The role of leadership in driving corporate social responsibility and innovation: insights from Serbian organizations
Abstract
The objective of this study is to examine the impact of transformational and transactional leadership styles on Corporate Social Responsibility (CSR) and Organizational Innovation (OI) within Serbian organizations. Using responses from 204 employees across small and medium, domestic and foreign companies, the research explores how leadership behaviors influence CSR initiatives and innovative practices. Data were collected through an online survey using a structured questionnaire and analyzed in SPSS with descriptive statistics, reliability testing, and multiple regression to examine relationships. Stratified sampling was applied to ensure representation across company size and origin. Two hypotheses were tested and proven highlighting significant differences of this influence based on organizational size and origin, with transformational leadership proving more effective than transactional leadership as a predictor of CSR and OI outcomes. The research findings point to the importance of culturally aligned leadership approaches in fostering sustainable and innovative practices, offering valuable insights for leadership development in transitional economies.
References
Amir, M., Siddique, M., & Ali, K. (2022). Responsible Leadership and Business Sustainability: Exploring the Role of Corporate Social Responsibility and Managerial Discretion. Business and Society Review, 127, 701–724.
Bahta, D., Yun, J., Islam, M.R., & Ashfaq, M. (2021). Corporate social responsibility, innovation capability and firm performance: evidence from SME. Social Responsibility Journal, 17 (6), 840-860.
Changar, M., & Atan, T. (2021). The role of transformational and transactional leadership approaches on environmental and ethical aspects of CSR. Sustainability, 13 (3), 1411.
Chen, L., Zheng, W., Yang, B., & Bai, S. (2016). Transformational leadership, social capital and organizational innovation. Leadership & Organization Development Journal, 37 (7), 843–859.
Christensen, L.J., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of management Perspectives, 28 (2), 164–178.
Farooq. M.. Farooq. O., & Jasimuddin. S.M. (2014). “Employees response to corporate social responsibility: Exploring the role of employees” collectivist orientation’. European Management Journal. 32 (6). 916–927
Ganesh, P. , & Srivastava, K.B.L. (2024), "Role of collective organizational engagement in the emergence of innovation: a micro-foundations perspective", Evidence-based HRM, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/EBHRM-10-2023-0307
Hofstede. G. (1980). Culture’s Consequences – International Differences in Work-Related Values. Abridged Edition. Newbury Park, CA, USA: Sage.
Hofstede. G. (2001). Culture’s Consequences. Comparing Values. Behaviours. Institutions. and Organizations Across Nations. Thousand Oaks, CA, USA: Sage Publications.
House. R.J.., Hanges. P.J., Javidan. M., Dorfman. P.W., & Gupta. V. (2004). Leadership. culture.and organizations: The GLOBE study of 62 societies. Thousand Oaks, CA, USA: Sage.
Javeed, S.A., Latief, R., Jiang, T., & Ong, T.S. (2021). How environmental regulations and corporate social responsibility affect firm innovation: The moderating role of CEO power. Journal of Cleaner Production, 315, 128108.
Javeed, S.A., & Lefen, L. (2019). An analysis of corporate social responsibility and firm performance with moderating effects of CEO power and ownership structure. Sustainability, 11 (1), 248.
Joseph, N. (2023). The Impact of Corporate Social Responsibility on Employee Engagement and Organizational Performance: A Systematic Review. SSRN Electronic Journal, available at SSRN: https://ssrn.com/abstract=4805695 or http://dx.doi.org/10.2139/ssrn.4805695
Khaddage-Soboh, N., Yunis, M., Imran, M., & Zeb, F. (2024). Sustainable Practices in Malaysian Manufacturing: The Influence of CSR, Transformational Leadership, and Green Organizational Culture on Environmental Performance. Economic Analysis and Policy, 82, 753-768.
Khan, R., Rehman, A.U., Fatima, A. (2009). Transformational leadership and organizational innovation: Moderated by organizational size. African Journal of Business Management, 3 (11), 678-684.
Kong, G., Kong, T.D., Qin, N. & Yu L. (2023). Ethnic Diversity, Trust and Corporate Social Responsibility: The Moderating Effects of Marketization and Language. Journal of Business Ethics, 187, 449–471.
MacKenzie, S.B., Podsakoff, P.M., & Rich, G.A. (2001). Transformational and transactional leadership and salesperson performance. Journal of the Academy of Marketing Science, 29 (2), 115–134.
Mubeen, R., Han, D., Abbas, J., & Álvarez-Otero, S. (2021). The relationship between CEO duality and business firms' performance: The moderating role of firm size and corporate social responsibility. Frontiers in Psychology, 12, 669715.
Nedeljković, M., Vukonjanski, J., Nikolić, M., Hadžić, O., & Šljukić, M. (2018). A comparative analysis of Serbian national culture and national cultures of some European countries by GLOBE project approach. Journal of the Geographical Institute “Jovan Cvijić” SASA, 68(3), 363–382.
Podsakoff. Ph. M., & Organ. D.W (1986). Self-reports in organizational research: problems and prospects. Journal of Management. 12 (4), 531-544.
Podsakoff. Ph. M., MacKenzie. S.B. & Fetter. R. (1993). Substitutes for leadership and the management of professionals. The Leadership Quarterly. 4 (1). 1-44. https://doi.org/10.1177/014920639602200204
Podsakoff. Ph. M., Todor. W.D., Grover. R.A., & Huber. V.L. (1984). Situational moderators of leader reward and punishment behaviors: fact or fiction? Organizational Behavior and Human Performance. 34 (1). 21-63
Wang. F., Zhang. M., Das. A.K., Weng. H., & Yang. P. (2021). Aiming at the Organizational Sustainable Development: Employees’ Pro-Social Rule Breaking as Response to High Performance Expectations. Sustainability. 13 (1), 267.
The Author wishes to submit the Work to SJM for publication. To enable SJM to publish the Work and to give effect to the parties’ intention set forth herein, they have agreed to cede the first right to publication and republication in the SJM Journal.
Cession
The Author hereby cedes to SJM, who accepts the cession, to the copyright in and to the paper.
The purpose of the cession is to enable SJM to publish the Work, as first publisher world-wide, and for republication in the SJM Journal, and to grant the right to others to publish the Work world-wide, for so long as such copyright subsists;
SJM shall be entitled to edit the work before publication, as it deems fit, subject to the Authors approval
The Author warrants to SJM that:
- the Author is the owner of the copyright in the Work, whether as author or as reassigned from the Author’s employee and that the Author is entitled to cede the copyright to SJM;
- the paper (or any of its part) is not submitted or accepted for publication in any other Journal;
- the Work is an original work created by the Author;
- the Author has not transferred, ceded, or assigned the copyright, or any part thereof, to any third party; or granted any third party a licence or other right to the copyright, which may affect or detract from the rights granted to SJM in terms of this agreement.
The Author hereby indemnifies the SJM as a body and its individual members, to the fullest extent permitted in law, against all or any claims which may arise consequent to the warranties set forth.
No monetary consideration shall be payable by SJM to the Author for the cession, but SJM shall clearly identify the Author as having produced the Work and ensure that due recognition is given to the Author in any publication of the Work.
Should SJM, in its sole discretion, elect not to publish the Work within 1 year after the date of this agreement, the cession shall lapse and be of no further effect. In such event the copyright shall revert to the Author and SJM shall not publish the Work, or any part thereof, without the Author’s prior written consent.