Beyond Ethics: Exploring the Indirect Effect of Subordinate Extraversion and Agreeableness on Sustainable Performance and Moderating Role of Psychological Diversity Climate
Abstract
Aim: Sustainable performance may be indirectly impacted by an ethical leadership style. In addition, a number of other factors may influence sustainable performance. This study is to explore the relationship between ethical leadership and sustainable performance, with the moderating influence of psychological diversity climate and the mediating function of agreeableness and subordinate extroversion.
Methodology: The SMEs in Portugal This study focused on the Lisbon and Porto regions, and information was gathered from 310 middle and senior managers employed by SMEs. These answers were examined through the use of moment structure analysis.
Findings: The findings showed that subordinate extroversion and agreeableness have a major mediating effect between sustainable performance and ethical leadership. Furthermore, the association between subordinate extroversion and agreeableness and sustainable performance is strongly moderated by psychological diversity climate.
Implications/Novel Contribution: Middle and senior managers of Portuguese SMEs in the Lisbon and Porto regions who want to improve sustainable performance might use the study’s findings as a reference. They can naturally reach the highest level of sustainability if they emphasise agreeableness and extroversion and adhere to the ethical leadership strategy.As far as the authors are aware, this study is the first to examine ethical leadership within the framework of Portuguese SMEs. Its impact on subordinate extroversion, agreeableness, and eventually sustained performance is highlighted in the Lisbon and Porto regions. It also investigated at how the psychological diversity climate affected
ethical leadership and sustainable performance.
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