Relationship of Ethical Leadership, Corporate Social Responsibility and Organizational Performance

Min-Seong Kim,Brijesh Thapa

doi:10.3390/su10020447

Abstract

Corporate social responsibility (CSR) has become a major part of the foodservice industry due to external forces which encourage enterprises’ responsiveness. In reality, consumers’ social concern influences their attitudes towards foodservice firms’ socially responsible practices and purchase decisions, thereby influencing senior management to react. Considering this issue, this study examines the impact of senior management’s ethical leadership in evaluating operational, commercial, and economic performances along with the mediating role of CSR in the foodservice industry. A conceptual model was formulated and empirically tested based on responses from 196 foodservice franchise firms in South Korea. The results indicated ethical leadership significantly influenced CSR and operational performance, while CSR also had a positive effect on operational and commercial performances. Additionally, operational performance had a significantly positive influence on commercial performance, which subsequently enhanced economic performance. Overall, the findings highlight the role that ethical leadership exhibited by senior management of foodservice franchises influenced initiation of CSR activities, which provide implications for research and industry practice and is outlined.

Highlights

Corporate social responsibility (CSR) is referred to as “the broad array of strategies and operating practices that a company develops in its efforts to deal with and create relationships with its numerous stakeholders and the natural environment” [1] (p. 10)
This study demonstrates that ethical leadership of senior management at the franchisor level can, through its CSR activities lead to high levels of economic performance, including operational and commercial performances within the franchise system
This study investigated the role of ethical leadership of senior management and respective influence on their foodservice franchises’ CSR initiatives along with desirable organizational outcomes

Summary

Introduction

Corporate social responsibility (CSR) is referred to as “the broad array of strategies and operating practices that a company develops in its efforts to deal with and create relationships with its numerous stakeholders and the natural environment” [1] (p. 10). CSR has shifted from community-level activities (e.g., donation to local facilities or communities) to societal level initiatives (e.g., running a business that will not harm the environment or society) [2]. This expansion has been led by ideological thinking that an organization plays a role as a positive force for social change, as well as driven by the return on investment from CSR initiatives [3]. The role of senior management is central to understand external events [9], as they are largely driven by selective attention and interpretation, as well as the firm’s internal environment that includes management system and structure [10].

Objectives

Methods

Results

Discussion

Conclusion