Sustainable Leadership Practices Driving Financial Performance: Empirical Evidence from Thai SMEs

Abstract

Many managers and researchers alike are asking: What does an enterprise need to do to generate a proper balance between economic, social, and ecological objectives while gaining superior corporate financial performance, resilience, and sustainability? Several leadership concepts for enhancing organizational sustainability have emerged in recent years, but none provides an integrative approach, with the exception of Sustainable Leadership (SL). However, empirical research examining the effects of various SL practices on financial performance and other business outcomes is lacking. This article addresses this gap by empirically investigating the relationships between 23 SL practices and financial performance. Using a cross-sectional survey, data stem from 439 managers in small and medium-sized enterprises (SMEs) in Thailand. Of the 23 SL practices in SL, 16 were significantly associated with corporate financial performance. Four SL practices, in particular-amicable labor relations, valuing employees, social responsibility, plus strong and shared vision-were significant drivers, and positive predictors, of enhanced long-term firm performance. Lastly, implications, limitations, and future directions are discussed.

Sustainable development and economic performance: Gaps and trends for future research

“…Neither Lean and Nguyen (), who built a market model, nor Suriyankietkaew and Avery (), who used a survey in order to build his variable, defined specific economic variables in the construction of their papers.…”

“…Wang and Sarkis () suggested using variables that might cover economic, financial, and organizational performance to enrich the research, whereas other authors suggested using market variables combined to control variables (Lassala et al, ) and the indebtedness ratio, company size, value generation, and other control variables (Santis et al, ; Siew et al, ; Suriyankietkaew & Avery, ).…”

“…Other unusual indices for financial performance can be seen in Przychodzen and Przychodzen (2015) Neither Lean and Nguyen (2014), who built a market model, nor Suriyankietkaew and Avery (2016), who used a survey in order to build his variable, defined specific economic variables in the construction of their papers.…”

Sustainability, Transformational Leadership, and Social Entrepreneurship

“…We develop a multilevel theoretical and empirical model that proposes both main and interactive effects of transformational CLTs and sustainability of societies on individual level social entrepreneurship. We add to literature examining the interface of leadership and sustainability [25]. Our findings add to the increasing scholarship that apply inputs from institutional theory to explore and understand phenomenon at the crossroads of business and society [26,27].…”

Developing Sustainable Workplaces with Leadership: Feedback about Organizational Working Conditions to Support Leaders in Health-Promoting Behavior

“…Sustainability at the workplace should go beyond social and environmental responsibility and should include all management processes that aim at creating long-term well-being [2]. To develop a sustainable workplace, leaders are needed that engage in leadership behavior aimed at supporting the health of their employees in the long term [1].…”