Implications of Overwhelmed Leadership: How Executive Job Demands Hinder Corporate Sustainability Performance

Abstract

As implied by executive job demands theory, intensified job demands of a firm’s top executives limit their cognitive capacity and centralize the locus of decision-making, which may undermine corporate sustainability performance. The current study tests this effect, along with the impact of two contextual factors, to reveal that the negative influence of executive job demands is weaker if firms feature greater functional diversity and average tenure in their top management teams. In an extension of upper echelon theory, this study also outlines the influence of task challenges that confront strategic leaders on corporate sustainability performance.