To read the full version of this content please select one of the options below:

Can socially responsible leaders drive Chinese firm performance?

Shuo Wang (Post-doctoral Research Station, Economics and Management School Wuhan University, Hubei Province, China AND Post-doctoral Workstation, China Huarong Asset Management CO., LTD., Beijing, China)
Wei Huang (School of Labor and Human Resources, Renmin University of China, Beijing, China)
Yuhui Gao (DCU Business School, Dublin City University, Dublin, Ireland)
Sean Ansett (At Stake Advisors, London, UK,)
Shiyong Xu (School of Labor and Human Resources, Renmin University of China, Beijing, China)

Leadership & Organization Development Journal

ISSN: 0143-7739

Article publication date: 1 June 2015

1511

Abstract

Purpose

The relationship between socially responsible leaders, the key driver of corporate social responsibility (CSR) practices, and organizational financial performance is a salient issue in the global context for both CSR scholars and practitioners. The purpose of this paper is to provide much-needed insights into the interplay of responsible leadership, CSR practices, and organizational outcomes.

Design/methodology/approach

It analyses 85 CEOs’ behaviors and their companies’ performance in a two-year database. It thereby enriches understanding of how leaders’ socially responsible decisions impact upon CSR engagement and firm performance.

Findings

The results suggest that socially responsible leaders were positively related with organizational performance of return on equity (ROE). The aspects of integrity, morality, and stakeholder relationship aspects of responsible leadership are closely related to CSR. However, CSR practices were negatively related to ROA and ROE. It implies that in China CSR activities could not boost organizational performance in the short term, at least in two years.

Research limitations/implications

Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports. Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports.

Practical implications

Our research has practical implications for the business world. First, CSR practices in China shall be conducted in a strategic way. Second, responsible leadership is of significance for the Chinese MNCs that are overseas to build trustful stakeholder relations with local stakeholders.

Originality/value

Based on the data analysis, this study provides in-depth discussion of CSR situation in China and its relationship with firm performance, which is one of the first studies to examine responsible leadership in Chinese context and investigate the relationship between responsible leadership and organizational performance.

Keywords

Acknowledgements

This paper is submitted for a refereed paper of Leadership & Organization Development Journal. The authors presented an earlier draft of this paper at the 2013 Annual Conference of Academy of Management in Orlando, Florida, USA. This paper is the author’s original work, has not been published elsewhere, and is not under consideration for publication elsewhere at the time it is submitted.

Citation

Wang, S., Huang, W., Gao, Y., Ansett, S. and Xu, S. (2015), "Can socially responsible leaders drive Chinese firm performance?", Leadership & Organization Development Journal, Vol. 36 No. 4, pp. 435-450. https://doi.org/10.1108/LODJ-01-2014-0006

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

Related articles