CEO Ethical Leadership and Corporate Social Responsibility: A Moderated Mediation Model (original) (raw)

2014, Journal of Business Ethics

This study examined the relationship between CEO ethical leadership and corporate social responsibility by focusing on the mediating role of organizational ethical culture and the moderating role of managerial discretion (i.e., CEO founder status and firm size). Based on a sample of 242 domestic Chinese firms, we found that CEO ethical leadership positively influences corporate social responsibility via organizational ethical culture. In addition, moderated path analysis indicated that CEO founder status strengthens while firm size weakens the direct effect of CEO ethical leadership on organizational ethical culture and its indirect effect on corporate social responsibility. Theoretical and managerial implications of these results are discussed. Keywords CEO Ethical Leadership Á Corporate social responsibility Á Managerial discretion Á Organizational ethical culture Corporate scandals have widely raised awareness of and attention to ethical issues in business leadership. The awareness and attention of researchers are exemplified by the increasing number of studies on ethical leadership, which is defined as ''the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making'' (Brown et al. 2005, p. 120). Recent cross-cultural research has indicated that ethical leadership is a common concern among managers in Asia, Europe, and the United States (Resick et al. 2011). Ethical leadership has been found to result in various followers' positive outcomes including voice behavior (Walumbwa and Schaubroeck 2009), task significance, job autonomy, effort (Piccolo et al. 2010), job security (Loi et al. 2012), interactional justice, supervisor effectiveness, satisfaction with supervisors (Brown et al. 2005), and citizenship behavior (Liu et al. 2013; Mayer et al. 2009). Despite these fruitful findings, little attention has been devoted to the relationship between CEO ethical leadership and corporate social responsibility, broadly conceptualized as ''context-specific organizational actions and policies that take into account stakeholders' expectations and the triple bottom line of economic, social, and environmental performance'' (Aguinis 2011, p. 855). High levels of corporate social responsibility can bring numerous benefits to firms, stakeholders, customers, and employees, including improved competitive advantage, attractiveness to institutional investors, and organizational reputation (for a