The Roles of Leadership Styles in Corporate Social Responsibility.

TLDR: In this article, a large-scale field survey of managers reveals that firms with greater transformational leadership are more likely to engage in institutional CSR practices, whereas transactional leadership is not associated with such practices.

Abstract: This research investigates the interplay between leadership styles and institutional corporate social responsibility (CSR) practices. A large-scale field survey of managers reveals that firms with greater transformational leadership are more likely to engage in institutional CSR practices, whereas transactional leadership is not associated with such practices. Furthermore, stakeholder-oriented marketing reinforces the positive link between transformational leadership and institutional CSR practices. Finally, transactional leadership enhances, whereas transformational leadership diminishes, the positive relationship between institutional CSR practices and organizational outcomes. This research highlights the differential roles that transformational and transactional leadership styles play for a firm’s institutional CSR practices and has significant implications for theory and practice.

Full text

1
Final version:
Du, S., Swaen, V., Lindgreen, A., and Sen, S. (2013), “The roles of leadership styles in corporate
social responsibility”, Journal of Business Ethics, Vol. 114, No. 1, pp. 155-169. (ISSN 0167-
4544)
For full article, please contact LindgreenA@cardiff.ac.uk
The Roles of Leadership Styles in Corporate Social Responsibility
SHUILI DU
1
Simmons School of Management
VALÉRIE SWAEN
2
Université catholique de Louvain
ADAM LINDGREEN
3
University of Cardiff
SANKAR SEN
4
City University of New York
Topic section: Leadership
1
Shuili Du, Simmons School of Management, 300 Fenway, Boston, MA 02115, United States.
E-mail: shuili.du@simmons.edu.
2
Valérie Swaen, Université catholique de Louvain, Louvain School of Management, Place des
Doyens 1, 1348 Louvain-la-Neuve, Belgium and IESEG School of Management, 3 rue de la
Digue, 59800 Lille, France. E-mail: valerie.swaen@uclouvain.be.
3
Adam Lindgreen, Department of Marketing, Cardiff Business School, University of Cardiff,
Aberconway Building, Colum Drive, Cardiff CF10 3EU, United Kingdom. E-mail:
lindgreena@cardiff.ac.uk.
4
Sankar Sen, Department of Marketing & International Business, Zicklin School of Business,
Baruch College/City University of New York, One Bernard Baruch Way, Box B12-240, New
York, NY 10010, United States. E-mail: sankar.sen@baruch.cuny.edu.

2
ABSTRACT. This research investigates the interplay between leadership styles and institutional
corporate social responsibility (CSR) practices. A large-scale field survey of managers reveals
that firms with greater transformational leadership are more likely to engage in institutional CSR
practices, whereas transactional leadership is not associated with such practices. Furthermore,
stakeholder-oriented marketing reinforces the positive link between transformational leadership
and institutional CSR practices. Finally, transactional leadership enhances, whereas
transformational leadership diminishes, the positive relationship between institutional CSR
practices and organizational outcomes. This research highlights the differential roles that
transformational and transactional leadership styles play for a firm’s institutional CSR practices
and has significant implications for theory and practice.
KEY WORDS: corporate social responsibility, transformational leadership, transactional
leadership, stakeholder-oriented marketing, organizational outcomes.

3
Corporate social responsibility (CSR), defined 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” (Waddock, 2004, p. 10), has moved
from ideology to reality. More than 6,000 corporations across 135 different countries have
adopted the United Nation’s Global Compact policy, committing to align their business
operations with a set of standards of socially responsible behaviors. These widespread CSR
efforts are driven not only by ideological thinking that firms can be positive forces for social
change but also by the business returns that firms potentially reap from CSR engagement. Prior
research has shown that CSR enables a firm to appeal to the socio-cultural norms of its
institutional environment and contributes to its social legitimacy (Handelman and Arnold, 1999;
Palazzo and Scherer, 2006; Scott, 1987). In turn, social legitimacy ensures the continuous flow
of resources and sustained support from the firm’s internal and external stakeholders (Palazzo
and Scherer, 2006; Pfeffer and Salancik, 1978; Sen and Bhattacharya, 2001), which ultimately
results in enhanced firm financial performance (Luo and Bhattacharya, 2006; Margolis and
Walsh, 2003).
However, despite a growing body of research documenting the business case of CSR, our
knowledge of organizational antecedents to CSR remains embryonic (Angus-Leppan et al.,
2009). Leading scholars from various business disciplines (e.g., strategy, organizational behavior,
marketing) have pointed out the dearth of research on external and internal institutional factors
that might shape CSR activities in the first place and vigorously called for more research on its
organizational antecedents (Campbell, 2007; Hoffman and Bazerman, 2007; Margolis and Walsh,
2003). In particular, considering the importance of leadership in shaping organizational strategies

4
and practices, the lack of research on the interface between organizational leadership and CSR is
noteworthy (Groves and LaRocca, 2011a; Waldman and Siegel, 2008).
Recent enthusiasm about the topic of responsible leadership (Maak and Pless, 2006; Pless
and Maak, 2011) also highlights certain deficiencies in current leadership theories, particularly
with regard to the interface between leadership and CSR. Responsible leadership theory
broadens the notion of leadership from a traditional leader–subordinate relationship to leader–
stakeholder relationships and contends that “building and cultivating … ethically sound relations
toward different stakeholders is an important responsibility of leaders in an interconnected
stakeholder society” (Maak and Pless, 2006, p. 101). Reflecting the urgent need to bridge
leadership theories and CSR literature, Waldman et al. (2006) call specifically for research that
“consider[s] a broader array of leadership components and practices” (p. 1721), such as
transformational and transactional leadership styles, as drivers of CSR practices. Relatedly,
although different leadership styles have been linked to organizational effectiveness measures,
such as employee satisfaction and financial performance (Lowe et al., 1996), no prior research
has investigated how leadership styles influence the effectiveness of CSR in generating positive
organizational outcomes.
This study addresses these research gaps by investigating how the leadership styles
adopted by firm managers, specifically, transformational and transactional leadership, affect the
firm’s CSR practices and the organizational outcomes of CSR. This study contributes to the
interface of organizational leadership and CSR in several significant ways. First, to the best of
our knowledge, this large-scale field study is the first to investigate both transformational and
transactional leadership styles exhibited by managers as potential antecedents of the firm’s CSR
practices. Waldman et al. (2006) find that one component of transformational leadership,

5
intellectual stimulation, relates positively to CSR. However, they do not examine transactional
leadership or other components of transformational leadership (e.g., charisma) as possible
antecedents. Furthermore, they focus on CEO leadership, whereas this study considers leadership
styles by management in general.
Second, going beyond a main effect model of the leadership–CSR relationship, we
investigate how a firm’s stakeholder-oriented marketing interacts with leadership styles to jointly
influence the firm’s CSR practices. We adopt a theoretical perspective that spans organizational
behavior (i.e., leadership styles) and marketing (i.e., stakeholder-oriented marketing), because
CSR is inherently a cross-disciplinary phenomenon (Du et al., 2011; Raghubir et al., 2010). By
showing that stakeholder-oriented marketing reinforces the positive link between
transformational leadership and a firm’s CSR activities, this research paints a more nuanced and
complex picture of organizational antecedents to CSR. Specifically, this research indicates that
stakeholder-oriented marketing provides necessary cross-functional support (e.g., broader and
deeper understanding of stakeholder needs) to catalyze the positive impact of transformational
leadership on a firm’s CSR practices. More generally, our research highlights the importance of
cross-disciplinary investigations in CSR research.
Third, this study extends current knowledge about organizational factors that influence
the business case of CSR. Prior literature has depicted a contingent picture of the organizational
outcomes of CSR, including corporate reputation, competitive position, and the fit between CSR
and core competences (Du et al., 2011; Porter and Kramer, 2011; Yoon et al., 2006). We extend
this body of literature by showcasing that transformational and transactional leadership styles
both moderate the organizational outcomes of CSR, but in opposite ways. Transactional
leadership enhances, whereas transformational leadership diminishes, the positive relationship

Frequently asked questions

Q1. What future works have the authors mentioned in the paper "The roles of leadership styles in corporate social responsibility" ?

Although prior research has conceptualized various organizational antecedents to CSR, such as managers ’ mental frames and sense-making processes ( Basu and Palazzo, 2008 ), organizational culture ( e. g., future or performance orientations ; Berger et al., 2007 ), and leadership styles ( Angus-Leppan et al., 2009 ), large-scale empirical studies of organizational drivers of CSR are lacking ( cf. Waldman et al., 2006 ). Limitations and further research Several caveats should be taken into consideration when interpreting the results of this study. Further research should individualistic vs. collectivistic ) or different economic developmental stages ( e. g., developing countries ). More generally, further work on how other dimensions of leadership, beyond transformational and transactional, influence CSR policies and success would help deepen understanding of this important but underexamined internal driver of CSR. 

Q2. what is the slope of institutional CSR practices on organizational outcomes?

Also with transformational leadership being at the mean level, when transactional leadership is low (i.e., one standard deviation below the mean), the simple slope of institutional CSR practices on organizational outcome is b = .09 (t = 2.57, p < .05). 

Q3. What is the role of stakeholder-oriented marketing in the CSR process?

As a critical organizational function, marketing plays an important role in facilitating CSR decision making by transformational leaders (Kotler and Lee, 2005). 

Q4. What is the role of transformational leadership in the business case of CSR?

a transformational leadership style is best suited for initiating and designing socially responsible practices; transactional leadership is best suited for implementing and deriving business benefits from socially responsible practices. 

Q5. What is the role of stakeholder-oriented marketing in institutional CSR?

Consisting of both “outside-in” (e.g., environmental scanning, marketing research, understanding stakeholder needs) and “inside-out” (e.g., new product development, new service offerings introduced to the market, CSR campaigns) processes, stakeholder-oriented marketing enables a firm to better understand its environment and address its stakeholder-related challenges. 

Q6. Why did the authors exclude questionnaires from respondents who spent less than 10 minutes filling out the survey?

because preliminary tests showed that respondents would need at least 10 minutes to answer the survey, the authors excluded questionnaires from respondents who spent less than 10 minutes filling out the survey. 

Q7. What does the research show about transformational leadership?

the authors find that transactional leadership amplifies, whereas transformational leadership diminishes, the positive link between institutional CSR and organizational outcomes. 

Q8. What are the recent theories and qualitative studies?

Recent theoretical (Maak and Pless, 2006; Pless and Maak, 2011) and qualitative (Angus-Leppan et al.,responsible, leadership behaviors such as protecting and advancing the interests of secondary stakeholders. 

Q9. What is the common method of analyzing the likelihood of a single or dominant factor?

Employing the widely used Harman’s one-factor method (e.g., Carr and Kaynak, 2007; Podsakoff and Organ, 1986), the authors ran a factor analysis of all measures to examine the likelihood of a single or dominant factor.