Virtuous Leader, Virtuous Firm: How Humble CEOs Build Good Firms by Fostering Virtuousness

Abstract

The rise of positive organizational scholarship has brought virtues back to business studies, applying a positive lens to organizations. While some scholars highlight the importance of individual virtues in promoting human flourishing, others have emphasized a set of “organizational virtues” that create both individual and collective benefits. These studies, however, are quiet on how and when individual virtues may help to build good firms. We address the how by examining the role of CEO humility in fostering organizational virtuousness — a constellation of virtues that manifest in collective behaviors, activities, processes, and policies in organizations — which in turn leads to positive firm outcomes, including improved financial performance and external stakeholder support. To explicate when, we specify firm status as a moderator of the positive effect of CEO humility on firm outcomes via organizational virtuousness. Using a sample of 253 firms from China, we find support for our main hypotheses. We discuss important implications for research on humility and organizational virtuousness.