Linking responsible leadership with financial and environmental performance: determining mediation and moderation
International Journal of Productivity and Performance Management
ISSN: 1741-0401
Article publication date: 7 June 2021
Issue publication date: 2 January 2023
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. (2023), "Linking responsible leadership with financial and environmental performance: determining mediation and moderation", International Journal of Productivity and Performance Management, Vol. 72 No. 1, pp. 24-46. https://doi.org/10.1108/IJPPM-12-2020-0626
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited