Effect of ethical leadership and ethical climate on corporate social responsibility and firm performance: a mediated model

Leadership has a decisive role in the success of organisations irrespective of size and type, and ethical behaviour of the leader and ethical the climate in the organisation play a key role. This research investigates the effect of ethical leadership and ethical climate on corporate social responsibility and firm performance in the telecom sector. A closed-ended questionnaire was administered through an online survey to collect data from 415 telecom employees across the country. The proposed relationship was tested using partial least square structural equation modelling (PLS-SEM) approaches (i.e., PLS algorithm and bootstrapping). The findings of study results showed that there is a positive and significant effect of ethical leadership and ethical climate on firm performance and corporate social responsibility. Corporate social responsibility also had a positive and significant influence on firm performance. In addition, corporate social responsibility indirectly influences the link between ethical climate and firm performance. This study explained 50.3 variances in corporate social responsibility and 44.8% in firm performance.