021

595

Abstract

Purpose

Drawing upon the institutional theory, this study examines the influence of responsible leadership on firm performance. Furthermore, this research investigates environmental management practices (EnvMP) as an underlying mechanism and institutional pressures as boundary condition between responsible leadership and firm performance.

Design/methodology/approach

Time-lagged data were collected using survey-questionnaire from 385 mid-level employees of construction industry in Pakistan. Partial least square-structural equation modeling (PLS-SEM) was used to analyze the data.

Findings

Results demonstrate that responsible leadership impacts firm performance (financial and nonfinancial) directly and through EnvMP. Furthermore, institutional pressure moderates the link between responsible leadership and EnvMP. However, moderated mediation effect of intuitional pressures was found insignificant.

Practical implications

This study suggest that EnvMP is a key process through which responsible leadership influences firms' financial and nonfinancial performance and shed lights as to when responsible leaders matter most in terms of firm performance through low or high institutional pressures.

Originality/value

This paper is an early attempt which contributes to the body of literature on responsible leadership by investigating mechanisms (how) and boundary condition (when) through which responsible leadership influences firms' financial and environmental performance.

Keywords

Acknowledgements

No financial support was received for this study. Permission for copyright from third parties is not required for this study.

Conflict of interest: Authors declare no conflict of interest.

Citation

Ur Rehman, Z., Shafique, I., Khawaja, K.F., Saeed, M. and Kalyar, M.N. (2021), "Linking responsible leadership with financial and environmental performance: determining mediation and moderation", International Journal of Productivity and Performance Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJPPM-12-2020-0626

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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