An Examination of Business Leadership in Sri Lanka: Cultural Modelling of Sustainability Leadership

An examination of business leadership in Sri Lanka: Cultural modelling of sustainability leadership

Erabaddage Ayoma Gayathri Sumanasiri

Thesis submitted in fulfilment of the

requirements for the degree of

Doctor of Philosophy

Faculty of Business and Law

Swinburne University of Technology

2016 Abstract

Sustainability leadership at the organisational level has attracted much attention in recent years, as an essential element in enhancing national development. Yet much of the relevant research has been qualitative and focused on developed economies – little is known about sustainability leadership among managers in developing economies. Therefore, the main objective of this thesis was to test and develop an integrated cultural model to explain what constitutes sustainability leadership among Sri Lankan managers. This model that is unique to the cultural environment will provide a framework to identify specific managerial skills, behaviours and capacities that encourage sustainability leadership in other developing economies.

This study defined sustainability leadership as managers with excellent leadership qualities, including minimising negative impacts on society, the environment and the organisation’s financial performance. Stakeholder relationships, long-term orientation and employee engagement were identified as the main drivers positively influencing the sustainability leadership dimension.

A deductive and quantitative research approach was employed using a paper-based questionnaire that was administered to managers in Sri Lankan organisations. Responses from 821 managers were subsequently analysed using factor analyses and structural equation modelling.

The findings confirmed that Sri Lankan manager’s prioritisation of stakeholder relationships and employee engagement are the main drivers influencing perceptions of sustainability leadership, particularly stakeholder relationships. Given Sri Lanka’s socioenvironmental and cultural context, managers’ long-term orientation was found to have no impact on perceptions of sustainability leadership, only influencing perceptions of organisational change leadership. This raised the question of whether the traditionally long-term oriented Sri Lankan culture has shifted to short-term orientation due to the rapid changes and corresponding uncertainties in Sri Lankan society. In addition, it is the conclusion of this research that what constitutes excellence in leadership in the management context does not necessarily constitute an excellent ii leader in the sustainability context in Sri Lankan organisations. The study’s respondents in general had clearly differentiated managerial leadership roles in support of the day-to-day management and the longer-term sustainability prospects.

This study adds to the literature on sustainability leadership in developing economies by providing a unique integrated cultural model to explain managerial perceptions of sustainability leadership in Sri Lankan organisations. The most unique facet in Sri Lanka organisations is that sustainability leadership is perceived to have both a management face and a sustainability face. Hence, this study further contributes to knowledge in the field of leadership research and sustainable development in developing economies. These findings could be used by management trainers, human resource managers and designers of tertiary level management education programs to develop managerial behaviours that support sustainability leadership in developing economies.

Keywords: sustainability leadership, excellent leadership, leadership behaviours, cultural modelling, developing economies, complex markets

iii

Acknowledgement

I would like to take this opportunity to thank all the people that have contributed to my PhD journey.

First of all, I would like to thank my Principal Coordinating Supervisor, Professor Christopher Selvarajah, for his encouragement, guidance, valuable feedback and personal attention to me. He especially built confidence in me. I would also like to thank my Associate Supervisor Dr Aron Perenyi for his valuable support, advice and guidance. He continually motivated me towards the speedy and timely completion of my thesis. I would also like to thank Associate Professor Everarda Cunningham and Associate Professor Denny Meyer for offering valuable advice that strengthened my data analysis results. I am also grateful to Professor Pamela Green and Professor John Bowden for sharing their insightful research knowledge. In addition, I would like to thank Mr Carlton Samarajiwa for his editorial support and encouragement in completing my doctorate studies. I am also grateful to Ms Jeanette Walton who edited my thesis.

I would like to take this opportunity to thank the Coordinators of Master’s programs for granting me the facilities for collecting data. The strong support that I received from the Master’s students, teaching staff and administrative staff members is unforgettable. Without their support this study could not have been completed. I would also like to thank Professor Heath McDonald (Associate Dean Research and Engagement- FBL), Swinburne Research staff members, Faculty of Business and Law-Research staff members, and fellow PhD students at Swinburne for their support in many ways. I would also like to especially mention the support extended by Mr Sebastian Fazinno and Mrs Sue Fazinno, and the friendly staff members of Kerrimuir Primary school for ensuring a successful completion of my studies.

I would especially like to thank my loving husband Eranga Perera for encouraging me and strengthening my willpower to accomplish my academic dreams. Without his support I would not have reached my goal. I would also like to thank my seven-year- old little angel Ayami Tharinma Perera for her patience, compassion and iv understanding during the busy times I encountered during my studies. From the age of three, she has been curious about what I was writing. So, in appreciation of their sacrifices, immense support, encouragement and understanding, I would like to dedicate this thesis to my loving daughter and my loving husband – they stood by me during this arduous journey.

I would also like to thank my beloved parents Erabaddage Sumanasiri and Premalatha Rajapaksha for their inestimable efforts and commitment to educate me and my brother, Gishan Sumanasiri, who has been my role model in life. I am also grateful to the Vice-Chancellor, Dean of the Faculty of Management Studies and Commerce, Head of the Department of Commerce, and all other academic and administrative staff of the University of Sri Jayewardenepura for their valuable support. I would also like to thank the Director of the Board and the administrative staff members of the National Centre for Advanced Studies in Humanities and Social Sciences (NCAS) in Sri Lanka.

Last but not least, I am eternally grateful to all the teachers that taught me from my childhood up to now. “Teachers do change the world”. Thank you all for your wonderful support and for believing in my strengths.

Declaration

I certify that this thesis does not contains any material previously published or written by another person except where due reference is made. Also, the materials in this thesis has not been previously submitted for another degree or diploma, except where, due reference is made. The thesis is less than 100,000 words in length excluding tables, bibliography and appendices.

Ms Jeanette Walton edited this thesis. The editing addressed only style and grammar and not its substantive content.

Erabaddage Ayoma Gayathri Sumanasiri

5th January 2016

Table of contents

Abstract ...... ii Acknowledgement...... iv Declaration ...... vi Table of contents ...... vii List of Tables...... xiv List of figures ...... xvii CHAPTER 1. INTRODUCTION ...... 2

Introduction ...... 2

Background of the study ...... 3

Research problem and objective ...... 5

Research questions ...... 6

Significance of the study ...... 7

Conceptual framework of the study ...... 10

Methodology ...... 11

Developing the study ...... 13

Structure of the thesis ...... 14

Chapter summary ...... 17

CHAPTER 2. EVOLUTION OF ORGANISATIONAL LEADERSHIP THEORIES ...... 20

Introduction ...... 20

Importance of leadership in complex organisational environments ...... 21

Evolution of organisational leadership theory ...... 21

Leadership eras ...... 24

The development of neo-charismatic leadership theories ...... 31

Chapter summary ...... 38

vii

CHAPTER 3. EVOLUTION OF THE CONCEPT OF SUSTAINABILITY . 39

Introduction ...... 39

Shift in leadership theories from leader-member relationship to a holistic sustainable perspective ...... 41

Concept of sustainability ...... 43

Sustainability at the national and at the organisational levels ...... 50

Corporate sustainability...... 53

Corporate sustainability in practice ...... 58

Challenges for corporate sustainability initiatives ...... 60

Sustainability and cultural values ...... 61

Sustainability challenges for organisations in the developing world ...... 62

Strategic importance of leadership in achieving organisational sustainability ...... 64

Significance of sustainability leadership in corporate sustainability ...... 65

Chapter summary ...... 71

CHAPTER 4. MODEL DEVELOPMENT: IDENTIFYING THE DEPENDENT VARIABLES ...... 72

Introduction ...... 72

Sustainability leadership frameworks and models ...... 73

Identification of dependent variables in the study ...... 81

Chapter summary ...... 89

CHAPTER 5. MODEL DEVELOPMENT: IDENTIFYING THE INDEPENDENT AND MEDIATING VARIABLES ...... 90

Introduction ...... 90

Independent variables of the study ...... 91

Mediating variables of the study ...... 99

viii

Chapter summary ...... 107

CHAPTER 6. MODEL DEVELOPMENT: CONTEXT-SPECIFIC INFLUENCE ...... 108

Introduction ...... 108

Context-specific influence on the constructs of the study ...... 110

Implicit leadership theories ...... 113

Defining national culture ...... 114

Development of culture-specific leadership studies...... 115

Use of cultural modelling to explain leadership as a culture-specific concept ...... 116

Sustainability leadership in less developed economies ...... 119

Sustainability leadership in the Asian context ...... 120

Background of Sri Lanka ...... 122

Context-specific characteristics of the independent and mediating variables of the study ...... 132

Chapter summary ...... 144

CHAPTER 7. DEVELOPMENT OF THEORETICAL FRAMEWORK, RESEARCH QUESTIONS AND HYPOTHESES ...... 146

Introduction ...... 146

Selecting the appropriate methodology for the study...... 147

From literature review to theoretical model development ...... 148

Developing the theoretical framework ...... 149

Research objective of the study ...... 152

Research questions of the study ...... 154

Hypotheses development...... 158

Chapter summary ...... 193

CHAPTER 8. RESEARCH METHODOLOGY AND DESIGN ...... 195

Introduction ...... 195

Novelty and contribution of the study ...... 197

Research paradigm for the study ...... 198

Research design ...... 200

Study context ...... 203

Unit of analysis...... 204

Recruitment and sampling ...... 205

Sample size ...... 208

Questionnaire development ...... 210

Measurement development ...... 211

Multidimensionality of the sustainability leadership construct...... 219

Operationalising the independent variables in the theoretical framework ...... 224

Structure of the survey instrument ...... 231

Ethical considerations ...... 233

Process for collecting data and analysing ...... 234

Data screening ...... 242

Chapter summary ...... 246

CHAPTER 9. ANALYSIS AND RESULTS...... 248

Introduction ...... 248

Demographic profile ...... 250

Splitting the sample ...... 251

Initial item reduction using exploratory factor analysis ...... 251

Confirmatory factor analysis (CFA) ...... 262

Summary of the confirmatory factor analysis results ...... 262

Model validation ...... 278

Common method bias...... 287

Developing structural equation modelling for sustainability leadership ...... 290

Hypotheses testing and discussion ...... 294

Mediation analysis...... 298

Standardised total effects of leadership excellence dimensions on sustainability leadership ...... 308

Chapter summary ...... 309

CHAPTER 10. DISCUSSION OF RESULTS ...... 311

Introduction ...... 311

Revisiting the theoretical framework ...... 312

Discussion of the cultural model ...... 315

Excellent leadership in the Sri Lankan organisational context - a management perspective ...... 335

Excellent leadership in the Sri Lankan organisational context - a sustainability perspective ...... 338

Chapter summary ...... 342

CHAPTER 11. CONCLUSIONS, LIMITATIONS AND RECOMMENDATIONS ...... 344

Introducion ...... 344

Review of the research questions ...... 345

Contributions to theory and practice ...... 352

Limitations of the study...... 365

Future research directions ...... 367

Recommendations ...... 370

Chapter summary ...... 374

References ...... 376

Appendices ...... 429 Appendix 1: Future research areas for sustainability leadership ...... 429 Appendix 2: Leadership behavioural statements measuring EXL ...... 431 Appendix 3: Relevant studies that explore corporate social responsibility efforts to ensure sustainability ...... 432 Appendix 4: Relevant studies that explore ecological responsibility efforts to ensure corporate sustainability ...... 435 Appendix 5: Relevant studies that explore firm’s financial performance in establishing sustainability ...... 438 Appendix 6: Relevant leadership studies that measure stakeholder relationships to ensure corporate sustainability ...... 440 Appendix 7: Relevant studies that explore leader’s long-term orientation in decision- making to achieve corporate sustainability ...... 443 Appendix 8: Relevant studies that explore employee engagement to achieve corporate sustainability ...... 444 Appendix 9: Relevant studies that explore change leadership behaviours to achieve organisational sustainability ...... 447 Appendix 10: Relevant studies that explore leader’s sustainable thinking to achieve organisational sustainability ...... 452 Appendix 11: Summary of hypotheses developed ...... 455 Appendix 12: Summary of leadership studies that have used excellent leadership (EXL) constructs ...... 458 Appendix 13: Identifying leadership behavioural statements to measure ENV construct ...... 462 Appendix 14: Identifying leadership behavioural statements to measure FIN construct ...... 463 Appendix 15: Identifying leadership behavioural statements to measure STK construct ...... 464 Appendix 16: Identifying leadership behavioural statements to measure LONG construct ...... 465 Appendix 17: Identifying leadership behavioural statements to measure EMP construct ...... 466 Appendix 18: Identifying leadership behavioural statements to measure SUSTHINK construct ...... 467 Appendix 19: Identifying leadership behavioural statements to measure CHNG construct ...... 469 Appendix 20: Cover letter – Master’s students ...... 471 xii

Appendix 21: Cover letter – Alumni members ...... 472 Appendix 22: Survey questionnaire ...... 473 Appendix 23: Draft email- Request to collect data from Master’s students ...... 481 Appendix 24: Ethics approval letter ...... 483 Appendix 25: Summary of mean, median and SD for each of the statement in the questionnaire ...... 485 Appendix 26: Demographic characteristics of the sample ...... 489 Appendix 27: Industrial and organisational characteristics ...... 490 Appendix 28: CFA results of final measurement modesls and SEM results of Sustainability leadership model ...... 491 Appendix 29: Summary of hypotheses results ...... 499

xiii

List of Tables

Table 2.1 Comparison of leadership theories ...... 25 Table 3.1 Comparison of leaders with-managers ...... 67 Table 4.1 Composition of the dependent variables of sustainability leadership ...... 82 Table 7.1 Summary of hypotheses testing the relationships between the three independent variables and the three dependent variables ...... 159 Table 7.2 Summary of studies that highlight the leader’s stakeholder relationships as an important aspect for enhancing sustainability leadership...... 164 Table 7.3 Summary of studies that highlight the leader’s long-term-oriented decision- making as an important aspect for enhancing sustainability leadership ...... 169 Table 7.4 Summary of studies that highlight the leader’s concern for employee engagement as an important aspect to achieve sustainability leadership ...... 174 Table 7.5 Summary of studies that highlight the leader’s commitment to organisational change as an important aspect to achieve sustainability leadership . 177 Table 7.6 Summary of studies that highlight the leader’s commitment to organisational change influencing sustainability leadership ...... 188 Table 7.7 Summary of studies that highlight the leader’s sustainable thinking as an important aspect to achieve sustainability leadership ...... 192 Table 8.1 Summary of the leadership behavioural items identified for each construct in the questionnaire ...... 217 Table 8.2 Leadership behavioural items that measure excellent leader construct ... 221 Table 8.3 Leadership behavioural items that measure ENV construct ...... 223 Table 8.4 Leadership behavioural items that measure FIN construct ...... 224 Table 8.5 Leadership behavioural items to measure STK construct ...... 225 Table 8.6 Leadership behavioural items to measure LONG construct ...... 226 Table 8.7 Leadership behavioural items to measure EMP construct ...... 227 Table 8.8 Leadership behavioural items to measure SUSTHINK construct ...... 229 Table 8.9 Leadership behavioural items to measure CHNG construct ...... 230 Table 8.10 Summary of the model fit indices used in the study ...... 239 Table 8.11 Summary of the study’s survey responses ...... 242

xiv

Table 9.1 Summary of EFAs in the study ...... 252 Table 9.2 Exploratory factor analysis solutions for excellent leader (EXL) ...... 253 Table 9.3 Exploratory factor analysis solutions for concern for social and environmental sustainability (ENV) ...... 254 Table 9.4 Exploratory factor analysis solutions for concern for financial performance of the firm (FIN)...... 255 Table 9.5 Exploratory factor analysis solutions for leaders’ commitment to change (CHNG) ...... 256 Table 9.6 Exploratory factor analysis solutions for sustainable thinking (SUSTHINK) ...... 257 Table 9.7 Exploratory factor analysis solutions for stakeholder relationships (STK) ...... 258 Table 9.8 Exploratory factor analysis solutions for long-term-oriented decision- making (LONG) ...... 259 Table 9.9 Exploratory factor analysis solutions for employee engagement (EMP) 260 Table 9.10 Summary of the exploratory factor analysis results ...... 261 Table 9.11 Summary of the exploratory factor and confirmatory factor analyses... 263 Table 9.12 Unstandardised regression weights for excellent leader (EXL) ...... 265 Table 9.13 Unstandardised regression weights for concern for social and environmental sustainability (ENV) ...... 266 Table 9.14 Unstandardised regression weights for concern for financial performance of the firm (FIN)...... 268 Table 9.15 Unstandardised regression weights of leaders commitment to organisational change (CHNG) ...... 270 Table 9.16 Unstandardised regression weights for sustainable thinking (SUSTHINK) ...... 271 Table 9.17 Unstandardised regression weights for stakeholder relationships (STK) ...... 273 Table 9.18 Unstandardised regression weights for long-term decision-making (LONG) ...... 274 Table 9.19 Unstandardised regression weights for employee engagement (EMP) . 276 Table 9.20 Summary of the model fit statistics for confirmatory factor analysis .... 277

Table 9.21 Summary of measurement model for sustainability leadership (dependent variables) ...... 280 Table 9.22 Validity, reliability and correlation of the measurement model for sustainability leadership (dependent variables) ...... 281 Table 9.23 Summary of measurement model for mediating variables ...... 283 Table 9.24 Summary of measurement model for independent variables ...... 286 Table 9.25 Validity, reliability and correlation of the measurement model for independent variables ...... 286 Table 9.26 Independent sample t-test results for the final measurement model ...... 289 Table 9.27 Standardised regression weights for the final SEM ...... 293 Table 9.28 Hypotheses testing of the STK construct with the dependent variables 295 Table 9.29 Hypotheses testing of the LONG construct with the dependent variables ...... 296 Table 9.30 Hypotheses testing of the EMP construct with the dependent variables 297 Table 9.31 Mediation influence of CHNG on the relationship between independent variables and the dependent variables ...... 299 Table 9.32 Mediation influence of SUSTHINK on the relationship between independent and dependent variables...... 303 Table 9.33 Total standardised effect of excellence leadership dimensions on sustainability leadership ...... 308

xvi

List of figures

Figure 1.1 Composition of Chapter 1 ...... 2 Figure 1.2 Basic conceptual framework of the study ...... 11 Figure 1.3 Developmental process of this study ...... 13 Figure 1.4 Thesis structure ...... 14 Figure 2.1 Composition of Chapter 2 ...... 20 Figure 3.1 Composition of Chapter 3 ...... 40 Figure 3.2 Gross national product problem ...... 45 Figure 3.3 Three modes of resources used in national development ...... 46 Figure 3.4 Waves of sustainability ...... 54 Figure 3.5 The sustainability change matrix: Incremental paths ...... 56 Figure 3.6 Micro skills of effective change agents ...... 69 Figure 4.1 Composition of Chapter 4 ...... 72 Figure 4.2 Sustainable Leadership Pyramid...... 74 Figure 4.3 Seven-step sustainability change process ...... 76 Figure 4.4 Sustainability leadership model ...... 77 Figure 4.5 Complex problem-solving heuristic model ...... 78 Figure 4.6 Principles required for sustainability leadership ...... 79 Figure 4.7 The Economic Return on Social and Environmental Investments (EROSEI) model of the organisation ...... 80 Figure 5.1 Composition of Chapter 5 ...... 90 Figure 6.1 Composition of Chapter 6 ...... 109 Figure 6.2 Geography of Sri Lanka ...... 122 Figure 7.1 Composition of Chapter 7 ...... 147 Figure 7.2 Basic theoretical framework ...... 150 Figure 7.3 Extended theoretical framework ...... 151 Figure 8.1 Composition of Chapter 8 ...... 196 Figure 8.2 Distribution locations of universities ...... 207 Figure 8.3 Process for new scale development ...... 212 Figure 8.4 Procedure of developing questionnaire for this study ...... 214 Figure 9.1 Composition of Chapter 9 ...... 249

xvii

Figure 9.2 Confirmatory factor analysis for excellent leader (EXL) ...... 264 Figure 9.3 Confirmatory factor analysis for concern for social and environmental sustainability ENV ...... 266 Figure 9.4 Confirmatory factor analysis for FIN ...... 267 Figure 9.5 Confirmatory factor analysis for leaders’ commitment to organisational change (CHNG) ...... 269 Figure 9.6 Confirmatory factor analysis for sustainable thinking (SUSTHINK) .... 271 Figure 9.7 Confirmatory factor analysis for stakeholder relationships (STK) ...... 272 Figure 9.8 Confirmatory factor analysis for long-term decision-making (LONG) . 274 Figure 9.9 Confirmatory factor analysis for employee engagement (EMP) ...... 275 Figure 9.10 Final measurement model for sustainability leadership (dependent variables) ...... 279 Figure 9.11 Final measurement model for mediating variables ...... 282 Figure 9.12 Final measurement model for leadership excellence dimensions (independent variables) ...... 285 Figure 9.13 Developing the final SEM for sustainability leadership ...... 292 Figure 9.14 Sustainability leadership structural model with only significant paths 307 Figure 10.1 Composition of Chapter 10 ...... 311 Figure 11.1 Composition of Chapter 11 ...... 345

xviii

PART I

INTRODUCTION

CHAPTER 1. INTRODUCTION

Introduction This chapter provides an overview and details the structure of this thesis, which assists in explaining the motivation, rationale and purpose of this study. To begin, Section 1.2 explains the background of the study, followed by Section 1.3 which focuses on the research problem underpinning the study’s purpose, and Section 1.4 explains the research questions of this study. Section 1.5 explains the significance of the study from academic and practical perspectives. Section 1.6 summarises the conceptual framework of the study, while Section 1.7 explains the methodological background. Section 1.8 explains the process of developing this study. Section 1.9 explains the structure of the thesis, and Section 1.10 then provides a chapter summary. Figure 1.1 presents the compositional flow of Chapter 1.

Figure 1.1 Composition of Chapter 1

1.1 Introduction

1.2 Background of the study

1.3 Research problem and objective

1.4 Research questions Chapter 1:

Introduction 1.5 Significance of the study

1.6 Conceptual framework of the study

1.7 Methodology

1.8 Developing the study

1.9 Structure of the thesis

1.10 Chapter summary

Background of the study The United Nations (UN) Millennium Summit held in 2000 was a remarkable cornerstone in relation the world’s economic development. It was one of the largest international gatherings of world leaders who unanimously agreed to implement the Millennium Development Declaration (United Nations 2000). At this summit, national leaders agreed to develop new global partnerships aimed at eradicating poverty and hunger as part of eight millennium development goals (MDGs) by the year 2015. Although progress has been made over the past 15 years, the post-2015 MDGs report (United Nations 2015b) affirmed there is still much more to achieve, especially in developing countries.

With the expiration of these MDGs drawing near, the UN convened its annual Sustainable Development Summit (United Nations 2015a) in September 2015 to decide on a new action plan for the next 15 years. At this summit, all participating countries agreed to adopt a new sustainable development agenda and a new agreement for climate change. For this purpose, the following 17 sustainable development goals (SDGs) were established based on the eight MDGs identified in 2000: no poverty; zero hunger; good health and wellbeing; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; reduction of inequalities; sustainable cities and communities; responsible consumption and production; climate action; life beyond water; life on land; peace, justice and strong institutions; and partnerships in achieving these goals. These SDGs are particularly focused on developing countries, especially their economic, social, environmental, business and political decision-making systems (United Nations 2015a)

Organisations are considered major stakeholders in the economic and social development of a nation (Follet 1918; Freeman 1984; Freeman & Evan 1990; Freeman, Harrison & Wicks 2007; Schilling 2000). As such, organisations have an important role in instituting sustainable practices as part of their daily decision- making. Corporate failures and scandals in the developed world are often due to the prioritisation of short-term profit maximisation over long-term corporate responsibility (Avery & Bergsteiner 2010). However, the unsustainable behaviours of

3 some corporations have made it necessary for corporate leaders to be more ethical and transparent in their decision-making, to sustain the confidence of diverse stakeholders and investors (Hilb 2006).

Based on these learnings, national leaders as well as organisational leaders of developing nations need to act responsibly and ethically to solve complex and often sensitive sustainability challenges. Complexity in developing economies has arisen from advances in science, technology and knowledge, which puts pressure on organisational leaders to make sustainable decisions. As a result, compared to developed economies, developing economies are often more complex environments where leaders need to satisfy diverse stakeholder preferences such as those of governments, regulatory authorities, non-government organisations (NGOs), greener consumers, greener competitors, greener supply chain partners, as well as the general public. As the challenges in sustainability increase and become more complex, there is greater pressure on the organisational leadership to act more ethically, responsibly and sustainably.

Despite such increased pressures, studies exploring issues surrounding corporate sustainability challenges and managerial issues are scarce in the literature (Bossink 2007; Tang, Robinson & Harvey 2011). Bossink (2007) recognised the need for further research that explores leadership styles, attitudes and behaviours of managers that promote sustainability. As a result, the call to address organisational sustainability challenges has resulted in a new research field that aims to explore the sustainable leadership of managers (Avery 2005; Avery & Bergsteiner 2010, 2011b; Boiral, Cayer & Baron 2008; Kantabutra & Avery 2012; Metclaf & Benn 2013; Wolfgramm, Flynn- Coleman & Conroy 2013; Wong & Avery 2009).

However, most of these studies on sustainability leadership are either conceptual or qualitative, they often use small samples, and mostly relate to Western national contexts or developed economies. For example, Banerjee (2007) pointed out that most management studies on corporate social responsibility (CSR) are based on a Western perspective and have overlooked exploring irresponsible organisational behaviours, especially in the developing world. In more recent years, studies such as Kantabutra

(2011); Kantabutra and Avery (2012); Kantabutra and Saratun (2013), and Khan and Lund-thomsen (2011) have focused more on exploring CSR and sustainability issues in the developing world. Nonetheless, most of these studies have overlooked the impact of cultural diversity and of cultural values, attitudes, beliefs and behaviours on such management behaviours. These limitations in the literature and this author’s personal interest in sustainability provided the motivation to develop and empirically validate an organisational leadership model that helps to explore managerial perceptions of sustainability leadership in a developing country such as Sri Lanka.

Research problem and objective The importance of studying the concept of sustainability at a national as well as an organisational level has been noted above. In addition, the gaps identified in the literature suggested a need to identify unique, culture-specific values influencing individuals’ sustainability behaviours, as these often influence their perceptions and behaviours towards sustainability. Therefore, the main objective of this study is:

To develop an integrated cultural model that provides explanation to the relationship between the diverse dimensions that enable sustainability leadership in Sri Lankan organisations.

Previous literature has regularly identified the concept of sustainability as a multidimensional construct, and Chapter 3 of this study explains the prevailing constructs to measure corporate sustainability. However, there is a dearth of constructs that have been developed to measure the sustainability leadership attitudes of an individual manager. Therefore, this study has developed a new multidimensional construct to measure managerial perceptions of sustainability leadership.

This study assumes that sustainability leaders are considered excellent leaders who are concerned about minimising the negative impacts on the environment, society and economy, as stipulated in the principles of the triple bottom line (TBL) (Elkington 1994). Therefore, two leadership behaviour dimensions were chosen for this study: 1) the excellent leadership in management sense construct (Selvarajah et al. 1995) to represent excellent leadership behaviours that are useful to surpass other leaders in their organisations; and 2) the excellent leadership in sustainability sense construct to

5 represent sustainability leadership behaviours of managers, useful to minimise their negative impacts to environmental, social and economic systems of their nation. The excellent leadership in a management perspective construct has been widely used to explore managerial perceptions of excellent leadership behaviours in different organisational contexts, such as in Malaysia (Selvarajah 2008; Selvarajah & Meyer 2006, 2008a); China (Selvarajah & Meyer 2008b); Cambodia (Selvarajah, Meyer & Davuth 2012); Thailand (Selvarajah, Meyer & Davuth 2012; Selvarajah, Meyer & Donovan 2013); Singapore (Selvarajah et al. 2013); Europe (Anurit, Selvarajah & Meye 2011; de Waal et al. 2010); and the Association of South East Nations (ASEAN) (Selvarajah 2005).

However, due to the cultural influences on managerial perceptions and the cultural diversity common in Asian countries in particular, this study developed and empirically tested a model to specifically explain sustainability leadership among Sri Lankan managers. Based on the study’s research objective, to identify leadership dimensions that enable sustainability leadership in Sri Lankan organisations, three main research questions were identified. The rationalisation for these three research questions is provided below.

Research questions The literature has indicated that organisational leadership excellence dimensions relating to long-term orientation, employee engagement and stakeholder relationships positively affect sustainability leadership. However, most of these relationships have not yet been empirically tested in an organisational context, especially in a nation that is complex, multi-cultural and developing economy like Sri Lanka. Also, there is a limitation in using leadership models and theories developed in the West to interpret leadership dimensions in non-Western contexts (Wijewardena & Wimalasiri 1996). These theoretical and methodological issues justified the need to identify significant organisational leadership excellence dimensions essential to explaining sustainability leadership among Sri Lankan managers. This led to the development of the first research question for this study:

1. What are the leadership excellence dimensions that influence sustainability leadership in the Sri Lankan organisational context? 6

In addition to the three leadership excellence dimensions listed above, commitment to organisational change and sustainable thinking of the leader have been identified as essential determinants of managers’ sustainability leadership. In particular, scholars such as Avery (2005); Avery and Bergsteiner (2010, 2011a, 2011c); Dunphy and Benn

(2013); Dunphy, Griffiths and Benn (2007), and Fullan (2003, 2005) incorporated these extra determinants in their models as essential components to explain sustainability leadership. This suggests that managers’ positive attitudes towards organisational change, and ethical and responsible leadership behaviours ensure successful achievement of sustainability leadership. Hence, the second and third research questions for this study were developed as:

2. How does the leaders’ commitment to organisational change mediate the relationship between leadership excellence and sustainability leadership dimensions? and 3. How does the leaders’ sustainable thinking mediate the relationship between leadership excellence and sustainability leadership dimensions?

The above three research questions and the research objective influenced the development of a cultural model of sustainability leadership, by incorporating diverse leadership dimensions that enable sustainability leadership. This then established the purpose of this research that has been discussed earlier in this section.

Significance of the study  Personal desire to explore sustainability leadership The motivation to conduct this research is the author’s personal interest in sustainable economic development and the role of managers in ensuring the sustainability of organisations. This interest was further enhanced by the opportunity to study for her doctoral degree in Melbourne, Australia. While seeking opportunities to identity corporate managerial responsibility as a subject of study, the author in discussions with the Principal Supervisor was introduced to the importance of culture-specific managerial attitudes with regard to organisational sustainability. There was ample

7 literature confirming the importance of national cultural values shaping managerial perceptions and behaviours that enable excellent leadership. However, very few studies had addressed sustainability as a function of excellence in leadership. In pursuit of new knowledge that combined excellence in leadership with sustainability as a factor, this study has aimed to develop a cultural model of Sri Lankan leadership to determine what constitutes excellent leadership in a management sense and whether it can be distinguished from the excellent leadership in a sustainability sense.

 International and national interest towards sustainability and SDGs Due to the many criticisms against unsustainable practices at the national and corporate level, sustainability leadership has attracted more attention in recent years, especially in major global economic development forums (Brundtland 1987; Secretariat General EU 2009; United Nations 2005b, 2015a). As a result, more attention is now focused on the corporate sector in terms of organisational sustainability. However, corporate leadership specifically in relation to sustainability is still considered a relatively new research area (Bossink 2007). To address this gap in the sustainability literature, a cultural model of sustainability leadership behaviours has been advanced in this study. This model will empirically validate constructs to identify managerial perceptions of sustainability leadership, especially in a less-developed economic context.

 Need to identify best ways to deal with complex issues surrounding sustainability, especially in developing and complex market settings

Berns et al. (2009) and Deborah (2012a) suggested that a new model of corporate sustainability should be developed to resolve complex problems in respect to sustainability. Such complexity management has been identified as more important for developing economies that often have more complex business and social environments than developed economies (Jean 2010; Khavul & Bruton 2013). Relevant sustainability challenges include the rapid growth of the world population, depletion of oil resources, food shortage, and explosive growth in supply and demand for products and services, especially in developing nations. Such complexities often create a complicated social and economic environment that requires the attention of both the national and corporate leadership.

Issues surrounding sustainability are generally more crucial and urgent in developing nations than in developed nations. For example, the post-2015 MDGs report has identified that developing nations are still lagging behind in achieving sustainable economic development goals (United Nations 2015b). The urgency of addressing sustainability issues, especially in the developing world, is urging national as well as organisational leaders to act more promptly, responsibly and ethically by collaborating with more diverse partners such as diverse individuals, organisations and governments than ever before.

In the Sri Lankan context, as a developing nation it has had to face many complex social and economic challenges, such as human development needs and the implications of 30 years of civil war, as well as accusations of human rights violations. Organisational leaders working within a complex market like Sri Lanka need to focus on sustainable decision-making because of the national and international level attention towards Sri Lanka in achieving sustainable economic development. With this aspect in mind, this study aimed to develop and empirically validate a leadership model to explain sustainability leadership behaviours of Sri Lankan managers.

 Need for a culture-specific leadership model to explain sustainability leadership behaviours Many leadership scholars such as Ansoff (1979); Chhokar, Brodbeck and House (2008); Dorfman (1996); Harley, Metcalf and Irwin (2014); Lichtenstien et al. (2006); Metclaf and Benn (2013); Scarborough (1998); Western (2008), and Yukl (2012) highlighted the failure of traditional leadership models to find solutions for complex leadership challenges that continuously occur in many of today’s markets.

As a result, scholars such as Barker (2001) and Metclaf and Benn (2013) urged future researchers to consider leadership as a process that examines complex relationships between diverse participants in a social system. They recommended that future researchers move their focus away from mere leader-member relationships to explore more diverse, complex relationships in an interconnected social system. Thus, this study has aimed to identify and explain what constitutes sustainability leadership of Sri Lankan managers by developing a cultural model based on the literature on diverse

9 aspects of sustainable development, corporate sustainability and leadership for sustainability. This cultural model will provide a holistic picture of excellent leadership with a concern for sustainability in complex environments such as Sri Lanka.

In conclusion, the above gaps in the literature and practice are expected to be filled by gathering managerial perspectives of sustainability leadership, and empirically validating a leadership model to explain diverse leadership behaviours important for achieving sustainability leadership in a complex market setting such as Sri Lanka.

The findings of this study will make unique contributions to management practices in relation to sustainability, and the training and development of human resources. For example, policymakers could use the recommendations to strengthen the legal framework for developing sustainability attitudes among managers. Policymakers could also bring the government and private sector together by identifying community needs relating to sustainability as potential CSR projects of the corporate sector.

Conceptual framework of the study The leadership literature suggests that long term orientation, stakeholder relationship, and employee engagement as important leadership excellence dimensions that ensure sustainability leadership, and so were incorporated in the conceptual framework as independent variables. Similarly, the literature also recognised change-oriented leadership and sustainable thinking of the leader are essential leadership dimensions for achieving sustainability leadership (Dunphy & Benn 2013). Hence, these two leadership dimensions were incorporated into the conceptual framework as two mediating variables. Based on this, a cultural model was designed to examine the influence of these leadership dimensions in achieving sustainability leadership. This enabled the study to answer the three main research questions.

Figure 1.2 below presents the basic conceptual framework of this study – see Chapter 7 for further detail on the development of this framework.

Figure 1.2 Basic conceptual framework of the study

Leaders’ 1. Commitment to organisational change (CHNG) and 2. Sustainable thinking (SUSTHINK)

Leadership excellence Sustainability leadership dimensions dimensions

1. Stakeholder 1. Excellent leadership in a management sense relationship (STK) a. Excellent leadership 2. Long-term orientation (EXL) (LONG) 2. Excellent leadership in a 3. Employee engagement sustainability sense a. Concern for social and (EMP) environmental sustainability (ENV)

b. Concern for financial performance of the organisation (FIN)

Methodology The literature on leadership suggests that managers’ behaviours are often influenced by their experience, knowledge and other context-specific environmental values such as cultural and religious. Hence, this study has also assumed that managerial perceptions of leadership behaviours are influenced by these environmental forces, which can influence them to create ‘cognitive schema’ in their mind. Thus, this study has aimed to identify the influence of diverse leadership behaviours on sustainability leadership by examining the unique Sri Lankan cultural, social, political and economic

11 aspects. Based on this objective, constructivism paradigm (Guba & Lincoln 1994; Healy & Perry 2000) was deemed the most suitable research paradigm for this study. After a comprehensive literature review, leadership constructs predicting sustainability leadership and the relationships between the independent, mediating and dependent variables were derived.

The concept of sustainability leadership has mostly been examined in qualitative research studies located in Western cultures or economically well-developed nations. Therefore, in this study, a deductive-quantitative approach supported by prior logical reasoning (Veal & Ticehurst 2005) founded on previous qualitative research was applied. Further, existing sustainability leadership models were explored and modified to suit the sustainability dimensions of social, political, economic and cultural contexts in Sri Lanka.

As stated above, this study has aimed to gather Sri Lankan managerial perceptions of sustainability leadership. Therefore, the population of this study consists of full-time managers across different demographic profiles in Sri Lanka. The study adheres to cognitive categorisation of leadership based on the recommendations of Crocker, Fiske and Taylor (1984); Cronshaw and Lord (1987); Lord (1985), and Lord, Foti and Phillips (1982). The study’s questionnaire was developed to gather managerial perceptions via a cross-sectional survey design (Cresswell 2009); and the quantitative data collected was used to test the hypotheses via statistical tests using exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modelling (SEM) techniques based on SPSS and AMOS software.

Developing the study This study adhered to Zikmund and Babin (2010) recommendations on developing a research study – Figure 1.3 below presents the process that was used.

Figure 1.3 Developmental process of this study

Review Identify the Develop the Design literature on relevant theoretical research sustainability leadership framework of questions and and constructs sustainability hypotheses leadership, leadership identifying gaps

Conduct data Develop the Contribute to Examine and analysis research previous discuss using SPSS instrument and knowledge, research collection of offering findings and AMOS data recommendat -ions and methodology future research opportunities

Structure of the thesis This study’s thesis consists of 11 chapters, and Figure 1.4 presents the structure and flow of this document.

Figure 1.4 Thesis structure

Part I: Chapter 1. Introduction

Introduction

Chapter 2. Evolution of organisational leadership theories Part II: Chapter 3. Evolution of the concept of Literature review sustainability

Chapter 4. Model development: Identifying the dependent variables

Chapter 5. Model development: Identifying the independent and mediating variables

Chapter 6. Model development: Context-specific influence

Part III: Chapter 7. Development of

Research methodology theoretical framework, research questions and hypotheses

Chapter 8. Research methodology and Part IV: design

Data collection and analysis Chapter 9. Analysis and results

Chapter 10. Discussion of results Part V: Chapter 11. Conclusions, limitations Discussion of results and 14 and recommendations conclusions

Chapter 1 explains the background of the thesis followed by the research problem and research questions. This chapter also briefly explains the significance of this study. The process of developing the study as well as the conceptual framework is discussed briefly. The chapter also focuses on identifying the contributions of the study, and concludes with an explanation of the structure of the thesis.

Chapter 2 is the first literature review chapter that aims to explore literature relating to the evolution of organisational leadership theories. Such literature has explored diverse leadership eras and future leadership theories of the neo-charismatic leadership paradigm. The chapter examined the importance of organisational leadership especially in a complex organisational setting. The chapter also identifies the gaps in the leadership literature and the scholarly interest in exploring positivistic leadership theories.

Chapter 3 is the second literature review chapter and discusses the evolution of the concept of sustainability. It identifies and explains diverse definitions of sustainability and sustainable development at the national and corporate levels. Early models of sustainability measurements are reviewed, and sustainability challenges at the national level as well as corporate level are identified. The importance of cultural values in explaining organisational leadership is also reviewed. Sustainability issues in developing countries are also examined, together with the responsibility at the corporate level for achieving sustainable development goals. The corporate trend to move from CSR to sustainability is also explained. The discussion continues with a comparison between sustainability leadership and other leadership styles. Finally, the skills and abilities that are impactful on sustainability leadership are examined.

Chapter 4 is the third chapter in the literature review section, which identifies and explains the dependent variables of the conceptual framework. To identify and develop the dependent variables, diverse sustainability leadership frameworks and models are discussed in depth. The multidimensionality of the sustainability construct is justified using existing models. The chapter concludes with an explanation of the most important leadership dimensions for measuring the dimensions of sustainability leadership. 15

Chapter 5 is the fourth chapter in the literature review section, which deals with the extant literature supporting the independent variables found in the conceptual framework. The literature states that leadership excellence dimensions relating to the leader’s concern for stakeholder relationship, long-term orientation and employee engagement are important aspects of sustainability leadership. Further, additional leadership dimensions – change-oriented leadership and sustainable thinking – are examined and identified as mediators.

Chapter 6 explains Sri Lankan organisations in the context of this study. The chapter elaborates on Sri Lanka’s economic, social and cultural development commitments that are important to achieve the UN’s Millennium Development Goals. The literature is also reviewed to identify the leadership behaviours unique to Sri Lankan managers – it assesses diverse cultural, social, political and economic values specific to Sri Lanka, to develop an accurate profile of managerial leadership in Sri Lanka.

Chapter 7 aims to summarise the literature explained in previous chapters 2 to 6 (Part II). The chapter discusses the study’s development process of the theoretical framework, research questions and the hypotheses used to identify managerial perceptions of sustainability leadership in Sri Lankan organisations. The independent and mediating variables discussed in Chapter 5 are further explained, based on their influence on the dependent variable of sustainability leadership.

Chapter 8 describes the research methodology used in this study. The research paradigm chosen for this study is explained, with reference to alternative research paradigms. Theoretical and practical explanations are also provided in relation to the chosen quantitative methodology. The chapter also explains the development of the survey instrument, and the process of measurement development, validity and reliability. It also deals with ethical issues relating to data collection, demographic characteristics and expert feedback of the survey, and procedures employed for the data analysis.

Chapter 9 describes the data analysis process of the study, where SPSS and AMOS 23 have been used. The EFA and CFA are presented and corresponding results explained.

The confirmed measurement model was examined via SEM to test the hypotheses developed in Chapter 7. The chapter also discusses descriptive statistics, and their validity and reliability.

Chapter 10 discusses the study’s findings, reflecting on the literature that was covered in Part I. The chapter revisits the theoretical framework of the study and briefly explains the background of the study and summarises the conceptual framework. Hypotheses based on the three research questions are discussed with the support of the literature discussed in chapters 2 to 6. Findings relating to the first research question – What are the leadership dimensions that influence sustainability leadership in the Sri Lankan organisational context? – are discussed; followed by findings from the second and third research questions– How does the leaders’ commitment to organisational change mediate the relationship between leadership excellence and sustainability leadership dimensions?, and How does the leader’s sustainable thinking mediate the relationship between leadership excellence and sustainability leadership dimensions?.

Chapter 11, which is the final chapter, draws conclusions of the study. It offers recommendations for practitioners and policymakers, and discusses the potential limitations of this study. In addition, future research directions are identified, and implications for theory and practice explained.

Chapter summary The UN MDGs proposed in 2000 and the recent Sustainable Development Summit held in September 2015 have attracted increased global attention to the concept of sustainability. The main objective of organisational sustainability is to ensure positive impacts on the society, environment and the economy. Therefore, in the journey to attain sustainable economic development, the responsibility of corporate managers is crucial.

This study selected Sri Lanka as its research subject due to the dearth of sustainability leadership literature on developing economies such as Sri Lanka’s. As a developing nation, the concept of sustainability has been identified as a crucial aspect to ensure economic development of Sri Lanka.

Previous literature has contended that even though sustainability issues and challenges are common across most countries, the best solutions to these problems are unique to each nation. Therefore, a culture- and context-specific approach is considered the most effective for measuring managers’ sustainability leadership. As a result, to understand what constitutes sustainability leadership in a Sri Lankan organisational context, a cultural model of Sri Lankan managers has been hypothesised in this study. The study also assumed that what managers in one nation think of sustainability may be different from their cohorts’ perceptions in another nation.

Deriving from this research background, this study developed three research questions. The first question has been used to identify important leadership excellence dimensions influencing sustainability leadership; the second and third to explore the mediation influence of organisational change and sustainable thinking on the relationship between leadership excellence and sustainability leadership. The relationships between these variables were tested in this study to identify what constitutes sustainability leadership among Sri Lankan managers.

This chapter has concluded with a brief description of the content flow across this thesis. The next chapter commences this study’s literature review (i.e. Part II), aiming to explore the evolution of leadership theories, from classical to contemporary, which helps to understand the importance of broadening leadership attention beyond an internal organisational environment to a much broader external environment.

PART II

LITERATURE REVIEW

CHAPTER 2. EVOLUTION OF ORGANISATIONAL LEADERSHIP THEORIES

Introduction The aim of this chapter is to examine the evolution of organisational leadership theories, which includes reviewing the leadership literature from diverse disciplines. As shown in Figure 2.1 below Section 2.2 explains the leader’s role in a complex organisational environment, while Section 2.3 discusses the evolution from classical to traditional leadership theories. Next is Section 2.4 which deals with leadership eras and Section 2.5 discusses the neo-charismatic leadership paradigm, which is important for examining the concept of leadership in contemporary management. As shown in Figure 2.1 below Section 2.6 then provides a brief summary of the chapter.

Figure 2.1 Composition of Chapter 2

2.1 Introduction

2.2 Importance of leadership in complex organisational environments

Chapter 2: 2.3 Evolution of organisational Evolution of leadership theory organisational leadership theories 2.4 Leadership eras

2.5 The development of neo- charismatic leadership theories

2.6 Chapter summary

Importance of leadership in complex organisational environments The ability to remain competitive in a complex business environment has become a challenging task for most organisational leaders, as they now have to not only prioritise economic performance but also balance environmental and social impacts, which demand extraordinary abilities and skills from these leaders (Metclaf & Benn 2013). However, inadequate applicability of traditional leadership models have indicated the need to develop new leadership models to solve complex organisational challenges (Ansoff 1979; Chhokar, Brodbeck & House 2008; Dorfman 1996; Harley, Metcalf & Irwin 2014; Lichtenstien et al. 2006; Scarborough 1998; Western 2008; Yukl 2012). Accordingly, some scholars have introduced leadership models aimed at addressing questions such as: What constitutes good leadership?; and How can ideal leadership be achieved within a complex and uncertain organisational environment? (Van Seters & Field 1990; Western 2008; Yukl & Van Fleet 1990).

Evolution of organisational leadership theory The concept of organisational leadership has become the most sought-after research topic in leading management journals (Western 2008; Yukl 2010) since its evolution from the ancient Egyptian times (Bass 1990). Though leadership is a universal concept, leadership as a prevalent topic was studied and reported more in the Western world, particularly among Europeans where leadership was first defined as the act of holding a position or power (Astin & Astin 2000), and where ways to acquire and maintain such leadership positions have regularly been explored (Wren 1995).

Despite this common focus, the concept of leadership has been defined in various ways by different scholars such as Deborah (2012b); Northouse (2007); Western (2008); Yukl and Van Fleet (1990), and Yukl (1994). Pye (2005) revealed more than 35,000 definitions of leadership in the corresponding literature. Also identifying the diversity of leadership definitions, Stogdill (1974) concluded that ‘there are almost as many definitions of leadership as there are persons who have attempted to define the concept’ (p. 259). For instance, some scholars have used terms such as ‘traits’, ‘behaviours’, ‘influence’, ‘interaction patterns’, ‘role relationships’, and ‘occupation of administrative positions’ to define leadership (Yukl 2010). Based on an in-depth understanding amidst the diversity of leadership definitions, the next paragraph aims to summarise these diverse perspectives of leadership.

Leadership definitions began by researchers identifying leadership as a management tool to influence and direct subordinates to achieve organisational goals. Hemphill and Coons (1957) defined leadership as ‘the behaviour of an individual directing the activities of a group toward a shared goal’ (p. 7). A similar leadership definition was advanced by Katz and Kahn (1978): ‘the influential increment over and above mechanical compliance with the routine directives of the organisation’ (p. 528). House and Baetz (1979) defined leadership as those behaviours of the group members or the formally appointed leader that are perceived by subordinates as acceptable attempts to influence their behaviours; while Roach and Behling (1984) referred to it as ‘the process of influencing the activities of an organised group toward goal achievement’ (p. 46). In addition, House et al. (2004) defined leadership as ‘the ability of an individual to influence, motivate, and enable others to contribute towards the effectiveness and success of the organisations of which they are members’ (p. 15).

Researchers also recognised that leadership could not be defined as a solo-effort and that there was something more in the formula of effective leadership, which was identified as the collective efforts of organisational members toward achieving shared goals (Komives & Wagner 2012; Senge 1990). For example, Senge (1990) explained leadership as the collective capacity to create useful things. Some other scholars consequently identified leadership as a process between individuals and groups to achieve organisational objectives over time, rather than as a one-time exercise of power and influence (Deborah 2012b). The process approach to leadership examines how a manager responds to others and events rather than specific traits and characteristics, as described in the traits approach (Senge 1990; Yukl 1998).

Yukl (2010) defined leadership from a similar perspective: ‘the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives’ (p. 8). In addition, Burns (1978) described leadership as a process: ‘Leadership is exercised when persons mobilize institutional, political, psychological, and other resources so as to arouse, engage, and satisfy the motives of followers’ (p. 18). Northouse (2007) defined a similar perspective on leadership: ‘a process whereby an individual influences a group of individuals to achieve a common goal’ (p. 3).

Such leadership requires at least one other person to use various forms of actions and behaviours such as guiding, structuring and facilitating activities, and managing relationships to proactively interact with other organisational members (Yukl 2010). A similar perspective was identified by Bass (1990) who believed that leadership needs interaction between two or more people within the organisation, which often involves the structuring or restructuring of the context which is most suitable to the perceptions and expectations of the organisational members. Summarising the main definitions of leadership, Nahavandi (2009) proposed that leadership consists of three key elements: 1) a group phenomenon; 2) goal-directed; and 3) assuming a hierarchy in the group.

Yukl (2010) proposed that leadership theories can be categorised into three criteria: 1) characteristics of the leader (e.g. leader’s traits, confidence and optimism, skills and expertise, behaviours, and attributions towards followers); 2) characteristics of the follower (e.g. traits of the follower, trust in the leader, skills and expertise, and satisfaction with job and leader); and 3) characteristics of the situation (e.g. type of organisational unit, size of the organisation, organisational culture and national cultural values).

Yet some of the sustainability leadership literature suggests that traditional leadership theories are inappropriate for resolving complex challenges associated with organisational sustainability, other researchers such as Torres and Reeves (2011) have instead described transactional, transformational, ethical and responsible leadership styles as relevant for addressing sustainability challenges and for remaining competitive in the global markets. It is therefore worth exploring major leadership theories such as charismatic, transformational, transformative, ethical, organic and servant leadership to identify diverse leadership characteristics that may be required to resolve uncertain and complex problems surrounding organisational sustainability. This approach of exploring and integrating different approaches toward organisational leadership has also been recommended by scholars such as Van Seters and Field (1990) and Western (2008). Based on this objective, the section below explores the evolution of diverse leadership theories and models across previous studies on organisational leadership.

Leadership eras In the industrial era during the 18th century, leadership was generally hierarchical, positional, directive and one-way (Rost 1991). At the beginning of the 19th century, many scholars started to believe that leaders were born with particular traits (such as higher intelligence levels) that influence them to become leaders (Stogdill 1948). During this period, leadership effectiveness was often measured by the length of time leadership positions were held (Astin & Astin 2000) or the highest or best output (Komives & Wagner 2012). However, after the industrial revolution, leadership effectiveness became more popular, and scholars began to explore how leaders collaborated with others to get their work done (Komives & Wagner 2012).

Due to the limitations and criticisms of the traits approach, many leadership scholars started to introduce new leadership models in post-industrial revolution period (e.g. servant, ethical and adaptable leadership) to study the diverse leadership characteristics often needed to adapt to complex challenges occurring in the organisational environment (Astin & Astin 2000; Northouse 2007; Rost 1991; Western 2008). These post-industrial revolution leadership theories have redefined leadership from a concept based on position or role to a concept that is based on inspiring and mobilising others to achieve purposeful change (Heifetz 1994). Most of these new leadership models have prioritised enabling change as an essential characteristic of leadership (Komives & Wagner 2012).

Despite these advances, leadership challenges had become even more critical and complex by the end of the 20th century, which highlighted the inadequacy and limitations associated with existing leadership models to address diverse and complex issues arising in the newer, more challenging global environment (Metclaf & Benn 2013). A new form of positive leadership models (Cameron 2008) are therefore emerging in the 21st century (e.g. ethical, authentic and ecocentric leadership) which indicate that contemporary leaders must display range of certain normative characteristics, such as ethics, collaboration, sharing power, process orientation, networking, multidimensional, innovative, adaptable, and multiple leadership styles and roles (Heifetz 1994; Manolis et al. 2009; Rost 1991; Senge 1990).

This evolution of leadership has involved a shift of leadership theories from the traits era to more positivistic and contemporary leadership models concerned with distributive leadership for the betterment of society (Alban-Metcalfe & Alimo- Metcalfe 2013). From this stance, it is worth further exploring the evolution of the main leadership theories. Thus, the following subsections summarise the main leadership theories, their limitations and how emerging leadership models have been introduced to solve complex problems in the social systems. This is based on a combination of leadership theory classifications introduced by Nahavandi (2009); Van Seters and Field (1990), and Western (2008) (see Table 2.1 below).

Table 2.1 Comparison of leadership theories

10 leadership eras 3 leadership 5 main stages of Leadership era introduced by eras leadership eras introduced by Van Seters and Field introduced by by Alban- Western (2008) (1990) Nahavandi Metcalfe and (2009) Alimo-Metcalfe (2009) Personality era Traits era Traits or grate man 20th century to Influence era theories in 1930s post-world war II (stage 1) industrial Behavioural era Behavioural Behavioural revolution where era theories in 1950s workers (stage 2) were considered Situational era Situational and commodities that Contingent era Contingency contingency brought their era theories (stage 3) unique identities Transactional era 1970s and early to the organisation Anti-leadership era 1980s new Culture era paradigm of Transformational era leadership that resulted in leadership models of distant and heroic leadership Emerging era Nearby, post- heroic transformational or engaging leadership (stage 5)

2.4.1 Personality era Literature on the traits approach dates back to the late 1800s and to the early part of the 20th century, where it is perceived that leaders have special traits or characteristics that are either inborn or learnt, or both (Northouse 2007). In some of the early relevant scholarly works such as ‘Heroes and hero worship and the heroic in history’ (Thomas 1907), ‘Great men and their environment’ (James 1880), and ‘The role of heredity’ (Galton 1869), it is evidenced that scholars defined leadership as personal and innate qualities.

However, there is much criticism in relation to the traits approach, including that it fails to generate a proper definition of leadership (Nahavandi 2009; Northouse 2007; Van Seters & Field 1990). Some also believe that it does not adequately explain the relationship between the leader’s traits and organisational performance outcomes, such as productivity, profitability and group performance (Northouse 2007). The traits approach has more recently been recognised as inappropriate for contemporary managers (Western 2008), especially based on Stogdill (1948) earlier declaration that there are no universally accepted traits that differentiate leaders from non-leaders under different contexts.

Although it continues to be commonly acknowledge that traits are important for achieving excellent leadership, later studies have shown that personal characteristics are diverse and dependent on the social context that leaders have to work within (Ackerson 1942; Bird 1950; Jenkins 1947; Newsletter, Feldstein & Newcomb 1938; Stogdill 1948). Therefore, many scholars now tend to reject the traits approach and have shifted towards the leader’s influential power on their followers to achieve commonly shared goals (i.e. influence era).

2.4.2 Influence era At the commencement of the influence era, the relationship between leader and follower was identified, and it was believed that it was not a characteristic that individuals innately possess (Van Seters & Field 1990). The influence approach generally relates to how leaders exert influence via coercive, dictatorial, authoritarian and controlling characteristics (French 1956; French & Raven 1959; Schenk 1928). The main objective of this ‘controller discourse’ approach is to explore ways to control

26 organisational resources to maximise efficiency (Western 2008). When the influence era was at its peak, workers were deemed as commodities, and individuals were thought to bring their own identities to the organisation. However, shifting changes in the social and business environment have meant that this top-down exertion of leadership through power is now often perceived as inappropriate to a more contemporary business context (Van Seters & Field 1990).

2.4.3 Behavioural era The behavioural approach identifies leadership as an act or behaviour to bring the necessary changes into organisations (Northouse 2007; Van Seters & Field 1990). Democratic, autocratic and laissez-faire leadership (Lewin & Lippit 1938; Lewin, Lippit & White 1939) are a few initial characteristics that were identifies as part of the behavioural approach. Fleishman (1953); Halpin and Winer (1957), and Hemphill and Coons (1957), all developed characteristics lists that identified the most important leadership behaviours. Behavioural leadership theories such as Theory X and Y (McGregor 1960), Four-Factor Theory (Bowers & Seashore 1966), Action Theory of Leadership (Argyris 1976), Managerial Grid Model (Blake & Mouton 1964), Ohio State Studies (Fleishman & Harris 1955) and Michigan State Studies (Likert 1961) were also introduced during this period.

The two primary leadership behaviours identified as influencing leadership performance are task-related (initiating structure) and relationship-related (consideration) behaviours (Fleishman 1953), which are considered independent measures of leadership effectiveness (DeRue et al. 2011; Judge, Piccolo & Hies 2004). The Path Goal Theory (House 1971), Leadership Substitute Theory (Kerr & Jermier 1978), Situational Leadership Theory (Hersey & Blanchard 1977) and Managerial Grid Model (Blake & Mouton 1964) are some of those based on this categorisation of organisational leadership theories.

Despite the research activity that surrounds the behavioural era, the inconsistency of taxonomies of leadership behaviours have been identified as the main limitations of the behavioural approach (Bass 2008; Yukl 2012). For instance behavioural studies such as the Ohio State Studies did not attempt to identify the relationship between leadership behaviours and leadership effectiveness (Nahavandi 2009; Yukl 2012).

However, some clear advantages including that behaviours can be easily observed, more precisely and accurately measured, easily taught, and developed at any stage have meant that the behavioural approach is still commonly perceived as superior to the traits approach in relation to leadership (Nahavandi 2009).

2.4.4 Situational era At the onset of the situational era, researchers began to explore situational factors such as the type of task, social status of the leader and subordinate, and the nature of the external environment influencing leadership (Bass 2008). These situational factors were considered important determinants of effective leadership and for deciding on which traits, skills or behaviour are ideal for each situation (Van Seters & Field 1990). Research in the situational era continued to focus on environmental variables that influence leadership, and also expanded into the sociotechnical period where scholars began to combine environment and social parameters (Van Seters & Field 1990).

2.4.5 Contingent era As part of the contingent era, it has been argued that leadership does not arise from any of the previously defined leadership theories, but has rather emerged from a combination of factors such as traits, behaviours, influence and situation (Nahavandi 2009; Van Seters & Field 1990). As a result, Path Goal Theory (House 1971), Normative Theory and Contingency Theory (Fiedler 1967) were developed to help diagnose the situation that the leader has to work within. Among these theories, Normative Theory has captured the most attention because it is based on the hypothesis that effective leadership can be achieved by changing leadership behaviours to best suit the situation the leaders work within (Fiedler 1967). In contrast, it has been contended that Contingency Theory fails to explain the nature of leadership and its interaction with the situation (Van Seters & Field 1990).

2.4.6 Transactional era The transactional era is largely based on the perception of leadership as not only depending on the leader’s behaviours or situation, but also on the role of differentiation and social interaction between the leader and subordinates (Van Seters & Field 1990). In this era, the transaction between the leader and subordinates has been explored, and it has been recognised that leadership will only arise when the group of subordinates acknowledge their leader (Bass 1990). It has been put forward that transactional

28 leadership consists of two sub-dimensions: 1) contingent reward; and 2) management- by-exception (Avolio, Bass & Jung 1999). The Vertical Dyad Linkage theory, Leader- Member Exchange Theory, Reciprocal influence approach and Emergent leadership are several of the leadership theories that have emerged from this era.

2.4.7 Anti-leadership era The anti-leadership era represents when researchers began to conceive of leadership as a concept that lies in the mind of the observer. Based on this, Mitchell (1979) believed that leadership is only a perceptual phenomenon in the mind of the observer. The Ambiguity Leadership Theory developed by Pfeffer (1977) as part of this era refers to leaders as ‘symbols’, which suggests a limited applicability of leadership performance in the organisation.

2.4.8 Cultural era The cultural era rejected earlier concepts in relation to leadership and put forward that organisational culture exerts the main influence on leadership. During this period, the focus of leadership shifted from concentrating on the quantity of work to the quality of work (Van Seters & Field 1990). Most cultural era theories are an extension of substitute theories which argue that a strong organisational culture will enable subordinates to lead themselves (Van Seters & Field 1990). Based on this, leadership will only be required if the organisational culture needs to be changed at any time (Schein 2010).

2.4.9 Transformational era The concept of transformational leadership was first defined by Downton (1973), but popularised when Burns (1998) introduced the two concepts of transformational and transactional leadership. The inspiring work of Burns (1978) subsequently helped Bass (1985) to develop the Transformational Leadership Theory. As part of this theory, Bass (1990) emphasised that transformational leadership generally occurs ‘when leaders broaden and elevate the interest of their employees, when they generate awareness and acceptance of the purposes and mission of the group, and when they stir their employees to look beyond their own self-interests for the good of the group’ (pg. 21). Therefore, transformational leadership not only aims to achieve organisational goals, but also to transform followers to become better self-actualised individuals (Burns 1998).

Avolio, Bass and Jung (1999) contended that transformational leadership has three sub-dimensions: 1) charisma; 2) intellectual stimulation; and 3) individualised consideration. Transformational leadership mostly fits better with today’s workforce needs in relation to motivation, development and inspiration to confront challenges in more uncertain environments (Northouse 2007).

2.4.10 Charisma period Charisma has been identified as an essential and necessary component of transformational leadership (Avolio & Bass 1988). Charismatic leadership defines the relationship between the leader and their followers, where charisma stems from the leader’s behaviours that evoke passionate reactions and attributions among their followers (Waldman & Javidan 2009). Weber (1947) believed that such charisma was a special leadership attribute that gave a person ‘superhuman’ or exceptional leadership powers.

The relationship between the leader and the subordinate is the foundation that connects the relationship between leaders and subordinates in the charismatic leadership concept (Hayibor et al. 2011). In line with this, Bass and Avolio (1993a) believed that charismatic leaders provide ‘a role model for ethical conduct which builds identification with the leader and his or her articulated vision’ (p. 29).

The similarities and differences between charismatic and transformational leadership are still evolving, and vagueness about the two concepts can make comparisons difficult (Yukl 2010). Yukl (1999a) has argued that charismatic and transformational leadership characteristics cannot occur at the same time. Avolio and Bass (1988) also previously contended that a leader can be charismatic but not transformational. Despite these opinions, Bryman (1993); Conger and Kanungo (1998), and Conger and Kanungo (1988) were all able to differentiate between transformational and charismatic leadership in their studies. In addition, Wua and Wang (2012) and Yukl (1999a) observed that transformational leaders often empower their followers and treat them as partners in achieving organisational objectives, while charismatic leaders depend on the followers’ trust placed on the leader’s unique expertise.

Despite these more positive associations, charisma has also been challenged by numerous scholars, mostly due to corporate failures which have been caused by the

30 unethical practices of leaders (Alban-Metcalfe & Alimo-Metcalfe 2007; Alimo- Metcalfe & Alban-Metcalfe 2008; Collins 2001; Mintzberg 1999). This ‘dark side’ of charisma (Hogan & Hogan 2001) suggests that organisations need to not only look for positive leadership skills, but also ensure the absence of darker side traits such as unethical behaviours, harassments, conflicts, theft, and decreased productivity among potential leaders.

The development of neo-charismatic leadership theories The neo-charismatic paradigm relates to the need for leadership theories that best respond to the shifting needs and challenges of organisations in a highly uncertain, complex, globalised and interconnected social network (Alban-Metcalfe & Alimo- Metcalfe 2009; Alban-Metcalfe & Alimo-Metcalfe 2013). It is commonly recognised that contemporary leaders are continuously challenged by complex business problems such as climate change, limitation of natural resources, environment responsibility, financial and economic crises, technological revolution, growing population, extensive political power, CSR, multicultural contexts, protection of indigenous rights, and needs for change and innovation (Avery & Bergsteiner 2011a; Metclaf & Benn 2013; Van Seters & Field 1990; Western 2008). Such business challenges have transformed leadership research studies from the traditional focus on the individual/personality level to an organisational/group level, with some further expanding into leadership models concerned with a broader external organisational environment (Katz & Kahn 1978; Van Seters & Field 1990; Western 2008; Yukl 2010).

The shift of focus from the internal to external organisational environment suggests the need for a broader stakeholder perspective in leadership – one that requires leaders to act responsibly and ethically (Kociatkiewicz & Kostera 2012; Mullins 2006). As most traditional leadership models are unable to provide viable solutions for complex business issues in today’s environment, some scholars have introduced new leadership models such as ethical and social responsible, stakeholder, transformative, environmental, and sustainability leadership to remain organisational competitiveness in a chaotic market (Avery & Bergsteiner 2011a; Dunphy, Griffiths & Benn 2003; Metclaf & Benn 2013; Todnem & Burnes 2012 ). These newer models continuously indicate a need for extraordinary leadership abilities and skills to solve complex

31 business problems while also being sustainable (Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003; Metclaf & Benn 2013).

Overcoming public distrust has also become an organisational priority, suggesting that contemporary leaders need to be more credible and responsible than before (Covey 2004; Friedman 2006, 2009; Hosmer 2007; Paine 2003; Todnem & Burnes 2012 ). As a result, controlling the public image of an organisation engaging in stakeholder interests has been identified as important to remain sustainable for the long term (Todnem & Burnes 2012 ; Van Seters & Field 1990; Western 2008). Hence, an ethical and responsible leadership approach have been identified as essential leadership qualities for finding solutions to socioenvironmental complexities (Bush 2010; Todnem & Burnes 2012 ). Understanding the importance of the moral aspect of leadership to achieve organisational sustainability, many scholars have introduced new leadership models that also address the complexities arising from the socioenvironment.

Based on the complexities surrounding sustainability leadership, the subsections below examine the contemporary leadership theories and models that explain complex leadership challenges surrounding social and environmental problems.

2.5.1 Ethical leadership The ethical and moral perspective of leadership has attracted much attention from contemporary researchers and practitioners that are studying organisational leadership (Bush 2010; Lawton & Páez 2014). Brown, Trevin˜o and Harrison (2005) confirmed that ethical leadership is concerned with ‘the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making’ (p. 120). The main concept of ethical leadership centres around the ethicality of a leader’s personal conduct when decision-making by engaging in various relationships with others, such as honesty, integrity, setting ethical standards and communications (Lawton & Páez 2014).

2.5.2 Spiritual leadership It has been argued that spiritual leadership is essential for transforming organisations into learning organisations (Louis & Melissa 2013). The Spiritual Leadership

Institute’s website states that spiritual leadership ‘involves intrinsically motivating and inspiring workers through hope/faith in a vision of service to key stakeholders and a corporate culture based on the values of altruistic love to produce a highly motivated, committed, and productive workforce’ (Spiritual Leadership Institute 2015). Spiritual organisational leaders often strive to change the inner-self of the group members’ values, beliefs and attitudes, and transform organisations into better-performing entities (Louis & Melissa 2013).

2.5.3 Responsible leadership Responsible leaders are perceived as those that find responsible solutions to complex, ambiguous and uncertain organisational challenges by incorporating diverse stakeholder interests, needs and demands into managerial decisions (Greenleaf 1991). The uncertain, unexpected and complex issues often require responsible leaders to link transactional and charismatic leadership qualities (Doh & Stumph 2005). Responsible leadership was defined by Pless (2007) as ‘maintaining strong social and moral relationships between leaders and followers based on a sense of justice, a sense of recognition, a sense of care, and a sense of accountability for a wide range of economic, ecological, social, political and human responsibilities, to achieve long- term success’ (p.451). The scholarly works of Schraa-Liu and Trompenaars (2006) and Waldman et al. (2001) have highlighted integrity, teamwork, respect and professionalism as essential characteristics of a responsible leader. Responsible leadership is therefore centred around leadership skills and abilities that arise from the inner-self of the leader, consisting of self-discipline and self-mastery (Pless 2007).

The literature often suggests that organisational sustainability is clearly linked with responsible leadership, because sustainability leadership and responsible leadership both prioritise issues such as corporate governance practices, ethical practices and economic objectives while responding via justice-based relationships towards non- core stakeholders of the organisation (Cameron 2011).

2.5.4 Servant leadership The concept of servant leadership was first introduced by Greenleaf in the 1970s (Greenleaf 1991). Since then, Ludema and Cox (2007) have contended that servant leaders are those that ‘provide leadership that focuses on the good of those who are being led and those whom the organisation serves’ (p. 875). Servant leadership 33 generally emerges when leaders identify the needs, desires, interests and welfare of followers above their own self-interest (Salem 2012). In a chaotic situation, servant leaders often behave with personal integrity to lead their followers to deal with obstacles while gaining the trust, respect and commitment of followers (Salem 2012).

2.5.5 Adaptive leadership Complexities in the organisational environment, especially at a time of social crisis or in instances where social influence is high, will require leaders and followers to enable change to remain competitive in their market (Heifetz, Grashow & Marty 2009; Torres & Reeves 2011). In theory, adaptive leaders enable a dynamic network of ‘actors’ to achieve common goals, even in an environment of uncertainty (Torres & Reeves 2011).

Leadership characteristics such as navigating the environment, leading with empathy, learning through self-correction, and creating win-win situations has been identified as four dimensions that distinguish adaptive leadership from traditional leadership models (Calarco & Gurvis 2007). In contrast, fear, stress, resentment and resistance are common barriers of ability to change (Cappelli et al. 2010). Adaptive leadership has a close relationship with sustainability leadership, because both of these leadership theories require leaders to master innovation and be adaptive to change as key leadership abilities that enable them to succeed particularly in an uncertain globalised market.

2.5.6 Authentic leadership Avolio and Gardner (2005) defined authentic leaders as ‘those who are deeply aware of how they think and behave and are perceived by others as being aware of their own and others’ values/moral perspectives, knowledge, and strengths; aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient and of high moral character’ (p. 321). Authentic leadership relates to the importance of the leader’s interpersonal-self as trustworthy and able to develop a leader-follower relationship that is based on trust and integrity (Avolio & Gardner 2005; Gardner, Avolio & Walumbwa 2005).

The leader’s self-awareness and authentic self-regulation have commonly been identified as the main characteristics of authentic leadership (Chan 2005; Gardner et

34 al. 2005; Gardner, Avolio & Walumbwa 2005). However, self-awareness about what is right and wrong is not enough to create authentic leadership; while self-regulation among leaders and followers to achieve organisational goals is necessary to establish authentic leadership (Luthans & Avolio 2003).

Cooper, Scandura and Schriesheim (2005) contended that any scholars that want to advance the authentic leadership theory via conceptual and empirical work need to first give careful consideration to four critical issues: ‘1) defining and measuring the construct; 2) determining the discriminant validity of the construct; 3) identifying relevant construct outcomes; and 4) ascertaining whether authentic leadership can be caught’ (p. 477).

2.5.7 Environmental leadership Deborah (2012b) identified environmental leadership as a process by which the earth’s inhabitants apply interpersonal influence and engage in collective action to protect the planet’s natural resources and its inhabitants from further harm. However, the theory of environmental leadership is still in its early stages and needs to be complemented with experience, observation and individual thinking in relation to the environment (Gordon & Berry 1993). Historically, environmental leadership has focused on many areas including natural resource conservation, reduction of environmental hazards to public health, management of natural resources and of landscape, ecological and cultural preservation, and reduction of pollution (Andrews 2012).

2.5.8 Conservation science leadership Conservation science leadership aims to integrate organisational leadership with conservation biology by suggesting adaptive leadership skills to improve the effectiveness of conservation (Manolis et al. 2009). Complex issues surrounding the protection of humans and biodiversity has become an important aspect of contemporary organisational management for future sustainability (Manolis et al. 2009). Therefore, conservation biology has become an important aspect of contemporary organisational leadership tasks in becoming ethical and socially responsible stakeholders in society. Effective leadership skills that integrate conservation science into various business aspects such as policy, management and society at large can help to create a sustainable future.

2.5.9 Ecocentric leadership Increasing industrialisation has resulted in corporations rethinking the limitations of natural resources, which has resulted in many placing ecological values at the centre of management decision-making (Shrivastava 1994a). Most ecocentric leaders prefer to gain a competitive advantage by introducing green products, green production systems and marketing, recycling and renewing, environmental efficiency, green technology, and waste management into every aspect of their organisational structures and business functions (Shrivastava 1994a). Most of these ecological leaders believe that the followers’ commitment is essential for maintaining their organisation’s ecological perspective (Shrivastava 1994a). Common attributes of ecocentric leaders have been identified as including empowerment, eco-identity, economic balance, and thinking globally and acting globally (Shrivastava 1994a).

2.5.10 Regenerative leadership Hardman (2010, 2011) believed that to achieve environmental and social sustainability, organisational leaders have to acknowledge the need for a radical organisational change. Hardman (2011) explained that regenerative leadership ‘is applied by formal and informal leaders at all levels of organisations who engage groups of people in the development of higher levels of awareness that translate into behaviours that seek not merely to preserve existing natural and social resources while ensuring a healthy bottom line but to restore and create new resources that have become depleted through overuse or misuse’ (p.4).

2.5.11 Creative leadership Creative leadership generally arises during a complex state of synchronicity that requires leaders to ‘set the stage’ – that is, to combine unrelated events to achieve stronger results (Salem 2012). Creative leadership theory believes that society is built up of interconnected relationships and is organised around these relationships (Salem 2012).

Creative leadership is deeply rooted in beliefs of interconnectedness and interdependence similar to the servant leadership theory (Gardner, Avolio & Walumbwa 2005). Creating positive connectedness within the followers and the community at large is therefore an essential component to achieve sustainability.

Therefore, a leader’s concern for creativity will lead to new ways of thinking – innovations and alternatives to solve problems surrounded by chaos and uncertainty, to ensure sustainable performance in organisations (Dunphy, Griffiths & Benn 2003).

2.5.12 Global leadership Conducting business in a global market context generally means that leaders need to interact with a network of culturally diverse people with complex organisational structures that demand new leadership skills (Nirenberg 2002). Prior to the 21st century, global leadership was a concept that commonly related to the leadership of diverse employees and being sensitive to culturally different customers (Nirenberg 2002). Yet most of today’s leaders still lack the global leadership skills necessary to engage with people from diverse backgrounds (Gregersen, Morrison & Black 1998).

An in-depth knowledge of diverse cultures and beliefs will help to achieve effective global leadership (Nirenberg 2002). Characteristics such as high intelligence, facilitating open communications, exchanging ideas about the necessary changes that will enable solutions for diversity management, sacrificing personal interests and limitations, and being ready to implement workable changes have been put forward as essential for achieving effective global leadership (Nirenberg 2002).

2.5.13 Dialogic leadership Dialogic leaders are concerned with communication ideas such as generating a strong dialogue, creating a strong environment that reduces fragmentation, and bringing out the collective efforts and wisdom of various people (Nielsen 1990). Dialogic leadership aims to improved autonomy, collaboration and commitment by creating healthy interpersonal relationship between multiple parties in an organisation such as peers, subordinates and superiors (Nielsen 1990). In such instances, employee conflicts, misunderstandings and frustrations are minimised and a quality working atmosphere is created.

Dialogic leadership is different from autocratic and coercive leadership, but similar to ethical and Theory Y leadership which believes that people have an inherent desire to do the right thing (Nielsen 1990).

2.5.14 Social change model of leadership The objective of the social change model of leadership is to influence a positive social change via actions that seek to improve the human condition or care for the environment (Komives & Wagner 2012). This leadership model is based on the belief that socially responsible leadership with change-oriented attitudes is essential to achieving a better future for everyone. As part of this theory, contemporary leaders need to get involved with diverse stakeholders, make a connection with them and learn to give leadership to create positive social change (Komives & Wagner 2012) .

Chapter summary The chapter’s main objective was to explain the evolution of leadership theories and diverse leadership concepts surrounding sustainability leadership. The chapter has reviewed and summarised the evolution of the two main leadership theories: 1) classical leadership; and 2) neo-charismatic leadership. The discussion in this chapter confirms that most of the newly developed leadership models such as Environmental leadership, Ecocentric leadership and Regenerative leadership recognise the importance of shifting the attention of leaders beyond their internal organisation where leader-subordinate relations are considered more important than external organisational matters. Thus, a new leadership paradigm has emerged which prioritises the leader’s role in ensuring greater benefits to society and the environment, while still including the traditional managerial preference for maximising the economic wellbeing of the organisation.

CHAPTER 3. EVOLUTION OF THE CONCEPT OF SUSTAINABILITY

Introduction Here in Chapter 3, the concepts of leadership and the evolution of sustainability leadership in the literature are discussed. The main objective of this chapter is to review the sustainability at an organisational level and sustainability leadership among managers. The concept of sustainability has attracted a great deal of interest in recent years. International and national political leadership dialogues relating to sustainable economic development goals have confirmed the need for sustainable action at the organisational level.

Based on this chapter’s main objective, Section 3.2 aims to explain the shift of leadership theories from a classical perspective to a much broader holistic leadership perspective. Section 3.3 explains diverse concepts, frameworks and models relevant to the concept of sustainability. Section 3.4 then explores diverse concepts of sustainability at the international, national and organisational level. Section 3.5 reviews the literature on corporate level sustainability, while Section 3.6 explored the practice of sustainability in public, private, multinational corporation (MNC) and small-to-medium enterprise (SME) sectors. Section 3.7 next reveals some of the main obstacles preventing corporate sustainability initiatives, while Section 3.8 explores the role of culture in relation to sustainability concepts. Section 3.9 then reviews the most commonly identified sustainability challenges in the developing world. Next, Section 3.10 confirms the importance of leadership in achieving corporate sustainability, while Section 3.11 explains the concept of sustainability leadership in organisations. As a conclusion, Section 3.12 provides a summary of the chapter.

Figure 3.1 Composition of Chapter 3

3.1 Introduction

3.2 Shift of leadership theories from leader-member relationship to a holistic sustainability perspective

3.3 Concept of sustainability Chapter 3:

Evolution of the 3.4 Sustainability at the national and at the concept of organisational levels sustainability

3.5 Corporate sustainability

3.6 Corporate sustainability in practice

3.7 Challenges for corporate sustainability initiatives

3.8 Sustainability and cultural values

3.9 Sustainability challenges for organisations in the developing world

3.10 Strategic importance of leadership in achieving organisational sustainability

3.11 Significance of sustainability leadership in corporate sustainability

3.12 Chapter summary

Shift in leadership theories from leader-member relationship to a holistic sustainable perspective To ensure a firm’s long-term competitiveness in today’s market, organisational leaders need to transform their organisation so it can adapt to environmental challenges. This is not a relatively new phenomenon, as a firm’s long-term competitiveness was recommended as a priority by earlier management scholars such as Ansoff (1979). Ansoff (1979) suggested that leaders should transform their organisations to match ‘new customer attitudes, new dimensions of social control, and the importance of organisations regularly questioning their role in society’ (p. 36).

This organisational transformation requires leaders to collaborate with diverse stakeholders and incorporate stakeholder feedback and interests into their business decision making (Ansoff 1979; Freeman 1984; Harley, Metcalf & Irwin 2014; Mintzberg 1989). This suggests the inapplicability of traditional leadership models to answer diverse questions that contemporary managers often have to face. For example, recent scholars such as Metclaf and Benn (2013) have adopted a much broader perspective towards leadership, where it is perceived as a function of engaging with diverse participants in the social system. Relevant new leadership models have confirmed that contemporary leadership is a more diverse, robust, multifaceted and multifocused concept than ever before (Gardner et al. 2010; Metclaf & Benn 2013; Western 2008; Yukl 2010). This has sparked a paradigm shift in the leadership literature, at least in a theoretical sense, where research emphasis has shifted from exploring leader-member relations to a much broader perspective of integrating the whole organisational environment in leadership decision-making (Western 2008).

As a result of this paradigm shift, leadership literature has expanded into other well- established management research streams such as CSR (Blowfield 2008; D’Amato, Henderson & Florence 2009; Du et al. 2012; Lenssen et al. 2007; Mitchell 2001; Samy, Odemilin & Bamption 2010; Van de Loo 2006); complexity leadership theory (Lichtenstien et al. 2006); corporate governance (Doh & Stumph 2005); environmental management (Hanson & Middleton 2000; Jackson et al. 2012); and positive leadership (Cameron 2008). Such new leadership theories highlight ethical and responsible leadership towards society needs, and leadership that goes beyond the internal organisational environment to a much broader perspective. For example, Metclaf and

Benn (2013) proposed that this new leadership paradigm will help leaders answer complex business problems such as how to sustain the competitiveness of the business in a complex business system.

Although much has been done to provide ideal leadership solutions to today’s more complex business challenges, there is still a ‘leadership vacuum’ in the literature, as many stakeholders in general have voiced dissatisfaction with the selfish behaviours of many contemporary leaders and believe that ‘leadership has failed us’ (Wheatley 2007). To address this gap, leadership scholars have started to explore effective leadership skills, attitudes and behaviours that can help to achieve satisfaction of stakeholders that ensure organisational sustainability. To achieve organisational sustainability in a chaotic and complex environment, leadership with diverse skills is necessary (Metclaf & Benn 2013). Relevant skills include interacting with other stakeholders, predicting outcomes through complexity, thinking through complex problems, engaging groups through dynamic, adaptive organisational change, and possessing emotional intelligence to adaptively engage in problem-solving through association with one’s own emotions (Harley, Metcalf & Irwin 2014; Metclaf & Benn 2013); possessing adaptability and flexibility towards change (Senge 1990, 1999); and being sensitive to environmental changes, and developing stakeholder relationships (Joshi, Pandey & Han 2009; Marrone 2010; Yukl 2004, 2010).

Following the above explanation, this study therefore seeks to understand what conveys excellence in leadership in a chaotic and complex environment, and what actions among contemporary leaders would generate sustainability perspectives across every aspect of their lives. Thus, the main research focus of this study is exploring diverse perceptions of excellence in leadership to create sustainability within a Sri Lankan organisational context. In addition, to accommodate diverse leadership behaviours, this study extended its focus to other disciplines such as environmental science, sociology and psychology.

Exploring the relevant theories and research is an important aspect to construct the research problem and develop the theoretical framework of a study (Maxwell 2013). However, as the literature on sustainability leadership is still in its infancy (Bossink 2007), this author has adapted, explored and interlinked other concepts from national

42 and organisational levels in relation to sustainability literature. Findings from these other sustainability disciplines have been incorporated into developing the theoretical framework of this study.

Concept of sustainability It has commonly been acknowledged that the concept of sustainability is difficult to define and extant literature suggests that scholars are still engaged in clarifying and providing a focus on this concept (Dunphy, Griffiths & Benn 2003; Laszlo 2008; Mullins 2006; Rogers 2011).

The extant literature reveals that most research on sustainability has aimed to answer the following questions:

 What constitutes sustainability, sustainable development and organisational sustainability?  How should sustainability be achieved?  How should sustainability practices be implemented in different contexts?  What are the most important areas of a business organisation that should focus on achieving sustainability?  Who is responsible for sustainability initiation in the organisational context?  What are the expected outcomes of sustainability initiatives in the organisational context?

The subsection below explores sustainability literature relating to the above questions and specifically explores the concept of sustainable development, models that support sustainable development and how sustainable development is measured.

3.3.1 Defining sustainable development The first gathering of the UN on the protection of the human environment (Conference on the Human Environment) was held in Stockholm, Sweden in 1972 (United Nations Environment Programme 1972). This conference established guidelines that covered a range of environmental issues including natural resource management, pollution prevention, and the relationship between the environment and development. Just over a decade later in 1983, the UN’s World Commission on Environment and Development (WCED) further acknowledged the limitations of the earth’s natural resources and the ever-increasing pollution of the global environment, which impacts 43 on the long-term economic and social development of the world (United Nations General Assembly 1987). On 20 March 1987, the UN commissioned another WCED conference to discuss issues pertaining to sustainability, which was popularly known as the ‘Brundtland Commission’. The WCED was then chaired by the Prime Minister of Norway, Gro Harlem Brundtland, who defined sustainability as

‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’, (WCED 1987, p. 43).

This definition indicates that sustainable development requires the efforts of all participants in society (e.g. individuals, voluntary organisations, businesses, institutes and governments) to invest more than what we consume, and pass on more than what we take from what belongs to future generations (Arrow et al. 2004; Dasgupta 2010). The confusion surrounding sustainability definitions has been largely resolved, as most scholars are now more concerned about how to realise sustainability results than on finding a suitable definition of ‘sustainability’ (Avery & Bergsteiner 2011b; Mullins 2006; Rogers 2011). As a result, scholars and practitioners are now interested in branching out into other relevant areas, such as what constitutes sustainability and how to implement sustainability in different contexts.

Two years after the 1987 WCED, preparations began in Rio de Janeiro, Brazil for the UN Conference on Environment and Development (UNCED), also termed ‘Earth Summit’, in 1989 (United Nations. 1992). More than 30,000 global participants from governments, government authorities and non-governmental institutions put forward recommendations for changing the existing international legal framework to ensure the protection of the environment. At this summit, economists and statisticians calculated and highlighted the main weaknesses in the main economic development concepts of gross national product (GNP) and gross domestic product (GDP), which only record national assets yet underpin the productivity of most developed economies (Henderson 2006). As pointed out by Henderson (1996), the 1989 Earth Summit raised public awareness of the growing social and environmental costs from increasing the GNPs and GDPs (see Figure 3.2 below).

Figure 3.2 Gross national product problem

Source: Henderson (1996)

To devise solutions to growing social and environmental costs while maximising economic development, the Earth Summit developed significant global agreements such as The Rio Declaration and Agenda 21.

These agreements were focused on providing guidance on how to link national-level sustainable economic development targets with organisational and individual levels (Ministry of Environment 2012). For example, Agenda 21’s main objective was to build a global consensus and attract political commitment to development and environmental cooperation (Ministry of Environment 2012).

Twenty years after the Earth Summit, the UN held another sustainable development conference named ‘Rio+20’ in June 2012 in Rio de Janeiro, Brazil. The main objectives of Rio+20 were securing a renewed political commitment to sustainable development, assessing the progress to date, identifying the remaining gaps in the implementation of sustainable development practices, and addressing new and

45 emerging challenges (United Nations 2012). To achieve these objectives, two main themes were established at Rio+20: 1) the Green Economy relating to poverty eradication and sustainable development; 2) and improved international coordination for sustainable development (United Nations 2012).

3.3.2 Early models for measuring sustainable development The above UN conferences have motivated numerous scholars to identify important challenges in achieving sustainability. For example, Arrow et al. (2004) and Dasgupta (2010) suggested that sustainability requires the balancing of three segments: 1) the country’s rate of population growth; 2) rate of change in the stock of capital (including the natural environment); and 3) investment in technology and innovation. Countries with high population growth, environmental pollution and poverty that are often unable to achieve higher levels of sustainability could use innovation as a solution to break the cycle (Barkemeyer 2011). Another sustainability model developed by Henderson (2006) suggests that humans need to have access to three basic resources while achieving global sustainability: 1) information; 2) matter; and 3) energy (see Figure 3.3). Among these three modes of resources, Henderson (2006) put forward information as most important dimension to achieve sustainability.

Figure 3.3 Three modes of resources used in national development

Source: Henderson (2006)

3.3.3 Measuring sustainability Despite many studies having identified the main dimensions of sustainable development, measuring sustainable development has often proven a challenging issue (Slaper & Hall 2011). Despite such difficulties, several successful methodologies for calculating sustainability have been produced, including indicators by Talberth, Cobb and Slattery (2007), and the Minnesota Planning Environmental Quality Board (2000).

3.3.3.1 Genuine Progress Indicator

The Genuine Progress Indicator (GPI) (Talberth, Cobb & Slattery 2007) was developed based on the concept of sustainable income which was introduced by Hicks (1946) with the aim of replacing GDP as a measure of economic growth. The GPI incorporates environmental and social factors that have been disregarded in the traditional GDP measure. It consists of 25 variables concerned with economic, environmental and social factors.

3.3.3.2 Minnesota Progress Indicator

The Minnesota Progress Indicator (Minnesota Planning Environmental Quality Board 2000) is comprised of 42 variables, based on the main objective of measuring the goals that establish a healthy economy.

In addition to these measurements of sustainability development, the concept of sustainability has also been interpreted via new ways of thinking based on the TBL (Elkington 1997), cradle to cradle (McDonough & Braungart 2002) and natural step (Robert 1989) concepts.

3.3.3.3 Triple bottom line for sustainability The concept of the TBL was first introduced in 2005 at the United Nations General Assembly (United Nations 2005a). It was later termed ‘triple bottom line’ as an accounting framework first introduced by Elkington (1994) to measure the performance of corporate America.

This framework has since moved beyond traditional financial performance measures such as profit, return on investments and shareholder value to much broader perspectives that include impact on the social and environmental aspects. Triple bottom line is now regularly used as a common ground for the 47 development of sustainability standards, certificates and principles relating to various industries (Buckley, Salazar-Xirinachs & Henriques 2009; United Cities and Local Governments 2010). In addition, the TBL framework is now commonly used by most for-profit and non-profit organisations, as well as in the government sector at federal, state and local levels to achieve sustainability goals.

Deborah (2012b) identified economic challenges includes fair allocation of resources, and transfer of technology including technology spillover. Social challenges consist of issues such as human rights violations, employee rights, and improved health and safety regulations. Environment challenges can relate to climate change, managing waste, recycling and exploring ways to generate energy from waste piles such as solid, electronic and hazardous wastes. Deborah (2012b) described many of these environmental challenges as ‘wicked problems’, and climate change as the ‘super wicked problem’ that most leaders have to find solutions to.

Complex challenges such as the above emphasise to most managers that improving productivity of human capital is not a sufficient condition for achieving sustainability (Friedman 2006; Hawken, Lovins & Lovins 1999; Senge 1999). It has therefore been pointed out that there need to be alternative ways to maximise financial performance while minimising the negative impacts on the firm’s socioenvironmental dimensions (Shrivastava 1994a).

Despite its heavy usage, a major drawback in Elkington (1994) TBL model are the lack of measurements for each of the three main pillars of environment, society and economy. This limitation has limited the practicality of using TBL to measure performances towards sustainability (Slaper & Hall 2011). Although a lack of universally accepted standards to measure TBL performance has been identified by some as an advantage. For instance, Slaper and Hall (2011) argued that ‘this can be viewed as a strength because it allows a user to adapt the general framework to the needs of different entities (business or non-profit), different projects or policies (infrastructure investment or

educational programmes), or different geographic boundaries (a city, region or country)’ (p. 5).

3.3.3.4 Natural step for sustainability

Brundtland (1987) efforts towards defining sustainability motivated Robert (1989) to develop the framework of the natural step. This framework set out the conditions that are required to ensure the sustainability of human activities on earth, and introduced four main conditions that a society must focus on as part of their contribution to sustainable development.

This framework also recommended prohibiting the extraction of materials from the earth, stopping the production of all human-made substances, and stopping any activity that disturbs the natural environment. Because the economic and industrial systems have failed to stop environmentally damaging practices, the framework suggests a method termed ‘back-casting from principles’ to advance societies towards sustainability. Based on this, sustainability needs the integration of ‘systems thinking’ with ‘back-casting from sustainability principles’ to apply various tools and practices in the planning and re-designing of management areas such as organisational strategies and processes, and new product innovation.

3.3.3.5 Impact assessment for sustainability Impact assessment was identified by the Commission of the European Communities (2002) as a concept that ‘identifies the likely positive and negative impacts of proposed policy actions, enabling informed political judgements to be made about the proposal and identifying trade-offs in achieving competing objectives’ (p. 2). At an international level, the European Union has developed guidelines based on impact assessment (Commission of the European Communities 2002) and upgraded them via several rounds of improvements such as at the Secretariat General EU (2009).

3.3.3.6 Dow Jones Sustainability Indices for sustainability

The Dow Jones Sustainability Indices (DJSI) is commonly used to measure the financial performance of corporate sustainability methods (S & P Dow Jones Indices 2015). The main objective of the DJSI is to track the financial performance of leading sustainability-focused companies. S & P Dow Jones Indices (2015) recommends that every organisation should immediately shift towards sustainability strategies to stay competitive in the future.

Sustainability at the national and at the organisational levels While sustainability first evolved as a macroeconomic objective introduced by Brundtland (1987), the concept shifted to an organisational aspect based on identifying the organisation as another living organism in an interconnected ecological community that requires responsible decision-making in every aspect (Hargett & Williams 2009). In addition to this shift in organisational relevance global sustainability issues such as food and water security, climate change, environmental cost of war and terrorism, natural disasters, and urbanisation are also pushing organisations to act more sustainably than they have in the past (United Nations Environmental Protection Agency 2012; United Nations General Assembly 1987; World Business Council for Sustainable Development 2010; World Economic Forum 2014; World Wild Life Fund for Nature 2008).

Complex challenges and sustainability issues like these have pushed organisations towards greater sustainability across all aspects, shifting from the business-as-usual model which can no longer ensure the firm’s competitiveness and longevity of business success (Dunphy, Griffiths & Benn 2003). In 2010, the Chairman of the Sustainable Development Commission, Will Day, affirmed that sustainability works well when organisational leadership accepts they need to make changes that contribute to sustainability (Sustianable Development Commission 2011). In line with this, many recent scholars such as Dunphy and Benn (2013); Rogers (2011), and Shrivastava (1994a, 1995) have continually acknowledged that changing the attitudes, values and behaviours of individuals and organisations is essential for transforming firms to sustainability. For example, Roome and Bergin (2006) revealed how organisational leadership influenced positive transformational change on the Ontario Hydro, which

50 moved beyond traditional environmental protection practices to a broader sustainable development perspective that has provided more benefits to society at large.

This study has therefore explored the central role played by organisational leadership towards achieving better organisational sustainability. Hence, the next sub-section explores various concepts relating to sustainability at the organisational level, sustainability leadership models, sustainability leaders, and sustainability leadership practices, behaviours, skills and attitudes.

3.4.1 Traditional theoretical perspectives surrounding sustainability The concept of sustainability encourages strong interrelationships between the members of social networks, whereas modernity aims to maximise the self-objective for economic benefits (Salem 2012). The concept of modernity mandates a fragmented view of the world, focusing on the self at the expense of the community. In contrast, the concept of sustainability requires appreciation, harmony and a holistic understanding of the universe. Early economist such as Friedman (1970) believed that organisations were bound by government rules and regulations, and that the sole purpose of businesses was to maximise economic benefits – a perception that has minimal validity today (Harley, Metcalf & Irwin 2014; Metclaf & Benn 2013). Although this may have been largely due to early economic and political philosophers such as Karl Marx and John Maynard Keynes who also failed to explain the negative socioenvironment impacts of profit maximisation (Elkington 1997; Parkin 2010).

Even earlier on, 17th century theorists such as James Hutton and Adam Smith were able to fill unanswered gaps by identifying the link between the organisation’s role in the maximisation of economic output and the protection of the environment. In particular, Smith in The Theory of Moral Sentiment (Smith 1761) emphasised that one’s inner-self judgement associated with honesty, compassion and trust makes an individual fit for society and can create social harmony. For example, if all organisations had been perceived as living organisms in the social system, some infamous corporate failures such as Enron (USA), Aldephia (USA), Healthsouth (USA), Parmalat (Italy), Worldcom (USA) and Tyco (USA) may have been withdrawn from the markets before their failure, as it was clear that these firms placed minimal

51 priority on corporate governance and CSR (Albert 1993; Mitchell 2001; Padgett 2005; Perucci 2009).

In contrast, more sustainable firms such as Jerry’s Home Made Ice Creams, Proctor and Gamble (P & G), 3M, The Body Shop, and Volvo Car Company have been able to survive turbulent times after transforming their strategies to prioritise the state of ecology and sustainability (Shrivastava 1994b). Various recollections of corporate successes and failures have caused many organisations to realise the potential negativities that can result from prioritising modernity (capitalistic) values within a firm; many of these organisations have shifted their strategic focus towards an ecological perspective and natural capitalism, offering better competitive advantages and business longevity (Avery & Bergsteiner 2011c; Elkington 1997; Parkin 2010; Van Marrewijk 2003).

The new environmental paradigm (NEP) introduced by Dunlap and Van Liere (1978) and Dunlap et al. (2000) is a concept similar to natural capitalism and the ecological perspective. NEP conveys that human intervention in the natural system can have negative impacts; as opposed to the dominant social paradigm (DSP) where the world is perceived as having unlimited resources and that humans are superior to other species based on their engagement in the development of the world. Based on these concepts, an individual that affirms NEP values is considered more sustainable than those who prioritise DSP values.

The question arises here as to whether capitalistic and modernity values lead organisations towards unsustainable practices, or whether sustainability values confirm social and environmental sustainability practices in a complex social environment. Delving further into the literature, such as Hargett and Williams (2009), it was indicated that national cultural values in promoting social responsibility facilitates the successful implementation of organisational sustainability. For example, Hargett and Williams (2009) identified Norwegian cultural values of protecting the environment and taking care of people as natural activities that have helped Wilh Wilhelmsen Group to successfully establish corporate sustainability.

Avery (2005) stated ‘the form of capitalism practised in a particular region influences how easy or difficult it is to adopt sustainable principles’ (p. 13). For example, Avery

52 and Bergsteiner (2010) found American and British that CEOs tend to favour capitalistic values such as shareholder wealth maximisation, whereas continental European CEOs traditionally prefer engaging with a range of stakeholders. These scholars therefore concluded that geography does not determine an enterprise’s leadership philosophy; it is instead based on the level of acceptance of capitalistic values in an organisation.

Corporate sustainability Corporate sustainability is a multifaceted concept that has progressively evolved since from the 1980s. Across the literature, the concept has many definitions, often lacks clarity, relates to varying practices, and still has space for further development (Dunphy, Griffiths & Benn 2003; Turker 2009).

Literature on corporate sustainability suggests that the evolution of sustainability has emerged from corporate governance (Brandt 1980; Costanza & Wainger 1991), which has then spread into many areas such as ecological economics (Hawken 1993; Parker & Daly 1978); ethical and responsible corporate responsibility (D’Amato, Henderson & Florence 2009; D’Amato & Roome 2009; Du et al. 2012; Ferdig 2007; Watson 1991); investments in CSR to enhance an organisation’s profit performance (Samy, Odemilin & Bamption 2010); emergence of sustainability leadership during the implementation of resource-saving initiatives (Harley, Metcalf & Irwin 2014); investments in human resource development to enhance organisational sustainability (Jackson et al. 2012); challenges of eco-leadership (Hanson & Middleton 2000); and social responsibility and stakeholder views in relation to organisational decision- making (Lenssen et al. 2007).

In summary, the literature indicates that sustainability at one extreme is based on corporate activities that flow from a firm’s funds and resources in a more charitable way to ensure the betterment of society and the protection of the natural environment (Navarro 1988), while the other extreme relates to sustainability values embedded as core values and principles that in every aspect safeguard the TBL (Avery & Bergsteiner 2011c). Similarly, Dunphy, Griffiths and Benn (2007) identified corporate sustainability as a process (i.e. a journey) rather than one particular static status, as shown in Figure 3.4 below.

Figure 3.4 Waves of sustainability

Source: Dunphy, Griffiths & Benn (2007, p.17)

According to this process model, corporate sustainability generally begins with opposition towards achieving corporate sustainability. Dunphy, Griffiths and Benn (2007) highlighted in this model that sustainable goals, organisational actions, interventions and the types of effective leadership vary across the phases.

However, a study conducted by McKinsey (2010), using 1,946 executives from a diverse range of industries and regions, found that most corporate leaders still lack clarity about the concept of sustainability. In this study, 55% of respondents believed that sustainability is related to the environment, another 48% identified sustainability as a governance issue concerned with challenges such as adherence to regulations, ethical practices and meeting acceptable industry standards, while a further 41% of executives perceived sustainability as a social issue.

Another perspective of corporate sustainability was defined on the website of Dow Jones Sustainability Indices (2014) as:

‘A business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social development … is crucial in driving interest and investments in

sustainability to the mutual benefit of companies and investors. As this benefit circle strengthens, it will have a positive effect on the societies and economies of both the developed and developing world.’

The increasing scholarly interest and growing public demand for sustainable organisations has created complex business challenges with relation to transforming traditional organisations into sustainable organisations (Berns et al. 2009; Galpin & Whittington 2012; Hargett & Williams 2009). Dunphy, Griffiths and Benn (2003) identified both internal and external forces as causing organisations to shift towards sustainability. External pressures include governments, communities, consumers, market expectations, other corporations, industry associations, and NGOs. Internal pressures can stem from corporate leaders and other change agents such as employees, shareholders and investment companies that see the benefits and push for organisational sustainability. For example, marketing, human resources and production functions are some of the internal operations that often prefer to incorporate sustainability into their business functions (Dunphy, Griffiths & Benn 2003).

In relation to determining whether an organisation is sustainable, Avery (2005) proposed four factors that should be considered:

1) ‘An enterprise is not sustainable if it produces negative outcomes for the parties it contracts with; for example, if it has dissatisfied employees, owners and customers. 2) An enterprise that produces positive outcomes for voluntary stakeholders (e.g. satisfied employees, owners and customers) but negative outcomes for non- contracting parties (e.g. depleting non-renewable resources, or a farmer who uses more water than their legal entitlement) is only sustainable a. if no-one holds the enterprise accountable for the negative outcomes b. until all the negative outcomes of similar firms eventually combine to undermine the entire industry – an example is the fisheries industry where fish are harvested faster than they can breed. 3) An enterprise or business model that produces positive outcomes for contracting parties (e.g. satisfied employees, owners and customers) but negative outcomes for large groups of non-contracting parties (e.g. pollution, poverty and social alienation) is not sustainable and should not be sustained.

4) An enterprise or business model that produces positive outcomes for both contracting and non-contracting parties alike is sustainable’ (p. 61).

Resistance to change to achieve sustainability is often considered a threat to the company’s competitive position (Dunphy, Griffiths & Benn 2003). Sustainability can be defined as a social movement that raises public awareness of sustainability, as well as a response of organisational change through adapting sustainability business practices (Dunphy, Griffiths & Benn 2003). This has caused some leaders to shift from traditional employee-oriented and production-oriented leadership styles to a third- dimension change-oriented leadership style (Ekvall & Arvonen 1991).

Dunphy, Griffiths and Benn (2003) defined the creation of sustainability in organisations as an incremental change process that requires diverse strategies and leadership skills unique to each phase, as shown in Figure 3.5 below.

Figure 3.5 The sustainability change matrix: Incremental paths

Source: Dunphy, Griffiths & Benn (2003, p. 227)

Many scholars and practitioners now perceive sustainability as a main organisational strategy that can deliver a competitive advantage to firms (Avery & Bergsteiner 2010; Boiral, Cayer & Baron 2008; Elkington 1997; Fullan 2003; Metclaf & Benn 2013; Parkin 2010; Shrivastava 1994a). Based on these perceptions, it has been suggested

56 that reorientating and redesigning the firm’s strategies by identifying demands for less environmentally and socially damaging activities will ensure the most effective form of organisational sustainability (D’Amato & Roome 2009).

3.5.1 Sustainability as an investment opportunity Galpin and Whittington (2012) opined that sustainability has often been considered by leaders as an investment opportunity that yields promised results. For example, Post, Preston and Sachs (2002) highlighted how organisations could attract stakeholders through CSR investments to build loyalty and to achieve better financial performance. However, researchers such as Ameer and Othman (2012); Cavaco and Crifo (2014); Choi, Kwak and Choe (2010); Hart (1995); Hillman and Keim (2001); Lev, Petrovits and Radhakrishnan (2010); McWilliams and Siegel (2000); Navarro (1988); Orlitzky, Schmidt and Rynes (2003), and Paine (2003) have achieved contradictory results under different contexts between a firm’s sustainability investments and its financial results. Some other non-financial benefits of sustainability initiatives include new skilled labour, additional marketing opportunities via greener competition, brand repositioning, a stronger brand image, and the attainment of social and ecological labels (McKinsey 2010).

3.5.2 Sustainability initiatives As a result of the growing prevalence of sustainability, some organisations have implemented ad hoc strategies that are unsuitable for and mismatch the context, defined by Porter and Kramer (2006) as ‘disconnected from the firm’s strategy, that neither make any meaningful social impact nor strengthen the firm’s long-term competitiveness’ (p. 4). Scholars have often contended that most managers prefer adapting familiar and generic sustainability business models rather than implementing new and customised sustainability strategies (Avery & Bergsteiner 2010; Rogers 2011). However, most of these traditional frameworks cannot guarantee positive sustainability results, as they are often mismatched with the organisational context. Organisational leaders instead need to implement sustainability strategies that are appropriate to their own organisational context (Dunphy, Griffiths & Benn 2003).

The world media have consistently reported on unsustainable practices of well- established organisations that have often used traditional models to implement

57 sustainability. This validates the research perspective that these traditional sustainability models are unable to solve individual organisation’s contemporary problems in a complex environment. In line with this, various scholars such as Clark (2007); Galpin and Whittington (2012) and Shrivastava (1994a) have suggested such issues can be avoided by developing a framework that guides organisational leaders to implement customised sustainability strategies.

Similarly, scholars such as Berns et al. (2009) and Deborah (2012a) have also highlighted the pressing need to develop business models that address unsolved complex problems in relation to corporate sustainability. Khavul and Bruton (2013) suggested that these new sustainability models should incorporate innovation and the natural environment as an essential indicator to measure concepts surrounding sustainability. Regardless of this progress, the journey still continues towards a corporate sustainability model since the evolution of the concept in the 1980s (Adams 2006; Avery 2005; Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Post, Preston & Sachs 2002).

Corporate sustainability in practice As noted previously, organisational sustainability has attracted strong attention across a range of sectors such as small and medium enterprises (SMEs), MNCs, NGOs and government authorities. The sub-sections below therefore focus on the range of relevant issues and applicability of the sustainability concept across each of these sectors.

3.6.1 Sustainability in for-profit, family-owned businesses and small-to- medium enterprises Strong stakeholder relationships enable many family-oriented businesses to perform financially better than other larger organisations, even during economic downturns (Anderson & Reeb 2003; Lee 2004; McConaughy, Matthews & Fialko 2001; Miller & Le-Breton-Miller 2003). Family-owned businesses rarely lay off staff (Gudmundson, Tower & Hartman 2003), and are often more concerned about social responsibility, business reputation and innovation (Adams, True & Winsor 2002; Heffes & Sinnett 2006), which strengthens their position in the market compared with other larger businesses.

Unlike public-listed companies, SMEs are not legally bound to disclose their sustainability initiatives, which has prompted scholars Slaper and Hall (2011) to propose the following guidelines to measure their TBL scorecard.

1) economic (amount of taxes paid) 2) social (average hours of training for employees, from welfare to career retention, and charitable contributions) 3) environmental and safety (safety accident rate, lost/restricted workday rate, sales dollars per kilowatt hours, greenhouse gas emissions, and amount of waste to landfill).

3.6.2 Sustainability in multinational corporations MNCs are often considered the driving force behind the uptake of sustainable business practices (Guerrera 2009). For example, Avery and Bergsteiner (2010, 2011c); Hargett and Williams (2009), and Post, Preston and Sachs (2002) all explored diverse issues those arose during the implementation of sustainability in MNCs.

Numerous MNCs have received public backlash in relation to well-known unsustainable incidents such as the Ok Tedi natural disaster in Papua New Guinea, the BP oil spill off the Mexican Gulf, sweatshop factories operated by Nike and Levi Strauss, and accusations of rate fixing by HSBC in pursuit of better financial outcomes (Castello & Lozano 2009). As public awareness of sustainability increases, many MNCs have moved towards better sustainability practices. There are many examples of MNCs embracing sustainability, such as Starbucks, Shell, Cascade Engineering, Motorola, General Electric, Unilever, Proctor and Gamble, 3M, Adidas, and Patagonia, whose sustainability initiatives have attracted the attention of numerous scholars including Avery (2005); Avery and Bergsteiner (2011c); Dunphy, Griffiths and Benn (2003); Post, Preston and Sachs (2002), and Slaper and Hall (2011).

Research on sustainability initiatives in MNCs is diverse. At one extreme, some of these organisations prioritise conveying social responsibility by improving their voluntary commitment to disclosure requirements such as the Global Reporting Initiative (2013b); and at the other extreme, others adapt sustainability as a legal or institutional requirement expected from organisations such as the World Business Council for Sustainable Development (WBCSD) (WBCSD 2013). Virgin Group

(Branson 1998) and Interface (Dunphy, Griffiths & Benn 2003) are examples of MNCs that have voluntarily prioritised sustainability by incorporating such values into every aspect of their business activities. Other MNCs such as Unilever have been able to improve their shareholder value by prioritising customer satisfaction and acting as a responsible corporate citizen (McKinsey 2010).

Irrespective of the lack of a universal measurement tool to calculate the sustainability impacts of MNCs, most senior managers have started to adapt the concept of TBL into their MNC’s sustainability strategies.

3.6.3 Sustainability in non-profit organisations Many for-profit organisations now choose to partner with non-profit organisations to improve their sustainability initiatives using the TBL principle to measure the sustainability of their projects (Slaper & Hall 2011). In line with this, it has been identified that most for-profits organisations prefer sponsoring not-for-profit organisations that prioritise economic prosperity, social wellbeing and environmental protection as their key goals (Nancy 2007). Some non-profit organisations such as Ford Foundation (Stark & Markley 2011) and RSF Social Finance (RSF Social Finance 2015) have linked TBL concepts to achieve sustainability. For example, RSF Social Finance (2015) has used food and agriculture (economic), ecological stewardship (environmental), and education and the arts (social) as its organisational sustainability.

3.6.4 Sustainability in government organisations Most state, regional and local government institutes use the TBL sustainability framework as a performance assessment tool in their policy decision-making (Slaper & Hall 2011). For example, Minnesota Planning Environmental Quality Board (2000) have implemented the TBL or similar sustainability frameworks (e.g. impact assessments) to assess which policies or projects to implement and which to reject.

Challenges for corporate sustainability initiatives Sustainability initiatives at the organisational level often require radical transformations within an organisation (Dunphy, Griffiths & Benn 2007; Senge 2008), which can produce complex challenges for organisational leaders (Metclaf & Benn 60

2013). For example, Wilh Wilhelmsen, an international maritime company in Norway, encountered a range of challenges when it decided to practise sustainability, including an inability to control globally-expanded processes across the organisation, investments in CSR, the need to communicate sustainability values with different parties, lack of common understanding about sustainability leadership, identifying the most suitable ways to measure the impact of sustainability, aligning day-to-day decisions with both company values and local norms, dealing with single-focus stakeholders, establishing consistent CSR accountability processes, and integrating a traditional organisational culture with new innovative organisational changes (Hargett & Williams 2009).

In a global business context, cultural mismatches between a parent company and its international operations can also be a barrier to implementing company-wide sustainability (Hargett & Williams 2009). However, Hargett and Williams (2009) suggested that such cultural clashes or mismatches could be avoided by developing a common communication platform, developing best practices for diverse national cultures, implementing a systematic approach to integrating the TBL into the company’s internal and external practices, enhancing employees’ knowledge of CSR, increasing diversity in the organisation especially at the headquarter level, and developing a sponsoring strategy that highlights the main areas the company will support and fund, including the reasons behind these sponsoring choices.

Sustainability and cultural values Hargett and Williams (2009) believed that national cultural values incorporated into CSR promotions can often facilitate the successful implementation of organisational sustainability. Therefore, Hargett and Williams (2009) noted that sustainability leaders should be capable of identifying national cultural values relating to sustainability perspectives, and be able to match those values with their organisational values. For example, these scholars identified Norwegian cultural values of protecting the environment and taking care of people as natural activities that helped Wilh Wilhelmsen to successfully establish corporate sustainability despite the challenges it faced. Similarly, Avery (2005) conferred that ‘the form of capitalism practised in a particular region influences how easy or difficult it is to adopt sustainable principles’ (p. 13). Based on these perceptions, Avery and Bergsteiner (2010) concluded that

61 geography does not determine an enterprise’s leadership philosophy, but rather it is based on the level of acceptance of capitalistic values in an organisation.

In line with the importance placed on national cultural values in establishing corporate sustainability, scholars such as Hawkes (2001) and Schmidheiny (1992) contended that the environment, economy and society do not adequately reflect the complexities in society – they recommended culture as the fourth necessary dimension. Hence, most policymakers perceive culture as the solid bridge span across the other three pillars of TBL (Culture 21 Agenda ; United Cities and Local Governments 2010) – culture ultimately reflects and shapes what we mean by development, reflects the true results of policy implementation, and determines how most people act.

Schmidheiny (1992) also recommended that future models relating to corporate sustainability should incorporate the cultural perspective. Hargett and Williams (2009) also suggested that future researchers should explore sustainability leadership as a value-based leadership approach, and should explore what leadership practices, perspectives and behaviours are effective levers for implementing sustainability in different cultural contexts. As a result, some scholars have begun to explore diverse characteristics surrounding corporate sustainability and sustainability leadership in different contexts, such as the role of sustainability leaders, challenges facing sustainability leaders, and their accepted behaviours and practices, to improve organisational sustainability (Berns et al. 2009; Dunphy & Benn 2013; Khavul & Bruton 2013; Metclaf & Benn 2013).

Sustainability challenges for organisations in the developing world Most of the sustainability leadership literature is either based on Western or developed economies, highlighting the potential for future studies to explore corporate sustainability in non-Western or less-developed economies (Kantabutra & Saratun 2013). Studies such as Barkemeyer (2011) have indicated that corporate sustainability challenges are relatively homogeneous across developed and developing countries, although the roles and responsibilities of corporate sustainability were considered to be significantly different from each nation to another.

Similar to the perceived diversity of sustainability challenges across different contexts (Dunphy, Griffiths & Benn 2003; Khavul & Bruton 2013; Metclaf & Benn 2013), 62 contemporary leaders in the developing world generally face different issues to those in the developed world. For example, high pollution, high population growth, poverty, malnutrition, lack of development of a transparent legal framework, and violation of human rights have been identified as some of the sustainability issues common to developing countries (Barkemeyer 2011).

Among other sustainable development issues, poverty is more crucial to developing countries than to developed countries (Khavul & Bruton 2013). In a developing economy, the majority of the population is below the poverty line, meaning less personal savings and a lack of investment and capital, often hindering opportunities for organisational expansion (Bowels, Durlauf & Hoff 2006). Poverty also often has a direct impact on the pollution of the natural environment (Duraiappah 1998; Khavul & Bruton 2013). Unlike in developed markets where long-term ethical business performance is often prioritised, less-developed markets generally face challenges associated with the need to maximise short-term profits at the cost of the environment – a sensitive, controversial issue as it often ensures the longevity of a business (Karande, Rao & Singhapakdi 2002).

It has been suggested that these mismatches of cultural values and sustainability issues indicate that corporate leaders, especially in the less-developed world, should localise their strategies to achieve long-term success (Khavul & Bruton 2013). Based on this perspective, to achieve corporate sustainability, leaders in the less-developed world would need to develop innovative strategies by considering the characteristics of their local customers, including their values and attitudes; the close networks of people who can influence the customer’s purchasing decision; and aspects of the local business ecosystem (Khavul & Bruton 2013).

Strategic importance of leadership in achieving organisational sustainability

Transforming organisations towards sustainability generally requires managers to act sustainably in every aspect of their daily activities (Paine 2003). To achieve such transformations, organisations often need a new breed of extraordinary leaders with strong moral and responsible values (Dunphy, Griffiths & Benn 2003; Metclaf & Benn 2013; Todnem & Burnes 2012 ).

The role of strong leadership in achieving corporate sustainability is not a new concept. As Drucker (1968) stated:

‘What is most important is that management realise that it must consider the impact of every business policy and business action upon society. It has to consider whether the action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony.’ (p. 461)

In line with this, more contemporary scholars such as Avery and Bergsteiner (2010, 2011b); Berns et al. (2009); Bossink (2007); Dunphy, Griffiths and Benn (2003); Fullan (2003); Jayne (2004); Kiron et al. (2012); Martin and Jucker (2005); Metclaf and Benn (2013); Nidumolu, Prahalad and Rangaswami (2009); Parkin (2010); Rogers (2011), and Thompson (2011) have defined leaders as the main stakeholders in achieving corporate sustainability. On the other hand, contemporary leaders also believe in establishing sustainability as a main leadership responsibility and a leadership competency to be developed (Berns et al. 2009).

Although ample research is available in relation to corporate sustainability, many scholars (Avery & Bergsteiner 2011b; Berns et al. 2009; Dunphy, Griffiths & Benn 2003; Galpin & Whittington 2012; Hargett & Williams 2009; Kiron et al. 2012) have opined there is still more areas to be explored in relation to the concept of sustainability leadership (see Appendix 1).

Significance of sustainability leadership in corporate sustainability Sustainability leadership is a relatively new research area that has already captured much attention in leadership literature (Laszlo 2008; Rogers 2011; Tang, Robinson & Harvey 2011). As an area that is still developing, there are many diverse and complex definitions that currently exist in sustainability leadership literature (Du et al. 2012).

For example, Avery and Bergsteiner (2010) explained sustainability leadership as follows:

‘Sustainable leadership helps an organisation endure over time and weather the inevitable storms that beset an enterprise. Both terms ‘sustainable’ and ‘leadership’ have to do with moving towards some future state. (p. 7)’

In addition, Salem (2012) defined sustainability leader as:

‘Anyone who takes responsibility for understanding and acting upon complex sustainability challenges qualifies as a sustainable leader whether or not they hold formal leadership positions. They take conscious actions, individually and collectively, leading to outcomes that nurture, support, and sustain healthy economic, environmental and social systems.’ (p. 32)

Salem (2012) believed that sustainability leadership is relevant to any context, including in families, groups, businesses, not-for-profit organisations, governments, schools and religious organisations. Sustainability leadership has been defined by Dunphy and Benn (2013) as a concept that is guided by the leader’s personal interest to improve not only the organisation’s financial performance, but also to minimise the potential risks to the environment and social system. In addition, Akins et al. (2013) identified sustainability leadership as the development of leadership qualities that meet the economic, environmental and social needs of the present, while preparing to meet the challenges of the future.

3.11.1 Moving from corporate social responsibility to sustainability leadership Similar to the trend of many organisations starting to replace their traditional CSR function with sustainability, many have redefined CSR managers as sustainability managers (Tang, Robinson & Harvey 2011). Tang, Robinson and Harvey (2011) explained that sustainability managers are responsible for planning, implementing and controlling the achievement of organisational sustainability targets. They also identified four types of sustainability managers: 1) scientist; 2) messenger; 3) storyteller; and 4) artisan. Tang, Robinson and Harvey (2011) also highlighted personal meanings such as empowerment, expertise, values, inspiration, strategic thinking and social contributions as important for achieving excellence as a sustainability manager.

On the other hand, Willard (2009) believed that effective sustainability entrepreneurs are neither leaders nor managers, but are leader-managers that are implementing and managing sustainability leadership practices, often having to avoid impediments to the organisational transformation to sustainability. To distinguish sustainability leaders from sustainability managers, the next sub-section explores the differences between sustainability leadership and sustainability management.

3.11.2 Comparison between leadership and management Most popular definition that clarify the difference between leader and manager have been introduced by Bennis and Nanus (1985), who stated that ‘managers are people who do things right, and leaders are people who do the right thing’ (p. 221). Astin and Astin (2000) later defined leadership as a process that ultimately creates a change or a movement from where we are now to some different place or a condition, while believing that management suggests a preservation or maintenance. In addition, Metclaf and Benn (2013) stated that ‘leaders are not necessarily managers, although the study of leadership is dominated by a dyadic relationship between formally designated leaders (or managers) and their subordinates’ (p. 372). Metclaf and Benn (2013) further stated that leadership is a much broader concept than management.

Willard (2009) defined leadership as a role which aims to lead people individually, in networks, inside or between departments, or above or below the hierarchy; while management is a position that overlooks measuring, monitoring, documenting and achieving results using proven tools (see Table 3.1 below for further details).

Table 3.1 Comparison of leaders with-managers

Leaders and leadership Managers and management Leadership is about people and Management is about processes and relationships tasks Leading is coaching, empowering, Managing is planning, controlling, facilitating, serving directing Leading is doing the right things Managing is doing things right Leaders lead change between paradigms Managers maintain the status quo within paradigms Leaders earn power based on their Managers have appointed, positional credibility power Leaders support innovation Managers crave order Leaders inspire faith in new directions Managers demand proof Leaders rely on trust Managers rely on control Leaders ask what/why Managers ask how Leaders set the direction Managers get us there Source: Willard (2009)

3.11.3 Comparing sustainability leadership with other leadership styles Many scholars have strived to distinguish the differences and similarities between sustainability leadership and other leadership styles including, Caldwell et al. (2012); Du et al. (2012); Dunphy and Benn (2013), and Metclaf and Benn (2013).

Du et al. (2012); Dunphy and Benn (2013); Galpin and Whittington (2012), and Metclaf and Benn (2013) all believed that traditional leadership styles such as transactional and transformational leadership are essential to implementing corporate sustainability. Dunphy and Benn (2013) further argued that sustainability leaders are

67 more transformational and innovative than traditional leaders. Harley, Metcalf and Irwin (2014) believed that in order to design and initiate sustainability, transformational leadership styles are helpful, while transactional leadership styles are essential to ensure that positive organisational outcomes are correctly delivered. In addition, Salem (2012) contended that the main characteristic that defines sustainability leadership is the ability to identify and act fast during complex sustainability challenges.

Sustainability leadership has often been perceived as sharing similarities with charismatic leadership (Hargreaves & Fink 2004). This is where employees perceive the leader’s passion and commitment towards sustainability as an extraordinary characteristic. These leaders’ perceptions of sustainability values inspire employees and motivate them to engage in activities that ensure organisational sustainability. As a result, such employees generally believe, trust, follow and respect such leaders with sustainability values; therefore accepting their leadership decisions.

Barker (2001) and Metclaf and Benn (2013) stressed that new organisational leadership theories need to move beyond merely explaining ways to maximise leader- subordinate relationships, and should aim to define the concept of leadership as a process with shared responsibility, to optimise complex relationships with diverse participants in the social system. Todnem and Burnes (2012 ) also conferred that the leadership role is a responsible and ethical unit in the social system that is very important for creating sustainability leadership and personal values and attitudes relating to empathy, integrity, honesty, ethical, creativity and systems thinking. Although alternative leadership styles such as distributive (Spillane 2006), change and innovation (Senge 2008), and adaptive (Heifetz 1994; Heifetz, Grashow & Marty 2009) have also been put forward as important for establishing sustainability leadership in an organisational context.

3.11.4 Skills and abilities of a sustainability leader Although leadership traits and skills are different from actual leadership behaviours, an understanding of them helps to interpret why some leaders behave differently (Yukl 2012). While one cannot conclude that a particular leadership trait or skill influences good leadership, it can be perceived as having a direct influence on the creation of the

68 individual leadership behaviours. Based on this recognised importance of leadership traits and skills along with behaviours, this-section aims to identify the range of leadership traits and skills that have a significant influence on the creation of sustainability leadership.

Metclaf and Benn (2013) and Senge (1990) both associated leadership with extraordinary abilities that often supersede any others during the implementation of sustainability initiatives and the realisation of projected results. In line with this, Cappelli et al. (2010) and Metclaf and Benn (2013) both contended that organisations require competent managers with an ethical and moral perspective to be able to solve complex problems and achieve sustainability objectives. Avery and Bergsteiner (2011c); Dunphy, Griffiths and Benn (2003), and Senge (2008) also conferred that innovative and change management leadership skills are essential to resolving complex environmental challenges while transforming organisations to sustainability. Such leaders must work as change agents with positive attitudes toward change, especially to achieve the long-term survival of the organisation (Dunphy, Griffiths & Benn 2003; Hart 2005; Rogers 2011). Dunphy, Griffiths and Benn (2003) defined the leadership skills required to change organisations to sustainability as ‘micro skills’, as shown in Figure 3.6 below.

Figure 3.6 Micro skills of effective change agents

Source: Dunphy, Griffiths and Benn (2007)

Following on from the above micro skills model, Dunphy and Benn (2013) specified three change-related leadership skills most important to achieving sustainability: 1) self-change skills; 2) interpersonal change skills; and 3) change project leadership skills. This is despite Dunphy, Griffiths and Benn (2003) perception that leadership skills relating to technical knowhow will not guarantee successful change implementation, while project management and interpersonal skills are largely needed to determine success.

In addition, Metclaf and Benn (2013) suggested that organisations need leaders with extraordinary skills when transforming to sustainability, such as navigating through complexity, engaging groups during complex, adaptive organisational change, and managing emotions appropriately. Stavrou, Kanssinis and Filotheou (2007) believed that leadership skills such as making decisions independent of the financial market, non-heroic CEOs, strong vision and values, long-term investment horizons, focusing on developing the firm’s capabilities via training and development, prioritising employees, and ensuring a low staff turnover are important to establish organisational sustainability. In line with this focus on employees, Galpin and Whittington (2012) emphasised encouraging employee participation and their attraction towards the leader’s vision as essential for sustainability leadership.

In addition to attracting shareholder interests (Samy, Odemilin & Bamption 2010), it is commonly believed that involving stakeholders in the decision-making is important for creating sustainability in an organisation (Dunphy, Griffiths & Benn 2003; Thompson 2011). Soft skills such as interpersonal skills in the leader are also deemed important to establish corporate sustainability (Dunphy, Griffiths & Benn 2007) (see Figure 3.6 above). In line with this, Elkington (2001) identified strength, vision, stamina, appreciation of diversity, readiness to ‘walk the talk’, desire to learn, learning from failures, and a healthy sense of humour as essential characteristics of a responsible leader. In addition, Waddock (2007) highlighted natural intelligence, network analysis, holistic systems thinking, cross-cultural understanding, power- sharing, and self-reflection as important skills in an excellent sustainability leader.

Setting high standards, promoting dialogue and engagement, and balancing social and economic factors are other skills that have been deemed as important for establish organisational leadership for sustainability (Googins, Mirvis & Rochlin 2007). Parkin (2010) identified 10 specific leadership qualities for successfully establishing sustainability: learning, empowering, adaptability, developing, engaging, reflection, sustaining, humility, integrity, and practice. In addition, Strategic Direction (2011) suggested that sustainability leaders should be competent to improve organisational consciousness about sustainability, develop a shared understanding of the threats and opportunities it provides, and to engage business unit managers in sustainability initiatives.

Chapter summary Chapter 3 has discussed the diverse concepts in relation to sustainability, especially the evolution of corporate-level sustainability. Sustainability has attracted the attention of many scholars in recent years – the concept has become a crucial dimension for evaluating national and international economic developmental performance. In particular, well-known unsustainable practices, especially at the corporate level, have created strong backlash in recent years, including the questioning of managers’ perceived selfish behaviours which appear to be aimed more at maximising the firm’s financial goals at the expense of social and environmental harmony. The people, planet and profits have become strategic concerns across most organisations.

In line with this, the chapter has explored the role of organisational leadership in implementing sustainability. To this end, the main purpose of this chapter was to better understand the perceived need for extraordinary leadership skills to achieve sustainability leadership.

Chapter 4 next discusses the various models in relation to sustainability leadership, including the process of developing the dependent variable: sustainability leadership.

CHAPTER 4. MODEL DEVELOPMENT: IDENTIFYING THE DEPENDENT VARIABLES

Introduction This chapter aims to identify the dependent variables through exploring the existing theoretical frameworks in relation to sustainability leadership. Due to the limitations of empirical studies on sustainability leadership, this study has developed a new construct to measure the sustainability leadership of managers; and this chapter discusses the process of developing the relevant dependent variables. Following this introduction, Section 4.2 explores the previous models of sustainability leadership, which have confirmed that sustainability leadership is a multidimensional construct. Section 4.3 next explains the sub-dimensions of the sustainability leadership construct of this study. The chapter concludes with a summary in Section 4.4.

Figure 4.1 below present the composition and roadmap of Chapter 4.

Figure 4.1 Composition of Chapter 4

4.1 Introduction

4.2 Sustainability leadership Chapter 4: frameworks and

Model development: models Identifying the dependent variables 4.3 Identification of dependent variables in

the study

4.4 Chapter summary

Sustainability leadership frameworks and models The literature on sustainability in general reveals that the concept of sustainability is a multidimensional construct. To identify what constitutes sustainability leadership, this study reviewed the main leadership models relating to sustainability that have been previously developed. Most of these sustainability leadership models have been based on the earlier concepts and models relating to sustainable development, such as Brundtland (1987); Commission of the European Communities (2002); Elkington (1994, 1997), and Robert (1989). In addition, most of them have identified sustainability as a concept that consists of three pillars: 1) environment (planet); 2) society (people); and 3) economy (prosperity).

The sustainability leadership models discussed below explain the diverse forces that have generally influenced the creation of sustainability leadership within an organisation. Most of these models consider the leader’s cognitive process (inner-self) that consists of personal values, beliefs, attitudes and skills as essential to create sustainability leadership. With this in mind, the sub-sections below summarise the diverse forces in each of the sustainability leadership models.

4.2.1 Sustainable leadership pyramid by Avery and Bergsteiner (2010) Avery and Bergsteiner (2010) developed the sustainable leadership pyramid based on 23 intangible elements (see Figure 4.2 below) to categorise the sustainable leadership practices of organisations.

Figure 4.2 Sustainable Leadership Pyramid

Source: Avery and Bergsteiner (2010)

Initially the model only contained 19 intangible elements, which was later expanded to 23 intangible elements. Avery and Bergsteiner (2010) have shown how these 23 intangible elements interact at three levels to produce five performance outcomes. Within this pyramid model, there can be top-down, bottom-up and across-the-same- level elements that affect each other in achieving the five performance outcomes (Avery & Bergsteiner 2010).

4.2.2 Four habits of thoughts by Parkin (2010) Parkin (2010) introduced the four habits of thoughts concept which consists of resilience, relationships, reflection and reverence. Parkin (2010) recommended that every manager regularly self-check via these four habits when making business decisions (see Appendix 4, 6, 7 and 10 for further detail). Another contribution of Parkin (2010) is the identification of 10 ideal leadership qualities: learning, empowering, adaptability, develop, engage, reflection, sustain, humility, integrity and practice.

4.2.3 Seven-step sustainability change process by Willard (2009) Willard (2009) introduced the following seven steps for organisations to use to transform to sustainability: 1) wake up and decide; 2) inspire a shared vision; 3) assess current realities; 4) develop strategies; 5) build the case for change; 6) mobilise commitment; and 7) embed and align (see Figure 4.3 below).

This framework also includes seven leadership practices for sustainability change: 1) get credible, stay credible; 2) dialogue; 3) collaborate, educate, network; 4) meet them where they are; 5) piggyback existing initiatives; 6) influence the influencers; and 7) practise ‘painful opportunism’.

In addition, Willard (2009) linked seven paradoxes to the framework that is used by successful sustainability organisations: 1) you have to do it yourself, you can’t do it alone; 2) to get ‘hard results’ work on the ‘soft stuff’; 3) motivators inhibit commitment; 4) one person’s dream is another person’s nightmare; 5) go small to go fast; 6) go small to go big; and 7) things need to get worse before they can get better. Another seven derailers are also included in this framework, which organisational leaders need to be avoided during the transformation to sustainability: 1) displaying hubris; 2) mishandling office politics; 3) being a ‘problem child’; 4) failing to produce results; 5) succumbing to stress; 6) changing everything at once; and 7) getting off to a bad start.

Figure 4.3 Seven-step sustainability change process

Source: Willard (2009)

4.2.4 Sustainability leadership model by Galpin and Whittington (2012) This is a multi-level model that provides a foundation for the formulation, implementation and execution of organisational sustainability efforts (see Figure 4.4 below).

Figure 4.4 Sustainability leadership model

Source: Galpin and Whittington (2012)

This framework suggests that workforce engagement is the central element in transforming organisations into sustainable entities. Traditional leadership models such as transactional and transformational leadership behaviours are also recognised as important for engaging HR in strategy implementation.

4.2.5 Leadership for sustainability by Metclaf and Benn (2013) The sustainability leadership model put forward by Metclaf and Benn (2013) aims to solve the confusion over multiple leadership styles relating to CSR implementation. This model recognises that organisations function within a complex system and continuously face complex problems, such as sustainability. Figure 4.5 below explains the model developed by Metclaf and Benn (2013) to solve complex problems.

Figure 4.5 Complex problem-solving heuristic model

Source: Metclaf and Benn (2013)

To find solutions to complex problems surrounding sustainability, Metclaf and Benn (2013) suggested that organisations require leaders with extraordinary abilities. Such abilities include, ability to navigate through the complexity, think through complex problems, engage diverse organisational groups through complex adaptive organisational change, and manage their own emotions appropriately.

4.2.6 Leading sustainability by Rogers (2011) In this leadership model Rogers (2011) highlighted three principles for achieving sustainability (Figure 4.6).

Figure 4.6 Principles required for sustainability leadership

Source: Rogers (2011)

Rogers (2011) emphasised that these three sustainability leadership principles could be developed by identifying the changes in cognitive thinking, knowing and doing; and recommended that they be used to develop sustainability leaders. Rogers (2011) also contended that sustainability leaders need similar leadership capacities highlighted in other leadership theories such as charisma, adaptability, emotional intelligence, systems thinking, interest in new ideas, and an ability to new information.

4.2.7 Sustainable leadership framework by Fullan (2003) Fullan (2003) developed eight elements in relation to sustainability leadership: 1) public service with a moral purpose; 2) commitment to changing context at all levels; 3) lateral capacity building via networks; 4) new vertical relationships that are co- dependent encompassing both capacity building and accountability; 5) deep learning; 6) dual commitment to short-term and long-term results; 7) cyclical energising; 8) and

79 the long lever of leadership. This concept is based on the belief that sustainability is achieved through developing systems thinking.

Fullan (2003) also proposed five action-and-mind sets especially for leaders in educational institutes, based on a study of sustainability leadership in educational institutes conducted in the United States, England and Canada. Fullan (2003) believed that organisational leaders who think of the long-term consequences of their short-term decisions, possess a sense of moral purpose, convey emotional intelligence, create coherence around chaotic situations, show commitment to new knowledge, and believe in sharing knowledge are important aspects of assuring sustainability leadership, which also directly focuses on the leader’s self-discipline towards sustainability thinking.

4.2.8 Advances in global leadership by Thompson (2011) Thompson (2011) contended that sustainability leadership can be effectively achieved by integrating stakeholders’ interests into organisational strategy (see Figure 4.7 below).

Figure 4.7 The Economic Return on Social and Environmental Investments (EROSEI) model of the organisation

Source: Thompson (2011)

The framework suggested by Thompson (2011) focuses on economic-based stakeholder relationships in the interests of stakeholders. Based on this premise, Thompson (2011) grouped stakeholders of an organisation into three economic categories: 1) direct economic reciprocity; 2) indirect economic reciprocity; and 3) justice relationships (non-economic). Thompson (2011) believed this classification of stakeholders would enable leaders to identify, prioritise and integrate stakeholder interests that increase the long-term shareholder value of the organisation.

Identification of dependent variables in the study Based on an in-depth exploration of previous sustainability leadership models, the next sub-sections discuss the relevant constructs used to develop the dependent variables in the conceptual framework. The dependent variable of this study is sustainability leadership. Previous literature has often referred to this concept as ‘sustainability leadership’, as well as ‘leadership for sustainability’ and ‘sustainable leadership’ with similar meanings. Due to the common usage of the term ‘sustainability leadership’ in previous literature, this study has chosen to refer to its dependent variable as ‘sustainability leadership’.

Unlike other leadership theories, the concept of sustainability leadership shifts leaders’ attention from leader-member exchanges to a much broader perspective covering the whole social system. This study has accordingly extended the concept known as ‘excellence in leadership’ to ‘excellence in leadership with concern for sustainability’. This new dimension of sustainability leadership explains what the best behaviours of a leader are for becoming an excellent organisational leader in the contemporary, complex corporate world that prioritises sustainability.

This dependent variable of sustainability leadership designed in this study therefore, consists of two sub-dimensions as refered to below equation.

Sustainability leadership (i.e. Perceptions of excellence in leadership with concern for sustainability) = excellent leadership in management sense + excellent leadership in sustainability sense (i.e. concern for the impact on the environment, society and economy)

In total there are three dependent variables designed in this study to measure the above two sub-dimensions: 1) perceptions of excellence in leadership; 2) concern for social and environmental sustainability; and 3) concern for firm’s financial sustainability. As these three variables will determine the ultimate dependent variable of sustainability leadership, the above has been developed to explain the main dependent variable of this study.

The above formula views sustainability leadership as a much broader concept than the traditional perspective of excellence in leadership. Each of these three sub-dependent variables has its own primary objective, as shown in Table 4.1 below.

Table 4.1 Composition of the dependent variables of sustainability leadership

Sub-dimensions of Sub-construct aims Objective of the construct the dependent to measure each variable sub-dimension (sustainability leadership) Excellence in Perceptions of Aims to identify the combination of leadership in a excellence in excellent leadership behaviours that management sense leadership are desirable to achieve good leadership through surpassing others in a particular organisation. Excellence in Concern for social Aims to identify perceptions of leadership in a and environmental excellent leadership behaviours that sustainability sense sustainability are important to create the welfare of society and ensure the protection of natural resources. Concern for firm’s Aims to identify perceptions of financial excellent leadership behaviours sustainability important to ensure healthy financial performance of the organisation.

Similar to Dunphy and Benn (2013) and Hargett and Williams (2009) who proposed that context-specific factors influencing sustainability leadership, this study has also assumed its dependent variables and the independent variables are subjective to the situational and organisational context.

Exploring leadership as a concept that is influenced by culturally unique values has attracted much interest in recent years. For example, Hilton (1998); Selvarajah, Meyer and Davuth (2012), and Selvarajah, Meyer and Donovan (2013) have all explored culture-specific factors influencing the managerial leadership. Similarly, this study aims to understand how context-specific cultural values, beliefs and attitudes, especially relating to sustainability, influence perceptions of excellence in leadership in the Sri Lankan organisational context. Similar to other traditional leadership concepts such as transformational, transactional, charismatic and responsible leadership, the concept of excellence in leadership (Selvarajah et al. 1995) also strives to identify diverse leadership behaviours via perceptions of excellent leadership in organisations. The sub-sections below discuss each of the dependent variables of this study in detail.

4.3.1 Excellence in leadership in a management sense (EXL) Over the past half century there has been some confusion in research relating to effective leadership behaviours, as many scholars have attempted to identify effective leadership behaviours (Yukl 2012). A similar leadership concept to effective leadership named excellence in leadership (Selvarajah et al. 1995) has been developed in East Asian region to identify the perceptions of leaders regarding leadership behaviours that enable them to become excellent leaders within the organisational context. However, compared to the effective leadership concept which gathers perceptions of subordinates about their supervisors, the excellence in leadership dimension collects the perceptions of leaders, not the subordinates.

The concept of an excellent leader has been described as a combination of behaviours and attitudes desirable for good leadership within an organisational context (Selvarajah & Meyer 2008b). A corresponding scale was developed in the Asian perspectives on leadership (APEL) model (Selvarajah et al. 1995), which has since been regularly used as a cross-cultural leadership framework to measure the leadership perceptions of managers across different industries, countries and societies (Selvarajah 2008; Selvarajah & Meyer 2006, 2008a, b; Selvarajah, Meyer & Davuth 2012). As part of the APEL model, a list was developed of 94 specific leadership behaviours or actions that enable excellent leadership in an organisation (Selvarajah et al. 1995). Previous work of Anurit, Selvarajah and Meye (2011); de Waal et al. (2011); de Waal

83 et al. (2010); Selvarajah (2008); Selvarajah et al. (1995); Selvarajah and Meyer (2006, 2008a, 2008b); Selvarajah, Meyer and Davuth (2012); Selvarajah et al. (2013); Selvarajah (2005); Shrivastava et al. (2014), and Taormina and Selvarajah (2005) have confirmed that the excellent leader (EXL) construct is a prevalent measurement tool to explain perceptions of excellent leadership behaviours of managers.

When first developed, a notable limitation of the APEL framework was that it was only limited to East Asian countries, especially to ASEAN countries, in exploring perceptions of excellent leadership. As a response to this limitation, Selvarajah and Meyer (2008b) and de Waal et al. (2012) tested the APEL model beyond the ASEAN region. The APEL model and its 94 leadership behavioural statements have since been empirically tested in a number of countries in the East (Selvarajah & Meyer 2006, 2008a, b; Selvarajah, Meyer & Davuth 2012; Taormina & Selvarajah 2005) as well as in the West (de Waal et al. 2011), which supports its ability to measure the excellence in leadership dimension across different cultural contexts.

The findings of APEL studies have confirmed that the APEL model’s 94 behavioural statements and the excellence in leadership construct can be used to interpret the behaviours of managers beyond the East Asian context, and that there is enough flexibility to adapt and implement them into the development of any new leadership model that explores excellence in leadership in a specific national or cultural context (Selvarajah, Meyer & Davuth 2012).

Based on a comparison of the various APEL studies (Anurit, Selvarajah & Meye 2011; de Waal et al. 2011; de Waal et al. 2010; Selvarajah 2008; Selvarajah et al. 1995; Selvarajah & Meyer 2006, 2008a, b; Selvarajah, Meyer & Davuth 2012; Selvarajah et al. 2013; Selvarajah 2005; Shrivastava et al. 2014; Taormina & Selvarajah 2005), this study has identified and summarised relevant perceptions of excellence in leadership statements, which can be viewed in Appendix 2. This appendix includes 10 excellence in leadership behavioural statements that have been adapted from the 94 APEL leadership statements. Similar to the methodology used to design questionnaires in studies such as Selvarajah, Meyer and Davuth (2012), the remaining 84 statements have been used to measure other leadership behavioural dimensions identified in the conceptual framework.

4.3.2 Excellence in leadership in a sustainability sense The definition of sustainability has often been based on the TBL concept (Elkington 1994) or similar concepts such as those of Cavaco and Crifo (2014); Commission of the European Communities (2002), and Robert (1989). Most of the sustainability concepts developed around the world have been founded on the UN people, planet and prosperity concept (United Nations General Assembly 1987). In line with this, this study has considered the firm’s efforts towards sustainability as a multidimensional construct that needs to be measured simultaneously. Therefore, this study also identifies sustainability as consisting of three common dimensions explaining sustainability: 1) economic (prosperity); 2) environmental (planet); 3) and social (people).

4.3.2.1 Concern for society and environment (ENV)

Similar to the resource-based view of firms (Hart 1995), establishing social and environmental sustainability is now considered essential to achieving a competitive advantage and ensure lasting business success (Hart 1995). The concept of sustainability promotes diverse participants in the social system networking together to live in harmony (Capra 2005). Soft values such as empathy, complementarities, non- competitiveness, respect for diversity, sharing and caring are essential ingredients for creating strong communities (Salem 2012). Cultural values such as mutual respect, confidence and caring for other members of society have often helped to establish strong community bonds by developing confidence, reducing uncertainty and minimising conflicts between diverse social groups (Armstrong 2005; Salem 2012).

As stated by Salem (2012), respect for diversity enables strengthening human relationships, which in turn improve belongingness and trustworthiness between each other. In contrast, non-acceptance of diversity within society often results in human rights violations, discrimination, greed and unhealthy competitiveness (Salem 2012). Excessively greedy behaviours such as competing to outdo the other party through selfish consumption of limited resources and maximising short-term financial targets at the expense of future generations while overlooking the negativities they create are common aspects that hinder sustainability in many communities (Elkington & Hartigan 2008).

Therefore, managers who appreciate community values such as empathy, unity, caring and sharing, diversity, harmony, collaboration, and appreciation of the universe are more able to create socially responsible behaviours. Sensitivity to diversity, equal opportunity and social responsibility have also been identified as important aspects of corporations’ sustainability initiatives (Global Reporting Initiative 2013a). McWilliams and Siegel (2000) contended that socially responsible organisations generally prefer to move beyond the legal requirements by sacrificing resources and time, and making voluntary commitments to different ethical practices such as banning child labour, reducing their carbon foot print, improving employee welfare and protecting human rights. To measure corporate socioenvironmental responsibility, Ameer and Othman (2012) developed the community index, diversity index and global reporting initiative (see Appendix 3). These measurement tools identified in Appendix 3 present diverse CSR aspects that have been identified as most relevant to leaders’ behaviours, which can help to establish socially and environmentally responsible behaviours.

Some corporate sustainability models have proposed that environmental sustainability is the most important aspect. This is based on the assertion that excessive industrialisation has caused a range of environmental issues such as depletion of the ozone layer, global warming, a decline in biodiversity and nuclear waste (United Nations 2005b). It has been noted that depletion of natural resources for commercial activities is particularly common in developing economies, where their ecological resources are used to improve the living condition of citizens without consideration for the environmental damages that will affect the future (Dasgupta et al. 2005). This issue has influenced the UN to include environmental sustainability as one of Agenda 21’s primary MDGs (United Nations 2005b).

Hence, the protection of environmental resources continues to be a main dimension across many contemporary sustainability frameworks (Khavul & Bruton 2013; Rogers 2011). Some scholars such as Rogers (2011) have emphasised that the learning and implementing of ecologically-based frameworks such as ecological footprint, the natural step, natural capitalism, industrial ecology, cradle to cradle, and biomimicry will ensure organisational sustainability. As a result, a new form of leadership is often

86 required to incorporate environmental responsibility as a principal corporate objective (Shrivastava 1994a).

Despite this strong focus on environmental sustainability, most of the sustainability frameworks mentioned in Chapter 3, Section 3.3 do not align with the common idea behind the Venn diagram concept aligned with the TBL that consists with people, planet and profit introduced by Elkington (1994). In particular, scholars such as Rogers (2011) have highlighted the inappropriateness of providing equal attention to the TBL, and has recommended future sustainability models be developed that centralises the natural environment ahead of other two dimensions of economy and society. Appendices 3 and 4 list literature that has considered ecological and social sustainability as a main dimension in its frameworks.

4.3.2.3 Concern for firm’s financial performance (FIN)

Traditional leadership theories that prioritise maximising short-term financial performance at the expense of long-term survival is now being challenged by most scholars such as Avery (2005) and Dunphy, Griffiths and Benn (2003), with it now being recommended that firms incorporate sustainability perspectives into their strategies (Henderson 2006). In line with this, many firms are now open to disclosing their financial performance via financial reporting guidelines such as the Global Reporting Initiative (2013a). After reviewing the content analysis and financial reports of the top 100 global sustainable companies, Ameer and Othman (2012) suggested that firms that prioritise their commitment towards the four sustainability aspects – ethical, environmental, community and diversity – are more likely to achieve superior financial performance compared to those without a commitment to sustainability practices. Cavaco and Crifo (2014) and Hillman and Keim (2001) also argued that firms that prioritise stakeholder relationships will achieve better financial outcomes and a stronger competitive advantage. In addition, Avery (2005) and Avery and Bergsteiner (2010), in their sustainable leadership model, also indicated that ensuring a firm’s financial stability in the short-term as well as the long-term is essential to establishing sustainability. The firm’s financial performance, and a focus on improving long-term shareholder and stakeholder values were also highlighted as important leadership aspects in this model.

Despite these proactive sustainability aspects, Cavaco and Crifo (2014) and Choi, Kwak and Choe (2010) observed that the relationship between a firm’s investments in sustainability practices and a firm’s financial performance shows mixed results. In addition, over-investment in CSR activities is not recommended by some scholars, as it is believe that it might result in a negative financial performance (Cavaco & Crifo 2014; Post, Preston & Sachs 2002).

The Global Reporting Initiative (2013a) promotes its economic dimension as a way to measure the flow of financial gains among different stakeholders. In this initiative, four sub-categories to measure economic impact are recommended: 1) economic performance; 2) market presence; 3) indirect economic impact; and 4) procurement practices. The economic dimension could be measured using financial performance outcomes such as diversification, return on capital employed, profit margins, disclosure of political contribution, rating agencies report, and innovation (see Appendix 5 for further detail).

Most sustainability research has used two types of measures to measure financial sustainability: financial measures such as return on assets and return on equity; and 2) market-based measures such as the Tobin’s Q a measure used to evaluate the ability of a firm to generate future economic gains (Choi, Kwak & Choe 2010). In their content analysis study, Ameer and Othman (2012) measured financial performance by using return on assets, profit before taxation, and cash flow from operations and stated these financial measures can be summarised into two broader categories:1) backward- looking (e.g. return on assets, return on equity, or return on sales); and 2) forward- looking (e.g. Tobin’s Q ).

Chapter summary Sustainability has become a central focus of corporate decision-making in recent years. Organisational leaders have become more vigilant about their CSR activities, aimed at minimising the negative effects on the environment, society and economy. To contend with the often complex and challenging issues in relation to sustainability, most corporate managers need extraordinary leadership skills.

This chapter has reviewed and identified sustainability leadership models most relevant to organisational contexts. These models confirm the multidimensionality of the construct of sustainability leadership. In addition, in this chapter it has been put forward that sustainability leaders need extraordinary leadership skills as well as their standard day-to-day excellent leadership skills to be able to succeed in their complex organisational setting.

Limitations in quantitative studies that have specifically explored sustainability leadership of managers influenced this researcher to develop a new variable using the extant qualitative and quantities studies in relation to corporate sustainability. Thus, two sub-dimensions of sustainability leadership were identified. The first is based on the excellent leadership construct developed by Selvarajah et al. (1995), to measure excellent leadership in a management sense. The second was developed from the extant literature on sustainability and sustainability leadership, to measure excellent leadership in a sustainability sense. This chapter has also reviewed the diverse sustainability-related literature and highlighted the most relevant leadership behaviours that demonstrate sustainability leadership (see Appendix 3, 4 and 5).

CHAPTER 5. MODEL DEVELOPMENT: IDENTIFYING THE INDEPENDENT AND MEDIATING VARIABLES

Introduction Chapter 5 explains the development of the independent and mediating variables in this study. The literature that helped to identify the three independent and two mediating variables are also discussed in this chapter. Section 5.2 reviews the literature relating to the three independent variables: 1) stakeholder relations; 2) long-term orientation; 3) employee engagement. Section 5.3 reviews the literature relating to the two mediating variables: 1) leaders’ commitment to organisational change; 2) sustainable thinking. Based on this in-depth literature review, leadership characteristics such as behaviours, skills and attitudes that help to describe each independent and mediating variables were identified (see Appendices 6 to 10). These leadership characteristics will be the basis for development of new constructs to measure each leadership dimension identified in the conceptual framework. Section 5.4 provides a summary of the chapter. Figure 5.1 below further explains the flow of Chapter 5.

Figure 5.1 Composition of Chapter 5

5.1 Introduction Chapter 5:

Model 5.2 Independent variables of the study development:

Identifying the 5.3 Mediating variables of the study independent and mediating 5.4 Chapter summary variables

Independent variables of the study The theoretical framework proposed in this study has introduced three independent variables that affect the dependent variable of sustainability leadership:

1) Stakeholder relationship (STK) 2) long-term orientation (LONG) 3) Employee engagement (EMP)

In addition to the traditional leadership theories, the sustainability literature also puts forward some neo-charismatic leadership theories such as organisational change and sustainable thinking, which have been deemed essential to achieve sustainability leadership (Dunphy & Benn 2013). These two constructs have therefore also been identified as mediating variables in the conceptual framework of this study:

1) leader’s commitment to organisational change (CHNG) 2) leader’s sustainable thinking (SUSTHINK).

The section below defines each of these independent and mediating variables including their concepts and characteristics (i.e. leadership skills, attitudes, values and competencies) which help to identify sustainability leadership behaviours dependent on them.

5.2.1 Stakeholder relationships (STK) The concept behind ‘stakeholder’ is a complex phenomenon that lacks unity (Miles 2012). Freeman (1984) defined stakeholders as ‘any group or individual who can affect or is affected by the achievement of the organisation’s objectives’ (p. 46). It has been argued that most managers prioritise developing stakeholder relationships over general neoclassical attention that promotes profit maximisation (Samy, Odemilin & Bamption 2010). Schilling (2000) highlighted the work of Mary Parker Follet (Follet 1918), noting how she continually challenged traditional theories based on transactional relationships and proposed this new dimension of prioritising stakeholder relationships.

Stakeholder considerations became even more common in the late 1970s such as in the work of Ansoff (1979) and Mintzberg (1989). Early researchers such as Donaldson and Preston (1995); Higgins (1984); Polansky (1995); Porter and Kramer (2006), and Post, Preston and Sachs (2002) recognised maintaining stakeholder relationships as a ‘core strategic leadership competency’ that would help to solve complex challenges in the business environment.

Making comparisons with other traditional transactional leadership theories, Kaplan (1984); Kotter (1982) and Willard (2009) highlighted the leader’s concern for stakeholder relationships as an essential leadership aspect. Most of the traditional leadership models were perceived as incapable of addressing stakeholder perspectives, which led many researchers including Yukl (2010, 2012) to encourage future leadership scholars to consider stakeholder relationships as a separate meta-category when developing leadership models.

Sustainability leadership has been identified as a concept that assumes that society consists of complex and interrelated networks to ensure unity and harmony within the social network (Salem 2012). Based on this, scholars such as Avery and Bergsteiner (2011b) and Salem (2012) identified concern for stakeholder engagement, prioritising stakeholders and strong stakeholder relationship management as dimensions for achieving sustainability leadership. Other research also suggests that strong ethical and responsible attitudes towards stakeholders have a positive influence in creating sustainability leadership (Polansky 1995; Thompson 2011). For example, organisations such as P & G and Olay are able to remain competitive by understanding their customers’ requirements through extensive engagement in market research (Strategic Direction 2011). In addition, Shell and Motorola have both achieved a sustainable competitive advantage by strategically positioning the firm within their stakeholder network (Post, Preston & Sachs 2002).

Many believe that maintaining strong stakeholder relationships enhances the capacity to generate long-term financial performance (Post, Preston & Sachs 2002), which also improves brand reputation, customer satisfaction, long-term shareholder value and stakeholder values (Avery & Bergsteiner 2011c). Charitable donations is a popular method for attracting stakeholders that enhance consumer satisfaction and a firm’s

92 sales (Navarro 1988). However, charitable investment only guarantees positive financial results in certain industries such as retail and financial services (Lev, Petrovits & Radhakrishnan 2010).

Expectations of better financial results have often made managers over-invest in CSR activities that reflect the organisation’s concern for stakeholder interests (Barnea & Rubin 2010). However, over-investment does not always guarantee improved results. For instance, research has often revealed that over-investment in corporate citizenship activities can in fact produce negative financial performances (Barnea & Rubin 2010). In addition, if the government or any other public corporation becomes the firm’s primary customer, leaders cannot expect positive revenue through charitable donations (Lev, Petrovits & Radhakrishnan 2010). However, the decision might improve employee performance and relationships with the government or other public customers (Lev, Petrovits & Radhakrishnan 2010).

Building strong stakeholder relationships can enhance an organisation’s ability to ‘stay alive’, encouraging the implementation of organisational transformations that cultivate long-term survival (Crawford & Nahmias 2010). Stakeholder engagement has been identified as an essential leadership competency that facilitates organisational transformation (Crawford & Nahmias 2010). Stakeholder engagement requires diverse leadership skills, attitudes and practices that are especially suitable to the organisational context (Avery & Bergsteiner 2011a; Kouzes & Posner 2010; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012). Appendix 6 further discusses diverse leadership characteristics that leverage strong stakeholder engagement in the organisational context.

5.2.2 Long-term orientation (LONG) Individuals’ perceptions and preference for a particular time horizon (i.e. short-term vs. long-term) have become a hot topic in recent times (Earley 1997; Nevins, Bearden & Money 2007; Spears, Lin & Mowen 2001). The organisational decisions in relation to how to value, estimate, utilise and weigh the time between past, present and future events have been explored by many scholars. Some of the relevant studies can be categorised as follows: the effect of time orientation in understanding individual behaviours in decision-making (Earley 1997; Spears, Lin & Mowen 2001);

93 understanding marketing and consumer behaviours (Graham 1981; Loewenstein & Prelec 1993; Prelec & Loewenstein 1998); leadership and cross-cultural leadership studies (Earley 1997; Mosakowski & Earley 2000; Spears, Lin & Mowen 2001); CSR- related areas such as ethical behaviours (Nevins, Bearden & Money 2007); and long- term orientation in sustainability leadership (Fullan 2003).

Saunders, Slyke and Vogel (2004) believed that an organisation’s preference for long- or short-term orientation is dependent on several factors, such as the nature of the business and the industry. Avery and Bergsteiner (2011c) contended that firms in particular service industries such as aircraft, shipping and project management are more likely to make long-term decisions, spending more time and resources on analysis, while other businesses such as those in the fast-moving consumer goods (FMCG) industry are more interested in making prompt decisions that prioritise their short-term performance. In addition, it has been put forward that personal values relating to morals and justice (Rawls 1999), as well as national cultural values (Graham 1981; Hofstede & Bond 1988; Ko & Gentry 1991; Mosakowski & Earley 2000; Spears, Lin & Mowen 2001), can have an influence on long- or short-term decision- making preferences within a business.

Scholars such as Cappelli et al. (2010) have indicated that most Eastern organisations are able to survive even in periods of global financial hardships because they are more focused on the long-term success of their organisations, whereas most Western organisations start to collapse during such times because they are more short-term profit motivated. For example, some of the most well-known corporate collapses in the West such as Enron, Worldcom, Aldelphia, HealthSouth and Parmalat have been blamed on their managers’ prioritisation of short-term financial survival at the expense of the longevity of their business (Barnes et al. 2002; Millman 2002; Padgett 2005). In contrast, Eastern cultural values generally prioritise long-term orientation through being internally focused and prioritising employee development, which has helped many of these business leaders to maintain the trust and loyalty of employees and other stakeholders, and to stay competitive in the market (Cappelli et al. 2010). These results have caused many organisations to start to reconsider the benefits of prioritising long- term survival as a key corporate strategic objective (McKinsey Quarterly 2006).

It has been commonplace for managers in the East and West to prioritise short-term wealth maximisation over long-term strategies, preferring to cut down on internal investments such as employee training, and other development and innovation activities, while encouraging decisions to lay off staff to minimise operational costs (Freeman 1984). In contrast with this perspective, most leaders with a long-term vision are committed to developing resources and capabilities that maintain their long-term competitiveness in the market (Avery & Bergsteiner 2011c; Mitchell 2001). Many scholars such as the McKinsey Quarterly (2006) and Avery and Bergsteiner (2011c) have highlighted positive results from long-term-oriented decision-making in achieving organisational sustainability. Yet many managers have continued to go down the short-term orientation path, often because their organisations measure their performance based on the meeting of short-term targets, which are generally linked to managerial remunerations, promotions and career advancement (Avery & Bergsteiner 2011c).

5.5.2.1 Theories measuring long-term orientation

Most theories in relation to time orientation preferences have confirmed that short- term orientation does not align with the longevity of a business (Albert 1993; Avery & Bergsteiner 2010; Ghoshal 2005; Hall & Soskice 2001; Kennedy 2000; Mitchell 2001).

The theories that introduce the ‘polycronic’ and ‘monocronic’ distinctions (Hall & Hall 1990; Kaufman, Lane & Lindquist 1991) have highlighted that individual preferences for a particular time orientation are often based on cultural perspectives. These theories define individuals from monocronic cultures as those that perceive time as a sequential process and prefer a linear approach that helps them to plan their tasks well ahead, and those from polycronic cultures as individuals that perceive life events as non-linear and interconnected, meaning they have to be dealt with simultaneously. Based on these theories, polycronic individuals are assumed to be able to handle complexity and non-routine tasks more effectively than those from monocronic cultures.

A similar perspective was introduced by Trompenaars and Hampden-Turner (1998), who defined two types of individuals in relation to time orientation: 1) individuals who

95 view time as consisting of events passing one after the other is (i.e. sequential); and 2) individuals who believe events cannot be desegregated from each other (i.e. past, present and future are all interrelated).

Another commonly used time orientation model was introduced by Hofstede and Bond (1988), which defines time orientation from a cultural perspective. The work of Hofstede and Bond (1988) was an extension of the original model of Hofstede (1980), and originally aimed to explore the influence of Confucian values (e.g. tradition, perseverance, saving for the future, and allowing others to save face in relationships) on economic growth in developing countries. Hofstede and Bond (1988) later introduced this new dimension as the fifth dimension and named it ‘Confucian dynamism’ in to the initial model of Hofstede (1980). However, due to complexities associated with measuring and defining Confucian dynamism it was later renamed ‘long-term orientation’ (Fang 2003; Hofstede 2001b). Long-term orientation has attracted considerable attention from cross-cultural studies such as Bearden, Money and Nevins (2006) who introduced this dimension into their studies.

Another model that explains long-term orientation was developed by Lin and Mowen (1994) based on anthropology, psychology and sociology to capture the cognitive- motivational modelling of time orientation. This model consists of two broad dimensions: 1) the cognitive dimension that reflects the individual’s cognitive representation of the time horizon; and 2) the motivational dimension that reflects the individual’s emotional attachment to particular time horizons. Spears, Lin and Mowen (2001) expanded on this model by introducing a four-dimensional framework in relation to time horizons: 1) envisionality; 2) causality; 3) preferential/pre- occupational; and 4) referential.

The above theoretical developments for measuring long-term orientation in organisational decision-making have been widely acknowledged across the sustainability leadership literature (see Appendix 7). For example, Avery and Bergsteiner (2011c); Cameron (2003), and Dunphy, Griffiths and Benn (2003) argued that leaders must prioritise the firm’s long-term survival when they make decisions regarding complex and competitive challenges in the contemporary business environment. However, balancing the right mix of long- and short-term objectives has

96 been identified as a difficult but essential leadership skill to ensure the firm’s competitive advantage and long-term survival (Barney 1991; Strategic Direction 2011). In line with this, Metclaf and Benn (2013) believed that favouring one time zone more than another is a challenging leadership ability. For example, BMW was successful in incorporating a long-term perspective into its strategic planning that revolutionised the car industry (Avery & Bergsteiner 2011c). Similarly, companies such as P & G, Oley, and Starbuck have also successfully achieved organisational sustainability with the correct mix of long- and short-term objectives (Strategic Direction 2011).

Yet even though long-term orientation has been studied in relation to the individual’s ethical values (Nevins, Bearden & Money 2007), it is yet to be empirically explored within the context of sustainability leadership. Appendix 7 provides further detail on relevant studies that have considered sustainability leadership characteristics pertaining to long-term orientation in business decision-making.

5.2.3 Employee engagement (EMP) Many scholars have acknowledged that organisations with skilled, motivated, loyal and committed staff enjoy a competitive advantage, which helps to ensure the firm’s sustainability (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Gardner et al. 2005; Shrivastava 1994a). In addition, today’s workforce is more likely to take on meaningful work that makes a positive social and ecological contribution to their society, while the firm ensures compensation for their work in the organisation (Rok 2009). When leaders consider the sustainability of their business as a main corporate priority, employees also tend to incorporate sustainability values into their own daily lives (Quinn & Dalton 2009). Hence, the contemporary workforce generally prefers organisations that engage in sustainability initiatives (Backhaus, Stone & Heiner 2002; Bhattacharya, Sen & Korschun 2008), and offer employee career advancement through learning opportunities which ensure the quality of their work life (Hewitt and Associates 2001).

As a result of these employee needs, many organisational leaders have redesigned their roles to include challenging goals that create job enhancement (Galpin & Whittington 2012). It has been acknowledged that organisations that continue to invest in employee

97 training and development activities, even in a period of financial hardship, are more able to enhance employee motivation, which often results in improvements in trustworthiness and loyalty to their organisation (Avery & Bergsteiner 2011c; Salem 2012). For example, companies such as BMW, Colgate, Porsche, Huawei Technologies, Allianz, Marriott, HSBC, Munich Reinsurance, and Westpac are some of the organisations offering annual staff training and development programs that may cost millions of dollars but have helped to improve employee skills aligned with long- term strategic goals (Avery & Bergsteiner 2010).

Despite these proven positive outcomes, some leaders still disregard the importance of their employees, and tend to be more interested in spending time and resources on external stakeholder development activities such as CSR activities (Galpin & Whittington 2012; Willard 2009). This misconception has resulted in many of these leaders giving less attention to their employees, which has generally resulted in a lower than expected performance (Galpin & Whittington 2012; Willard 2009). For example, there remains a common leadership belief that training opportunities should be limited to a certain group of employees (Levitan & Werneke 1984). This is based on the perception that most employees do not stay in one organisation for long, causing many managers to take personal, short-term decisions when investing in employee training and development (Levitan & Werneke 1984). Although this belief has been challenged by some scholars including Hargett and Williams (2009) and Levitan and Werneke (1984), who have argued that limiting employee training and development opportunities will limit the potentiality to achieve expected results.

Scholars such as Fullan (2003); Hind, Wilson and Lenssen (2009), and Kets De Vries et al. ( 2010) have highlighted the creation of effective teams and improvement of employee commitment as essential criteria for ensuring long-term survival. Many now believe that to improve profits, organisational competitiveness and environmental quality of their products, firms need to link their sustainability efforts with human resource strategies (Jackson et al. 2012). Yet there are many contemporary leaders that still struggle to effectively incorporate human resource strategies into their firm’s sustainability missions (Jackson et al. 2012; Lacy, Arnott & Lowitt 2009).

To fill this gap, Galpin and Whittington (2012) highlighted a two-stage process consisting of transactional and transformational leadership behaviours to maximise employee engagement in sustainability initiatives. They identified four transformational leadership skills useful for leaders in motivating their employees and transcending employees’ self-interests for the betterment of the organisation (see Appendix 8 for further detail). Some other positivistic leadership theories such as servant leadership, adaptive leadership and ecocentric leadership have also emphasised that leaders need to encourage employee commitment to ensure sustainability (Metclaf & Benn 2013). To achieve employee commitment, the literature indicates that diverse leadership competencies, skills and practices are essential to engage, motivate and develop the employees, to subsequently ensure the firm’s long-term success (see Appendix 8).

Mediating variables of the study Globalisation has expanded education opportunities across most societies, and has increased awareness about unsustainable practices that can disturb our daily lives (Dunphy, Griffiths & Benn 2003). Public awareness and pressure to ensure ethical and responsible business actions, new technological innovations, and new rules and regulations are continuously pressuring organisations to achieve sustainability (Akins et al. 2013; Ekvall & Arvonen 1991; Galpin & Whittington 2012; Johnson 1998; Khavul & Bruton 2013; Senge 1990; Strategic Direction 2011; Watkins & Marsick 1993). Based on this apparent essentiality of organisational change and sustainable thinking to achieve sustainability leadership, this study has identified the following two leadership dimensions as mediators in its conceptual framework:

1) leader’s commitment to organisational change (CHNG) 2) leader’s sustainable thinking (SUSTHINK).

5.3.1 Leaders’ commitment to organisational change (CHNG) Since the 1950s, organisational change has captured the attention of many scholars (Murphy 2002). Sharif and Scandura (2014) categorised organisational change research into two streams: 1) employees’ resistance to change; and 2) openness to change. Earlier literature on organisational change by Levy and Merry (1986) recognised two broader concepts: 1) planned change; and 2) managed change. Levy 99 and Merry (1986) explained that planned changes arise when internal or external experts are involved in the implementation of the planned changes; manage change is how managers implement planed changes in their organisation.

Most of today’s firms are more willing to change their structures and improve organisational performance to successfully face market competition, respond to new customer and supplier demands, and adapt to new technological innovations (Murphy 2002). As a result of embracing change, an organisation’s ability to continuously evaluate environmental changes and plan ahead for possible future organisational changes often leverages a competitive advantage (Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003, 2007; Levy & Merry 1986). For example, most Canadian firms believe organisational change is necessary to compete against their domestic and global counterparts, and to increase their firm’s profitability (Magun 1998). However, retaining client loyalty against such fierce competition has become a challenge for most organisations (Murphy 2002). Many industries such as telecommunications, consumer electronics and FMCG are experiencing rapid developments in new technologies and changes in consumer preferences that demand their leaders to promptly adapt to new market innovations and changes (Garvin 1993 ; Khavul & Bruton 2013). For example, to prioritise customer orientation, the implementation of new work practices and shorter production cycles, and the continuous renovation of product designs can challenge managers – many have to transform their traditional management practices into new, innovative management practices (Murphy 2002).

Senge (1990) argued that organisational change can be achieved through enriching learning within the organisation. In addition, Watkins and Marsick (1993) defined a learning organisation as one that learns continuously and transforms itself. Another main characteristic of learning organisations is the effort to learn from their past experiences (McGill, Slocum & Lei 1992), as well as addressing the need for a long- term commitment from management (Watkins & Marsick 1993). Senge (1990) identified committed, competent and skilled organisational leadership as one that encourages change. It is commonly believed that organisations that strive to create a learning culture based on continuous learning will successfully adapt to their environmental changes more than others (Watkins & Marsick 1993).

100

5.3.1.1 Sustainability and organisational change Brundtland (1987) introduced the concept of sustainability not as a fixed state of harmony, but rather a process of change through the exploitation of resources, direction of investments, orientation of technological development, and institutional changes that will ensure satisfaction of future as well as present needs.

An organisation’s transition towards sustainability is often related to a leader’s ability to immediately adapt to changes in the environment to ensure long-term success (D’Amato & Roome 2009; Hargett & Williams 2009; Strategic Direction 2011; Willard 2009). According to Dunphy and Benn (2013) and Dunphy, Griffiths and Benn (2007), to achieve organisational sustainability, leadership has to solve both the ongoing problems as well as plan ahead. Such organisational transformation from unsustainability (i.e. opposition) to sustainability (i.e. commitment) needs to accommodate diverse sustainable goals, organisational actions, interventions, and types of effective leadership that could differ from one phase to the other (Dunphy, Griffiths & Benn 2007). For example, Dunphy and Benn (2013) and Dunphy, Griffiths and Benn (2003, 2007) highlighted the important role of organisational leadership to implement organisational change that achieves sustainability. Most of the sustainability frameworks discussed in chapters 3 and 4, such as TBL (Elkington 1997), the natural step (The natural step 2008), cradle to cradle (McDonough & Braungart 2002), sustainable leadership pyramid (Avery 2005), the seven step change process to sustainability (Willard 2009), four habits for thoughts for sustainability leadership (Parkin 2010), and sustainable leadership (Fullan 2003) have also identified organisational change as an essential aspect to achieve sustainability.

5.3.1.2 Organisational change and leadership In recent years, organisational change has been heavily researched by leadership scholars and practitioners (Andersen 2010; Armenakis, Harris & Mossholder 1993; Crawford & Nahmias 2010; Dunphy, Griffiths & Benn 2007; Kanter, Stein & Jick 1992; Khavul & Bruton 2013; Levy & Merry 1986; Pettigrew, Woodman & Cameron 2001; Whitely & Whitely 2007). It is commonly believed that organisational change

101 leadership is founded on the leader’s ability to identify the need for change (Akins et al. 2013; D’Amato & Roome 2009; Lueneburger & Goleman 2010; Strategic Direction 2011), often involving leaders taking on change agent responsibilities to lead their organisation through its reforming, redesigning and restructuring (Hawken 1993).

Also, it is also important to know which organisational leadership competencies are necessary to adapt to changes and innovations. Appendix 9 summarises the leadership competencies, skills and attitudes that are deemed most impactful on the successful implementation of organisational changes.

Resistance to organisational change can create unsustainable outcomes such as employee dissatisfaction, low productivity, impact to psychological wellbeing, high absenteeism, theft and staff turnover (Bordia et al. 2004; Miller, Johnson & Grau 1994). Winning employee support is therefore essential, as employee resistance to change could limit effective implementation of organisational change (Miller, Johnson & Grau 1994). As part of this, leaders should support collective decisions that enhance employees’ attitudes, visions and beliefs (Eisenbach, Watson & Pillai 1999; Podsakoff, MacKenzie & Bommer 1996). Managers should also strive to engage with employees as educators, mentors and coaches – this is likely to achieve more positive change implementation results (Armenakis, Harris & Mossholder 1993; Santhidran, Chandran & Borromeo 2013).

Some believe that organisations with patriarchal values and top-down decision-making structures are limiting their change implementation outcomes (Doppelt 2009). In line with this, Detert and Burris (2007) recommended changing bureaucratic leadership practices to more collaborative, sharing practices, which will encourage employee participation. Empowering followers to take responsibility for their own tasks is more likely to achieve successful change implementation (Doppelt 2009). In their efforts to better understand effective change implementation, Ekvall and Arvonen (1991) identified the need for a shift in leadership styles from a traditional employee-oriented and production-oriented leadership style to include a new third-dimension leadership style of change-oriented leadership.

102

In addition, speedy and timely adjustments to address changes in the business environment are often highlighted as an opportunity to enhance the company’s competitive position (Dunphy, Griffiths & Benn 2003). In line with this, it has been contended that organisations that quickly respond to internal and external market changes achieve a competitive advantage (winners), while those unable to cope with such changes lose their competitive edge (losers) (Khavul & Bruton 2013; Revans 1982). For example, Interface Chairman Ray Anderson changed his organisational strategies by establishing sustainability values as a corporate priority linked to all internal functions such as human resources, production and marketing, which achieved long-term corporate success (Dunphy, Griffiths & Benn 2003).

Most scholars perceive leadership that can accommodate organisational change an essential aspect (Crawford & Nahmias 2010; Whelan-Berry, Gordon & Hinings 2003) – organisational change is now considered integral for keeping with new technology and maintaining a competitive advantage, as the traditional work practices are no longer assuring future competitive advantage (Murphy 2002). Continuous social and environmental pressures for organisational change have caused many organisational leaders to perceive change-oriented leadership skills as an essential leadership competency (Akins et al. 2013; Avery & Bergsteiner 2011c; Bossink 2007; Goldsmith, Ulrich & Carter 2005; Strategic Direction 2011). Although Yukl (2012) contended that change-oriented leadership behaviours are more important to senior than lower-level managers (Crawford & Nahmias 2010; Levy & Merry 1986; Turner, Grude & Thurloway 1996). Recognising the essentiality and essentiality of organisational change leadership, Yukl (2012) believed there is a need for further research in relation to the organisational leader’s commitment to change.

Despite this recognised need, leadership behavioural research exploring organisational change and innovation has not received much attention, especially in leadership literature (Armenakis & Harris 2009; Yukl 2012). It is still commonly considered an underdeveloped research area, especially within corporate responsibility literature (D’Amato & Roome 2009). Yet regardless of these limitations, Ekvall and Arvonen (1991); Yukl (1999c), and Yukl, Gordon and Taber (2002) were all able to introduce validated constructs that have offered new insights for most leadership behavioural

103 scholars. These theoretical developments have motivated many scholars to incorporate change leadership as an important dimension in their new leadership frameworks.

These new leadership frameworks include Bass (2008) who indicated that change leadership is dependent on the leader’s personal characteristics, as well as situational contingencies. In particular, Schwartz (1992) and Schwartz and Blisky (1987) categorised individuals based on their characteristics, ranging from egoistic to altruistic, and from conservative to open to change. Based on this categorisation, Stern, Dietz and Guagnano (1995) and Corraliza and Berenguer (2000) proposed that individuals who are altruistic and open to change are more likely to be environmentally friendly. In addition, Selvarajah, Meyer and Davuth (2012) identified two change- related leadership dimensions to assess how environmental changes influence perceptions of excellent leadership (i.e environmental tracking and embracing change).

5.3.1.3 Organisational change in the developing world

Most studies on leadership during organisational change have related to either Western countries or developed economies (Santhidran, Chandran & Borromeo 2013). Only limited attention has been placed on organisational change leadership in the developing world (Khavul & Bruton 2013), especially in the Asian region (Santhidran, Chandran & Borromeo 2013).

The limited research indicates that as a traditional response to market changes, most organisations in the developing world prefer to adapt successful technologies and innovative strategies from the developed world, irrespective of their applicability (Chiaburu 2006; Khavul & Bruton 2013). Diversity of customer preferences in developing countries suggest that leaders need to properly understand each relevant preference prior to making change decisions (Khavul & Bruton 2013). In such instances, organisations need to invest more in research and development to understand the characteristics of local customer needs, living patterns, influential parties on purchasing decisions, and other important information about the community (Khavul & Bruton 2013). In particular, personal values, attitudes and behaviours in developing countries are largely influenced by other participants of the social system

104

(e.g. immediate networks of family, extended family, neighbours and friends) (Khavul & Bruton 2013). In addition, managers working in markets in the developing world need to understand the composition of the local community and its social structure (Khavul & Bruton 2013). These studies provide confirmation that adapting universal management practices to any market is inadvisable (Murphy, McBean & Farahbakhsh 2009) – leaders should instead develop context-specific change strategies, based on specific customer values, attitudes and behaviours.

5.3.2 Leaders’ sustainable thinking (SUSTHINK) The concept of corporate sustainability has motivated some researchers to further explore acceptable, ethical and responsible leadership practices to adequately overcome diverse challenges surrounding sustainability (D’Amato, Henderson & Florence 2009; Donaldson & Preston 1995; Higgins 1984; Post, Preston & Sachs 2002).

Research in relation to the leader’s ethical and moral thinking has a long history, starting with Carson (1962); Ehrlich (1968) and Schumacher (1973). Brown, Trevin˜o and Harrison (2005) have since defined ethical leadership as ‘the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making’ (p. 120). Although this definition of ethical leadership has been criticised by some scholars including Eisenbeiss (2012) who highlighted its vagueness, especially in relation to what ‘normatively appropriate conducts’ are.

Initial attempts to explore ethical and responsible leadership characteristics first evolve from transactional leadership and expanded into transformational leadership, charismatic leadership, eco-sensitive leadership, and has even been linked with some contemporary management literature such as complexity leadership (Rogers 2011). The leader’s inner-self integrity resounds in most of the organisational leadership models, such as positive leadership (Cameron 2008), servant leadership (Greenleaf 1977), spiritual leadership (Fry 2003), and authentic leadership (Avolio et al. 2004; George 2003). In line with this, the influence of the leader’s integrity values on

105 corporate strategic planning was first identified as a concept relating to CSR (Blowfield 2008; Freeman, Harrison & Wicks 2007; Hawken 1993).

5.3.2.1 Leaders’ integrity values and sustainability

The advancement of social awareness for sustainability and relevant corporate responses such as adapting to change has influenced some scholars to more deeply explore the leader’s integral values that most need to ensure sustainability. In particular, these scholars have included values surrounding integrity, ethics and morals as an important dimension in most of their leadership models (Dunphy, Griffiths & Benn 2003; Hind, Wilson & Lenssen 2009). For example, sustainability leadership models such as those of Avery and Bergsteiner (2011c); Dunphy and Benn (2013); Fullan (2003); Hind, Wilson and Lenssen (2009); Kociatkiewicz and Kostera (2012); Metclaf and Benn (2013), and Parkin (2010) acknowledged the importance of the leader’s integrity values in relation to ethical and responsible leadership.

The need to deeply explore how ethical and responsible thinking emerge within one’s own self and how these attitudes gradually expand to one’s own family members, to the wider community and to society at large has led most scholars to use the theory of moral development (Kohlberg 1981). These studies have also revealed a relationship between self-maturity by age and socially responsible leadership behaviours. Scholars such as Jayne (2004) believed that the individual’s ethical concern for society grows as they mature. Further to this, Gallup (2004) suggested that the short-term focus prevalent within adolescent behaviour generally decreases as the person matures with age and becomes more responsible about their own self-behaviour within society. In an organisational context, the leader’s capacity to see the ‘big picture’ and the interconnected networks has also been identified as an important characteristic to ensure ethical and responsible behaviours. In line with this, Roome (1994) and Frankel (1998) further contended that the leader’s systems thinking, holism (ability to identify individual problems from a complex system), and ability to transmit single disciplinary meaning to the world ensure social and environmental responsible leadership.

Despite the focus of some scholars, the number of studies exploring how leader’s integrity values enhance a firm’s financial performance is limited (Trevino, Brown &

106

Hartman 2003). As a result, Yukl (2012) identified leader’s integrity values in general as a potential future research area. This has motivated some researchers such as Eisenbeiss, van Knippenberg and Fahrbach (2014) to further explore the relationship between leader’s integrity values and firm performance, mediated by the firm’s ethical culture, and moderated by the firm’s ethics programs. Appendix 10 further discusses the integrity values of leadership that are most impactful on sustainability leadership in an organisational leadership context.

Chapter summary The main objective of this chapter was to identify and discuss the main independent variables and mediating variables influencing sustainability leadership among managers. A comprehensive review of the literature has helped to identify three key leadership excellence dimensions influencing sustainability leadership: 1) leaders’ concern for stakeholder relations; 2) employee engagement; and 3) long-term-oriented decision-making. In addition, the literature has regularly highlighted the impact of organisational change leadership and sustainable thinking (i.e. ethical and responsible leadership) on achieving sustainability leadership. Hence, these two leadership dimensions were deemed as mediating variables and included in this study’s conceptual framework.

Following an in-depth review of the literature, the researcher identified diverse leadership skills, values, behaviours and attitudes that define each leadership dimension (see Appendices 6 to 10). In addition, due to the limitations in empirical studies of validated measures for each of these leadership dimensions, all five constructs (i.e. three independent and two mediating variables) have been developed and empirically validated as new constructs in this study’s conceptual framework. The identified leadership characteristics (as detailed in Appendices 6 to 10) have been used as a basis to develop these new constructs.

In the next Chapter 6, the literature on Sri Lankan leadership practices and the issues surrounding sustainability in Sri Lankan organisations is examined.

107

CHAPTER 6. MODEL DEVELOPMENT: CONTEXT- SPECIFIC INFLUENCE

Introduction This chapter explains the importance of context-specific characteristics for understanding sustainability leadership among Sri Lankan managers. Sections 6.2 and 6.3 discuss the cultural theories that are useful for exploring culture-specific leadership concepts. Next, Section 6.4 reviews the diverse definitions of national culture, and Section 6.5 then discusses the relevance of culture-specific knowledge for understanding sustainability leadership. Section 6.6 covers literature on cultural modelling and its applicability to explain diverse leadership concepts. As Sri Lanka is a developing economic nation in the South Asian region, this chapter also explores sustainability and sustainability leadership in both developing nations as well as the South Asian regional context in Section 6.7. Section 6.8 then discusses sustainability leadership in the Asian and South Asian context.

Section 6.9 covers the literature relating to Sri Lanka’s cultural and social value, identifying country-specific economic development and sustainable economic development. For this purpose, the process involved in achieving the UN MDGs is also discussed. Section 6.10 next examines the Sri Lankan literature relating to each of the leadership dimensions identified in this study’s conceptual framework, and summarises the most common organisational leadership behaviours in Sri Lankan organisations. Section 6.11 is a summary of the chapter’s discussions and observations.

Figure 6.1 below presents the flow of Chapter 6 in a diagram format.

108

Figure 6.1 Composition of Chapter 6

6.1 Introduction

6.2 Context-specific influence on the constructs of the study

6.3 Implicit leadership theories

6.4 Defining national culture

6.5 Development of culture- specific leadership studies

6.6 Use of cultural modelling to explain leadership as a culture- specific concept Chapter 6: 6.7 Sustainability leadership in Model development: Context- less developed economies specific influence

6.8 Sustainability leadership in the Asian context

6.9 Background of Sri Lanka

6.10 Context-specific characteristics of the independent and mediating variables of the study

6.11 Chapter summary

109

Context-specific influence on the constructs of the study The previous chapter specified the five leadership dimensions (i.e. stakeholder relationships, long-term orientation, employee engagement, organisational change, and sustainable thinking) influencing sustainability leadership. The literature confirms that each of these five independent variables has a positive influence on the dependent variable of sustainability leadership. Similar to other leadership research such as Yukl (2012), this study also believes that the characteristics of the study context (e.g. the organisational and national context) will decide the influence of each of the independent variables on the dependent variable. For example Dunphy, Griffiths and Benn (2007) and Khavul and Bruton (2013) studied organisational-level and national context specific characteristics influencing CSR strategies of the firm. Dunphy, Griffiths and Benn (2007) and Khavul and Bruton (2013) also recommended that future researchers explore the context specific characteristics for any future study on sustainability leadership.

6.2.1 Leadership and the national context Having identified the importance of exploring the organisational and national context in relations to sustainability leadership, this study has aimed to develop a leadership model by identifying the values, beliefs, norms and attitudes that prevail in a Sri Lankan organisational context. It was anticipated that this would enable the researcher to explain what constitutes sustainability leadership in the Sri Lankan organisational context. The sub-sections below summarise the literature on how cultural values influence diverse leadership characteristics in different contexts.

Traditionally, the leadership literature has assumed that organisational leadership is a universal phenomenon (Bass 1990; Bass & Avolio 1993b; Fahr, Podsakoff & Cbeng 1987; Murdoch 1967; Wakabayashi & Green 1984), although this perspective has been questioned by several leadership scholars such as Den Hartog et al. (1999) and Scanduraa and Dorfman (2004) who recognised leadership as a culturally contingent concept. Most of the previous leadership literature was biased towards America, which caused Wijewardena and Wimalasiri (1996) and Peterson and Hunt (1997) to criticise the inadequacy of Western-based leadership theories to explore diverse organisational leadership characteristics of non-Western cultures. It was Wijewardena and Wimalasiri (1996) that identified the continuous transformation in the economies,

110 societies, political systems and industries in Asia, which has resulted in the emergence of a new breed of Asian leaders who are perceived as different from the traditional, well-researched American and Japanese leadership styles.

The urgency to identify diverse leadership styles across cultures has attracted the attention of scholars such as Hofstede (1986); Hofstede and Bond (1988); House et al. (1999), and House and Javidan (2004) who re-examined the concepts surrounding leadership and recognised the influence of diverse cultural values, beliefs and behaviours. Yet even though much has since been done to understand the cultural influence on leadership, many scholars such as Dicksona, Den Hartogb and Mitchelsona (2003); Morrison (2000); Scanduraa and Dorfman (2004); Trompenaars and Hampden-Turner (2011), and Yukl (2012) have still argued that there is limited amount of existing leadership models that help to explain the complex challenges that continuously arise from diverse organisational environment. This has caused some scholars to call for a new cognitive approach mixed with other interdisciplinary knowledge (e.g. psychology, anthropology and behavioural sciences), where leadership will be defined as a cognitive process in the development of future leadership research (Dorfman 2003).

The perception of leadership as a culture-specific concept began to attract attention from scholars who started to explore diverse concepts surrounding leadership as a culture-specific concept (Laurent 1986). Some of this literature has even argued that the duties of a leader are often similar across cultures, but that leadership roles, actions and behaviours are different from one culture to another. For example, Drucker (1988) stated: ‘Because management deals with the integration of people in a common venture, it is deeply embedded in culture. What managers do … is exactly the same. How they do it may be quite different’ (p. 75). In particular, scholars such as Brodbeck et al. (2000); Javidan et al. (2006); Selvarajah, Meyer and Davuth (2012), and Selvarajah, Meyer and Donovan (2013) used the cognitive approach to explain the influence of cultural values, norms, attitudes and beliefs on diverse leadership behaviours in different cultural contexts.

These cross-cultural leadership researchers have also recognised the suitability of the cognitive approach in developing new leadership models, and some have

111 recommended that future researchers use this method to further explore the influence of national cultural values on diverse perspectives of leadership. This focus on the cultural perspective of leadership then began to be popularised by many scholars, who explored diverse concepts surrounding excellent leadership in different cultural contexts (Anastasia et al. 2010; D' Andrade & Strauss 1992; Hilton 1998; Selvarajah, Meyer & Davuth 2012; Singh 2002).

6.2.2 Importance of culture-specific knowledge in leadership In a globalised market, awareness of diverse cultural values helps leaders to make optimal decisions that match the local context (Javidan & House 2001; Scanduraa & Dorfman 2004; Triandis 1995). The importance of local cultural values, beliefs, customer preferences and the interests of the employees was deemed important in some of the early studies such as Parson (1951). It has been suggested that those organisations that accept cultural diversity are always able to outperform their counterparts (Avery & Bergsteiner 2010, 2011c). In this context, it is believed that the leader’s knowledge of diverse cultural values, beliefs and norms in the local market will facilitate excellent leadership decisions that have a minimum impact on the organisational environment (Avery & Bergsteiner 2011c; Hargett & Williams 2009; Khavul & Bruton 2013).

6.2.3 Successfulness of localised strategies in complex markets Traditionally, most organisations have adapted a universal business strategy across diverse markets without considering the unique characteristics that differentiate one from another (Khavul & Bruton 2013). On numerous occasions, adapting a foreign strategy without localisation has caused corporate disputes, market failures or business collapses (Khavul & Bruton 2013; Trompenaars & Hampden-Turner 2011). Therefore, if leaders are aware of their local cultural values, beliefs and norms, they are more likely to develop local strategies that best match the local cultural context (Trompenaars & Hampden-Turner 2011). Trompenaars and Hampden-Turner (2011) termed localising a foreign corporation’s strategies as ‘glocalisation’. In this context, when leaders localise strategies matched to the local context, it enables the successful implementation of sound managerial decisions that improve social and environmental harmony while maximising the organisation’s strategic business objectives (Khavul &

112

Bruton 2013). Based on this, the exploration of unique characteristics in the local context can be defined as adapting implicit leadership or the cognitive approach to leadership. The following section explores the implicit leadership theories or the cognitive approach to leadership, as used in this study.

Implicit leadership theories In a globalised environment where situational and cultural contingencies are often more important than personal traits, implicit leadership theories have started to dominate and challenge the traits approach to leadership (Schyns & Meindl 2005). Traditionally, implicit leadership theories have been used to assess the leadership behaviours that help to identify an individual as a more effective and ideal leader than others (Eden & Leviatan 1975). Implicit leadership theories present cognitive schemas that can be observed in the everyday life of people who try to explain and predict their own or others’ behaviours to derive their strategies (Schyns & Schilling 2011). For example, the House et al. (2004) described implicit leadership theories as ideas about how leaders are and the expectations that others have of them.

Kenney, Schwartz-Kenney and Blascovich (1996) believed that implicit leadership theories help to explain the cognitive structures which include the traits and behaviours of a leader. Implicit leadership theories are also popularly used in cross-cultural leadership research to understand what produces effective leadership in different cultural contexts (Den Hartog et al. 1999).

Due to these advances, the implicit leadership theories began to capture the attention of many other scholars in examining diverse leadership perceptions around the conceptualisation of what makes good leadership (Lord & Maher 1990). As a result, scholars began to incorporate the leader’s emotions, beliefs, ideas and perceptions into their identification of effective leadership in a particular organisational and national contexts, and started to develop new conceptual frameworks by incorporating them into modern and emerging issues of leadership. For example, popular leadership studies such as that in relation to ‘Global Leadership and Organisational Behaviour Effectiveness’ - GLOBE (Hofstede 1986, 2001a; House et al. 2004), and APEL (de Waal et al. 2010; de Waal et al. 2012; Selvarajah 2008; Selvarajah et al. 1995; Selvarajah & Meyer 2006, 2008a, b; Selvarajah, Meyer & Davuth 2012; Selvarajah,

113

Meyer & Donovan 2013; Selvarajah 2005; Taormina & Selvarajah 2005) used implicit leadership theories to explore emerging issues of leadership in different cultural contexts.

Defining national culture National culture has generally been a difficult concept to universally define (Triandis et al. 1986). Hofstede (1980) defined national culture as ‘the collective programming of the mind which distinguishes the members of one group or category of people from another’ (p. 21). Most scholars have perceived a national culture as consisting of shared values and beliefs that have a direct impact on human behaviours and perceptions. In line with this, Trompenaars and Hampden-Turner (2011) stated: ‘Culture is not what is visible on the surface. It is the shared ways groups of people understand and interpret the world’ (p. 14). Similarly, Robbins, Bergman and Stagg (1997) defined national culture as: ‘Something that is shared by all, or most inhabitants, of a country and that shapes their behaviour and the way they see the world’ (p. 124).

Adding to this perception of shared values, Hofstede (1998) believed that cultural differences are primarily based on the differences in people’s shared values, defining these as ‘broad tendencies to prefer certain states of affairs over others’ (p. 19). Schein (2010) further defined culture as the way in which a group of people solves problems and reconciles dilemmas. Trompenaars and Hampden-Turner (2011) believed that national cultural diversity results from diverse beliefs, perceptions and behaviours, explaining that ‘each of us carries within us the ways we have learned about organizing our experience to mean something. This approach is described as phenomenological, meaning that the way people perceive phenomena around them is coherent, orderly and sensible’ (p. 31).

In addition, scholars such as Trompenaars (1993) and Trompenaars and Hampden- Turner (2011) grouped culture into three levels: 1) national culture or regional society; 2) corporate or organisational culture; and 3) professional culture. Other scholars such as Scarborough (1998) and Dicksona, Den Hartogb and Mitchelsona (2003) contended that cultural values are not static, that they change over time. Yet regardless of these

114 cultural changes, it has also been suggested that most societies still respect their core values and beliefs passed from one generation to another (Scarborough 1998).

Development of culture-specific leadership studies Hofstede (1998) believed that the concept of culture in relation to leadership was being inadequately used without a proper framework, which limited its adaptability into other contexts. Hofstede (1998) therefore developed the most common framework used to date, to identify the influence of local cultural values on leadership. While developing his model Hofstede (1998) observed that certain leadership constructs and behaviours are comparable and common across cultures (‘etic’). However, later scholars began to highlight the inability of the etic approach to study leadership in multicultural contexts, such as Eastern cultures (Adler 1991; Hofstede 1986, 1993; Smith & Peterson 1988; Triandis 1993). As a result of globalisation, the popularity of the etic approach to leadership diminished, and a new approach defined as ‘emic’ emerged to explain leadership as a culturally contingent concept. This new emic or ‘insider’ approach to leadership considers leadership variables as unique to a particular culture (Berry 1980).

Recognising the importance of an emic approach to leadership research, most scholars such as Kirkman, Lowe and Gibson (2006); McSweeney (2002); Mooij (2013); Oyserman, Coon and Kemmelmeier (2002); Schwartz (1994); Smith (2002), and Smith and Bond (1999) started to criticise Hofstede’s work. Dicksona, Den Hartogb and Mitchelsona (2003) went so far as to describe Hofstede’s study as an over- simplistic model that neglected the changing of cultural values over time. Similarly, Yukl (2012) questioned the suitability of Hofstede’s cross-cultural model for identifying leadership across cultures.

Further, Selvarajah, Meyer and Davuth (2012) and Mooij (2013) believed that such large-scale, cross-cultural leadership studies like Hofstede’s and GLOBE’s (House, Javidan & Dorfman 2001; House et al. 1999) were only concerned with dominant cultural values, and de-emphasised the importance of unique leadership attributes specific to sub-cultures or populations. As an alternative, Dicksona, Den Hartogb and Mitchelsona (2003); Drenth and Den Hartog (1998); Mooij (2013); Scanduraa and Dorfman (2004); Scarborough (1998); Selvarajah, Meyer and Davuth (2012), and

115

Yukl (1999b) each developed leadership models that helped to explore leadership as a culture-specific concept.

Other scholars like Scanduraa and Dorfman (2004) indicated that there was difficulty and misconception in using the two concepts of etic and emic, and therefore proposed that future researchers use culture universal and culture-specific approaches instead of the previous two. As a result, cultural universal and culture-specific themes became a popular topic in leadership research (Jayakody 2008) . In particular, culture-specific leadership even became commonly used in large-scale, cross-cultural projects such as GLOBE’s, which decided to adapt the emic (or culture-specific) approach (Chhokar, Brodbeck & House 2012) which had been overlooked in previous research (House et al. 2004; House et al. 1999). Similarly, other scholars such as Alimo-Metcalfe and Alban-Metcalfe (2001); Ardichvili and Gasparishvili (2001); Brodbeck et al. (2000); Dorfman and Howell (1997); Hetland and Sandal (2003); Jackofsky, Slocum and McQuaid (1988); Lim (1997); Mukherjee (2004); Selvarajah and Meyer (2006, 2008a, 2008b); Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013), and Slater et al. (2002) began to explore culture- specific concepts of leadership.

Use of cultural modelling to explain leadership as a culture-specific concept Cultural knowledge of the study context enables explaining the deeply rooted cultural values underlying organisational leadership behaviours. In line with this, culturally unique characteristics therefore help to explain leadership behaviours that are unique to the Sri Lankan organisational context. The cognitive approach (Strauss & Naomi 1997) is often used for the purpose of understanding the influence of national cultural values when defining leadership. The cognitive approach to leadership enables an understanding of the unique cultural perspectives and concepts that are linked with deeply embedded cognitive models, which are particularly influential within a multicultural context such as of Sri Lanka. Dicksona, Den Hartogb and Mitchelsona (2003) predicted the cognitive process for identifying leaders across cultures as a popular future leadership study area.

116

The cognitive approach is regularly being used to explain how national culture and its values affect human behaviours (D' Andrade & Strauss 1992; Hilton 1998; Holland & Naomi 1987; Selvarajah, Meyer & Davuth 2012; Shore 1996; Singh 2002; Strauss & Naomi 1997). This approach emphasises cultural values felt via schemas, scripts and prototypes of both the leader and the follower (Dorfman 2003). This where the interaction between the interpersonal-self and the extra-personal world create behaviours that are unique to a cultural group (Strauss & Naomi 1997). People tend to decide which behaviours are acceptable and effective in a context by developing these mental schemas (Singh 2002).

Similarly, in the context of social membership, leaders also have similar cultural values to the collective, and these cultural values influence leaders to practise the most socially desirable and acceptable leadership styles to match the national culture (House et al. 2004). In this context, leadership scholars such as Selvarajah, Meyer and Davuth (2012) and Selvarajah, Meyer and Donovan (2013) have adapted cultural modelling to explain excellent leadership in different cultures. The concept of cultural models suggests a deep understanding of national cultural values, beliefs and norms that pass from one generation to another, which helps to explain culture-specific behaviours. Knowledge of cultural modelling will help to assess how the cognitive process influences human behaviour including leadership (Singh 2002).

6.6.1 Importance of cultural modelling in exploring sustainability leadership As noted previously, the concept of sustainability leadership has often been considered a universal leadership concept that relates to either developed or Western countries (Avery & Bergsteiner 2010, 2011a; Fullan 2003; Hargreaves & Fink 2004; Harley, Metcalf & Irwin 2014; Hind, Wilson & Lenssen 2009; Kociatkiewicz & Kostera 2012). Although sustainability leadership has been explored in different nations, culture-specific leadership practices have not yet been extensively discussed (Kantabutra 2011; Kantabutra & Avery 2012; Kantabutra & Saratun 2013; Metclaf & Benn 2013). Most of the sustainability leadership research to date has studied it as a culture-general concept, based on qualitative methodology that lacks generalisation, suggesting the need for development of a new framework that empirically tests sustainability leadership phenomena in unique cultural settings, especially in the developing and emerging national contexts (Kantabutra & Saratun 2013).

117

Most of the literature also identifies the concept of sustainability leadership as complex and surrounded by wealth, lifestyle, consumer preferences, and purchasing influence of/from peers, and that social cultural values directly influence the achievement of sustainability (Khavul & Bruton 2013; Metclaf & Benn 2013). Identifying the need to explore sustainability leadership as a culture-specific concept, Wolfgramm, Flynn- Coleman and Conroy (2013) opened up this new research avenue because they valued ‘the role of cultural dynamics including values, beliefs, behavioural norms, symbols and artefacts that support the development of new cultures of leadership in transition to sustainable societies’ (p. 659). For example, Avery and Bergsteiner (2010) found that American and British CEOs tend to favour the short-term shareholder model; whereas continental European CEOs traditionally prefer engaging with a range of stakeholders.

Despite these apparent differences, Khavul and Bruton (2013) argued that sustainability challenges are homogeneous between developing and developed countries across the world, even though the responsibilities and roles in achieving sustainability are unique to each country. This draws attention to diverse sustainability leadership behaviours in Western society that are not unique even in what are known as ‘Western cultures’, and hints at the possibility of diversity among countries, regions and cultural contexts. Avery and Bergsteiner (2010) also contended that geography does not determine an enterprise’s leadership philosophy, but rather it is based on the level of acceptance of capitalism in the different aspects of each organisation. Looking back on the theoretical basis of sustainability leadership, Avery (2005) stated that ‘the form of capitalism practised in a particular region influences how easy or difficult it is to adopt sustainable principles’ (p. 13).

In general, scholars have also identified the importance of local cultural values, beliefs and norms in helping leaders to develop local strategies that influence better results, especially in less-developed countries (Khavul & Bruton 2013) and eastern cultures (Kantabutra 2011; Kantabutra & Avery 2012; Kantabutra & Saratun 2013). Parboteeah, Addae and Cullen (2012) used six of the nine cultural dimensions of House et al. (2004) to study the influence of cultural values on the propensity to support sustainability initiatives. They found that performance orientation and assertiveness have a negative influence, while collectivism, future orientation and

118 human orientation have a positive influence on the propensity to support sustainability initiatives. However, Parboteeah, Addae and Cullen (2012) limited their work only that of the House et al. (2004) framework, and correspondingly suggested that future researchers use primary data rather than secondary data based on larger samples.

Based on such findings and recommendations in relation to exploring sustainability leadership as a culture-specific concept, this study has rejected the adaptation of some of the more popular frameworks such as Hofstede (1980); House et al. (2004); Schwartz (1992), and Trompenaars (1994) instead utilising a cognitive approach to leadership in explaining sustainability leadership, by identifying cultural models that exist in the study context.

Sustainability leadership in less developed economies Sustainability leadership has become a more crucial organisational issue in the developing world than the developed because of the more unique and diverse characteristics of most of these countries’ social and economic contexts (Khavul & Bruton 2013). Such diversity has thrown up many complex challenges for organisational leaders in developing countries (Khavul & Bruton 2013). For example, poverty is one of the most sensitive corporate sustainability challenges in most developing countries, and localising corporate strategies into the local market is an essential success factor to remain competitive (Khavul & Bruton 2013). Maximising short-term profit is another sensitive and often controversial issue in a developing country, particularly compared with businesses in developed countries that instead need to prioritise long-term ethical business performance (Karande, Rao & Singhapakdi 2002). Most contemporary leaders in developing countries have to find solutions for such complex issues surrounding organisational sustainability as a corporate priority (Khavul & Bruton 2013; Metclaf & Benn 2013).

To remain competitive in a developing country, it has been suggested that corporate leaders should make an effort to understand areas such as the local customer’s thinking, their network of relationships, and their social and economic background (Khavul & Bruton 2013). Hence, sustainability is a concept that highlights its attachment to social cultural values that require contemporary corporate leaders in

119 developing countries to explore, understand and incorporate culture-specific values and beliefs into their sustainability strategies (Khavul & Bruton 2013) .

Sustainability leadership in the Asian context The literature on Asian cultural studies in relation to leadership is wide-ranging. Although many of these studies have assumed that Asian culture can easily be generalised across the region’s nations, and have disregarded the cultural diversity of Asia (Jayakody 2008; Wijewardena & Wimalasiri 1996). For instance, Chen (1993); Doktor (1990 ); Hofstede (1986); Hu (1982); Ouchi (1981 ), and Yamada (1992) all made comparisons between Asian managers and their Western counterparts. They had assumed that popular Asian values such as Japanese cultural values could be generalised to other Asian countries (Wijewardena & Wimalasiri 1996).

However, scholars such as Wijewardena and Wimalasiri (1996) contended that most Asian managers are different from both Western and extensively researched Japanese managers, and generally reflect unique managerial practices. Asian managerial behaviours are derived from three main ethnocentric backgrounds: 1) Chinese (mostly decedents from the Nanyang Chinese or from Southern China); 2) Malay (domiciled mainly in Malaysia and Indonesia); and 3) Indian (South Asians) (Wijewardena & Wimalasiri 1996). These three ethnic groups of Asia differ from each other in terms of their religion, ethnicity, cultural values, languages and political systems (Wijewardena & Wimalasiri 1996). This suggests that even though there are some commonalities among characteristics of Asian nations, such as a unique history, sociocultural and religious influences have resulted in each Asian nation being different from each other (Wijewardena & Wimalasiri 1996).

Even though exploring sustainability leadership in less developed economies is a challenging task, because of their diversity especially in the Eastern cultures, Kantabutra (2011); Kantabutra and Avery (2012); Kantabutra and Saratun (2013), and Kantabutra and Suriyankietkaew (2012) were able to achieve this in an East Asian context. Most scholarly focus on sustainability leadership in Asian countries has been on East Asia and South East Asia (Kantabutra & Saratun 2013; Rama 2012; Selvarajah, Meyer & Davuth 2012; Selvarajah, Meyer & Donovan 2013; Wong & Lee 2012) due to the high economic potential and attractiveness to foreign direct investors.

120

Yet despite these efforts, cultural leadership literature focused on sustainability is still immature in a South Asian context.

6.8.1 Sustainability leadership in South Asian countries All members of the South Asian region are developing countries and have their unique development challenges (Koehler & Chopra 2014). In addition, most South Asian countries have been identified as having the lowest per capita income, which has led to common welfare and developmental challenges in the region (Koehler 2014). The South Asian region which is often referred to as a ‘subcontinent’, shares some commonalities across its countries, including the influence of the Indus and Himalayan cultures, and the prior subjugation by the British Empire (Koehler 2014). Yet despite such similarities, under the surface there are significant differences in relation to each South Asian nation’s development challenges such as poverty, malnutrition, unemployment, protection of human rights, workers’ rights, civil war, the backdrop of massive political power changes, corruption, rights to language and education, and gender equality (Koehler 2014).

These diverse economic and social issues across the region have presented many organisational leaders with complex, wide-ranging challenges that need to be solved to ensure their organisation’s long-term performance (Koehler 2014). Even though South Asia is a densely populated region, the environmental complexities, less- developed economic status, and the vulnerabilities in the socioeconomic and political environments have reduced its attractiveness not only to investors and practitioners, but also to researchers. Yet despite such challenges, the South Asian region has been able to achieve satisfactory macroeconomic growth and technological progress in recent years (Bonnerjee 2014).

With this objective of exploring what constitutes sustainability leadership in a less- developed economic context, within the South Asian region, this study has chosen to focus on Sri Lanka – an island country in South Asia that is densely populated, multicultural, multiethnic, and has undergone a range of economic and industrial transition phases. In addition, Sri Lanka is unique from its other South Asian counterparts based on its higher level on the Human Development Index (HDI) compared with its low levels of economic growth (Sanderatne 2000). The focus of this

121 study has therefore moved away from the common practice of generalising Asian leadership to any Asian country’s organisational context; instead exploring leadership behaviours that are unique to Sri Lankan organisations.

Section 6.9 below presents a background on the various historical, cultural, socio- political, economical, industrialisation and demographic characteristics that are specific to Sri Lanka.

Background of Sri Lanka Figure 6.2 Geography of Sri Lanka

Source: CIA (2013)

6.9.1 Historical background Sri Lanka is a multicultural nation situated in the Indian Ocean with more than 20 million people belonging to diverse ethnic and religious groups consisting of Sinhalese (74.9%), Sri Lankan Tamils (11.2%), Indian Tamils (4.2%), Moors (9.2%), and others such as Burghers and Malays (0.5%) (Central Bank of Sri Lanka 2013b). In relation to

122 religion, most Sri Lankans practise Buddhism (70.2%), followed by Hinduism (12.6%), Islam (9.7%), Christianity (7.4%), and other (0.1%) (Central Bank of Sri Lanka 2013b).

Sri Lanka’s history includes more than 2,000 years under the rule of 181 kings (from the Anuradhapura period to the Kandy period), followed by the colonial rule of the Portuguese, Dutch and British (from 1796 to 1948). Sri Lanka has historically been able to maintain close ties with other South Asian countries, especially India. Its close relationship with Indian society has consistently contributed to the development of Sri Lankan culture and economy. For example, the main religion of Buddhism was introduced to Sri Lanka in the 4th century BCE from India during the period of King Asoka. Most of Sri Lanka’s ancient cities still reflect the rich traditions, architectural designs and rule of its native kings.

The chronicles of Sri Lanka have recorded the influence of the Europeans (Portuguese, Dutch and British respectively) which began in the 16th century and continued for more than 450 years, and who introduced their main religion of Christianity to Sri Lankans. Prior to their invasion, most South Asian nations had a unique way of managing their economic and political organisations (Wijewardena & Wimalasiri 1996). The British Empire in particular converted Sri Lanka into a trading hub, from a traditional agricultural society to a commercialised export-oriented agricultural society (e.g. tea, rubber, coffee and spices).

Prior to its subjugation, most of Sri Lanka’s local farmers had used indigenous management practices, based on a traditional, agro-based Sri Lankan culture which prioritised permanency over profit by mitigating uncertainties (Hewege et al. 2008). After the colonial invasions, many of these long-term horizon practices began to disappear (Wijewardena 1992) – the Sri Lankan indigenous administration system was progressively destroyed as the colonial management practices were introduced (Wijewardena & Wimalasiri 1996). Replacing existing native management systems and structures was a common prerequisite for the successful implementation and institutionalisation of colonialism at that time (Young 1986). By the end of British rule in 1815, the European colonials had developed Sri Lanka’s commercial and

123 administration sectors such as banking, telecommunications, legal, postal, share market, and inland and port transportation.

Sri Lankan’s current legal and political system mostly reflects its Western colonial influence (Samarasinghe 2000). By the time of its independence in 1948 from the British Empire, Sri Lanka had a nationalised political system with a closed market that popularised nationalistic attitudes such as valuing national industrial sustainability, the government’s role in protecting local industries, the government as the sole owner of labour, the protection of human welfare, and the government’s responsibility for infrastructure development. In 1972, Sri Lanka assumed the status of a republic; but by this time its economic, social, political and cultural environments had already been embedded with a mix of Eastern and Western cultural values (Hewege et al. 2008). The subsequent nationalisation of foreign-owned enterprises created a large number of state-owned enterprises (SOE). The state therefore became the main employer of Sri Lankan labour, with only a few private enterprises still in operation. Up to now, most Sri Lankans still believe that employment in government organisations is a more secure source of employment in the long term (Hewege et al. 2008).

6.9.2 Economic development Sri Lanka has been categorised as a lower-middle-income country, which achieved an improvement in its per capita GDP from 8% in 2010 to 8.2% in 2011 (Central Bank of Sri Lanka 2013a). However, subsequent provisional data indicated that per capita GDP had decreased to 6.4 % in 2012 (Central Bank of Sri Lanka 2013a). Yet, in real terms, Sri Lanka’s per capita GDP increased from US$2,057 in 2009 to US$3,280 in 2013, and has been predicted to increase to US$4,000 by 2016, which reflects overall high economic growth (Central Bank of Sri Lanka 2013a). Sri Lanka aspires to become a nation with knowledge bases and high-value economic status, according to the United Nations Development Programme (UNDP) (United Nations Development Programme 2014c).

The Sri Lankan economy mainly depends on its services sector (59.5% in 2011), with increased performance in its industrial sector (29.3% in 2011). In contrast, the contribution of the agricultural sector (11.2% in 2011) has decreased over recent years (Central Bank of Sri Lanka 2013a). The economy of Sri Lanka is now mainly external

124 market-oriented, and is largely dependent on the economic performance of its major export partners of Europe and the United States (Central Bank of Sri Lanka 2012b). Vulnerability of these international markets can have a significant impact on the demand for Sri Lankan exports, and can indirectly impacts on employees in these sectors (Central Bank of Sri Lanka 2012a).

6.9.3 Sustainable development The concept of sustainability is not new to most Sri Lankans, as it was often considered as part of ancient wisdom (Ministry of Environment 2012). Ancient rulers believed they had three primary duties relating to sustainability: 1) protecting the territory; 2) protecting the religion; and 3) protecting the natural resources and ensuring food security (Ministry of Environment 2012). The ancient state was governed under the philosophy of the link between the irrigation tanks, the dagaba, the village and the temple (Ministry of Environment 2012). Although ecological instability was not as relevant in ancient times, ancient rulers still encouraged environmentally friendly water and land management systems (Ministry of Environment 2012).

Despite this common theme of sustainability considerations in Sri Lanka, complex issues surrounding sustainability have evolved in more recent times. The year 2015 marked 19 years since the Earth Summit held in Rio de Janeiro, involving 172 nations that agreed on a global sustainability pact known as ‘Agenda 21’, an action plan for global sustainable development (United Nations 2015b). As a member of the UN, Sri Lanka consequently agreed to achieve the plan’s MDGs by 2015. Since then, sustaining a high economic growth rate comprising environmental conservation and restoration has been one of the biggest challenges in Sri Lanka (Ministry of Environment 2012).

In particular, the journey from war to peace has not been an easy task for a nation such as war-torn Sri Lanka. Its civil war ended in May 2009, after more than 30 years of violence and conflict between the Liberation Tigers of Tamil Elam (LTTE) and the Sri Lankan Government. Since then, the state has taken on the huge responsibility of transforming the underlying social, economic, political and cultural dimensions according to a sustainable approach. Despite its legacy of violent conflicts, Sri Lanka has been able to achieve notable advances in its human development, even with these

125 major socioeconomic and political challenges (AusAID 2013; United Nations Development Programme 2014c).

Private sector participation has been identified as a key factor towards achieving organisational sustainability in Sri Lanka (Ministry of Environment 2012). For example, many of these organisations have voluntarily adopted ISO 14000 (Environmental Management) and taken on registration of the Clean Development Mechanism (CDM) (United Nations 1998). In addition, most of the industrial sector organisations have obtained Environmental Protection Licensing, and have committed to practising CSR and sustainability reporting via the standards of the Association of Chartered Certified Accountants (ACCA), as well as voluntary reporting of their carbon footprint. The Ceylon Chamber of Commerce, Sustainable Energy Authority, and ACCA are a few of the authoritative bodies that annually recognise private and public sector organisations in Sri Lanka that achieve sustainability.

Despite the challenges, compared with other South Asian countries, the Sri Lankan economy has satisfactorily progressed towards achieving MDGs (AusAID 2013), even achieving some of the targets earlier than the target of 2015 (United Nations Development Programme 2014c). Sri Lanka has consequently been categorised as a high human-developed nation, with a HDI at 0.715 in 2012 that ranked it 73 out of 187 participating countries (Central Bank of Sri Lanka 2013b) – the highest ranking in South Asia and ahead of some East Asian countries (United Nations Development Programme 2014a, 2014c).

It has been suggested that these high-performing HDI results are largely due to Sri Lanka’s early investment in health and education (United Nations Development Programme 2014c). However, issues such as social security, human rights, corruption, unsustainable practices of production and consumption, malnutrition, non- communicable diseases, air and water pollution, and protection of natural and environmental resources remain some of the main issues affecting the country’s sustainability (Ministry of Environment 2012). In particular, it has been recommended that the Sri Lankan state needs to develop strategies to further engage youth (individuals aged between 15 and 29) in its development and reconciliation strategies (United Nations Development Programme 2014c).

126

To attain a clearer understanding of the sustainability achievements and challenges for Sri Lanka, the following section analyses Sri Lanka’s sustainable development performance based on its recent MDG achievements and challenges.

6.9.4 Millennium development goals 6.9.4.1 MDG-1: Eradicate extreme poverty and hunger

Despite Sri Lanka’s high economic achievements, poverty is one of its major development challenges. There are income and regional economic disparities within Sri Lanka; in 2012, 20% of the Sri Lankan population received only 4.5% of the total household income, whereas the richest 20% of the population received 54.1% (Central Bank of Sri Lanka 2013a). In addition, more than 80% of the population live in rural areas (Central Bank of Sri Lanka 2013a), while 45% of Sri Lanka’s economic activities are concentrated around Colombo and the Western Province, suggesting regional economic disparities (UN-Habitat 2012). Sri Lankans living in the rural areas and former war-affected areas are particularly vulnerable, mainly due to limited infrastructure facilities – reducing their impoverishment has been a challenge for the Sri Lankan Government (United Nations Development Programme 2014c).

6.9.4.2 MDG-2: Achieve universal primary education

Average adult literacy in Sri Lanka was recorded at 91.9% in 2010 (Central Bank of Sri Lanka 2013b). Despite this, government spending on health and education is still at a low level compared with other low-income countries in the South Asian region (AusAID 2013; Central Bank of Sri Lanka 2012a). It has been recognised that Sri Lankan children from high-income families are enrolled in and complete school education at a higher level than lower-income children (Ministry of Education 2008). Although primary school enrolment is high in Sri Lanka, most children are unable to complete their education beyond upper secondary level due to a range of reasons that include poverty, high youth unemployment, and the uneven distribution of access to quality schools (Ministry of Education 2008). In addition, most of the well-resourced, higher quality schools are concentrated in the Western Province where economic activity is strong, which is another reason for regional disparities in educational performance (Ministry of Education 2008). In particular, those living in the rural sector

127 and war-affected areas struggle to keep up with the national education curriculum (Ministry of Education 2008).

Most Sri Lankan youth lack confidence in the practicality and applicability of school education; many are disappointed with their schools because they didn’t find schools useful (United Nations Development Programme 2014c). It has also been reported that most of these youth believe the state’s tertiary education does not guarantee employment, noting that the local university education system is unable to provide the necessary competencies to be competitive graduates in the corporate world in Sri Lanka (United Nations Development Programme 2014c).

6.9.4.3 MDG-3: Promotion of gender equality and empower women

Sri Lanka was one of first nations to promote gender equality, which commenced at its independence in 1942 (Ministry of Environment 2012). As a predominant Buddhist country founded on equal opportunities and respect for women has enabled most Sri Lankan women to obtain the same opportunities as males (Samarasinghe 2000). Compared with other South Asian countries, Sri Lankan women have greater access to education, and are more respected as competitors to their male counterparts (Samarasinghe 2000; United Nations Development Programme 2014c). The Sri Lankan woman enjoys more equality, access to education and other human rights compared with other South Asian women (Samarasinghe 2000). As proof of this in Sri Lanka, the female literacy rate is 90.8%, and male literacy is 93.2% (United Nations Development Programme 2014c).

Despite these positive statistics, there is still concern that young females in the Sri Lankan workforce are often in roles that are not commensurate with their academic achievements, with reasons such as gender stereotyping, employers’ preferences for males, and family choices and commitments (United Nations Development Programme 2014c). However, female participation in Sri Lankan leadership positions is still commendable; and most are able to compete with their male counterparts in regard to political participation and leadership (Samarasinghe 2000).

This has helped many women to reach leadership positions and play a significant role in Sri Lankan society (Samarasinghe 2000). Most Sri Lankan women still accept

128 patriarchal values and male dominance, but this does not seem to affect their organisational leadership behaviours – many still strive to demonstrate their power and capacity when competing with their male counterparts in an organisational context (Samarasinghe 2000).

6.9.4.4 MDG-4: Reduce child mortality; MDG-5: Improve maternal health

Compared with other South Asian countries, the Sri Lankan heath sector performs strongly, including achieving low levels of infant and maternal mortality (United Nations Development Programme 2014c). The average life expectancy of a Sri Lankan has recently been recorded as 75 years of age (Central Bank of Sri Lanka 2013b). In addition, the awareness and effective immunisation coverage across the country has helped to improve the life expectancy of Sri Lankans. Nearly 60% of Sri Lankans choose public health care facilities, although the private sector health care providers are higher than the government sector (Dayaratne 2013).

Despite these positive results, issues such as malnutrition, infant feeding, food security, social protection for the poor, and access to safe water have been recognised as areas where Sri Lanka could still improve to achieve better health and further decrease infant and maternal mortalities (AusAID 2013).

6.9.4.5 MDG-6: Combat HIV/AIDS, malaria and other diseases

Information services are available to Sri Lankan youth on sexual and reproductive health and mental health care facilities. However, it has been reported that the younger generation Sri Lankans generally believe these services are only available for those who are married; and, due to shame and perceived legal obstacles, they tend to avoid using these state facilities (United Nations Development Programme 2014c). In addition, more than half of the younger generation are unaware of contraceptive methods (United Nations Development Programme 2014c).

Homicide, purposely inflicted injuries and suicides are major causes of death among Sri Lankan youth (United Nations Development Programme 2014c). In addition, due to peer pressure, high stress levels and perceptions of an uncertain future, unemployment and lack of education and other opportunities have also increased addictions to smoking and alcohol (United Nations Development Programme 2014c).

129

The more addictive lifestyle of Sri Lankan teenagers has changed their eating habits and decreased physical activities, with only a quarter of them recently recorded as being actively involved in sports (United Nations Development Programme 2014c).

6.9.4.6 MDG-7: Ensure environmental sustainability

Ensuring environmental sustainability is an important and challenging objective for every developing country (Khavul & Bruton 2013). To improve the living standards of citizens, most developing countries have been spending their natural ecological capital today, and putting off worrying about environmental challenges until tomorrow (Dasgupta et al. 2005). Based on these short-term, non-environmental perspectives, international policymakers have recommended an environmental assessment of the impact of every policy before it is implemented to control unsustainable behaviours, especially in developing countries.

Adhering to this requirement, most Sri Lankan project managers assess the impact of their actions on the natural and social environment via ex-post and ex-ante impact assessments (Samarakoon & Rowan 2008; Zubair 2001). Protecting the environment from the negative impacts of commercial and industrial activities has been identified by scholars as a major objective of most of the large-scale organisations in Sri Lanka (Morimoto 2013; Wattage & Mardle 2005). In 2008, Sri Lanka prepared a National Green Reporting System known as the Haritha Lanka Programme (National Council for Sustainable Development 2009), which aimed to establish green guidelines for the industrial and service sectors of Sri Lanka.

The Haritha Lanka Programme is the main action plan connecting all government ministries to achieve sustainable development targets set at the Earth Summit in 1992. This action plan has put national policy strategies into practice and encouraged individuals and industries to become more responsible in their everyday practices (National Council for Sustainable Development 2009). Sri Lanka has also identified the disruption of downstream fisheries, increases in population and biodiversity losses as common negative impacts of commercial activities on the environment (National Council for Sustainable Development 2009).

130

Other Sri Lankan environmental sustainability programs include the Haritha Lanka Strategy for SDGs, the Multilateral Environmental Secretariat, and the Participatory Green Results Monitoring Mechanism (Ministry of Environment 2012). Each of these strategies aim to improve the awareness of sustainability of the natural and social environment in Sri Lanka. Other action plans have been developed and implemented via the government ministries to engage all Sri Lankans at provincial and local government levels, within the private sector, and within the community to enact sustainable development (Ministry of Environment 2012). The Sri Lankan Government has even taken steps to improve awareness and knowledge and set guidelines for dealing with sustainability issues relating to the environment and society.

6.9.4.7 MDG-8: Global partnership for development

Sri Lanka has shown a responsibility towards incorporating the corporate sector into efforts to achieve sustainable economic development targets (Ministry of Environment 2012). In this regard, the Sri Lankan Government has implemented several strategies such as the National Green Reporting System in the industrial and services sectors, new international laws relating to pollution control, global environmental partnerships, green energy and energy saving appliances, and conserving energy in daily life (Ministry of Environment 2012). Sri Lanka has also ratified the 36 Multilateral Environmental Agreements (MEAs), and has developed national policies in line with these such as the National Environment Policy, National Cleaner Production Policy, Renewable Energy Policy, National Climate Change Policy, National Forestry Policy, National Policy on Wildlife Conservation, National Land Use Policy, and the National Policy on Urban Air Quality Management (Ministry of Environment 2012).

Furthermore, Sri Lanka has adopted the Stockholm Declaration, the Nairobi Declaration, the Rio Declaration, the Washington Declaration, the Charter of the United Nations, the Statute of the International Court of Justice (IJC), the 1969 Vienna Convention on the Law of Treaties, as well as UN Resolution 2625 (XXV) of 24 October 1979 which declared the Principles of International Law Concerning Friendly Relations and Cooperation among states (Ministry of Environment 2012). Sri Lanka is also an active member of the South Asian Cooperative Environment Programme

131

(SACEP), South Asia Association of Regional Cooperation (SAARC), and the South Asia Regional Seas Programme (Ministry of Environment 2012).

6.9.5 Organisational initiatives for sustainable development in Sri Lanka The Sri Lankan private sector has been identified as the ‘engine’ of Sri Lankan economic growth (Ministry of Environment 2012). It has been recognised that progress towards improved sustainable development requires Sri Lanka to have strong governance structures and processes, transparency and accountability in policy and decision-making, and an effective mechanism to fairly evaluate political leadership positions (United Nations Development Programme 2014c). Hence, to achieve better results in sustainable development, policymakers, bureaucrats and public officials, and private and non-state sectors need to be more engaged and held accountable (United Nations Development Programme 2014c).

In line with this, identifying and promoting leadership behaviours that cultivate sustainability will encourage leaders to manage their everyday activities sustainably. Hence, it is important to identify sustainability leadership behaviours which are specific to the Sri Lankan business context. Yet despite this obvious need, the literature in relation to understanding leadership behaviours, perceptions, practices, competencies, styles and other cognitive attributes of the leader in the Sri Lankan organisational context is limited. Therefore, this study has aimed to fill this literature gap by exploring leadership behaviours essential to achieving sustainability in Sri Lankan organisations, which has included identifying sustainability leadership characteristics of Sri Lankan managers.

Context-specific characteristics of the independent and mediating variables of the study The previous chapter conceptualised that three independent and two mediating organisational leadership dimension influence sustainability leadership in Sri Lanka. Therefore, in the following section, some of the main Sri Lankan cultural values in relation to each of these study dimensions are discussed. Specifically, the sections describes the context specific characteristics of the independent and mediating variables of the study.

132

6.10.1 Stakeholder relationships in the Sri Lankan organisational context (STK) Since before the colonial era, Sri Lankan society has been a patriarchal one (Hewege et al. 2008; Kamalika 2008; Nanayakkara 1992). In particular patriarchal values and structures are a common characteristic of the Asian management style (Wijewardena & Wimalasiri 1996), and are visible and accepted in most South Asian cultures (Samarasinghe 2000). The patrimonial and feudal elements, a caste-based social structure, and religious institutions have all played a role in the pre-colonial Sri Lankan social system (Hewege et al. 2008). Some of the feudal and patrimonial rituals practised in traditional peasant society are still observable among contemporary Sri Lankan workers today (Hewege et al. 2008). This confirms that Sri Lankan society is still often characterised by inequality in the distribution of power and authority between the social classes and even within the workplace (Chandrakumara & Sparrow 2004).

In addition, Sri Lankan society is hierarchical with a high power distance (Liyanage 1996b); contemporary Sri Lankan corporate culture has a clear disparity in the distribution of power between managers and non-managers (Hewege 2011; Jayawardana, O'Donnell & Jayakody 2013). In a high power distance society, tall hierarchies, acceptance of inequality, and placement of people in the suitable place in institutional hierarchies are evident (Hofstede 1986). In addition, in a high power distance society it is common to observe managers dominanting their subordinates, subordinates afraid to disagree with their managers, autocratic managerial decision- making, and paternalistic leadership behaviours (Hofstede 1986). These managers often consider the implementation and achievement of their decisions as a main managerial responsibility, even though their decisions are generally made as a collective (Wijewardena & Wimalasiri 1996).

Asian managers often make decisions by contacting their own senior managers or consulting with subordinates (Wijewardena & Wimalasiri 1996). Popular Japanese management practices that involve collective decision making such as common meetings, staff meetings and open assemblies are also common in Sri Lankan organisations (Hewege 2011). In addition, most of these organisations in Sri Lanka prioritise their customers’ needs, as they believe maintaining customer satisfaction

133 should be one of the main elements in their organisation’s mission statement (Yapa 2012). Based on this perspective, most Sri Lankan organisations regularly conduct customer satisfaction surveys as a common research tool for collecting customer feedback (Yapa 2012).

6.10.2 Long-term orientation in the Sri Lankan organisational context (LONG) It is common in Sri Lankan society for parents to expect their children to seek permission for even minor tasks (Liyanage 1996a), believing their children’s wisdom and experience will develop under their supervision as they mature with age (Liyanage 1996a). Similar behaviours are observable in the organisational context, as Sri Lankan managers also expect their subordinates to respect authority and status within the organisation (Liyanage 1996a). In addition, most Asian managers respect rank, expect status recognition in social situations, and treat managers as ritual personalities and courtesies are consistently observed from most of the Asian management (Wijewardena & Wimalasiri 1996). Such Asian management practices are common among Sri Lankan managers (Liyanage 1996a). Therefore, most Asian cultures with high power distance and family orientation opt to categorise Asian managers as directive and authoritarian, performing within a paternalistic framework (Wijewardena & Wimalasiri 1996).

Within the Sri Lankan banking sector, Edirisinghe (2008) observed a formalised strategic planning system at the corporate level, but noted that strategic intent and intelligent opportunism were lacking, with most bottom-line managers. Edirisinghe (2008) also found that most corporate-level bank managers are responsible for competitive, supplier, economic and political analysis, while marketing managers are mostly responsible for customer analysis, and operational managers for technological analysis. It was also noted by Edirisinghe (2008) that most corporate-level managers prefer to use economic and financial indicators for strategic planning purposes, yet the use of the more advanced computer systems for decision-making is still in the development phase in Sri Lanka.

Femininity and masculinity paradigms have also been recognised as useful dimensions to understand leadership attitudes towards decision-making (Liyanage 1996a).

134

Cultural value categorisations such as people orientation, quality of life, working to live, service ideals, interdependence ideals, intuition, sympathy for the unfortunate and caring for others are considered feminist (Hofstede 1986). Hence, Sri Lankan culture which is femininity oriented means that many Sri Lankan managers demonstrate such femininity values in their daily decision-making, while their subordinates often establish a patriarchal relationship with their supervisors (Liyanage 1996a).

6.10.3 Employee engagement in the Sri Lankan organisational context (EMP) It has been put forward that most Asian managers maintain closer employee relationships and are more group-oriented than their Western counterparts (Wijewardena & Wimalasiri 1996). In line with this, Asian businesses often recruit employees deemed as trustworthy such as their relatives, rather than searching for qualified but unknown candidates; this is conducive to strong mutual bonds within an organisation (Wijewardena & Wimalasiri 1996). Hofstede (1986) and House et al. (2004) both believed that collectivism is a key characteristic of Asian culture. Hofstede (1986) defined collectivism as ‘characterised by a tight social framework in which people distinguish between in-groups and out-groups; they expect their in-groups (relatives, clan, organisations) to look after them, and in exchange for that they feel absolute loyalty to it’ (p. 45). Such strong cultural values pertaining to connectedness and caring for each other often create confidence and a feeling of reassurance that enables sustainability in an organisational context (Salem 2012).

In pre-colonial Sri Lankan society, major business decisions such as the distribution of labour for agriculture were made based on common agreement between the community leaders and villagers, representing the collectivistic values of Sri Lankan people (Hewege et al. 2008). In contrast, European colonial bureaucrats exercised patrimony and patronage in the Sri Lankan organisational context (Hewege et al. 2008). Peasant values such as unconditional devotion, loyalty to kinship, colonial religious values and rituals, and non-caste-based social obligations and values are still observable within the contemporary Sri Lankan working class (Hewege et al. 2008; Ranugge 2000).

135

The concept of collectivism is also common within Sri Lankan families – a hierarchical structure where major decisions are made by the father (Liyanage 1996a). The Sri Lankan family system also cultivates the value of accepting any order by the seniors of the hierarchy without challenging them (Liyanage 1996a). Sri Lankan employees therefore often show respect, fear and subservience to their managers (Hewege 2011). Sri Lankan managers perceive their subordinates as their children, and thereby a relationship develops between managers and subordinates like a father looking after his children (Liyanage 1996a). However, when employees perceive their managers as their father, they can grow to expect their managers to look after their employees’ career needs and employee welfare facilities (Liyanage 1996a; Nanayakkara 1992). In addition, as a result of the paternalistic attitudes of such Sri Lankan managers, their subordinates then often bring and share their personal problems with them (Hewege 2011). As a result of this, most Sri Lankan employees work as a family along different levels in the organisational hierarchy, and group participation is also common in Sri Lankan organisations. Yet despite these paternalistic leadership styles, many Sri Lankan managers maintain closer relationships with their supervisors or peers than their subordinates (Nanayakkara & Ranasinghe 1984).

In Sri Lanka, decentralisation is mostly practised in sectors such as banking, where responsibilities are decentralised among different departments (Edirisinghe 2008). Often Sri Lankan managers make decisions and convey them to their subordinates through verbal (e.g. meetings, quality circles, mass gatherings) or written communication methods (e.g. mission statements, manuals, check sheets, employee suggestion schemes) (Yapa 2012). Due to the close relationship between manager and subordinate, Sri Lankan managers often make biased decisions when appraising their employee’s performance, suggesting they are not too strict in appraising their subordinates (Jayawardana, O'Donnell & Jayakody 2013). Due to this, Sri Lankan employees often build strong relationships with their supervisors; indicating that failure to be in the manager’s ‘in-group’ can have a serious effect on an employee’s performance appraisal (Jayawardana, O'Donnell & Jayakody 2013). In addition, high- performing employees often expect their efforts to be recognised by their management via job enrichment opportunities such as recognition at awards nights, promotions, salary increases and foreign tours. These rewards will especially improve middle-level

136 managers’ job satisfaction and motivation (Jayawardana, O'Donnell & Jayakody 2013).

Company relationship-building events such as annual staff trips, award ceremonies and other sociocultural events are common in Sri Lankan organisations (Hewege 2011). Organising these events is generally the responsibility of the manager, which can increase trust and relationships between managers and subordinates (Hewege 2011). On the other hand, most employees affiliate themselves to a major political party or an employee union to secure their employment rights (Hewege et al. 2008). Therefore, Sri Lankan managers perceive employee unions as a powerful force that can have a strong influence on their business decisions (Hewege 2011).

6.10.4 Leader commitment to organisational change in the Sri Lankan organisational context (CHNG) Little attention has been paid to exploring change-related attitudes in developing countries (Khavul & Bruton 2013). Leadership behaviours that enable change are important for an organisation, especially when the leadership has identified change as an essential component of sustainability (Metclaf & Benn 2013).

After the liberalisation of the economy, in 1977 the Sri Lankan commercial sector was blessed with the arrival of private entrepreneurship that introduced new products, innovations, technology, management tools and methods (Bibile 2013). As a result, the economy became more vulnerable to international market performance (Central Bank of Sri Lanka 2013a; Herring 1987). Many believed that Sri Lanka’s economic liberalisation was another successful ‘Singaporean economic model’; yet Sri Lanka’s economic performance has lagged behind Singapore’s due to the pressures of patronage, civil disorder and its prevailing politics (Herring 1987). Although compared with other South Asian countries, Sri Lanka has achieved high economic development including advances in technology (Asian Development Bank 2015; Koehler & Chopra 2014).

Wickramasinghe, Hopper and Rathnasiri (2004) deemed organisational change as a management challenge in the Sri Lankan organisational context, based on decades of government bureaucracy, political patronage, trade union agitation, work rhythms of employees, and the minimal financial orientation of non-capitalistic traditional

137 organisations that often hinder organisational change. Most Sri Lankans and their organisations have also been identified as less open to accepting risk (Hewege 2011). In addition, traditional feudalistic and colonial influences have made Sri Lankan employees reluctant to develop a long-term commitment to their organisation (Hewege 2011), mainly because the Sri Lankan Government offers social benefits such as pensions, free health and education, and access to infrastructure (Central Bank of Sri Lanka 2012a). This has resulted in negative attitudes towards innovation, entrepreneurship, risk acceptance and self-employment among most Sri Lankans (Hewege 2011). In addition, many Sri Lankan senior managers are perceived as too subjective when conducting employee performance appraisals – it has been suggested that they need to be trained and educated to conduct less biased performance appraisals (Jayawardana, O'Donnell & Jayakody 2013).

Much of Sri Lanka’s public sector culture has been identified as characterised by bureaucratic and inflexible structures that inhibit managers from effectively implementing competitive strategies (Wickramasinghe, Hopper & Rathnasiri 2004). These public sector managers often exert patrimonial authority, bureaucratic and inflexible structures of the political party in power (Hewege et al. 2008; Wickramasinghe, Hopper & Rathnasiri 2004). In addition, due to this political protection, senior public management often resort to unethical behaviours (Hewege et al. 2008).

However, Sri Lankan privatisation policies introduced changes to the traditional public sector culture previously characterised by bureaucratic structures, centralised organisational cultures and biased employee appraisals (Wickramasinghe, Hopper & Rathnasiri 2004). Sri Lankan SOEs are now exposed to a mix of traditional, colonial and post-modern bureaucratic systems that reflect both traditional and contemporary managerial practices (Hewege et al. 2008). However, Sri Lankan SOEs are also now more exposed to direct and indirect influences from politicians, and are controlled by politically supported seniors and by administrative staff (Hewege et al. 2008). Thus, it has been inferred that Sri Lankan patronage politics and a transformed bureaucracy are continuing to interfere in the organisational transformation from traditional to contemporary management practices (Hewege et al. 2008; Wickramasinghe, Hopper & Rathnasiri 2004).

138

Globalisation has cultivated technological advances in the Sri Lankan organisational context, which has caused many contemporary managers to question their current managerial competencies which they perceive as inadequate – many believe there is a need to develop competencies that accommodate future organisational challenges (Wickramasinghe & De Zoyza 2009). As an example, after the end of the Multi Fibre Agreement, Sri Lankan garment manufacturers were exposed to strong international competition, which influenced the industry to introduce a new marketing campaign called ‘Garments without guilt’ to secure its market position in the local and international markets (Perry 2013). In addition, the Sri Lankan garment industry had to reorient its entire supply chain to be more sustainable, and had to introduce ethical work practices, new technologies and new management systems to contend with the international competition (Perry 2013).

Most Sri Lankan managers perceive the need for training and development to improve their present competencies to compete in a global market, such as technical competencies, safety focus and technological management, and positive vision (Wickramasinghe & De Zoyza 2009). Most Sri Lankan managers, especially middle- level, are willing to accept these responsibilities and achieve high performance in such competencies, based on the expectation of higher salary levels and promotions to senior management positions (Jayawardana, O'Donnell & Jayakody 2013).

In line with their willingness to improve organisational performances, Sri Lankan managers often adapt international management control systems, especially Japanese systems such as the 5S and Quality Circles (Hewege 2011) and Total Quality Management (TQM) (Yapa 2012). Therefore, many modern Sri Lankan corporate work values reflect Japanese management control practices (Hewege 2011; Yapa 2012). As a result, these Japanese practices are common among Sri Lankan managerial and non-managerial employees (Hewege 2011). It has been reported that senior managers such as CEOs, directors and general managers in Sri Lanka often use written and verbal communication methods to inform employees about the objectives of any new management practices (e.g. TQM) (Yapa 2012). However, Sri Lankan organisations are often less capable of adapting new technologies such as e-commerce services into their organisations, mostly due to a lack of exposure to new technologies, language barriers, and a lack of expert staff (Sri Lanka Business Development Center

139

2002). In addition, most employees being less-prone to risk-taking is an obstacle, making it difficult for managers to successfully implement contemporary management control techniques in the Sri Lankan organisational context (Hewege 2011).

6.10.5 Sustainability thinking in the Sri Lankan organisational context (SUSTHINK) The influence of the Buddhist monasteries and religious values that spread through these religious institutes was strong and powerful in Sri Lanka, even in the pre-colonial era (Alicia 2007; Hewege et al. 2008). Empathy, care for others, non-confrontation, help for the disadvantaged, respect for others’ views, avoiding harming others, and refraining from any misbehaviour as taught in the religion are values that have nurtured harmony, safety, caring and self-discipline in most of Sri Lankan society (Hewege et al. 2008). However, the introduction of the colonial education system transformed the traditional Buddhist monastery-based education system of Sri Lanka to a more internationalised missionary-based education system (Alicia 2007; Hewege et al. 2008). The missionary education system has greatly influenced Sri Lankan perceptions, knowledge and values (Hewege et al. 2008; Moore 1993).

Management studies were only introduced to the Sri Lankan education system in more recent times (Wijewardena & Wimalasiri 1996). Parallel to other Asian universities, Sri Lankan universities now also teach management philosophies adapted from the Western textbooks, which have had an enormous influence on management practices in Asia (Wijewardena & Wimalasiri 1996). Yet despite these education improvements in Asia, most contemporary middle-level managers still lack the necessary management skills and expertise to become successful in their organisations (Jayawardana, O'Donnell & Jayakody 2013). This is mainly put down to the inability of the local undergraduate education system to provide adequate skills and modern technologies to compete, which is also considered a principal reason for the high unemployment rate among local graduates (Jayawardana, O'Donnell & Jayakody 2013; Sheriffdeen 2012). In addition, this lack of managerial skills has resulted in some managers receiving low salaries with few rewards, cultivating low job satisfaction compared with high-performing managers who perceive their low performance as due to their inability to maintain a strong relationship with their seniors (Jayawardana, O'Donnell & Jayakody 2013). As rewards and recognitions for lower-performing

140 managers are often inadequate, they tend to maintain an economic relationship (transactional leadership) rather than social engagement (transformational leadership) with their senior management (Jayawardana, O'Donnell & Jayakody 2013).

Despite these management issues, most Sri Lankan employees have been identified as loyal to their organisations and their managers (Hewege 2011; Wijewardena & Wimalasiri 1996), often because their managers promote employee work-life balance and welfare facilities (Abeysekera 2007). Most of Sri Lanka’s senior managers prefer to create organisational cultures that promote loyalty, trust, care and mutual bondage, that indirectly function as a managerial controlling tool (Hewege 2011).

During the colonial period in Sri Lanka, many employees were chosen not only based on literacy and competency, but also on a sense of kinship and loyalty to their colonial authority (Wijewardena & Wimalasiri 1996). The colonials often used these loyal servants to implement their rules and policies, resulting in organisations characterised by hierarchical, deterministic and rigid structures (Wijewardena & Wimalasiri 1996). Those who were employed under the colonials learned the more common Western business practices such as profit maximisation, productivity, efficiency, competition, and risk management, creating a new breed of Asian managers that adhered to Western colonial values, as well as Asian values such as loyalty, trust, cooperation, compassion, tolerance, morality and empathy (Wijewardena & Wimalasiri 1996).

Despite the continuance of these Asian values, the 30-year war between LTTE and the Sri Lankan Government has meant that many Sri Lankan youths from that war-torn period grew up to suspicious, fearful and mistrustful of each other (United Nations Development Programme 2014c). The majority of these youth were separated spatially, linguistically, politically and culturally (United Nations Development Programme 2014c). Since the war ended, Sri Lankan youths have been able to enjoy and find peaceful ways of expressing idealism and social justice (United Nations Development Programme 2014c). Many of them now want equitable development rather than identity politics (United Nations Development Programme 2014c). Therefore, the Sri Lankan youths are generally perceived as possessing anti-capitalistic values, beliefs and attitudes which lead them to behave differently from their previous pre-colonial generations (Moore 1993).

141

On the other hand, most Sri Lankan employees expect their managers to be exemplary in character and to conduct good practices even in their personal lives (Wijewardena & Wimalasiri 1996). A breach of these ethics will damage the respect, trust and mutual bonds that are common characteristics of paternalistic relationships in the Asian context (Wijewardena & Wimalasiri 1996). Therefore, most Asian managers are sure to maintain a good personal relationship with their subordinates (Wijewardena & Wimalasiri 1996).

Sri Lankan employees tend to trust managers who are caring and helpful in developing employees’ professional development (Nanayakkara 1988). This enables attracting loyal employees to their organisations rather than organisations with managers that show little concern for their employees’ personal and career development (Nanayakkara 1988). More Asian managers offer long-term training opportunities, and provide promotions and other career opportunities to their employees to advance up the organisation’s career ladder and ensure job security for their employees compared to managers in western societies (Wijewardena & Wimalasiri 1996). In addition, most Asian organisations are reluctant to lay off employees, preferring to maintain a moderately high level of job security compared with Western organisations (Wijewardena & Wimalasiri 1996). As a result, most Eastern countries experience lower labour turnover rates compared with the West (Wijewardena & Wimalasiri 1996).

6.10.6 Concern for social and environment in the Sri Lankan organisational context Sri Lanka has made a great deal of progress in promoting social and environmental security compared to other South Asian countries. The 30-year civil war has cultivated nationalist ideologies in the minds of Sri Lanka’s youth, while the earlier generation’s youth mobilisation was primarily around issues of class inequality (United Nations Development Programme 2014c). Social issues surrounding ethnic identity, monolingualism, ethnic politics, structural class divisions, and caste and power relations all have an influence on Sri Lankan social activities (United Nations Development Programme 2014c).

142

It has been reported that the majority of today’s Sri Lankan generation (68.5%) perceive the right to be treated equally without discrimination (United Nations Development Programme 2014c). However, their positive attitudes towards sensitiveness to diversity and willingness to engage with people from diverse backgrounds has often been controlled by the perceived selfish interests of their adults and social institutions (United Nations Development Programme 2014c). Sri Lanka’s youth have often criticised their parents and families for encouraging selfishness, in the pursuit of individual success and material wellbeing, which they consider a barrier to social integration (United Nations Development Programme 2014c).

On the other hand, Sri Lankan managers’ concern for their employee’s work life and welfare help to develop a friendly working environment. Abeysekera (2007) found that most Sri Lankan executives in financial organisations enjoy work-family life balance, as they believe their managers support their family life. It was also identified that most Sri Lankan managers provide adequate recognition and compensation for their employees, which results in low employee turnover (Abeysekera 2007).

6.10.7 Summary of common managerial behaviours in the Sri Lankan context In conclusion, it has been indicated that Sri Lankan employees prefer the following characteristics in their organisation: to maintain trustworthy stakeholder relations, caring and sharing with others, parallel rather than vertical communications in hierarchies, dependence on a few groups, strong boundaries that restrict mobility between groups, voluntary participation of employees, commitment to work for the mutual benefit of the team or group, sense of belonging to the organisation, emotional attachment to the CEO, and a strong communal feeling (Hewege 2011). Other characteristics such as high political influence, political risk and corruption, bribery, European colonial political values, need for respect, and obedience shown to individuals who are politically powerful have also been identified within the Sri Lankan workforce (Hewege et al. 2008).

The contemporary Sri Lankan managers reflect a mix of traditional and Western cultural values such as feudalistic and patrimonial values mixed with Asian cultural values of loyalty, trust, cooperation, compassion, tolerance, morality and empathy

143

(Hewege et al. 2008; Wijewardena & Wimalasiri 1996). The influence of the colonial period on Asian managers, causing them to accommodate hard values of the West together with soft values of the East (Hamza-Sendut., Madsen & Thong 1989) is also applicable to the Sri Lankan organisational context.

Chapter summary The main objective of this chapter was to explain the importance of understanding context-specific cultural values, beliefs and behaviours that influence leadership perceptions. To achieve this objective, the chapter has elaborated on the literature on implicit leadership theories and cultural modelling. The chapter has also referred to Sri Lankan economic developmental challenges and sustainable development issues.

The chapter then explores the progress of Sri Lanka in achieving the UN’s MDGs. The chapter also explains the context-specific Sri Lankan literature relevant to understanding each of this study’s independent and mediating variables.

144

PART III

RESEARCH METHODOLOGY

145

CHAPTER 7. DEVELOPMENT OF THEORETICAL FRAMEWORK, RESEARCH QUESTIONS AND HYPOTHESES

Introduction The main objectives of this chapter are to summarise the literature covered in chapters 2 to 6, and to discuss the development of this study’s theoretical framework to adequately describe sustainability leadership in the Sri Lankan organisational context.

Based on this main objective, Section 7.2 aims to explain the appropriate methodology adopted for this study. Section 7.3 summarise the literature explained in previous literature review chapters. Section 7.4 then explains the development of the theoretical framework of this study. Three leadership dimensions of stakeholder relationships (STK), long-term orientation (LONG) and employee engagement (EMP) have been identified as independent variables within the framework; and leaders’ commitment to organisation change (CHNG) and sustainable thinking (SUSTHINK) have been identified as mediating variables. These three sub-dimensions of excellent leader (EXL), concern for social and environmental sustainability (ENV), and concern for financial performance of the firm (FIN) were also designed to represent the dependent variable of sustainability leadership of Sri Lankan managers: Section 7.5 and 7.6 discuss the research objectives and research questions in this study. Section 7.7 then explains the hypotheses developed in this study. Section 7.8 is a summary of the chapter’s discussions.

Figure 7.1 below provides roadmap of Chapter 7’s section flow.

146

Figure 7.1 Composition of Chapter 7

7.1 Introduction

7.2 Selecting the appropriate methodology for the study

7.3 From literature review to theoretical model development Chapter 7:

Development of theoretical 7.4 Developing the theoretical framework, research questions framework and hypotheses 7.5 Research objective of the study

7.6 Research questions of the study

7.7 Hypotheses development

7.8 Chapter summary

Selecting the appropriate methodology for the study Edmondson and McManus (2007) ideas in relation to theory classification is often deemed useful for identifying and categorising sustainability leadership as a mature theory. The literature on sustainability leadership has extensively used qualitative methodologies, and has been either explorative or conceptual (see Chapter 3 for further detail). Therefore, relevant scholars have often directed future researchers to develop measures based on the existing qualitative literature and to empirically validate these new measures in different contexts. However, due to the growing necessity of 147 corporate sustainability and the limitation of measurements to assess the leader’s concern for sustainability, some scholars have also incorporated sustainability into their new leadership measurements. As an example, Kalshoven, Den Hartog and De Hoogh (2011) identified the leader’s concern for sustainability efforts as a sub- dimension of ethical leadership. According to the theory classification of Edmondson and McManus (2007), the availability of ample qualitative literature, pre-developed measurements and conceptual models helped this present study to classify sustainability leadership as a mature theory.

Edmondson and McManus (2007) suggested that in mature theory studies the quantitative approach is the most suitable methodology to develop the theoretical framework, research objectives and questions, and to formulate hypotheses to validate the constructs in different contexts. This is because the adoption of a pure qualitative methodology for mature theories is similar to ‘reinventing the wheel’, according to Edmondson and McManus (2007). To enhance the quality of research in mature theories, Edmondson and McManus (2007) believed that researchers should use quantitative data as evidence, and also consider using qualitative data as necessary to introduce or discuss the research context.

From literature review to theoretical model development Chapter 4, Section 4.3 of this thesis included the identification of dependent variables of sustainability leadership for this study, and proposed dependent variables consisting of two sub-dimensions: 1) excellence in leadership in a management sense; and 2) excellence in leadership in a sustainability sense. The second sub-dimension of excellence in leadership with sustainability sense concerns with minimising negative impacts to the society, environment and economy and consists of two sub-constructs: 1) concern for social and environmental sustainability (ENV); and 2) concern for financial performance of the firm (FIN).

Chapter 5 then discussed the literature relating to this study’s three independent variables of the leader’s relationship with stakeholders (STK), long-term orientation (LONG) and employee engagement (EMP), and the two mediating variables of leaders’ commitment to organisational change (CHNG) and sustainable thinking (SUSTHINK). These five leadership dimensions are based on the assumption that a

148

Sri Lankan manager that focuses on developing strong relationships with stakeholders, long-term orientation in decision-making, enhanced employee participation, and commitment towards establishing and demonstrating sustainable thinking has a greater likelihood of creating sustainability leadership. As an example, it has been put forward that when managers prioritise developing external relationships with stakeholders such as customers and suppliers, it directly improves not only the firm’s financial performance but also positively impacts on the environment and society (Dunphy, Griffiths & Benn 2003; Senge 1999, 2008).

The literature discussed in Chapter 5 demonstrates that the three independent variables have a direct effect on the three dependent variables (see Figure 7.2 below), and also an indirect effect on the dependent variables through the two mediating variables of commitment to organisational change (CHNG) and sustainable thinking (SUSTHINK). The literature proposed that the leader’s commitment to organisational change and sustainable thinking are essential to achieving sustainability leadership, especially for managers in complex, volatile and uncertain markets (Dunphy & Benn 2013). Thus, organisational leadership should be ethical, responsible, highly committed, flexible and adaptable to ensure the firm’s sustainability (Dunphy, Griffiths & Benn 2003; Senge 2008).

Developing the theoretical framework A theoretical framework is often referred to as a ‘conceptual framework’ or ‘idea context’ of a study (Maxwell 2013), which consists of concepts, assumptions, expectations, beliefs and theories that help to explain the research study (Miles & Huberman 1994). A theoretical framework is primarily similar to a conceptual framework or a model that helps to explain and justify what is out there that a researcher plans to study and what is going on with the identified things, to understand and further develop a particular theory of the phenomenon that a researcher is studying (Maxwell 2013).

Based on this knowledge, Figure 7.2 below presents the basic theoretical framework of this study.

149

Figure 7.2 Basic theoretical framework

Leaders’ 1. Commitment to organisational change (CHNG) and 2. Sustainable thinking (SUSTHINK)

Leadership excellence Sustainability leadership dimensions dimensions

1. Stakeholder 1. Excellent leadership in management sense relationship (STK) 2. Long-term orientation a. Excellent leadership (EXL)

(LONG) 3. Excellent leadership in 3. Employee engagement sustainability sense (EMP) a. Concern for social and environmental sustainability (ENV) b. Concern for financial performance of the organisation (FIN)

Figure 7.3 below explains the extended theoretical framework of this study.

Studies that use SEM have to identify the number of independent variables in their theoretical model to decide the minimum sample size (Cunningham 2008). Chou and Bentler (2002 ) suggested a minimum criteria of five to six independent constructs for studies using SEM.

The framework below consists of five constructs that influence the three dependent variables to explain their influence on sustainability leadership. Among the five constructs, two (commitment to organisational change and sustainable thinking) are assumed to be the mediating variable. The remaining three independent constructs of

150 concern for stakeholder relationships (STK), long-term decision making (LONG) and employee engagement (EMP) are used to represent leadership excellence dimensions that influence sustainability leadership.

Figure 7.3 Extended theoretical framework

Leadership Sustainability Commitment excellence leadership dimension to organisational change Stakeholder (CHNG) Excellent relationships leader (STK) (EXL)

Long-term orientation Concern (LONG) for social and environme nt (ENV)

Employee engagement Concern for (EMP) Sustainable financial thinking performance (SUSTHINK) (FIN)

The first dependent variable in the above theoretical framework is excellent leader (EXL), which was adopted from Selvarajah et al. (1995). The second dependent

151 variable is concern for social and environmental sustainability (ENV), which is a self- developed construct based on Kalshoven, Den Hartog and De Hoogh (2011)’s concern for sustainability construct. The third dependent variable is concern for financial performance of the firm (FIN), which was founded on the international financial statement disclosure requirements such as those of Global Reporting Initiative (2013a). In summary, this study has assumed that the three independent variables have an equal influence on the three dependent variables, which are mediated through the leader’s commitment to organisational change (CHNG) and sustainable thinking (SUSTHINK).

It has been suggested that a theoretical framework helps a researcher to assess and refine research goals, develop realistic and relevant research questions, select appropriate methods, and to identify potential validity threats to research conclusions (Maxwell 2013). With this in mind, the next section explains the research objective, research questions and development of hypotheses in this study.

Research objective of the study Sustainability has become a key aspect of ensuring the long-term competitiveness of organisations (Avery & Bergsteiner 2011c; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003). Chapter 3 highlighted that most of the sustainability frameworks consider sustainability to be a multidimensional construct that is commonly used to reflect how human interventions can minimise the negative impacts on economic, social and environmental aspects. This is commonly referred to as the ‘triple bottom line’ concept (Elkington 1997), and is reflected in most sustainability models and measurements. Thus, this present study has also assumed the construct of sustainability leadership to be a multidimensional construct that reflects the impact of managerial decisions on the social and natural environment while managers attempt to maximise the firm’s financial returns.

Based on this explanation, this study has used two sub-dimensions to reflect the dependent variable of sustainability leadership. The excellent leader in management sense construct is the first sub-dimension used to assess positive leadership behaviours considered necessary for an excellent manager to surpass others in the organisation (Selvarajah et al. 1995). The second sub-dimension has been used to identify the

152 excellent leadership with concern for sustainability which consists of two variables: 1) concern for social and environment sustainability (ENV); 2) and concern for financial performance of the firm (FIN). This second sub-dimension was aimed at assessing the manager’s sustainability attitudes and their impact on the TBL. To maintain simplicity, clarity and future comparability in the field of sustainability leadership, this study has named its dependent variable ‘sustainability leadership’, as commonly used in the sustainability literature.

As amply explained in Chapter 3, most sustainability leadership literature has used qualitative methodology based on a small sample size, and has been based on Western or developed economies. However, most of these models have overlooked the importance of understanding the deep, context-specific cultural values of managers. Thus, to fill these gaps in the literature, this study has aimed to identify leadership dimensions that are important for achieving sustainability leadership.

This study has chosen Sri Lanka as its subject, an economically less-developed country in the middle-income category in the South Asian region (World Bank 2015). Recent statistics have shown that Sri Lanka still faces some major sustainable economic development challenges such as poverty, human rights violations and corruption (Human Rights Watch 2015); lack of access to infrastructure (Bopage 2010; Jebarajakirthy, Lobo & Hewege 2013; Somasundaram & Sivayokan 2013); an ageing population (World Bank 2015); urban and rural disparities in poverty and unemployment rates (World Bank 2015); and a lack of new technologies (Wickramasinghe, Hopper & Rathnasiri 2004; Yapa 2012). Understanding sustainability leadership in Sri Lankan organisations should help these managers to face complex and uncertain challenges unique to the Sri Lankan market while sustaining organisational performance.

As noted above, the main research objective of this study is to identify diverse leadership behaviours that enable sustainability leadership among Sri Lankan managers. The comprehensive literature review in chapters 2 to 6 confirmed that this study consists of sustainability leadership as a mature theory. The recommendation of Edmondson and McManus (2007) to adapt quantitative methodology for mature theories influenced this study to use this methodology, to develop a model based on

153 the ample quantitative and qualitative studies available in the sustainability literature. However, qualitative exploration still has a relevance to sustainability leadership research, especially for case studies to deeply explore a topic; although this should be done via in-depth methodological reasoning (Maxwell 2013). This study’s data was subsequently collected via the survey method and analysed using SEM.

Thus, based on such gaps in the sustainability leadership literature and the relevance of achieving organisational sustainability in the Sri Lankan context, it was anticipated that this study would further identify relationships referred to in the previous studies via a quantitative approach. It was also anticipated that this study would develop and empirically validate a model suitable to explain leadership behaviours influencing sustainability and leadership excellence in an economically developing country with a complex and uncertain business environment. Based on these expectations, this study’s research objective is as follows:

To develop an integrated cultural model that provides explanation to the relationship between the diverse dimensions that enable sustainability leadership in Sri Lankan organisations.

This research objective has been further defined and examined by using the research questions discussed below.

Research questions of the study Edmondson and McManus (2007) suggested that research questions relating to mature theories should focus on elaborating, clarifying or challenging specific aspects of the existing theories. Based on this recommendation, this study’s research questions are more focused on confirming and clarifying the existing ideas around sustainability leadership. The hypotheses have been developed to confirm and clarify the relationships identified as important variables in the existing sustainability leadership literature. Thus, this study developed the following three main research questions (RQ) to explore the influence of independent variables and the mediating variables on the dependent variables:

154

RQ1: What are the leadership dimensions that influence sustainability leadership in the Sri Lankan organisational context? This first research question was developed to identify and examine the main leadership dimensions that influence sustainability leadership. For this purpose, chapters 4 and 5 surveyed the literature and identified the relevant independent and dependent variables. Further, the literature surveyed in Chapter 5 indicated that the three independent leadership dimensions and two mediating variables have a positive influence on sustainability leadership.

However, there is a dearth of quantitative studies for empirically validating measures to identify the nature of the relationship among these three leadership dimensions of sustainability leadership. Thus, by extracting the literature from diverse disciplines in management studies, this study has proposed a positive influence from each leadership dimension on the sustainability leadership construct. As the relationships among the leadership dimensions and sustainability leadership has not yet been empirically examined, the first research question of this study aimed to examine the degree of importance of each identified leadership dimension in creating sustainability leadership in the Sri Lankan organisational context. It was perceived that assessing the level of impact of each leadership dimension on sustainability leadership would provide much value, especially in areas such as leadership training and development.

RQ 2: How does the leader’s commitment to organisational change (CHNG) mediate the relationship between leadership excellence and sustainability leadership? and RQ 3: How does the leader’s sustainable thinking (SUSTHINK) mediate the relationship between leadership excellence and sustainability leadership?

The second and third research questions address an empirically untested assumption in sustainability leadership, about how leadership excellence dimensions relating to STK, LONG and EMP affect the leader’s commitment to organisational change and sustainable thinking. Thus, it was assumed in this study that the organisational change leadership and sustainable thinking in turn impact on sustainability leadership. Testing

155 these relationships enables the researcher to identify whether the mediating variables are mediating the relationships between the three leadership excellence dimensions and sustainability leadership.

According to Baron and Kenny (1986), the first step in mediation testing is to confirm that the independent variables affect the mediator. For this purpose, the independent variables and the mediator must be correlated (Baron & Kenny 1986). As a result, the three leadership excellence constructs in this study – STK, LONG and EMP – were correlated with the two mediators (CHNG and SUSTHINK) in the model. For example, leaders that encourage employee participation often prefer to act as coaches or trainers, and aim to make their staff feel ready for the necessary changes in the organisation (Armenakis, Harris & Mossholder 1993). Therefore, such leaders that are more participative and seek employees’ ideas will enable organisational change and will also indirectly influence sustainability leadership (Dunphy, Griffiths & Benn 2003).

The second step for satisfying mediation testing is to confirm that the independent variables affect the dependent variables in the model (Baron & Kenny 1986). Chapter 5 explained the influence of this study’s three independent variables on the dependent variables. For example, leaders that prefer to motivate and engage employees’ ideas in organisational activities will create a facilitating environment that enables employees to competently perform their task to ensure organisational sustainability (Avery & Bergsteiner 2011c). It was therefore proposed in this study that there is a direct and positive influence from the leader’s concern for employee engagement (EMP) on sustainability leadership, and vice versa.

However, the review of sustainability leadership literature has shown that most of the prior research is limited to the qualitative paradigm. Lack of quantitative work has limited the opportunity of finding evidence to support the correlation and the significance of the relationships between leadership dimensions and sustainability leadership. Thus, this study sought support from other related management fields to better understand and develop the hypotheses to test the relationship between these variables. As a result, this study has proposed a linear relationship between the

156 independent and dependent variables identified in the model, and the hypotheses were developed to test these relationships to explain RQ1.

As the third step in mediation testing, it has been suggested that the mediator and the dependent variable(s) need to be correlated (Baron & Kenny 1986). Chapter 5 surveyed the literature from diverse disciplines that explain how the leader’s commitment to change and sustainable thinking have an impact on sustainability leadership. Based on this, the conceptual ideas of Avery and Bergsteiner (2011c); Bossink (2007); Doppelt (2009); Dunphy and Benn (2013); Dunphy, Griffiths and Benn (2003, 2007); Fullan (2003); Gilbert et al. (2009); Goldsmith, Ulrich and Carter (2005); Khavul and Bruton (2013), and Senge (2008) confirmed that the leader’s commitment to organisational change and sustainable thinking are important for achieving sustainability leadership. In line with this, leaders that are committed to enabling organisational changes are generally considered effective leaders compared with those that resist change (Armenakis, Harris & Mossholder 1993).

The literature reviewed in Chapter 5 confirmed that change management and sustainable thinking (i.e. ethical and responsible leadership) are mature theories; although empirical work to understand the relationship between leadership attitudes towards organisational change and sustainable thinking and sustainability leadership is lacking. Thus, incorporating change leadership and sustainable thinking into the theoretical framework has enabled this study to empirically test the relationship between the two mediators and sustainability leadership; and thereby extend the concept of sustainability leadership. The theoretical framework in this study has assumed there is a direct influence from the three independent variables on the dependent variables, and an indirect impact from the independent variables on the dependent variables through the two mediating variables. Therefore, RQ2 and RQ3 have aimed to understand the influence of the three leadership excellence dimensions on sustainability leadership through the two mediating variables.

This aspect of indirect influence is further explained in the subsections below in relation to hypotheses development. As a final step in mediation testing, Baron and Kenny (1986) recommended the testing of a complete mediation model, which enables testing irrespective of whether it is a full or partial mediation. For a full mediation,

157 these scholars believed that the relationship between the independent and dependent variables should be zero when the mediator is included in the model.

Section 7.7 below explains the hypotheses used in this study to test the relationships between the independent and dependent variables, and the testing of mediation after the introduction of the mediator into the model.

Hypotheses development This section describes the development process of the hypotheses to test the influence of the three leadership excellence dimensions on the sustainability leadership construct. In total, there were 27 hypotheses developed to test the relationships between the eight variables in the model (see Appendix 11).

7.7.1 Hypotheses 1 to 9: Testing the relationship between the three leadership excellence dimensions and sustainability leadership The first research question has aimed to examine which of the three leadership excellence dimensions (i.e. STK, LONG and EMP) are most impactful on sustainability leadership in the Sri Lankan organisational context. Thus, hypotheses 1 to 9 have been developed to answer RQ1 (see Table 7.1). Sustainability leadership scholars such as Avery and Bergsteiner (2011c) and Fullan (2003, 2005) discussed how leadership excellence dimensions relating to STK, LONG and EMP can become an essential component in achieving sustainability leadership. In addition, Chapter 6, Section 6.10 on the Sri Lankan management context explained that these three leadership excellence dimensions are suitable to define the culture-specific leadership values of Sri Lankan managers. Thus, nine hypotheses were formulated to test the nine relationships identified between the three independent and three dependent variables.

158

Table 7.1 Summary of hypotheses testing the relationships between the three independent variables and the three dependent variables

Dependent variables in the theoretical framework

Excellence in Excellence in leadership in a leadership in a sustainability sense (i.e. leader’s management concern for sustainability) sense (EXL) Concern for social Concern for and environmental financial sustainability performance of (ENV) the firm (FIN)

Stakeholder H1 H2 H3 relationships (STK) Long-term H4 H5 H6 orientation (LONG)

Employee H7 H8 H9 engagement Independent variables (EMP)

7.7.1.1 Hypotheses 1, 2 and 3: Concern for stakeholder relationships (STK)

Construct definition: The concept of sustainability leadership has been identified as where a society consists of complex and diverse interrelated networks, where leadership responsibility is to ensure unity and harmony within society (Salem 2012). Thus, this study has proposed the construct concern for stakeholder relationship (STK) as an important leadership excellence dimension in achieving sustainability leadership, and has defined it as the ‘extent to which organisational leadership considers maintaining a close relationship with its diverse stakeholders as an important aspect in achieving sustainability’. The objective of this construct is to identify diverse managerial perceptions of important leadership behaviours that help to develop strong relationships with diverse stakeholders. This study has referred to ‘stakeholders’ as individuals and constituencies such as suppliers, customers, competitors and government institutes that have an interest in and are affected by organisational activities.

159

Hypothesised relationships: Various qualitative studies have suggested the leader’s concern for stakeholder relationships as an essential criterion for achieving sustainability leadership. It has been contended that managers that have strong relationships with external parties will positively impact on a firm’s productivity (Murphy 2002). Yet even though stakeholder relationships has been identified as a key dimension that improves the firm’s long-term competitiveness, sparse empirical research has examined the important leadership behaviours that help leaders to achieve sustainability.

In addition, the stakeholder perspective has been identified as a core strategic leadership competency (Donaldson & Preston 1995; Higgins 1984; Polansky 1995; Porter & Kramer 2006; Post, Preston & Sachs 2002). It is believed that leaders that seek new opportunities to develop stakeholder relationships and maintain strong external relationships are better able to maximise the longevity of business success than those that neglect the value of stakeholder relationships (Avery & Bergsteiner 2011c; Murphy 2002). For example, the Danish Ministry of Business and Industry (1996) concluded that some Danish firms were able to outperform others by increasing their productivity based on the development of new relationships with external stakeholders via practices such as outsourcing, strategic alliances, joint ventures, mergers and acquisitions.

It has also been recognised by the Organisation for Economic Co-operation and Development (OECD) that firms that prefer creating clusters with similar firms in the supply chain also outperform others (OECD 2001a). For example, the Sri Lankan garment industry has successfully created a strong cluster among all the Sri Lankan garments manufacturers to protect its international demand and competitiveness (Perry 2013). In line with this, Australian manufacturing firms have been able to enhance their innovation and marketing abilities by encouraging alliances with customers and suppliers (Sohal et al. 1999). Such results confirm that organisations that prioritise external stakeholder relationships are better able to ensure future business success (Murphy 2002; Post, Preston & Sachs 2002).

160

Despite these findings, it has been suggested that most organisational leaders still prioritise the firm’s financial performance over satisfying its diverse stakeholder interests (Groom 2011). Yet Post, Preston and Sachs (2002) argued that maintaining stakeholder relationships also enhances the capacity to increase the firm’s future financial performance. This aligns with the belief that ethical and responsible leadership behaviours towards stakeholders ensure corporate sustainability (Polansky 1995; Thompson 2011). That is, when management is ethical and responsible towards society will encourages organisations to invest more in CSR activities (Avery & Bergsteiner 2011c). However, over-investment in CSR activities does not always guarantee positive financial results (Barnea & Rubin 2010). It has been contended that relevant CSR expenses such as charitable donations guarantee positive financial returns only to certain types of industries, such as retail and finance (Lev, Petrovits & Radhakrishnan 2010).

Strengthening stakeholder relationships could also generate other sustainability benefits such as improved brand reputation, customer satisfaction, loyalty, and long- term shareholder and stakeholder values for the organisation (Avery & Bergsteiner 2011c). Appendix 6 has summarised diverse leadership characteristics that enable leaders to engage with stakeholders to enhance organisational sustainability. Therefore, this study has assumed that managers that prefer maintaining closer relationships with their diverse stakeholders better enable their firms to maximise their economic, social and environmental sustainability.

In Chapter 6, Section 6.10 it was pointed out that Sri Lankan culture is characterised by patriarchal values (Hewege et al. 2008; Kamalika 2008; Nanayakkara 1992) such as high power distance (Liyanage 1996b), which conveys that most Sri Lankan employees respect their power and authority held by their managers. In a high power distance society, it is common to see paternalistic leadership behaviours in managers, where they dominate leader-member relationships by being more autocratic (Hofstede 1986). Taking this one step further, many Asian managers prefer to make decisions after contacting their senior managers or in consultation with their subordinates (Wijewardena & Wimalasiri 1996).

161

Trade unions are also considered a powerful stakeholder group that can often be a management challenge, influencing management choices or pressures that often result in a negative impact on the firm’s productivity (Black & Lynch 2004). Trade unions are common in the Sri Lankan organisational context, with most employees preferring to affiliate themselves with one (Wickramasinghe, Hopper & Rathnasiri 2004). With their membership, many Sri Lankan employees anticipate that the trade union will protect and improve their welfare rights (Wickramasinghe, Hopper & Rathnasiri 2004). For example, Sri Lanka Telecom (SLT), a large privatised Sri Lankan telecommunications provider, faced significant pressures in its privatisation process from its trade unions (Wickramasinghe, Hopper & Rathnasiri 2004). Arnal, Wooseok and Torres (2001) indicates that firms with a labour union presence can achieve high productivity by introducing new work practices. It has also been suggested that firm managers with a labour union influence can lower their costs by introducing new work practices that encourage employee participation to maximise the firm’s productivity (Murphy 2002).

In addition to trade unions, Sri Lankan politicians and senior public administrators in government authorities have high influential power on local organisations, which often means that Sri Lankan managers strive to maintain healthy relationships with these impactful stakeholders (Wickramasinghe, Hopper & Rathnasiri 2004). Political appointments to the management and operational level are common in Sri Lanka’s public sector organisations (Wickramasinghe, Hopper & Rathnasiri 2004).

In more recent times, it has been identified that most Sri Lankan organisational cultures now prioritise their managers engaging with stakeholders such as employees, customers and trade unions (Wickramasinghe, Hopper & Rathnasiri 2004). Most contemporary Sri Lankan managers perceive stakeholders such as customers and employees as a loyal group ready to provide feedback and ideas to improve organisational performance (Wickramasinghe, Hopper & Rathnasiri 2004). In addition, Sri Lankan managers generally encourage the lodging of complaints about their employees, especially when they fail to meet their targets (Wickramasinghe, Hopper & Rathnasiri 2004). Many managers then use such employee grievances to explain poor performance in their divisions (Wickramasinghe, Hopper & Rathnasiri 2004). When communicating with stakeholders, most Sri Lankan managers still prefer

162 to use oral communication methods such as meetings and conferences, rather than electronic methods such as email (Yapa 2012).

It has been recognised that leaders that choose to seek customers’ ideas – feedback and suggestions to incorporate into their business decision-making – are generally able to achieve better sustainability in their organisation (Avery & Bergsteiner 2011c). In the Sri Lankan organisational context, many managers choose to maintain such close relationships with their customers, as they perceive customer orientation and customer friendliness as key to ensuring the firm’s long-term success (Wickramasinghe, Hopper & Rathnasiri 2004). For example, it has been recognised in past research that most Sri Lanka organisations specify customer satisfaction as one of their main priorities in their mission statement (Wickramasinghe, Hopper & Rathnasiri 2004; Yapa 2012). Most Sri Lankan managers also prioritise customer service training opportunities for their employees, with the objective of enhancing customer relationships (Wickramasinghe, Hopper & Rathnasiri 2004). A relevant example is SLT’s implementation of online customer service and employee management systems with the objective of improving both customer and employee satisfaction (Wickramasinghe, Hopper & Rathnasiri 2004). In general, many firms, especially in the services sector, have been able to enhance their performance by implementing technology-based customer relationship management techniques (Murphy 2002). Compared with private sector organisations, maximising customer satisfaction is often overlooked in the Sri Lankan public sector (Wickramasinghe, Hopper & Rathnasiri 2004).

163

Table 7.2 Summary of studies that highlight the leader’s stakeholder relationships as an important aspect for enhancing sustainability leadership

Research that has identified the leader’s stakeholder relationship as having a positive influence on sustainability leadership

International context Sri Lankan context

Excellent Donaldson and Preston Wijewardena and Wimalasiri leader (EXL) (1995); Higgins (1984); (1996) Polansky (1995); Porter and Kramer (2006); Post, Preston and Sachs (2002); Yukl (2012)

Concern for Avery and Bergsteiner Chandrakumara and Sparrow social and (2011c); Caldwell, Hayes (2004); Edirisinghe (2008); environment and Long (2010b); Liyanage (1996a); dimensions dimensions - sustainability Cavaco and Crifo (2014); Wickramasinghe, Hopper (ENV) Hargett and Williams and Rathnasiri (2004); (2009); Hind, Wilson and Wijesinghe (2012) Lenssen (2009); Jaworski (1996); Parkin (2010); Salem (2012); Van de Loo (2006)

Concern for Avery and Bergsteiner Wickramasinghe, Hopper financial (2011c); Barnea and and Rathnasiri (2004) Sustainability leadership sub Sustainability leadership performance Rubin (2010); Cavaco of the firm and Crifo (2014); Lev, (FIN) Petrovits and Radhakrishnan (2010); (Pfeffer 1998); Post, Preston and Sachs (2002)

In summary, most Sri Lankan managers choose to maintain strong stakeholder relationships with the objective of enhancing the social, environmental and economic sustainability of their organisations. Chapter 5 explained that the leader’s stakeholder relationships will enhance the firm’s performance, greater social harmony and environmental protection. However, empirical research examining the relationship

164 between the leadership preference for stakeholder relationships and sustainability leadership is limited. Therefore, this study has hypothesised that when management preference for stakeholder engagement is stronger, there will be a more positive influence on sustainability leadership. The leader’s positive attitudes towards stakeholder relationships are thus expected to positively influence the three sub- dimensions of sustainability leadership identified in the theoretical framework of this study (see Figure 7.3 above). In relation to the limited amount of literature on the leader’s attitudes towards stakeholder relationships and its influence on sustainability, the literature discussed in chapters 5 and 6 are summarised in Table 7.2 above.

Based on the limited literature supporting the relationship between the leader’s preferences for stakeholder relationships and sustainability leadership, the following three hypotheses have been developed in this study to examine the relationship between stakeholder relationship and the sustainability leadership dimensions:

H1: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with excellent leader (EXL) in Sri Lankan organisations. H2: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with concern for social and environmental sustainability (ENV) in Sri Lankan organisations.

H3: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with concern for financial performance (FIN) in Sri Lankan organisations.

7.7.1.2 Hypotheses 4, 5 and 6: Long-term decision-making (LONG)

Construct definition: Based on the literature surveyed in Chapter 5, this study has defined the construct long-term decision-making as the extent to which organisational leadership prioritises long-term-oriented decision-making as an important aspect to achieve organisational sustainability. Therefore, the long-term decision-making construct aims to seek leadership perceptions about the leader’s long-term perspective of decision-making in the Sri Lankan organisational context.

165

Hypothesised relationships: It has been contended by some researchers that leadership with a long-term focus will have a positive impact on sustainability of humanity as well as the natural environment (Doppelt 2012). In line with this, Avery and Bergsteiner (2011c) and McKinsey Quarterly (2006) believed that leadership with a concern for a long-term perspective enhances organisational sustainability. Many of those organisations that promote long- term orientation incorporate this as a key corporate strategic objective in their mission statements (McKinsey Quarterly 2006). However, in a period of global financial hardship, many managers opt for short-term wealth maximisation over long-term business survival; thus resorting to short-term behaviours such as layoffs to minimise operational costs, and cutting down on investments such as employee training, research and development (Avery & Bergsteiner 2011c; Elkington 2004; Freeman 1984).

This common reaction to financial hardship is counterproductive to what has been suggested in most conceptual models relating to sustainability leadership (Albert 1993; Avery & Bergsteiner 2010; Elkington 2004; Ghoshal 2005; Hall & Soskice 2001; Kennedy 2000; Mitchell 2001), where it is often noted that managerial preference for short-term financial gains will not guarantee the longevity of business success. Although Avery and Bergsteiner (2011c) argued that short-term wealth maximisation is particularly important for the survival of firms in certain markets, such as those in the less-developed world. It has also been argued that the complexities and uncertainties often associated with these less-developed countries make balancing the right mix of long-term and short-term perspectives in managerial decisions an essential leadership skill (Avery & Bergsteiner 2011c; Barney 1991; Fullan 2005; Strategic Direction 2011).

However, managers spending more time and resources on long-term-oriented activities such as developing employee skills and capabilities has been identified by some scholars as a support for organisations to survive even in periods of financial crisis (Avery & Bergsteiner 2011c; Mitchell 2001). This is based on the belief that when managers prioritise long-term orientation in their decisions, they ensure greater employee satisfaction and trust; thus enhancing the competitiveness of their business in the long term (Cappelli et al. 2010). In line with this, it has been pointed out that

166 many Sri Lankan organisations choose to make long-term investments in employee training and development, new information technology systems, and other innovations that change existing systems to achieve a competitive advantage in their industry (Wickramasinghe, Hopper & Rathnasiri 2004).

In Chapter 6, Sri Lankan culture was described as a long-term-oriented culture. Traditional feudalistic Sri Lankan agricultural society was based on the long-term perspective of decision-making (Jayewardene 2000). In addition, femininity cultures such as in Sri Lanka prefer to maintain long-term relationships with others (Liyanage 1996a). Paternalistic values of Sri Lankan managers can also cultivate long-term expectations; for example, managers expect obedience and respect from their subordinates, while subordinates expect career development opportunities and for management to listen to their grievances (Wickramasinghe, Hopper & Rathnasiri 2004).

Most Sri Lankan organisations facilitate social activities such as annual staff trips and staff and family get-togethers to strengthen the bond between managerial and non- managerial staff, with expectations of improving long-term relationships to enhance employee commitment and loyalty to the organisation (Hewege 2011). Most Sri Lankan managers also consider long-term customer orientation to be a key strategic competitive advantage, as they believe customers are generally loyal to their products and services (Wickramasinghe, Hopper & Rathnasiri 2004). Thus, the combination of femininity and paternalistic values of Sri Lankans means a common presence of long- term-oriented cultural values such as caring, sharing, obedience and trustworthiness that arise from long-term mutual relationships.

As a developing country that recently overcame around 30 years of ethnic conflict, Sri Lanka has great potential for its long-term-oriented decision-making to achieve economic development (Kelegama 2003). Even most of Sri Lanka’s political parties choose to put forward long-term visions in their development proposal. For example, the Janasaviya Program from 1989 to eradicate poverty (Stokke 1995), and the Samurdhi Program from 1995 (Glinskaya 2000) were introduced by the then ruling governments that prioritised long-term developmental visions. In addition, in 2006 the 10-year Mahinda Chinthana developmental program was introduced by the

167 government (Ministry of Environment 2012; Ministry of Finance and Planning 2010); and more recently in 2015 the newly elected president introduced a development vision in his 100 days Development Program (The President of Sri Lanka 2015).

All of these development programs and policies have been targeted at accelerating sustainable development in Sri Lanka (Kelegama 2003; Ministry of Environment 2012). In line with this, the newly elected Sri Lankan Government in 2015 proposed amendments to the Sri Lankan constitution and introduced changes to several parliament acts to try and address high corruption in the government sector, promote equal opportunities for the disadvantaged, and further develop social welfare facilities (Human Rights Watch 2015). Such recent changes in the socio-political environment in Sri Lanka in relation to sustainability have had an influence on local organisations and their management decisions. That is, when managers observe constant positive changes in the business environment and consider them in their managerial decision- making, this enables them to manage their organisations more sustainably.

Long-term orientation is a common strategic management practice in Sri Lankan organisations, especially among senior managers (Edirisinghe 2008). In addition, collective decision-making is a common cultural value in Sri Lankan organisations, although most managers still consider themselves the responsible party for ensuring higher performance results in their departments (Wijewardena & Wimalasiri 1996). Despite this personal conviction, it has been observed that a lack of contemporary management knowledge and opportunism has limited the strategic management skills of many Sri Lankan managers (Edirisinghe 2008). For example, due to a lack of knowledge of advanced information-technological methods, most Sri Lankan managers still prefer traditional economic and financial planning methods (Edirisinghe 2008). A relevant example relates to financial reports such as revenue reports, which are not used in the public sector as they are not required to prepare revenue reports for the central government’s accounting system (Wickramasinghe, Hopper & Rathnasiri 2004). Thus, long-term financial targets have little relevance in the Sri Lankan public sector.

Based on the above discussions, this study has included the leader’s preference for long-term orientation in decision-making as an important leadership dimension to

168 achieve sustainability leadership in the Sri Lankan organisational context. Appendix 7 has listed other studies that have also identified the long-term orientation of managerial decision-making as an essential aspect to achieve sustainability; however, most of these were qualitative and few assessed the specific relationship between leadership behaviours of long-term orientation and sustainability leadership. Therefore, based on the literature surveyed in previous chapters, this study has developed a new measurement combining pre-developed scales such as those used by Hind, Wilson and Lenssen (2009) and other leadership characteristics deemed important to cultivate long-term-oriented decisions, as shown in Table 7.3.

Table 7.3 Summary of studies that highlight the leader’s long-term-oriented decision-making as an important aspect for enhancing sustainability leadership

Research highlighting that the leader’s concern for long-term decision-making has an influence on sustainability leadership International context Sri Lankan context Excellent Avery and Bergsteiner Edirisinghe (2008); Hewege

leader (EXL) (2011c); Barney (1991); (2011); Wickramasinghe Cappelli et al. (2010); Fullan and De Zoyza (2009) (2005); Ghoshal (2005); Mitchell (2001); Strategic Direction (2011) Concern for Avery and Bergsteiner Hewege (2011); social and (2011c); Cappelli et al. Jayewardene (2000); environmental (2010); Freeman (1984); Liyanage (1996a); sustainability Mitchell (2001) Wickramasinghe and (ENV) Hopper (2005) Concern for Albert (1993); Ghoshal Wickramasinghe and financial (2005); Hall and Soskice Hopper (2005);

Sustainability leadership dimensionsSustainability leadership performance (2001); Kennedy (2000); Wickramasinghe, Hopper (FIN) Mitchell (2001) and Rathnasiri (2004)

In addition, to test the influence of the leader’s concern for long-term-oriented decision-making on sustainability leadership, this study developed the following hypotheses:

169

H4: The leader’s consideration for long-term decision-making (LONG) exhibits a positive relationship with excellent leadership (EXL) in Sri Lankan organisations.

H5: The leader’s consideration for long-term decision-making (LONG) exhibits a positive relationship with concern for social and environmental sustainability (ENV) in Sri Lankan organisations.

H6: The leader’s consideration for long-term decision-making (LONG) exhibits a positive relationship with concern for financial performance of the firm (FIN) in Sri Lankan organisations.

7.7.1.3 Hypotheses 7, 8 and 9: Employee engagement (EMP)

Construct definition: Extending the previous work of Porter (1985) on achieving a sustained competitive advantage, the resource-based view (RBV) of the firm was introduced (Barney 1991; Barney & Wright 1998). RBV relates to the managerial preference for employees and work practices that will add value and possibly provide a competitive advantage over competitors. It has been recognised that when managers opt for employee participation and empowerment, job design, teamwork in production systems, incentive compensation, and employee training and development it yields positive improvements in organisational performance (Pfeffer 1994). In regard to market competitiveness, it has also been shown that firms that are flexible, innovative and encourage employee participation outperform those firms that lack such an organisational culture (NUTEK 1996).

Thus, the objective of this study’s employee engagement construct was to identify managerial perceptions with regard to leadership behaviours that encourage employee engagement in Sri Lankan organisations. In Chapter 5, employee engagement was associated with any leadership activity that encourages staff participation in decision- making and any activity that recognises employee feedback.

Hypothesised relationships: Chapter 5 uncovered that organisations with skilled, motivated, loyal and committed staff generally enjoy a competitive advantage over their competitors, and are more likely to survive in the long term. In line with this, Appendix 8 has listed various

170 leadership skills, attitudes, behaviours and competencies that enable managers to improve employee engagement in their business activities.

Most firms that link sustainability initiatives with their HR strategy achieve various long-term benefits such as improvements in firm demand, and revenue and profits; increases in a firm’s competitiveness; and an enhancement of environmental quality of products and services (Jackson et al. 2012). In contrast, a lack of adequately trained and committed staff can deprive the firm of both its local and international competitiveness (Tomaka 2001). Improving employee knowledge and commitment not only requires transactional and transformational leadership skills, but also servant leadership, adaptive leadership and ecocentric leadership skills (Metclaf & Benn 2013).

Levine (1995) also believed that managers that proactively choose to implement employee involvement programs are more likely to improve the firm’s performance. Improving employee involvement and maintaining effective labour management relationships is likely to improve the firm’s productivity compared to others (OECD 2001b). Thus, creating effective teams and improving employee commitment are considered essential leadership criteria for organisational sustainability (Fullan 2003; Hind, Wilson & Lenssen 2009; Kets De Vries et al. 2010).

Various empirical studies have confirmed that employee participation also enhances organisational performance. For example, management practices to improve the production process which also encourage employee involvement have been found to be strongly associated with improving the firm’s productivity (Ichinowski 1990). Huselid (1995) also confirmed that there is a positive correlation between high- performance work practices and both operational (e.g. employee retention and productivity) and financial performance (e.g. accounting and marketing returns). For example, when firms change their HR strategy to encourage employee participation via incentive payments and employee training opportunities, they often significantly gain positive cash flows, profits and firm market value (Huselid & Becker 1996). Lam and White (1998) also provided evidence that organisations that offer extensive training and development opportunities, above-average compensation, employee benefits, and effective recruitment practices positively influence organisational

171 performance. Carmeli and Tischler (2004) further showed that intangible organisational elements such as management capabilities, human and organisational resources and skills, internal auditing, labour relations, organisational culture, and organisational reputation can positively influence the firm’s financial performance. In addition, Fulmer, Gerhart and Scott (2003) suggested that maintaining positive employee relationships is a powerful predictor of the firm’s financial performance. It is commonly believed that when employees are properly trained, they can improve the quality of their output while reducing rejection rates (Kling 1995).

Asians are traditionally recognised as collectivistic (Hofstede 1986; House et al. 2004), with a preference for maintaining close employee relationships and group orientation within their organisations (Wijewardena & Wimalasiri 1996). Similar to most other Asian cultures, Sri Lankan society is based on collectivistic values and decision- making (Hewege et al. 2008; Liyanage 1996a). In line with this, most Sri Lankan managers prefer to maintain paternalistic relationships with their subordinates (Liyanage 1996a). With the expectation of developing social harmony, it has been recognised that many Sri Lankan managers arrange events such as annual staff trips, award ceremonies and other sociocultural events within their organisations (Hewege 2011). Yet despite this employee engagement focus, it has also been recognised that many Sri Lankan managers prefer to maintain closer relationships with their senior managers and peers than with their subordinates (Nanayakkara & Ranasinghe 1984). For example, most Sri Lankan functional managers maintain close relations with their senior management, as they have to directly report to the CEO (Wickramasinghe, Hopper & Rathnasiri 2004).

Most of Sri Lanka’s contemporary managers perceive assessing employee performance as an important managerial task (Wickramasinghe, Hopper & Rathnasiri 2004). Based on this, most Sri Lankan employees choose to maintain favourable relationships with their supervisors, believing that personally knowing them will have a positive influence on their performance appraisal results (Jayawardana, O'Donnell & Jayakody 2013). However, due to the potential biasness in relation to these appraisals, it has also been revealed that some Sri Lankan employees expect organisations to implement unbiased evaluation systems consisting of multiple parties (i.e. different managers), rather than allowing a single manager (i.e. mostly the immediate

172 supervisor) to evaluate their performance (Wickramasinghe, Hopper & Rathnasiri 2004).

Although centralised decision-making is still common in the Sri Lankan organisational context, decentralisation has also captured much attention in industries such as banking and telecommunications (Edirisinghe 2008; Wickramasinghe, Hopper & Rathnasiri 2004). As an example, Japanese management practices such as quality circles are a common method used in Sri Lanka to encourage factory floor employees’ feedback in decision-making (Hewege 2011; Yapa 2012). However, it has also been argued that these quality circles only deliver short-term results, as they are designed to exchange information rather than engage employees in management decision-making (Kling 1995).

In addition, the increase in decentralised decision-making in organisations does not always align with the perception of Sri Lankans as inquisitive about the income and wealth of others (Wickramasinghe, Hopper & Rathnasiri 2004). This curiosity has often created squabbles in Sri Lankan organisations, particularly among similar job rankings and even within rival professional groups (Wickramasinghe, Hopper & Rathnasiri 2004). As a result, many Sri Lankan managers have implemented practices that enable the withholding of pay level information among staff members (Wickramasinghe, Hopper & Rathnasiri 2004). As an example, it has been reported that SLT has implemented a new employee performance management system that protects the secrecy of pay levels, benefits, qualifications and competencies of employees (Wickramasinghe, Hopper & Rathnasiri 2004).

Even though previous studies have indicated that a higher level of employee engagement will positively impact on sustainability leadership, most of the literature discussed here has been conceptual and lacking in empirical evidence that confirms the correlation between the two variables. Therefore, it has been proposed in this study that leadership behaviours that encourage employee participation have a positive influence on sustainability leadership in the Sri Lankan organisational context. Table 7.4 below summarises the literature on employee engagement that highlights it as an important aspect to achieve sustainability leadership.

173

Based on the literature referred to above, the following hypotheses were developed in this study to examine the effect of employee engagement (EMP) on sustainability leadership: H7: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with excellent leader (EXL) in Sri Lankan organisations.

H8: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with concern for social and environmental sustainability (ENV) in Sri Lankan organisations.

H9: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with concern for the financial performance of the firm (FIN) in Sri Lankan organisations. Table 7.4 Summary of studies that highlight the leader’s concern for employee engagement as an important aspect to achieve sustainability leadership

Research highlighting that the leader’s concern for employee engagement has an influence on sustainability leadership

International context Sri Lankan context

Excellent leader Avery and Bergsteiner (2011c); Edirisinghe (2008); Hewege et al. (EXL) Fullan (2003); Galpin and (2008); Liyanage (1996a); Whittington (2012); Gardner et al. Wickramasinghe, Hopper and (2005); Hind, Wilson and Lenssen Rathnasiri (2004) (2009); Kets De Vries et al. (

2010); Metclaf and Benn (2013); Shrivastava (1994a)

Concern for Arnal, Wooseok and Torres Edirisinghe (2008); Hewege social and (2001); Black and Lynch (2004); (2011); Hewege et al. (2008); environmental Jackson et al. (2012) Jayawardana, O'Donnell and (ENV) Jayakody (2013); Liyanage sustainability (1996a); Wickramasinghe, Hopper and Rathnasiri (2004)

Concern for Black and Lynch (2004); Carmeli Wickramasinghe, Hopper and financial and Tischler (2004); Fulmer, Rathnasiri (2004) performance of Gerhart and Scott (2003); Huselid Sustainability leadership dimensions the firm (FIN) (1995); Huselid and Becker (1996); Ichinowski (1990); Jackson et al. (2012); Lam and White (1998); Levine (1995); OECD (2001b)

174

7.7.2 Hypotheses 10 to 27: Testing the mediating effect of change leadership (CHNG) and sustainable thinking (SUSTHINK) influencing the relationship between the three leadership excellence dimensions (STK, LONG, and EMP) and sustainability leadership sub-dimensions (EXL, ENV and FIN) Baron and Kenny (1986) recommended that when testing for mediation, it is necessary to test the relationship between the independent variable(s), the potential mediator, and the dependent variable(s). They believed that the first step in mediation testing is to confirm the influence of independent variables on the mediator. The subsections below explain the relationships between variables to develop the mediation hypotheses of this study.

7.7.2.1 The relationship between the three leadership excellence dimensions (STK, LONG, and EMP) and the leader’s commitment to organisational change (CHNG)

In this study, the objective of the leader’s commitment to organisational change (CHNG) was to examine how enabling organisational change influences sustainability leadership, and how the CHNG construct mediates the relationship between the study’s three leadership excellence dimensions and sustainability leadership dimensions (see Figure 7.3).

Brown and Campbell (2001); Dunphy, Griffiths and Benn (2003); Metclaf and Benn (2013), and Senge (2008) all suggested that the commitment of leaders towards organisational change has a positive influence on sustainability leadership. That is, when there is managerial support for implementing new management policies, procedures, and learning and development activities, this generally has a positive influence on the firm’s performance (Ferguson & Reio 2010). In line with this, when facing environmental shocks, managers often use strategies that enable them to effectively respond to these necessary environmental changes (Bordia et al. 2004; Burnes 2004). It has also been argued that managerial skills that are non-technical such as HR, organisational development and psychology are more important for enhancing organisational change than technical skills (French & Bell 1999; Kanter, Stein & Jick 1992). This empirical evidence suggests there is a positive influence of the leader’s commitment to organisational change on sustainability leadership.

175

As Sri Lankans are generally presumed to be less open to accepting risks (Hewege 2011; Nanayakkara 1998), conducting business in an uncertain and complex environment (Metclaf & Benn 2013) like Sri Lanka has great importance for managers. In line with this, they are often perceived as dependent, lacking in confidence, accepting of the status quo, resistant to change, respectful of authority, and reluctant to accept responsibilities (Gamage, Cameron & Woods 2003; Nanayakkara 1998). In an organisational context, many Sri Lankan managers believe that activities such as training and development, the recruitment of professionals, and a proven commitment by management to introducing changes will reduce employee resistance to change (Rajapakse 2012). Therefore, it has been recognised in this study that the leader’s commitment towards organisational change has a significant influence on sustainability leadership in the Sri Lankan organisational context. However, Chapter 5 showed that limited scholarly attention has been focused on organisational change in the Sri Lankan organisational context. Thus, this study has aimed to fill this gap by identifying the construct the leader’s commitment to organisational change as a mediating variable in its theoretical framework.

Construct definition: Murphy (2002) defined organisational change as the ‘firm level modifications of structures, work interactions and human resources practices, affecting both internal business processes as well as relationships with customers and other firms’ (p. 6). Thus, change implementation in organisations is often influenced by firm- and industrial-level factors, as well as cultural and institutional variables at the national level (OECD 1998). It has been recognised that positive organisational change often creates changes in not only the existing organisational culture but also employees’ behaviours (Sharif & Scandura 2014), which can challenge the innate behavioural aspects of an individual (Levy & Merry 1986). Aware of this dual need, many change- oriented managers also try to change their employees’ innate beliefs, values, attitudes and behaviours, to better prepare them for the planned organisational changes (Armenakis, Harris & Mossholder 1993). Table 7.5 below summarises the literature that helped to construct the relationship between leadership dimensions and the leader’s commitment to organisational change.

176

Table 7.5 Summary of studies that highlight the leader’s commitment to organisational change as an important aspect to achieve sustainability leadership

Research highlighting that leadership excellence dimensions has an influence on the leader’s commitment to organisational change (CHNG) International context Sri Lankan context Stakeholder Avery and Bergsteiner Hewege (2011); Perry relationships (2011c); Crawford and (2013); Raymond (2013); (STK) Nahmias (2010); Dunphy Wickramasinghe, Hopper and Benn (2013); Dunphy, and Rathnasiri (2004); Yapa Griffiths and Benn (2003); (2012) Euchner and Ganguly (2014); Yukl (2012) Long-term Avery and Bergsteiner Edirisinghe (2008); orientation (2011c); Cappelli et al. Raymond (2013); (LONG) (2010); Crawford and Wickramasinghe, Hopper Nahmias (2010); Levy and and Rathnasiri (2004); Merry (1986); Strategic Wickramasinghe and De Direction (2011) Zoyza (2009) Employee Armenakis and Bedeian Gamage, Cameron and engagement (1999); Armenakis, Harris Woods (2003); Nanayakkara (EMP) and Mossholder (1993); (1998); Rajapakse (2012); Brown and Campbell Sri Lanka Business (2001); Brown and Development Center (2002);

excellence dimensions excellence Eisenhardt (1997); Choi Wickramasinghe, Hopper (2011); Clegg et al. (1997); and Rathnasiri (2004); Combs et al. (2006); Wickramasinghe and De Crawford and Nahmias Zoyza (2009) (2010); Fernandez (2001); Leadership Ford and Ford (1994); French and Bell (1999); Kanter (1991); Kanter, Stein and Jick (1992); Kotter (1995); Levy and Merry (1986); Li (2005); Manz and Sims (2001); Miller, Johnson and Grau (1994); Porras and Robertson (1992); Santhidran, Chandran and Borromeo ( 2013)

177

(a) Stakeholder relationships (STK) and leader’s commitment to change (CHNG) It has been argued that excellent managers generally encourage stakeholder engagement rather than stakeholder management (Crawford & Nahmias 2010). It is believed that these leaders that choose to interact with stakeholders and consider their interests are more likely to enable effective implementation of organisational change (Avery & Bergsteiner 2011c; Dunphy, Griffiths & Benn 2003). It has also been put forward that such leaders are better able to respond to necessary environmental changes (Dunphy, Griffiths & Benn 2003; Euchner & Ganguly 2014). In addition, some believe that constantly evaluating the interests of diverse stakeholders enables management to respond quickly to external environmental changes while reducing potential business risks (Euchner & Ganguly 2014). Based on these findings, this study has proposed that the leader’s concern for stakeholder relationships has a positive influence on implementing organisational change.

To proactively implement organisational change, Crawford and Nahmias (2010) contended that managerial competencies that encourage stakeholder engagement are essential. As a collectivistic culture, strong mutual understanding and the general preference for developing relationships with diverse stakeholders are considered essential and common managerial skills in the Sri Lankan context. As an example of their commonality in management, as a solution to the end of the quota system, Sri Lankan garment manufacturers have collectively formed links with the supply chain to improve sustainability and ethicality of Sri Lankan garment manufacturing (Perry 2013).

However, due to the high political and influential power of trade unions, Sri Lankan managers often have to withdraw or dramatically overhaul their organisational change proposals (Wickramasinghe, Hopper & Rathnasiri 2004). Because of this challenge, Sri Lankan managers often strive to maintain good relationships with trade unions, influential politicians and public administrators, particularly while implementing changes in their organisations (Wickramasinghe, Hopper & Rathnasiri 2004). In addition, even though it is deemed unethical to accept bribes, most Sri Lankan politicians, public administrators and trade union leaders have been accused of corruption (Human Rights Watch 2015). Senior managers in Sri Lanka are often

178 obligated to involve trade union leaders in their meetings, to resolve union disputes against managerial decisions (Wickramasinghe, Hopper & Rathnasiri 2004).

In general, effective communication skills are essential to be able to adequately inform about planned changes and to manage stakeholder expectations (Crawford & Nahmias 2010; Raymond 2013). Many Sri Lankan managers use presentation tools, meetings, symposiums and conferences to communicate information about their proposed organisational changes (Raymond 2013). In addition, as the more mature Sri Lankan generations are generally considered resistant to change, some managers recruit qualified young professionals with positive attitudes, skills and commitment towards organisational changes (Rajapakse 2012; Wickramasinghe, Hopper & Rathnasiri 2004).

Furthermore, it has been recognised that excellent managers often seek opportunities to gather stakeholders’ ideas and possible impacts of planned changes on stakeholders, to reduce potential frustrations (Crawford & Nahmias 2010). In line with this, Raymond (2013) believed that enabling fruitful stakeholder engagement facilitates positive organisational change and implementation strategies in Sri Lankan organisations. Many Sri Lankan managers arrange socialising opportunities such as cocktail parties outside of the formal office environment, with the objective of gathering stakeholder support and to exchange ideas about new organisational changes (Raymond 2013). Thus, public relations skills have a strong influence in the Sri Lankan organisational context.

As a result, this study has proposed the leader’s stakeholder relationships (STK) exhibits a positive relationship with the leader’s commitment to organisational change (CHNG) in Sri Lankan organisations.

(b) Long-term orientation (LONG) and the leader’s commitment to organisational change (CHNG) It is often perceived that most senior managers consider themselves responsible for organisational change (Crawford & Nahmias 2010). Relevant managerial competencies can help to plan changes in areas such as cost, time, risk, quality and scope, which are considered important aspects to enhance organisational

179 transformation (Crawford & Nahmias 2010). In addition, leadership competencies relating to long-term decision-making such as problem-solving skills and systems thinking are also deemed as important for achieving organisational change (Crawford & Nahmias 2010). In line with this, Levy and Merry (1986) proposed that managers with long-term orientation are concerned about organisational change in the long term.

Due to the complexities associated with most markets, especially in the less-developed world, managers are urged to be concerned about short-term survival rather than long- term sustainability (Avery & Bergsteiner 2011c). In particular, financial health has become even more important for small firms or new entrants that are trying to establish themselves in uncertain markets. As a developing economy, Sri Lanka also faces the high uncertainty and complexity associated with markets. Thus, this study has identified that the right mix of long- and short-term orientation is important for sustainability leadership in the Sri Lankan organisational context. As a result, this study has proposed that the leader’s long-term orientation (LONG) exhibits a positive relationship with the leader’s commitment to organisational change (CHNG) in Sri Lankan organisations.

(c) Employee engagement (EMP) and the leader’s commitment to change (CHNG) Ongoing rapid technological advancement is continuously pressuring the workforce to increase its speed, innovation and adaptability to change (Brown & Campbell 2001). This means there is often a need to change from existing organisational practices to new competitive methods (Levy & Merry 1986). Many of today’s employees have to learn how to use new technologies, master technical and intrapersonal skills and workplace competencies, and learn how to effectively handle new tools and technologies to achieve high performance in their organisations (Combs et al. 2006; Fernandez 2001). Most employees therefore expect the leader’s assistance, guidance, training and necessary information regarding issues to do with changes (Porras & Robertson 1992). It has therefore been asserted that change implementation is most effective when senior management commit themselves to facilitating an organisational culture that supports employees to embrace organisational changes (Brown & Eisenhardt 1997; Rajapakse 2012). When managers facilitate employee engagement in change implementation, better results are often the outcome (Clegg et al. 1997).

180

The process of organisational change generally involves winning employees’ support for change decisions, rather than disappointing them (Crawford & Nahmias 2010; Ford & Ford 1994). However, it has been recognised that organisational change often creates stress and confusion among employees (Armenakis & Bedeian 1999; Kanter 1991), mostly because organisational change creates changes to the existing work practices. Such resistance caused by workplace stress among employees needs to be avoided, as it is likely to negatively affect the end results (Rajapakse 2012). To remove such resistance to change, transformational leadership that prioritises a positive organisational culture has been identified as an important leadership aspect to change employees’ behaviours (Manz & Sims 2001). As organisational change often creates complexity and uncertainty within the organisation, many employees depend on the integrity and faith of their management (Li 2005). Thus, managers that have won their employees’ trust and faith are better able to implement organisational changes (Li 2005). Organisational leadership is commonly considered a main contextual factor that can influence employees’ feelings regarding organisational change (Choi 2011).

To achieve effective change implementation, human relation skills in leaders are more important than technical skills (French & Bell 1999; Kanter, Stein & Jick 1992). Leaders that actively engage with their employees as mentors and coaches are often able to better prepare their employees for future changes (Armenakis, Harris & Mossholder 1993). Leadership competencies such as team development and staff recruitment have also been highlighted as important for organisational transformation (Crawford & Nahmias 2010). In addition, recruiting qualified staff is also conducive to a positive change implementation process (Rajapakse 2012).

It has been argued that transformation in Sri Lankan organisations generally means that senior managers need to spend an adequate amount of time carefully planning and allocating resources for training, and most prefer to recruit young professionals with positive attitudes towards change (Rajapakse 2012; Wickramasinghe, Hopper & Rathnasiri 2004; Wickramasinghe & De Zoyza 2009). Yet even though resistance to change has been a common barrier (Gamage, Cameron & Woods 2003; Nanayakkara 1998), it has been suggested that most employees will positively commit themselves

181 to organisational change if they receive the necessary information and training from their managers (Miller, Johnson & Grau 1994; Rajapakse 2012).

As a result of organisational transitions, most of the traditional Sri Lankan organisational structures now have fewer levels than their previous rigid structures (Wickramasinghe, Hopper & Rathnasiri 2004). Even though empowering, decentralising and employee development are considered essential components for facilitating the organisational change process (Kotter 1995). Despite this, most Sri Lankan managers have maintained autocratic attitudes that can restrain change implementation (Wickramasinghe, Hopper & Rathnasiri 2004).

Sri Lankan SME’s have also been perceived as less capable of adopting new technologies such as e-commerce services due to a lack of adequate exposure to new technologies, an inadequate knowledge of English, and a lack of expert staff (Sri Lanka Business Development Center 2002). In contrast, most senior managers of larger organisations in Sri Lanka believe that changing the attitudes and work habits of employees will improve the firm’s competitive advantage (Wickramasinghe, Hopper & Rathnasiri 2004). It has therefore been recognised in this study that when Sri Lankan organisational leaders prioritise staff engagement as an important leadership aspect, they are better able to implement planned changes. As a result, this study has proposed the leader’s concern for employee engagement (EMP) exhibits a positive relationship with the leader’s commitment to organisational change (CHNG) in Sri Lankan organisations.

7.7.2.2 The relationship between the three leadership excellence dimensions (STK, LONG and EMP) and the leader’s sustainable thinking (SUSTHINK)

Construct definition: A recent survey conducted by Groom (2011) alleged that organisational leaders give more preference to profit than being ethical, while perceiving doing well as better than doing good. This is in contrast with the concept of sustainable thinking which is based on humans and organisations being more careful in planning their economic and social activities, so that the most important resources and materials of the earth will last for a longer period of time to safeguard the future of all (Doppelt 2012).

182

The previous work on ethical and responsible leadership that ensures sustainability (Dunphy & Benn 2013) has influenced this study to include the leader’s sustainability thinking as a mediating variable. The literature reviewed in Chapter 5, Section 5.3, and Chapter 6, Section 6.10 described the sustainable thinking construct as the leader’s understanding about the resource limitations of the earth, which requires responsible and accountable actions including careful planning of the organisation’s economic and social activities that aim to serve humanity. Therefore, this study has assumed that the leader’s inner-self qualities such as trust, loyalty, morality, integrity and genuine commitment to their career can be measured based on the construct of sustainable thinking. Hence, the objective of this construct in this study was to identify the main ethical and responsible leadership behaviours that promote the wellbeing of organisational stakeholders, the natural environment and the economy (see Appendix 10).

However, this study also identified a lack of clarity in the research in answering questions surrounding ethical leadership issues (Trevino, Brown & Hartman 2003). Most scholars still consider ethical leadership a concept in a nascent stage with promising avenues to be further developed (Sharif & Scandura 2014). In line with this, scholars such as Yukl (2012) suggested the integrity values of a leader as a potential future research area. Although little attention has been given to identifying the process that facilitates psychological requirements and ethical actions that ensure leaders behaving ethically (Trevino, Brown & Hartman 2003).

In Chapter 6, traditional Sri Lankan society was characterised based on empathy, caring and sharing, non-confrontation, helping the disadvantaged, respect for others’ views, avoiding harming others, refraining from any misbehaviour as taught in the religion, helping to create harmony, safety of oneself and others, caring, and self- discipline (Hewege et al. 2008). It is commonly believed that these cultural values are reflected in most Sri Lankan organisations, where the managers often develop their organisational cultures characterised by values such as loyalty, trustworthiness, career building and mutual bondage with others (Hewege 2011). It has also been suggested that these Sri Lankan cultural values indirectly function as a managerial control tool in the organisational context (Hewege 2011). For example, historically, Sri Lankan employees were considered as loyal and obedient to their organisations and their

183 masters (Hewege 2011; Wijewardena & Wimalasiri 1996), and most managers have prioritised employees’ work-life balance and welfare facilities as an important managerial task (Abeysekera 2007). Employees’ loyalty to their managers and the organisation also often works as a managerial control tool in Sri Lankan organisations (Hewege 2011).

Recent corruption charges against senior politicians and public servants, political instability, and ethnic and religious violence between extremists have disturbed Sri Lanka’s cultural, social and environmental harmony (Human Rights Watch 2015). The civil war that lasted for more than 30 years also caused most of Sri Lankan youth born during that time to be suspicious, fearful and mistrustful of each other, and has also damaged the social harmony of the traditional Sri Lankan society (United Nations Development Programme 2014c). In addition, Transparency International (2014) described Sri Lanka as a corrupt country, after it scored 38/100 in the 2014. Others have also contended that corruption levels in the Sri Lankan public sector have increased in more recent years (Hardoon & Heinrich 2011). Although accepting bribes in Sri Lanka is not as common as in other South Asian countries, it is still at a significant level (Hardoon & Heinrich 2011). It has been alleged that some senior public administrators offer bribes to trade union leaders to keep them silent and remove their intervention in any strategy implementations (Wickramasinghe, Hopper & Rathnasiri 2004).

(a) Stakeholder relationship (STK) and the leader’s sustainable thinking (SUSTHINK) The global trend towards sustainability suggests that individuals, groups, organisations and society should all act ethically and together towards protecting the climate, humanity and natural environment (Doppelt 2012). It has been suggested that most Asian managers believe that a breach of ethics will damage their respect, trust and mutual relationships with other stakeholders; thus, they generally place more importance on maintaining ethical values in their professional career (Wijewardena & Wimalasiri 1996). Similarly, it has been recognised that many Sri Lankan managers try to conduct ethical and responsible practices, based on stakeholders’ expectations of them acting decently in their professional as well as personal lives (Wijewardena &

184

Wimalasiri 1996). Thus, Sri Lankan managers are often more concerned about developing personal relationships that can help them to develop a positive personal image in both their personal and professional lives (Wijewardena & Wimalasiri 1996). Based on these findings, this study has proposed that developing stakeholder relationships (STK) positively enhances sustainable thinking (SUSTHINK) of Sri Lankan managers.

(b) Long-term orientation (LONG) and the leader’s sustainable thinking (SUSTHINK) It has been suggested that an individual’s ethical concerns for society improve as they mature over time (Jayne 2004). Based on this, a short-term focus is often identified as adolescent behaviour that decreases as the individual matures, with them becoming more responsible towards society (Gallup 2004). Most leaders that are able to see the bigger picture in a complex system are recognised as behaving ethically and responsibly from a long-term perspective (Frankel 1998; Roome 1994). This more holistic perspective of the leader’s integrity values has influenced most sustainability leadership scholars such as Avery and Bergsteiner (2011c); Dunphy and Benn (2013); Fullan (2003); Hind, Wilson and Lenssen (2009); Kociatkiewicz and Kostera (2012); Metclaf and Benn (2013), and Parkin (2010) to incorporate values surrounding ethical and responsible leadership characteristics in their models. As a result, this study has proposed the leader’s consideration for long-term-orientated decision-making (LONG) exhibits a positive relationship with the leader’s sustainable thinking (SUSTHINK) in Sri Lankan organisations.

(c) Employee engagement (EMP) and the leader’s sustainable thinking (SUSTHINK) Most Sri Lankan managers expect obedience and respect from their subordinates, which often pushes them to behave ethically and responsibly in both their professional and personal lives (Hewege 2011; Hewege et al. 2008). In addition, it has been suggested that most CEOs of Sri Lankan contemporary organisations believe they need creative and active employees and managers in their organisations (Wickramasinghe, Hopper & Rathnasiri 2004), and consider maintaining a relationship of trust with their employees as an important aspect of organisational leadership.

185

Yet despite these employee engagement convictions, Sri Lanka’s powerful trade unions have sometimes disrupted management decisions in relation to organisational change (Wickramasinghe, Hopper & Rathnasiri 2004). The strong influential power of trade unions has often resulted in public sector managers offering bribes to trade union leaders to stop them from interfering in organisational transformation decisions (Wickramasinghe, Hopper & Rathnasiri 2004). In addition, the Sri Lankan Government has been accused of unsustainable practices in several instances, such as human rights violations and a high incidence of corruption among politicians and public administrators (Human Rights Watch 2015). Based on such findings in the literature, this study has assumed that the leader’s consideration for employee engagement (EMP) exhibits a positive relationship with the leader’s sustainable thinking (SUSTHINK) in Sri Lankan organisations.

7.7.2.3 The relationship between the two mediators (CHNG and SUSTHINK) and sustainability leadership

As the second step in mediation testing, causal relationships need to be identified to reflect the relationship between the mediator(s) and the dependent variable(s). Chapter 5, Section 5.3 summarised the relevant literature and proposed that leaders that are highly committed towards organisational change (CHNG), and that think ethically and responsibly (SUSTHINK) are more likely to enhance sustainability leadership.

(a) The relationship between the leader’s commitment to change (CHNG) and sustainability leadership (EXL, ENV and FIN)

Organisational change leadership behaviour has often been identified as an excellent leadership quality (Manz & Sims 2001; Rajapakse 2012; Selvarajah et al. 1995). The excellence in leadership framework (APEL) assumes changes in the sociocultural environment are common (Shrivastava et al. 2014). Thus, Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013); Selvarajah et al. (2013), and Shrivastava et al. (2014) employed the construct of environmental influences (EI) to identify managerial perceptions deemed as useful to scan and evaluate these common environmental changes. The use of this EI construct has empirically confirmed that searching the external environment for new opportunities is an important aspect of 186 leadership excellence. Selvarajah, Meyer and Davuth (2012) found that EI was suitable to define excellent leaders in their Cambodian study. In addition, the recent work of Selvarajah et al. (2013) proposed and empirically confirmed EI as a mediating variable in assessing the relationship between managerial behaviours and leadership excellence among Singaporean managers.

The impact of organisational change on the firm’s performance has attracted much attention in the literature, especially in relation to lean production, quality control and employee training (Murphy 2002). TQM, lean production, Just-in-Time (JIT) and business re-engineering have all been recognised as having a positive impact on a firm’s efficiency and productivity (Murphy 2002). Black and Lynch (2004); Ichinowski (1990), and Mavrinac and Siesfeld (1998) all believed that implementing a bundle of change practices produces better results than a single high-performance practice. For example, business re-engineering enabled some American manufacturing firms to reduce lead times, inventories (work in progress), rejects, rework and scrap costs (Monga 2000). In the Sri Lankan organisational context, it has been revealed that international management practices such as Enterprise Resource Planning (ERP) (Rajapakse 2012); the 5S system and Quality Circles (Hewege 2011); and TQM (Yapa 2012) have resulted in improving the firm’s performance.

In its privatisation process, senior management in large-scale SLT made more capital investments in technology to achieve operational savings (Wickramasinghe, Hopper & Rathnasiri 2004). As a result, SLT was able to make cost savings rather than cost cutting, and also improved employee satisfaction, identified wasteful organisational functions, and increased the long-term competitiveness of its business (Wickramasinghe, Hopper & Rathnasiri 2004).

Based on these findings, the construct of the leader’s commitment to change has been proposed in this study to mediate the relationships between the three independent and three dependent variables identified in the theoretical framework (see Figure 7.3). Table 7.6 below explains the literature relating to identifying the influence of the leader’s commitment to organisational change (CHNG) on sustainability leadership.

187

Table 7.6 Summary of studies that highlight the leader’s commitment to organisational change influencing sustainability leadership

The leader’s commitment to organisational change (CHNG)

International context Sri Lankan context

Excellent Selvarajah, Meyer and Hewege (2011); Hewege et

leader (EXL) Davuth (2012); Selvarajah, al. (2008); Meyer and Donovan Wickramasinghe, Hopper (2013); Selvarajah et al. and Rathnasiri (2004); (2013); Shrivastava et al. Yapa (2012)

dimensions (2014) - Concern for Selvarajah, Meyer and Perry (2013); social and Davuth (2012); Selvarajah, Wickramasinghe, Hopper environmental Meyer and Donovan and Rathnasiri (2004) sustainability (2013); Shrivastava et al. (ENV) (2014) Concern for Black and Lynch (2004); Hewege (2011); financial Ichinowski (1990); Jarrel Wickramasinghe, Hopper performance and Easton (1996); and Rathnasiri (2004); of the firm Mavrinac and Siesfeld Yapa (2012)

Sustainability leadership sub Sustainability leadership (FIN) (1998); Monga (2000); Murphy (2002)

As most of the sustainability leadership literature is conceptual or qualitative, it has limited this study to identifying the significance of the relationship between the commitment to change (CHNG) and sustainability leadership. Thus, this study has proposed the leader’s commitment to organisational change has a positive relationship with the three dimensions that constitute sustainability leadership (EXL, ENV and FIN).

188

(b) The relationship between the leader’s sustainable thinking (SUSTHINK) and sustainability leadership (EXL, ENV and FIN)

Several APEL studies including Selvarajah and Meyer (2008a, 2008b), and Shrivastava et al. (2014) have found leadership behaviours relating to morality and integral values as the personal quality (PQ) dimension, and have suggested that leadership behaviours relating to PQ often influence excellent leadership. In line with this, Selvarajah and Meyer (2008a, 2008b); Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013), and Shrivastava et al. (2014) all believed that the leader’s PQ relating to morality, communication, emotional maturity and religion often influence excellence in leadership. This was based on research including the study by Shrivastava et al. (2014) on whether cultural values relating to impartiality, communication and morality influence excellent leadership among South African managers, and the study by Selvarajah and Meyer (2008b) that explored the same in relation to Chinese managers. Selvarajah and Meyer (2008a) also studied whether the leader’s PQ relating to morality, religion, interpersonal relationships and communication had an influence on excellent leadership among Malaysian managers; while Selvarajah, Meyer and Donovan (2013) studied similar relationships among Thai managers, and Selvarajah, Meyer and Davuth (2012) in relation to Cambodian managers.

The diversity of these studies shows that there is often a significant, positive and linear relationship between the leader’s various interpersonal qualities (e.g. morality and ethicality) and excellent leadership. Thus, this study has proposed that Sri Lankan cultural values relating to morality, ethicality, trustworthiness and genuine commitment to the job are beneficial for understanding the positive influence of the leader’s sustainable thinking (SUSTHINK) on excellent leadership (EXL) in Sri Lankan organisations.

In line with such interpersonal values, it has been contended that most ethical and responsible managers consider the long-term impact of their decisions on humanity as well as the natural environment (Doppelt 2012). Similarly, sustainability leaders have also be described as non-discriminative, responsible in their decision-making, honest and trustworthy, and protective of humanity and the natural environment (Doppelt

189

2012). Hence, this study has assumed that the sustainable thinking of leaders (SUSTHINK) has a positive influence on creating environmental and social harmony (ENV).

Despite these common perceptions of sustainable leaders, some of the literature refers to ethical leadership and the firm’s financial performance as two opposing concepts (Eisenbeiss, van Knippenberg & Fahrbach 2014). Some scholars have argued that most contemporary leaders and organisations still prioritise the organisation’s financial health over being ethical towards their diverse stakeholders (Groom 2011). However, research that specifically explores the relationship between ethical leadership and the firm’s financial performance has still not captured much attention (Trevino, Brown & Hartman 2003), possibly because most relevant studies are focused on ethical leadership and the employee’s performance (Brown, Trevin˜o & Harrison 2005).

Hambrick and Mason (1984) emphasised that ethical leadership values, attitudes and behaviours are strong determinants of organisational outcomes (e.g. market and financial performance); yet research exploring the relationship between the two is limited (Eisenbeiss, van Knippenberg & Fahrbach 2014). In one of the few studies, Eisenbeiss, van Knippenberg and Fahrbach (2014) contended that ethical leadership influences the firm’s financial performance when organisational leaders develop an ethical organisational culture, and therefore included the construct of ethical organisational culture as a mediating variable in their study.

In line with the limited literature, research on the relationship between ethical leadership and the firm’s financial performance in the Sri Lankan organisational context is sparse. However, other studies in relation to CSR have suggested there is a significant and positive influence of CSR on the Sri Lankan firm’s financial performance (Munasinghe & Kumara 2013; Tilakasiri 2012). Some scholars believe there has been minimum importance placed on management accounting controls in the Sri Lankan public sector, which is mainly controlled by bureaucratic powers (Wickramasinghe, Hopper & Rathnasiri 2004). Some large-scale privatised organisations such as SLT do not impose rigid control constraints on their senior managers on cost minimisation and short-term profits targets, as they believe this will impact on the sustainability thinking of their middle- and lower-level managers

190

(Wickramasinghe, Hopper & Rathnasiri 2004). As a result, large-scale organisations such as SLT have shifted from a financial culture to an operational culture, which has often facilitated deeper sustainable thinking among their managers and organisation at large (Wickramasinghe, Hopper & Rathnasiri 2004). Table 7.7 below summarises the literature supporting the positive relationship between the leader’s sustainable thinking (SUSTHINK) with the three sub-dimensions of sustainability leadership.

Based on the literature review that has been summarised in Table 7.7 below, this study proposes that the leader’s sustainable thinking (SUSTHINK) exhibits a positive relationship with the three sub-dimensions of sustainability leadership in Sri Lankan organisations.

191

Table 7.7 Summary of studies that highlight the leader’s sustainable thinking as an important aspect to achieve sustainability leadership

Leader’s sustainable thinking (SUSTHINK)

International context Sri Lankan context

Excellent Avery and Bergsteiner Hewege (2011); Hewege et leader (EXL) (2011c); Frankel (1998); al. (2008); Wickramasinghe, Groom (2011); Jayne Hopper and Rathnasiri (2004); Selvarajah and (2004); Wijewardena and Meyer (2008a, 2008b); Wimalasiri (1996) Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013); Shrivastava et al. (2014)

Concern for Avery and Bergsteiner Abeysekera (2007); Hardoon social and (2011c); Doppelt (2012); and Heinrich (2011); Hettige environmental Dunphy and Benn (2013); (2000); Hewege (2011); sustainability Groom (2011); Hewege et al. (2008); (ENV) Kalshoven, Den Hartog Transparency International and De Hoogh (2011); (2014); United Nations Roome (1994) Development Programme (2014a, 2014c); dimensions of sustainability leadership of sustainability dimensions - Wickramasinghe, Hopper and

Sub Rathnasiri (2004)

Concern for Eisenbeiss, van Munasinghe and Kumara financial Knippenberg and (2013); Tilakasiri (2012); performance Fahrbach (2014); Groom Wickramasinghe, Hopper and of the firm (2011); Hambrick and Rathnasiri (2004) (FIN) Mason (1984)

In conclusion, the sections above explained leadership excellence dimensions relating to STK, LONG, and EMP that directly influence the two mediating variables of CHNG and SUSTHINK as well as the three sub-dimensions constituting sustainability leadership (EXL, ENV and FIN). Based on the above explanations, the leadership excellence relating to STK, LONG, and EMP also have an indirect influence on sustainability leadership through the two mediating variables relating to change leadership (CHNG) and sustainable thinking (SUSTHINK). That is, change leadership

192 and sustainable thinking are facilitated by leadership excellence dimensions relating to STK, LONG, and EMP, and in turn influence sustainability leadership.

To test whether the leader’s commitment to organisational change (CHNG) and sustainable thinking (SUSTHINK) have any mediating roles, this study formulated eighteen hypotheses. Appendix 11 provides a summary of these hypotheses developed in this study based on the extensive literature review.

Chapter summary This chapter has focused on the development of the theoretical framework of this study, as well as the related research questions, research objectives and the relevant hypotheses. The aim of the study is to identify the perceptions of leadership behaviours that are important to achieve sustainability leadership in the Sri Lankan organisations. Hypotheses were therefore developed to examine the three main research questions in detail.

The theoretical framework of this study was based on pre-developed quantitative measures, as well as ample qualitative ideas in the field of sustainability leadership. However, due to the limitations of empirical work, this study also sought empirical evidence from management literature in other fields such as change management, organisational sustainability, ethical and responsible leadership, complexity management, and ecological management.

This study has aimed to identify new leadership constructs and develop new measures to test the relationships between variables. However, most of the relationships between variables have already been highlighted as important by researchers in the field of management. Thus, through the literature review in Part I of this study specifically identified three sub-dimensions that measure the sustainability leadership construct: 1) excellent leader in management sense (EXL); 2) concern for social and environmental sustainability (ENV); and 3) concern for the financial performance of the firm (FIN). In addition, based on the literature reviewed in Chapter 4, this study also specifically identified three leadership excellence dimensions: 1) concern for stakeholder relationships (STK); 2) long-term decision-making (LONG); and 3) employee engagement (EMP). This study also anticipated the need to examine how change leadership (CHNG) and sustainable thinking (SUSTHINK) mediate the relationship 193 between the three leadership excellence dimensions and the three sub-dimensions of sustainability leadership.

The literature relating to organisational sustainability and sustainability leadership is generally considered a mature research field. This general perception has provided this study with a novel approach, as it is aiming to contribute to previous knowledge by developing new constructs to test sustainability leadership in a new quantitative framework based on the qualitative literature on sustainability leadership. The next chapter is therefore devoted to explaining the research methodology, the development of the quantifiable measurements and the questionnaire, and statistical analysis and other procedures used for data collection.

194

CHAPTER 8. RESEARCH METHODOLOGY AND DESIGN

Introduction

The previous chapter discussed this study’s theoretical framework relating to sustainability leadership, including the constructs, research objectives, research questions and hypotheses. This next chapter describes the research methodology and design, the development of the survey instrument, the process of measurement, any issues of sampling, and the data collection used in this study. Based on the methodological suggestions by scholars such as Edmondson and McManus (2007); Hair et al. (2006); Hair et al. (2011), and Hinkin (1998), this study has used a quantitative methodology. The chapter layout is illustrated in Figure 8.1 below.

195

Figure 8.1 Composition of Chapter 8

8.1 Introduction

8.2 Novelty and contribution of the study

8.3 Research paradigm

8.4 Research design

8.5 Study context

8.6 Unit of analysis

8.7 Recruitment and sampling Chapter 8: 8.8 Sample size Research methodology and design 8.9 Questionnaire development

8.10 Measurement development

8.11 Multidimensionality of the sustainability leadership construct

8.12 Operationalising the independent variables in the theoretical framework

8.13 Structure of the survey instrument

8.14 Ethical considerations

8.15 Process for collecting data and analysing

8.16 Data screening

8.17 Chapter summary

196

Novelty and contribution of the study Assessing the level of novelty of a study is important in determining the research methodology to be used (Edmondson & McManus 2007; Wilkinson 2003). The novelty and the contribution of this study were examined by using the matrix developed by Wilkinson (2003). Below are some points that explain the novelty and contribution of this study.

8.2.1 Developing a new sustainability leadership model using the available literature (i.e. a new model based on the same theory) Sustainability leadership is commonly perceived as a concept that has plenty of room for further development – the ability to branch off from its deep roots in management literature. Based on this common perception and the criticality of organisational sustainability, this study developed a theoretical framework based on previous literature in relation to sustainable development, organisational sustainability and leadership for sustainability.

8.2.2 Adapting a different methodology using the survey technique and analysing data using structural equation modelling The study developed new measures to assess the identified constructs in the conceptual framework. Although these new constructs were developed based on the previous literature, there is significant novelty associated with the theoretical framework of this study – its constructs, their relationships and the compositions proposed are all new to the theory of sustainability leadership. These new measures were empirically tested using EFA, CFA and SEM techniques to confirm validity and reliability.

The proposed mediating variables of change leadership and sustainable thinking have been continuously highlighted in the literature as an important factor influencing sustainability leadership, yet no-one has previously attempted to test this dimension in an empirical study. This adds unique value to this study, because these attributes have not previously been empirically tested in a single model. Even though the theory of sustainability leadership has been mostly qualitative, which is already well-explored, it lacks empirical validation.

197

8.2.3 Testing a new model in a new context A sustainability leadership model with empirically validated constructs was not yet available in the literature, especially in a less-developed economic context. Due to this lack of ability to generalise the results, sustainability leadership scholars such as Kantabutra (2011); Kantabutra and Avery (2012), and Kantabutra and Saratun (2013) have encouraged future studies that explore the concept in other contexts such as developing economies. This study therefore aims to support the continuing development of sustainability leadership theory by exploring extant literature and empirically testing sustainability leadership in a different national context. The national context of the present study is Sri Lanka, a non-Western culture and a less- developed economy in the South Asian region.

Research paradigm for the study When discussing sociological paradigms and organisational analysis, Burrell and Morgan (1979) suggested a process for theoretical identification of research in organisation management context, and categorised philosophies of social science into two types: 1) the subjectivist approach to social science; and 2) the objectivist approach to social science. In the objectivistic approach, reality is measured via scientific methods, and reality is termed the ‘hard, external and objective reality’. In the subjectivistic approach, reality can be taped by the observer while accepting the biasness of their interpretation; thus the importance of the subjective experience is appreciated in the creation of the world (Burrell & Morgan 1979).

8.3.1 Constructivism paradigm Guba and Lincoln (1994) categorised scientific paradigms into four categories: 1) positivism; 2) realism; 3) critical theory; and 4) constructivism. Among these four paradigms, the constructivism paradigm enquires about ideologies and values behind particular findings including multiple local and specific constructed realities in people’s minds. The constructivism paradigm was chosen for this study as it assumes that people bestow knowledge and meaning to constructs based on their personal experiences and ideas (Guba & Lincoln 1994). This present study has aimed to examine the leadership perceptions of sustainability leadership in the Sri Lankan organisational context. It is commonly acknowledged that the assumption of cultural

198 values and experiences shapes the behaviours and attitudes of the human, which therefore justifies the selection of the constructivism paradigm for this study.

To identify what constitutes sustainability leadership in Sri Lankan organisations, three main research questions were developed in this study. The first research question aims to examine diverse leadership behaviours that influence sustainability leadership; while the second and third research questions aim to examine the indirect influence of leadership excellence behaviours relating to stakeholder relationships, long-term orientation and employee engagement on sustainability leadership through the mediating variables of organisational change leadership and sustainable thinking.

This study explored the literature from diverse management disciplines for an in-depth review of sustainability leadership, and found applicable leadership models such as excellence in leadership (Selvarajah et al. 1995), as well as other studies on sustainability leadership such as that of Avery and Bergsteiner (2011a); Elkington (2004); Fullan (2003, 2005); Hargreaves and Fink (2004); Parkin (2010), and Rogers (2011). The literature review identified gaps in the research (see Appendix 1) and surmised that the concept of sustainability leadership should therefore be tested in a developing economic context such as Sri Lanka. This involved the identification of diverse excellent leadership behaviours influencing sustainability leadership in the Sri Lankan organisational context, and the testing of them in a theoretical framework to expand the literature on sustainability leadership.

The hypotheses developed in this study, as discussed in Chapter 7, were used to test the relationships between the variables in the theoretical framework. These hypotheses assisted in explaining how the three leadership excellence dimensions (i.e. STK, LONG and EMP) and the two mediating variables (i.e. CHNG and SUSTHINK) influence sustainability leadership in the Sri Lankan organisational context. Through this hypothesis testing, conclusions were drawn and generalised to cover the sustainability leadership behaviours of managers in Sri Lankan organisations.

8.3.2 Deductive approach Although there are already pre-developed measures to assess sustainability initiatives at the organisational level, such as Global Reporting Initiative (2013a), the field of sustainability leadership has mostly been based on the qualitative research approach;

199 thus, this study identified ample exploratory and conceptual opportunities available in the sustainability leadership literature. In addition, as noted in previous chapters, sustainability leadership literature has mostly been concentrated around Western cultures or developed economies. This limitation indicated that future research such as this study should develop sustainability leadership models and empirically validate them in different social and economic contexts outside Western and developed economies, such as the Sri Lankan organisations chosen for this study. After a comprehensive literature review, similar to the ideas proposed by Veal and Ticehurst (2005) and Bryman (2012), a deductive quantitative approach was adopted for this study. Consequently, this study identified the most important leadership dimensions that determine sustainability leadership in the organisational context and included them in its theoretical framework to support the selection of the quantitative research paradigm.

Research design Bryman (2012) and Saunders, Lewis and Thornhill (2009) referred to two types of research design: 1) exploratory; and 2) explanatory. Exploratory studies often use qualitative data collection techniques such as interviews, observations, case studies and ethnographics (Neuman 2011; Robson 2002, 2011); explanatory studies generally aim to test a pre-defined theory in other contexts or with different groups of respondents (Saunders, Lewis & Thornhill 2009). Thus, explanatory studies often use survey methods that are either cross-sectional or longitudinal (Bryman 2012; Robson 2002).

As previously noted, there has already been a great deal of research on organisational sustainability and sustainability leadership in Western and developed economic contexts. However, most of these studies have been either qualitative or conceptual in nature, indicating the need to develop new quantitative measures and empirical validation in different contexts. This study therefore examined and identified the dependent, independent and mediating variables most suitable to explain the concept of sustainability leadership in a non-Western and less-developed context.

In order to understand and identify sustainability leadership in the Sri Lankan organisational context, previous literature was also surveyed. A sub-objective of this

200 study was to identify which of these leadership behaviours are the most important predictors of sustainability leadership in the Sri Lankan organisational context. For this purpose, this study developed hypotheses based on previous literature (see Chapter 7). It was assumed in this study that both direct and indirect relationships arise between the three independent variables (STK, EMP and LONG) and the dependent variables (EXL, ENV and FIN) that flow through the two mediating variables (CHNG and SUSTHINK). Thus, like other studies that have explored the different perspectives of organisational leadership, this study can also be categorised as an explanatory study. It has used the survey method, which is one of the most common quantitative methods for collecting data in leadership studies (see Yukl (2012) as a relevant example).

8.4.1 Justification of survey method to collect data Surveys are a common quantitative data collection method used in organisational behavioural studies (Stone 1978), often to gather diverse perspectives from respondents on their attitudes, beliefs, behaviours and intentions, especially from large numbers of respondents (Cresswell 2009; Louis 2014; Saunders, Lewis & Thornhill 2009). Surveys ask respondents to evaluate their individual perceptions of aspects such as their own behaviours or others’ behaviours. In particular, when the sample of respondents selected from a large population is distributed across a large geographical area, the survey method is more advantageous than other methods (Louis 2014). It allows the researcher to gather quantifiable data, empirically test the relationships and to generalise the results to other contexts (Bryman 2012; Louis 2014; Saunders, Lewis & Thornhill 2009). The survey method is well-used and is often perceived as more convenient and offering a higher response rate within a limited timeframe compared with other data collection methods (Sekaran 2003).

Most studies in relation to leadership perceptions have used the survey method, such as de Waal et al. (2011); de Waal et al. (2010); de Waal et al. (2012); Selvarajah (2008); Selvarajah et al. (1995); Selvarajah and Meyer (2006, 2008a, 2008b); Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013); Selvarajah et al. (2013); Selvarajah (2005), and Shrivastava et al. (2014). Surveys are also a popular method for self-evaluation of leadership performance, especially in fields such as leadership training and development (Agut, Grau & Peiro´ 2003; Hayes, Rose-Quirie & Allinson 2000), as well as competency assessments (Wickramasinghe

201

& De Zoyza 2009). In addition, Yukl (2012) noted that the survey method is the most common data collection technique in leadership behavioural research. These scholarly findings illustrated that the survey method would best enable this study to collect data from a sizable sample that is geographically dispersed across the country, and to generalise the results, especially among the Sri Lankan managerial population.

Yukl (2012) believed that surveys are most effective when studies have clearly identified the constructs with behavioural statements, and when the respondents are able to remember their past behaviours to provide an accurate rating. Although there are limitations associated with the survey method, it is still frequently used to measure leadership behaviours, and is also used for factor analysis of behaviour description questionnaires (Yukl 2012).

As noted earlier, this study explored the literature and identified the main leadership dimensions influencing sustainability leadership. Possible relationships between the variables were also identified and corresponding hypotheses developed, as discussed in the previous chapter. This study collected data via a paper-based survey (using both postal and face-to-face surveys), and analysed it via appropriate statistical methods to identify the causal relationships between the variables in the theoretical framework.

8.4.2 Selection of cross-sectional survey design This study chose the cross-sectional survey design to collect quantitative data from a sample of managerial respondents spread across Sri Lanka. It is generally deemed most suitable for studies that collect data at a single point of time from a large sample to represent the quantitative and quantifiable characteristics of the population and to detect the patterns or variations that help to finalise the research question(s) (Bryman 2004; Lavrakas 2008). However, as the main objective of this study was to identify leadership behaviours influencing sustainability leadership in Sri Lankan organisations and to identify relationships between the relevant variables, rather than examining the changes in leadership behaviours over a period of time, this study chose a cross-sectional survey as opposed to a longitudinal survey.

202

Study context The selection of a Sri Lankan managerial sample was theoretically important because most research on leadership has been focused on Western cultures (House & Aditya 1997), and there is a growing demand for leadership studies in non-Western and culturally diverse contexts (Bass 1990). As an emerging economy in the South Asian region, Sri Lanka has progressively drawn attention from the international business community (Statistics Department 2012). Sri Lanka has often been described as a developing economy after recently emerging from 30 years of civil war – a nation that is now poised to accelerate its economic development in a sustainable manner (Central Bank of Sri Lanka 2012a).

However, the end of 30 years of war in 2009 created development challenges for the Sri Lankan Government, especially to regain the lost opportunities in the war-affected areas (Bopage 2010; Somasundaram & Sivayokan 2013). The potential economic growth, political stability, high literacy, improvements made to the infrastructure, and the government’s campaign to encourage foreign direct investment (FDI) have made the country more attractive to foreign and local investors (Central Bank of Sri Lanka 2012a; Statistics Department 2012). The World Bank has categorised Sri Lanka as the highest ranking country in the South Asian region for ease of doing business (Statistics Department 2012). This achievement has leveraged the growing popularity of Sri Lanka for conducting business. However, Sri Lanka still faces some diverse challenges, such as perceptions of corruption, environmental pollution and its difficulty in achieving a regionally balanced economic development, in its way forward to achieving a sustainable economic performance (Ministry of Environment 2012).

Complex organisational contexts have become a challenging task for most contemporary managers, especially in a complex business environment (Metclaf & Benn 2013). Thus, developing a sustainability leadership model as done in this study has significant importance for managers in a complex business environment such as Sri Lanka. Developing a sustainability leadership model will allow researchers and practitioners to identify sustainable managerial skills, behaviours and capacities to facilitate the development of sustainability leadership efforts in Sri Lanka’s industrialisation process. As sustainability of businesses has now become an important

203 aspect of the Sri Lankan organisational context, Sri Lankan managers were considered suitable respondents for this study.

Unit of analysis Identifying the unit of analysis is considered one of the primary objectives in conducting research that will be subjected to statistical analysis, and is therefore deemed important to determine prior to sampling and data collection (Salkind 2010).

8.6.1 Appropriateness of selecting managers as the unit of analysis of this study The main aim of this research was to identify the perceptions of leadership behaviours influencing sustainability leadership among Sri Lankan managers. Most studies such as Anurit, Selvarajah and Meye (2011); de Waal et al. (2011); de Waal et al. (2010); de Waal et al. (2012); Selvarajah (2008); Selvarajah et al. (1995); Selvarajah and Meyer (2006, 2008a, 2008b); Selvarajah, Meyer and Davuth (2012); Selvarajah, Meyer and Donovan (2013); Selvarajah et al. (2013); Selvarajah (2005); Shrivastava et al. (2014), and Taormina and Selvarajah (2005) exploring perceptions of leadership behaviours of organisational leaders in different national cultures have identified managers as their respondents.

In a complex business environment such as Sri Lanka, achieving corporate sustainability is a challenging task compared with developed economies which often have more stable business environments. The complex economic and social challenges that underpin the low economic development in Sri Lanka have given a unique perspective to this study. So far, no scholarly work has gathered and examined leadership behaviours influencing the sustainability leadership of Sri Lankan managers. Thus, this study has aimed to gather and identify important leadership behaviours that help managers to be perceived as sustainability leaders. It has been argued that a manager can be identified as an individual in a position where they have at least one subordinate (de Waal et al. 2011). Thus, the unit of analysis of this study is defined as individuals working as managers in the Sri Lankan organisational context.

204

8.6.2 Common method bias It has been determined that collecting data from a single source can often lead to common method bias (Hinkin 1998; Podsakoff et al. 2003). This study tested eight variables simultaneously by collecting data from managers only; hence, there was the potential for common method bias. As a remedy, in the next chapter tests for common method bias by using statistical tests suggested by Hinkin (1998) and Podsakoff et al. (2003).

The techniques suggested by Podsakoff et al. (2003) to control the bias are at the item level but not at the construct level. The items in this study’s questionnaire were designed to be responded to by the managerial sample. Other similar leadership studies that have examined excellence in leadership, such as GLOBE (House et al. 2004), could not adopt a research design to address common method bias (Selvarajah, Meyer & Davuth 2012). After reviewing common method bias and remedies suggested to control this, Selvarajah, Meyer and Davuth (2012) concluded that common method bias could not be controlled in APEL studies using the statistical methods suggested by Podsakoff et al. (2003).

However, it has been suggested that common method bias can be minimised in most studies through careful design of the questionnaire to ensure anonymity, incorporate a customised format, allow social desirability and encourage openness of the respondents (Hinkin 1998). In addition, Siemsen, Roth and Oliveira (2010) found that common method bias tends to decrease as additional variables that are open to this bias are included in the regression equation. This study has eight leadership constructs that face the risk of common method bias – in a way, this study has controlled the common method bias by including these colloquial constructs in its model.

Recruitment and sampling The population of this study comprises managers in the Sri Lankan organisational context across different managerial levels – senior, middle and line managers. Previous studies of Sri Lankan managers have often covered a range of managers from senior, middle and operational levels (Edirisinghe 2008; Jayawardana, O'Donnell & Jayakody 2013; Rajapakse 2012).

205

In the leadership literature (Armstrong & Collopy 1996; Arnett & Hunt 2002; Graf et al. 2012; Jayakody 2008; O' Reilly, Charles & Chatman 1994; Selvarajah, Meyer & Donovan 2013; Sosik, Juzbasich & Chun 2011; Tjosvold, Sun & Wan 2005; Walumbwa et al. 2008), choosing full-time employed managers studying for their Master’s degree, or selecting Master’s qualified managers from among the alumni is still a popular sampling method. Similarly, APEL studies such as those by Selvarajah, Meyer and Davuth (2012) and Selvarajah, Meyer and Donovan (2013) used Master’s students and alumni as their respondents. This method of convenience sampling is considered cost-efficient and easy to administer, generally delivering a high response rate and enabling the selection of a representative sample with diverse characteristics relating to the local organisational context (Bryman 2011).

Based on a similar approach, this study recruited managers undertaking Master’s qualifications and Master’s qualified alumni to complete the survey. There is a high demand for enrolment in Master’s degrees in Sri Lankan universities, especially among young managers, because a Master’s qualification is often considered necessary for career advancement (Postgraduate Institute of Management 2015). This has resulted in most Sri Lankan managers seeking higher educational qualifications. The study of Jayawardana, O'Donnell and Jayakody (2013) involving a sample of 155 Sri Lankan managers consisted of 43 possessing secondary educational qualifications, 54 tertiary/graduate qualifications, 35 professional qualifications, and 23 unspecified, which indicated a strong preference for seeking higher educational qualifications among Sri Lankan managers. As a result, the first group of respondents recruited for this study consists of full-time managers studying in part-time Master’s programs.

The second group of managerial respondents recruited for this study consists of Master’s-degree-qualified managers holding membership of their university’s Master’s alumni associations. Most of Sri Lanka’s universities prefer to maintain close relations with their alumni community, which is often controlled under the program coordinators of individual degree programs (Faculty of Graduate Studies 2014 ; Postgraduate Institute of Management Alumni 2015). Thus, selecting Master's qualified respondents for a managerial sample is a suitable data collection strategy in the Sri Lankan context.

206

It has been reported that there are 36 local universities, higher education institutes and approved private universities in Sri Lanka (University Grant Commission 2012). Thus, for the purpose of data collection, this study contacted universities that conduct Master’s degree programs. However, covering the entire Master’s programs and alumni associations would have been both time- and resource-intensive. Thus, universities were selected and program coordinators contacted from different geographical regions such as Colombo, Kelaniya, Matara, Kandy, Mihintale and Batticaloa (see Figure 8.2 below).

Figure 8.2 Distribution locations of universities

1. Colombo and Kelaniya (Western

Province)

2. Matara (Southern Province)

3. Kandy (Central Province)

4. Anuradhapura-Mihintale (North Central

Province)

5. Batticaloa (Eastern Province)

Thus, the sampling method used for this study can be deemed purposive and targeted. According to the ethical requirements of Swinburne University’s Human Research Ethics Committee (SUHREC), the coordinators of Master’s programs of Sri Lankan

207 universities were first contacted (see Appendix 23 for the draft email) and their approval obtained to commence data collection.

Sample size The sample size has been defined as the number of subjects in the study (Salkind 2010). However, there is often debate over the appropriate size of a sample for conducting statistical significance testing (Hinkin 1998). Researchers should ensure that data is collected and statistical tests are conducted from a sample of adequate size, especially for studies that involve the development of new scales (Hinkin 1998). Statistical techniques such as SEM require researchers to ensure that a minimum number of cases is available to estimate its parameters, as the test results are sensitive to the number of cases in the study (Kline 2010). A small sample size is deemed as inadequate for generalising findings, as it does not have sufficient statistical power to generalise the results to the population (Hair et al. 2011; Kline 2010; Quintana & Maxwell 1999). Thus, a large sample provides more accurate and stable estimates of the standard error to ensure that factor loadings represent a truer reflection of the population (Hinkin 1998).

It has been suggested that researchers should consider the number of variables in the study, sample sizes used in similar and previous studies, size of the population, and the expected completion rates to determine an appropriate sample size (Malhotra & Birks 2007). Salkind (2010) believed that sample size should be determined based on a range of study specific factors such as the number of parameters in the study, the goals of the research and the characteristics of the population the data is to be collected from.

Hinkin (1998); Quintana and Maxwell (1999), and Reisinger and Mavondo (2007) highlighted that there is little consensus in the literature in relation to rules to determine the minimum sample size of a study. Kline (2010) recommended a minimum of 200 cases for a SEM study that examines simple models. As a differentiator, Quintana and Maxwell (1999) proposed a minimum sample size of 200 as suitable for more general, simple studies using SEM, and a sample size of 300 to 1,000 for studies with complex hypothesis testings, models with many parameters, or when the data deviates from multivariate normality. In contrast, Reisinger and Mavondo (2007) suggested a

208 minimum of 100 to 400 cases for SEM analysis. Yet Guadagnoli and Velicer (1988) believed that in most instances when intercorrelations are reasonably strong, a sample with 150 cases provides a good exploratory factor solution.

Kline (2010) developed a ratio to determine the ideal number of cases to parameters as 20:1, and a ratio of 10:1 as the less ideal sample size. He believed that when the ratio falls below 10:1, the statistical power and the trustworthiness of the results are also reduced. Reisinger and Mavondo (2007) suggested a ratio of minimum 5:1 cases per independent variable or construct. Item-to-response rates of 1:4 (Rummel 1970) and 1:10 (Schwab 1980) have also been recommended for factor analysis. Kline (2010) recommended that it is always better to choose a larger sample for complex theoretical model testing.

Campbell (1976) suggested not using the same sample for both construct development and assessment of the psychometric properties of the new constructs. In addition, Hinkin (1998) suggested using several independent samples for studies that expect to develop new scales.

As this study includes new measurements, it was considered that the total sample needed to be randomly split into two independent samples for the purpose of EFA and CFA (Hinkin 1998). The first sample was named the ‘calibration sample’ and was used for EFA, and the second split sample was named the ‘validation sample’ to be used for CFA purposes. Hoelter (1983) recommended a minimum sample size of 200 for CFA. However, it has been argued that a larger sample size is better because even small fluctuations can more easily be detected (Hayduk 1987). In line with this, Cunningham (2008) recommended at least a minimum of 200 or more cases in each of the calibration and validation samples.

Considering all of the above recommendations in deciding the minimum sample size and in relation to the nature of the study, it was decided in this study to try and collect data from at least 1,600 managers across the regions to represent diverse cultures, industries, departments, genders, age, experience and managerial levels to achieve at least 800 completed questionnaires. Collecting survey data from a large sample was deemed possible in the Sri Lankan context, as there is prior evidence in studies such as Jayawardana, O'Donnell and Jayakody (2013); Rathnayake (2011);

209

Wickramasinghe and De Zoyza (2009), and Yapa (2012) of collecting data from samples of 100+ in the Sri Lankan organisational context. Therefore, using the Master’s program for this study enabled the researcher to collect data from a sample that represents diverse social, economic and industrial characteristics in Sri Lanka.

The theoretical framework of this study has eight parameters in total. Thus, according to the 5:1 ratio introduced by Reisinger and Mavondo (2007), there should be at least 40 cases as a minimum sample. Based on the ratio introduced by Kline (2010) of 20:1, there should be at least 160 cases. Considering the novelty of this study and the objective of new measurement development, a larger sample was selected as suggested by Reisinger and Mavondo (2007). Most of the previous APEL studies (de Waal et al. 2012; Selvarajah, Meyer & Davuth 2012; Selvarajah, Meyer & Donovan 2013; Selvarajah et al. 2013; Shrivastava et al. 2014) have used samples of greater than 200.

Questionnaire development This study adopted the guidelines for developing questionnaires suggested by Cresswell (2009); Hair et al. (2011); Hinkin (1998); Malhotra and Birks (2007), and Schwab (1980). It was expected that a comprehensive survey instrument with parsimonious items (Thurstone 1947) would be developed, which could easily be understood by the managerial sample that represents diverse Sri Lankan sociocultural backgrounds.

The main objective of this study’s survey instrument was to collect primary data to evaluate the influence of diverse leadership behaviours on sustainability leadership in Sri Lanka. It defined sustainability leadership as the leadership behaviours that have the least amount of negative impact on the society, environment and economy. This study also followed a cognitive categorisation of leadership similar to what was suggested by Crocker, Fiske and Taylor (1984); Cronshaw and Lord (1987); Lord (1985), and Lord, Foti and Phillips (1982). It has therefore identified and defined sustainability leadership specifically in terms of the perceptions of Sri Lankan managers. This is because the perceptions of managers towards sustainability leadership can differ from those of subordinates in relation to the characteristics of sustainability leadership in their leaders. Therefore, a paper-based survey instrument

210 was developed to gather the perceptions of leaders and statistically identify the most important leadership behaviours.

Measurement development A two-stage approach with EFA and CFA was used for this study’s analysis, as recommended by Gerbing and Hamilton (1996). Adding to this, Joreskog (1993) proposed that models could be categorised into either strictly ‘confirmatory’ or ‘model generating’ models. According to these classifications, this study falls into the second option of model generating models, as it has aimed to develop several new measures. According to Joreskog (1993), the first step in model generating models is to develop the model using the current literature and practice, and then testing the factor structure of each construct using the suggested statistical methods. Changes can be made one at a time to each construct until a statistically good model fit is obtained. The full measurement model consisting of all the constructs confirmed at the EFA stage can then be tested for statistical significance using the CFA method.

This study used both empirically validated measures such as the excellent leadership construct (Selvarajah et al. 1995) and concern for sustainability (Kalshoven, Den Hartog & De Hoogh 2011), as well as some other newly developed measures based on the extant literature. Hinkin (1998) noted that when new items are included with well- established measurements, this can enable the examining of a ‘nomological network’ to identify the relationship between existing measures and newly introduced measures. Thus, for the development of its new measurements, this study followed the guidelines proposed by Hinkin (1998) (see Figure 8.3 below).

211

Figure 8.3 Process for new scale development

Source: Hinkin (1998)

8.10.1 Measurement development process for the survey Each construct identified in this study’s conceptual framework was operationalised using multiple items that would best describe the construct being chosen. Multi-item measures like these are often perceived as more advantageous than single-item measures because they produce more reliable responses while capturing a broader range of attributes (Churchill 1979). It has also been recognised that scales with many items generally have higher internal consistency than those with only a few (Cortina 1993). Thus, research studies often choose reliable and valid instruments (Girden & Kabacoff 2011) that can be used across diverse contexts (Walumbwa et al. 2008).

The literature that contributed to the development of this study’s leadership behavioural questionnaire highlighted two common methods. The first is the deductive method where researchers build their own lists of leadership behavioural items based on an extant review of early research work, as done by Jayakody (2008); Jayawardana, O'Donnell and Jayakody (2013); Selvarajah, Meyer and Davuth (2012), and Shaw, Erickson and Harvey (2011). The second is the inductive method that relates to researchers developing their own lists via grouping or classification, using a mixed

212 methodology. For example Brown, Trevin˜o and Harrison (2005); Kalshoven, Den Hartog and De Hoogh (2011), and Walumbwa et al. (2008) followed this second method in their studies.

The following are the reasons why this study chose the deductive approach of questionnaire development:

 The theoretical foundation of the study (i.e. sustainability leadership) provides enough information to identify the initial set of items.  Hinkin (1998) suggested that conducting a comprehensive literature survey enables a better understanding of the phenomenon being investigated and the identification of theoretical definitions of the constructs in the framework. Chapter 7, Section 7.7 identified and developed definitions for each construct in this framework.  According to the guidelines proposed by Schwab (1980), this study first developed definitions for each of its constructs and then the items were identified: o For example, the construct of employee engagement (EMP) has been defined as any leadership activity that would encourage the staff to participate in decision-making and that recognises employees’ feedback. This researcher used definitions to identify items that represent each construct under examination.

Figure 8.4 below presents the questionnaire development procedure of this study.

213

Figure 8.4 Procedure of developing questionnaire for this study

Step 1: Identify important leadership behavioural constructs to achieve sustainability leadership (see literature review chapters)

Step 2: Identify leadership behaviours that best describe each construct in Step 1

Step 3: Compare leadership behaviours in each construct to avoid any repetition in meaning – leadership behaviours that sound similar in meaning are reworded or removed to reduce repetition

Step 4: Compare leadership behaviours identified in Step 3 above with the 94 leadership behavioural statements in the APEL questionnaire

Step 5: Identify leadership behavioural statements that could not be represented by the 94 APEL leadership behavioural statements

Step 6: Design new or adopt pre-developed leadership behavioural statements to reflect leadership behaviours that are not representative in the APEL statements

Step 7: Review the questionnaire items and the design of the questionnaire by an expert panel

Final questionnaire ready for distribution

214

Across much of the sustainability literature including Ameer and Othman (2012); Avery and Bergsteiner (2010); Bossink (2007); Elkington (1994); Fullan (2003); Global Reporting Initiative (2013a); Hargreaves and Fink (2004); Hind, Wilson and Lenssen (2009); Parkin (2010), and Rogers (2011), the most important leadership behaviours, skills, competencies and attitudes that influence sustainability leadership in the organisational context have been highlighted.

From its literature survey (in chapters 2 to 6), this study has identified three leadership excellence categories that influence sustainability leadership: 1) stakeholder relationships; 2) employee engagement; and 3) long-term orientation. In addition, the two mediating variables of organisational change leadership and sustainable thinking have been incorporated into this study’s framework. The dependent variable of sustainability leadership, identified as a multidimensional construct, consists of two sub-dimensions: 1) excellent leadership in a management sense; and 2) excellent leadership in a sustainability sense. The second dimension of excellent leadership in a sustainability sense consists of two further aspects: 1) concern for social and environmental sustainability; 2) and concern for financial performance of the firm. According to the scale development guidelines of Churchill (1979); Hinkin (1998), and Schwab (1980), this study first identified definitions for each of these construct to be introduced in the survey instrument.

As the next step, this study sought suitable pre-developed measures for each construct identified in the conceptual framework. A few pre-developed measures were identified in the leadership literature for several of the constructs including excellent leadership (Selvarajah et al. 1995) and concern for sustainability (Kalshoven, Den Hartog & De Hoogh 2011). However, due to the sparseness of sustainability leadership literature, especially in the Asian context, this study also extracted pre-developed measures from other management disciplines such as responsible and ethical leadership, organisational sustainability, and change management literature (as discussed in chapters 4 and 5).

The 94 behavioural statements of the APEL questionnaire were adopted for the survey instrument of this study, and several other items were also supported with other pre- developed measures. Studies such as Selvarajah, Meyer and Davuth (2012);

215

Selvarajah, Meyer and Donovan (2013); Selvarajah et al. (2013), and Shrivastava et al. (2014) previously used APEL leadership behavioural statements to examine leadership behavioural dimensions as a culture-specific aspect. Adopting items that are widely used and empirically tested ensures their reliability and validity, and enhances the generalisability of the findings to a larger population while reducing potential errors in the items. Thus, all of the eight constructs in this study’s conceptual framework as well as their items have been supported with ample qualitative and quantitative literature covered in the literature review (see appendices 12 to 19).

8.10.2 Item generation In this study, a pool of leadership items that can best describe each construct were first created (see appendices 2 to 10). For this purpose, the literature from relevant management fields helped to identify leadership competencies, skills and behaviours. Particular attention was given to identifying leadership characteristics of an excellent leader in each of the eight leadership dimensions in the theoretical framework.

Next, the leadership items were compared with each other in a given construct and refined to minimise repetition – assuring a single meaning improves the understanding of the reader and the validity of the constructs. Finally, 105 theoretically derived leadership behavioural items were identified as suitable to capture the diverse leadership behaviours proposed in the eight leadership constructs in the theoretical framework. It was expected that these items would be clear, understandable and representative of each of the constructs.

Finally, the refined list of 105 items was matched with the 94 leadership behavioural statements in the APEL questionnaire developed by Selvarajah et al. (1995). These APEL leadership behavioural statements have been widely tested in various instances and empirically proven to be valid items to represent diverse leadership perceptions. This process enabled identification of valid and reliable leadership behavioural items based on the APEL questionnaire’s 94 behavioural statements. Table 8.1 below summarises the leadership statements identified to measure each construct in the theoretical framework of this study.

216

Table 8.1 Summary of the leadership behavioural items identified for each construct in the questionnaire

Nature of Constructs Number Behavioural statement(s) the variable of items adopted from Excellent leader (EXL) 10 Selvarajah et al. (1995) – pre-developed measure Concern for social and 11 Two items adopted from environmental Selvarajah et al. (1995); sustainability (ENV) – remaining nine items were self- includes both pre- developed with the support of developed items from literature such as Kalshoven, APEL and self- Den Hartog and De Hoogh Dependent developed items based (2011) variable(s) on literature Concern for financial 04 One item adopted from performance of the firm Selvarajah et al. (1995) (i.e. (FIN) – includes self- focus on maximising developed items based productivity); remaining three on literature items were self-developed using literature support such as Global Reporting Initiative (2013a) Stakeholder 11 relationship (STK) – includes APEL items based on literature Long-term-oriented 17 Independent (LONG) – includes variable(s) APEL items based on literature Employee engagement 11 (EMP) – includes Adopted from Selvarajah et al. APEL items based on (1995) literature Leader’s commitment 22 to change (CHNG) – includes APEL items Mediating based on literature variables Sustainable thinking 19 (SUSTHINK) – includes APEL items based on literature

The results of this item comparison indicated that all of the 94 APEL leadership statements are useful to gather perceptions of sustainability leadership. The 217 comparison of 105 leadership dimensions against the 94 APEL statements revealed that 11 items were not described in any of the APEL leadership statements. Thus, it was decided to add these 11 leadership items as new leadership behavioural items. These 11 remaining items were supported by pre-developed measures such as those by Kalshoven, Den Hartog and De Hoogh (2011); and Global Reporting Initiative (2013a); thus, the validity of the newly introduced items was not expected to be an issue. There were 105 leadership behavioural statements in the final sustainability leadership questionnaire of this study.

In conclusion, the 94 APEL items and 11 new items were assumed to be the most suitable leadership statements for collecting data from managerial respondents to support the research objectives of this study. The final 105 items were first subjected to content validity assessment by two senior academics in the field of leadership studies, and four Sri Lankan managers. In accordance with their feedback, amendments were made to the flow of the wording of the cover letter and the questionnaire.

The minimum number of items in a construct, according to Harvey, Billings and Nilan (1985), is four items; although Cook, Hepworth and Warr (1981) instead suggested a minimum of three. Adding to this, Hinkin (1998) recommended four to six minimum items for a single scale. Hinkin (1998) believed researchers should include at least twice as many items in a scale, because approximately one-half of the items in a construct will be removed in the scale development process. Based on this recommendation, this study tried to choose twice as many items in each construct, in the expectation of retaining at least three to six items in each construct.

8.10.3 Measurement scales and response format There are several types of scales (Malhotra & Birks 2007), but the most applicable scale should reflect the variations among the respondents, which will be useful at the data analysis stage (Stone 1978). Among other types of scales, this study has selected the Likert-type scale because it has been widely used in survey research (Cook, Hepworth & Warr 1981). As this study has chosen a behavioural approach to leadership, the Likert-type scale was considered most suitable to explore leadership behaviours (Kerlinger 1986).

218

The original Likert-type scale developed by Likert (1932) had 5 points. However, as the coefficient alpha reliability tends to decrease after 5 points in a Likert-type scale, a 5-point Likert-type scale for new scale development was later developed (Hinkin 1998). The 5-point Likert-type scale continues to be popular in measuring various aspects such as leadership attitudes, behaviours, intentions and perceptions. Ali Shurbagi and Zahari (2013); Brown, Trevin˜o and Harrison (2005); Kalshoven, Den Hartog and De Hoogh (2011); Roof (2014); Walumbwa et al. (2008), and Wickramasinghe and De Zoyza (2009) all used the 5-point Likert-type scale in their leadership studies. Most APEL studies have also been designed based on the 5-point Likert-type scale. Thus, this study used the 5-point Likert-type scale to measure all the important leadership behaviours in the questionnaire, as follows: 5 = High importance; 3 = moderate importance; and 1 = low importance.

The next section discusses the measurement of the constructs identified in the theoretical framework of this study.

Multidimensionality of the sustainability leadership construct Law, Wong and Mobley (1998) suggested that ‘under the latent model, the overall latent construct leads to various dimensions of the construct, because the dimensions are simply different wards the construct has realised’ (p. 747). Thus, the dimensions in a latent model construct must be correlated with other dimensions to justify summing the dimensions together into a single component that represents all the dimensions (Law, Wong & Mobley 1998). In addition, each of the sub-dimensions in a construct should make a unique individual contribution to the construct. Thus, discriminant validity must be established for the dimensions in a multidimensional construct.

Most of the sustainability leadership literature describes a sustainability leader as an individual that possesses excellent leadership qualities that help to minimise the negative impacts on the environment, society and economy. Accordingly, with the theoretical and empirical support in relation to multidimensionality of the sustainability leadership construct, this study has proposed that sustainability leadership consists of two sub-dimensions that are essential for recognising an individual as a sustainability leader. These two sub-dimensions are: 1) excellent

219 leadership in a management sense; and 2) excellent leadership in a sustainability sense. Thus, this study has proposed that these two sub-dimensions of the sustainability leadership construct consists of three further sub-dimensions: 1) excellent leader (EXL); 2) concern for social and environmental sustainability (ENV); and 3) concern for financial performance of the firm (FIN). The following subsections explain the measurements used to assess each of the sub-dimensions.

8.11.1 Excellent leadership in a management sense This study has assumed that excellent leader (EXL) is an essential dimension of sustainability leadership, as it represents leadership behaviours that enable recognition of a manager as an excellent leader in an organisational context. The construct of EXL has been defined as a combination of behaviours and attitudes desirable for excellent leadership within a certain cultural context (Selvarajah & Meyer 2008b). Previous

APEL work by Taormina and Selvarajah (2005) has defined excellence as surpassing others in accomplishment or achievement. Taormina and Selvarajah (2005) also referred to it as actions or behaviours of someone in a leadership position rather than in terms of personal traits or characteristics. In another APEL study, de Waal et al. (2011) defined a managerial position as one in which the individual has at least one subordinate.

Based on such definitions, this study has proposed that being an excellent leader in a management sense only ensures one dimension of sustainability leadership. It has also assumed that being an excellent leader does not always guarantee sustainability leadership, because the concept of sustainability leadership is also related to the management of negative impacts on the society, environment and economy (see Appendix 12 for a comparison of previous APEL studies that used the EXL construct to identify perceptions of excellent leadership in different cultural contexts).

Following the methodological roots similar to those of Selvarajah, Meyer and Davuth (2012), this study reviewed previous APEL work (as listed in Appendix 12) and adopted 10 leadership behavioural statements that are commonly highlighted in those APEL studies. In this study managerial respondents were requested to rate the 10 behavioural statements in the questionnaire using a 5-point Likert type scale, ranging from low importance = 1 to high importance = 5 (see Appendix 22 – Part 2). In

220 addition, a statement describing the concept of excellent leader (see Appendix part 2) was added to the questionnaire to further explain excellent leadership in a management sense (i.e. excellent leadership).

Much importance was given to the excellent leadership (EXL) construct because it is a central focus of this study. Similar to Selvarajah, Meyer and Davuth (2012), the remaining 84 leadership statements (after removing 10 statements from the 94 original APEL statements) were then used to measure other diverse perspectives of leadership behaviours identified in the theoretical framework of this study. Table 8.2 below shows the excellent leadership behavioural statements used in this study.

Table 8.2 Leadership behavioural items that measure excellent leader construct

Item Behavioural statement(s) Item label number provided in the question naire 1 Continue to learn how to improve performance EXL01 2 Create a sense of purpose and enthusiasm in the workplace EXL02 3 Develop strategies to gain a competitive edge in the EXL03 industry 4 Give recognition for good work EXL04 5 Have confidence in dealing with work and with people EXL05 6 Listen when employees want to say something EXL06 7 Motivate employees EXL07 8 Organise work time effectively EXL08 9 Be honest EXL09 10 Have a strategic vision for the organisation EXL10

8.11.2 Excellent leadership in a sustainability sense A statement that helps to define excellent leadership with concern for sustainability was included in the questionnaire to provide a better understanding about what was being measured (see Appendix 22: Section 3.6).

Excellent leadership in a sustainability sense consists of two sub-constructs: 1) concern for social and environmental sustainability (ENV); and 2) concern for financial

221 performance of the firm (FIN). The following subsections further explain each of these sub-constructs.

8.11.2.1 Concern for social and environmental sustainability (ENV)

Environmental issues such as depletion of the ozone layer, global warming, decline in biodiversity, acid rain, urban air pollution, and toxic and nuclear waste have influenced the UN to implement environmental sustainability measures and recommendations (United Nations 2005b). In previous sustainability research such as Ameer and Othman (2012); Global Reporting Initiative (2013a); Parkin (2010), and Rogers (2011), sustainability leadership has been conceptualised as the attitude towards protecting the environment and ecology as an important dimension of sustainability. Rogers (2011) criticised giving equal attention to the environment, society and economy identified by Elkington (1994); instead recommending that future sustainability models should prioritise the protection of the natural environment over the other pillars.

Due to the sparseness of empirical literature measuring leadership attitudes towards sustainability, this study developed a new scale stemming from its more general literature review. Ameer and Othman (2012); Global Reporting Initiative (2013a); Hind, Wilson and Lenssen (2009); Kalshoven, Den Hartog and De Hoogh (2011); Parkin (2010), and Rogers (2011) are some of the scholars that have previously identified diverse leadership behaviours, skills and practices used to measure leadership attitudes towards concern for social and environmental sustainability. Among these, the socioenvironmental responsibility measure of Ameer and Othman (2012) using the community and diversity indexes and the Global Reporting Initiative (Global Reporting Initiative 2013a), and the concern for sustainability construct developed by Kalshoven, Den Hartog and De Hoogh (2011) were used to develop new scales to assess leadership attitudes towards concern for social and environmental sustainability.

Through the literature reviewed in Chapter 4, it was identified that 11 leadership behavioural statements (as listed in Appendix 13) could be used to assess the perceptions of leadership in relation to concern for social and environmental sustainability (ENV) (see Table 8. 3 below).

222

Table 8.3 Leadership behavioural items that measure ENV construct

Item Behavioural statement(s) Item label number provided in the questio nnaire 1 Be sensitive to people of different backgrounds ENV1 2 Be socially responsible ENV2 3 Promote staff welfare and development ENV3 4 Establish a friendly working environment ENV4 5 Work as a volunteer in your community ENV5 6 Engage in work that makes your community a better place ENV6 7 Show concern for sustainability issues ENV7 8 Be environmentally responsible ENV8 9 Encourage recycling of items and materials in your department ENV9 10 Identify impact of your actions on the natural environment ENV10 11 Continuously learn how to protect the environment ENV11

8.11.2.2 Concern for financial performance of the firm (FIN)

A healthy financial performance has often been identified as a principal factor in establishing a firm’s sustainable performance (Avery & Bergsteiner 2011c; Elkington 1994). Although long-term financial performance is more often focused on long-term than short-term, many scholars such as Avery and Bergsteiner (2011c), and Fullan (2005) have emphasised that balancing both ends is essential to ensure a long-term, competitive financial performance.

To assess a firm’s financial performance, this study adopted a perceptual measure, as commonly used in other management studies for this purpose, such as Delaney and Huselid (1996); Den Hartog and Verburg (2004); Ferguson and Reio (2010), and Perry-Smith and Blum (2000). To reflect common leadership perceptions of concern for financial performance of a firm (FIN), this study identified four items (as shown in Table 8.4 below).

223

Table 8.4 Leadership behavioural items that measure FIN construct

Item Behavioural statement(s) Item label number provided in the question naire 1 Understand potential financial impacts of every decision FIN1

2 Achieve financial targets FIN2 3 Focus on maximising productivity FIN3 4 Ensure a maximum returns to investors FIN4

In the above table one item was adapted from the APEL questionnaire’s statements and the others were self-developed based on this study’s literature review (see Appendix 14 for further detail). To reflect the leader’s concern for productivity and cost-effectiveness of the firm, this study chose the behavioural statement of focus on maximising productivity from the APEL questionnaire. Representative behavioural items could not be identified in that questionnaire for the other three areas of concern: 1) financial impact of decisions; 2) financial targets (e.g. profit and sales); and 3) return to investors (e.g. share price and return on investment). Thus, this study developed three relevant statements to better capture the leader’s perceptions of the firm’s financial performance. Concern for financial performance was measured using a 5- point Likert-type scale, ranging from 1 = low importance to 5 = high importance.

Operationalising the independent variables in the theoretical framework 8.12.1 Concern for stakeholder relationships (STK) In this study, concern for stakeholder relationships has been treated as a single-factor latent construct. This construct has been used to identify how a leader’s stakeholder relationships ensure the sustainability of the organisation, influencing sustainability leadership in the organisational context A comparison of the leadership behaviours obtained from this study’s literature survey and the APEL questionnaire confirmed that 11 APEL leadership behavioural statements could be used to measure this

224 construct (as further detailed in Appendix 15). Table 8.5 below shows leadership behavioural statements measuring stakeholder relationships.

Table 8.5 Leadership behavioural items to measure STK construct

Item number Behavioural statement (s) Item in the label questionnaire provided 1 Accept that others will make mistakes STK1 2 Act as a member of a team STK2 3 Be consistent in dealing with people STK3 4 Be skilled in public relations STK4 5 Listen to and understand the problems of others STK5 6 Manipulate people to achieve work goals STK6 7 Listen to the advice of others STK7 8 Negotiate with various professionals and interest STK8 groups 9 Respect the self-esteem of others STK9 10 Respond to expectations of consumers STK10 11 Sell the professional image or corporate image to the STK11 public

A statement was included in the questionnaire to better explain the meaning of the construct to respondents (see Appendix 22 Part 3, Section 3.1).

8.12.2 Long-term-oriented decision-making (LONG) In this study, the LONG construct was designed as a single-factor latent model. As explained in Chapter 5, balancing short-term and long-term goals and perspectives is important for organisations, especially in developing economies. Leaders that place high importance on the LONG construct generally conduct long-term-oriented activities such as the following: strategic planning; analysing to achieve future targets; building personal and organisational reputation in relationships; and careful attention to cause and effect.

To introduce the objective and purpose of the LONG construct to the managerial respondents in this study, a statement was included in the questionnaire (see Apendix 22 Part 3, Section 3.2).

225

The leadership characteristics identified from the literature review as enabling long- term-oriented decision-making (as listed in Appendix 7) were then compared with the APEL behavioural statements to select behavioural items that best describe this construct. In this study, 17 leadership behavioural statements (see further detail in Appendix 16) were adopted to measure the construct of the leader’s concern for long- term decision-making (LONG), as shown in Table 8.6 below.

Table 8.6 Leadership behavioural items to measure LONG construct

Item Behavioural statement (s) Item numb label er in provided the questi onnai re 1 Be consistent in making decisions LONG1 2 Be logical in solving problems LONG2 3 Be objective when dealing with work conflicts LONG3 4 Be prepared to compromise on important work issues LONG4 5 Deal with work problems openly and honestly LONG5 6 Focus on the task-in-hand LONG6 7 Give priority to long-term goals LONG7 8 Give priority to short-term goals LONG8 9 Identify social trends which may have an impact on work LONG9 10 Keep to work deadlines LONG10 11 Make decisions earlier rather than later LONG11 12 Make decisions without depending too much on others LONG12 13 Make work decisions quickly LONG13 14 Think about the general implications of any problem LONG14 15 Think about what may happen in the future LONG15 16 Understand and analyse complex problems LONG16 17 Use economic indicators for planning purposes LONG17

8.12.3 Employee engagement (EMP) Chapter 5 of this thesis discussed the more common leadership characteristics highlighted in the literature regarding the leader’s concern for employee engagement

226

(as listed in Appendix 8). This list that consists of leadership behaviours to identify behaviours and characteristics that most often influence employee engagement was compared with the APEL leadership behavioural statements to select the items that could be used for the questionnaire of this study. As a result of this comparison, 11 APEL leadership statements were identified (see Appendix 17) as suitable to measure the employee engagement (EMP) construct (as shown in Table 8.7 below).

To better explain this construct to the managerial sample, a statement was included in the questionnaire (see Appendix 22 Part 3, Section 3.3).

Table 8.7 Leadership behavioural items to measure EMP construct

Item number Behavioural statement (s) Item in the label questionnaire provid ed 1 Allow other people time to do things EMP1 2 Allow subordinates authority and autonomy EMP2 3 Be formal when dealing with employees at work EMP3 4 Be informal when with employees outside work EMP4 5 Be strict in judging the competence of employees EMP5 6 Consider suggestions made by employees EMP6 7 Delegate EMP7 8 Make allowance for emotional pressure on staff at EMP8 work 9 Support decisions made jointly by others EMP9 10 Trust those to whom work is delegated EMP10 11 Tell subordinates what to do and how to do it EMP11

8.12.4 Sustainable thinking (SUSTHINK) Scholars such as Parkin (2010) believed that leaders with responsible and ethical values generally act sustainably, and therefore positively influence sustainability leadership. However, the sustainability leadership literature sourced in this study did not differentiate between behavioural descriptions of individualised regulations and positive moral perspectives, possibly because both of these aspects reflect the leader’s internal values and standards (Deci & Ryan 2000). In addition, the work of Trevino, Brown and Hartman (2003) highlighted the limitations of measurements to assess

227 ethical leadership. Even the empirical work by Kalshoven, Den Hartog and De Hoogh (2011) and Resick et al. (2006) did not include sustainable thinking within the ethical leadership measurements. In this study, it was therefore decided to develop a new measurement that specifically focuses on the leader’s sustainability thinking. Based on the literature explained in Chapter 5, this study identified the leader’s sustainable thinking as a single-latent construct.

As the first step of identifying leadership items, this study identified diverse leadership behaviours, values and attitudes that influence sustainable thinking (as listed in Appendix 10). These items were then compared against each other, with similar items pooled together to minimise repetition. Next, the leadership behavioural items were compared with the APEL leadership behavioural statements (as listed in Appendix 18). Overall, 19 ethical and responsible leadership behaviours were identified in this study as useful to represent the leader’s sustainable thinking construct (see Table 8.8 below).

Also, a statement was included in the questionnaire section relating to measuring sustainable thinking, to better explain the aim of the construct to respondents (see Appendix 22 Part 3, Section 3.5).

228

Table 8.8 Leadership behavioural items to measure SUSTHINK construct

Item number Item label in the Behavioural statement(s) provided questionnaire 1 Be dependent and trustworthy SUS01 2 Accept responsibility for mistakes SUS02 3 Cope with pressures of work SUS03 4 Deal calmly in tense situations SUS04 5 Speak clearly and concisely SUS05 6 Think about the specific details of any particular problem SUS06 7 Treat most people as if they were trustworthy and honest SUS07 8 Write clearly and concisely SUS08 9 Behave in accordance with his or her religious beliefs SUS09 10 Choose management ethics before self or the organisation SUS10 11 Follow the heart – not the head – in compassionate matters SUS11 12 Follow what is morally right – not what is right for self or SUS12 organisation 13 Have a sense of humour SUS13 14 Ignore personal morality in the interest of the organisation SUS14 15 Return favours SUS15 16 Select work wisely to avoid overload SUS16 17 Share power SUS17 18 Use rank and power to get things done SUS18 19 Work long hours SUS19

8.12.5 Leader’s commitment to change (CHNG) Previous studies such as Dunphy and Benn (2013) and Dunphy, Griffiths and Benn (2003) have claimed that the leader’s commitment to change ensures organisational sustainability. Based on the literature discussed in Chapter 5, a new measurement was developed to capture leader’s commitment to change. Table 8.9 below shows the leadership behavioural statements identified to measure leader’s commitment to change. For the purpose of adequately explaining this construct to respondents, a statement was included in the questionnaire (see Appendix 22: Part 3, Section 3.4).

229

A list of studies has been included in Appendix 9 in relation to leadership behaviours that promote commitment to change. This list was compared with APEL leadership statements to select items that best describe each of the leadership behaviours (Appendix 19). It was concluded in this study that 22 behavioural statements were suitable to assess the leader’s commitment to organisational change.

Table 8.9 Leadership behavioural items to measure CHNG construct

Item Item label number provided in the Behavioural statement(s) question naire 1 Adjust organisational structures and rules to realities of CHNG1 practice 2 Be an initiator – not a follower CHNG2 3 Be competitive CHNG3 4 Be adaptable CHNG4 5 Be involved in organisational politics CHNG5 6 Be knowledgeable about work of the industry CHNG6 7 Be practical CHNG7 8 Be responsive to political realities in the environment CHNG8 9 Be skilled in work-related technology CHNG9 10 Check constantly for problems and opportunities CHNG10 11 Constantly evaluate emerging technologies CHNG11 12 Foster an international perspective in the organisation CHNG12 13 Have a multicultural orientation and approach CHNG13 14 Have formal management training CHNG14 15 Keep up-to-date on management literature CHNG15 16 Look for and use the positive aspects of other cultures CHNG16 17 Persuade others to do things CHNG17 18 Study laws and regulations which may have an impact on CHNG18 work 19 Think frequently about the practice of management CHNG19 20 Try different approaches to management CHNG20 21 Turn up for a 3 p.m. meeting at 3 p.m. CHNG21 22 Use initiative and take risks CHNG22

230

Structure of the survey instrument Once the constructs and items were identified in this study, the next main step was to arrange the questions in a proper and coherent order that would increase the response rate. According to the guidelines of Zikmund and Babin (2010), questions that are simple, interesting and easy to answer are included at the beginning of the questionnaire. Thus, the demographic questions were included at the beginning of this study’s questionnaire (see Appendix 22 – Part 1). In addition, due to the apparent low preference for email communications and the lack of knowledge about information technology in the Sri Lankan organisational context (Yapa 2012), a paper-based survey was used rather than an online one.

This study’s survey instrument consisted of three sections:

1. A cover letter entitled ‘Consent Information Statement’ (see Appendix 20 for cover letter sent to Master’s students, and Appendix 21 for cover letter sent to alumni). Two different cover letters were used for these two groups because the return method was also different (postal and face-to-face). Both cover letter versions included an invitation to participate, an information statement about the study, instructions for returning the questionnaire, an informed consent statement, and Swinburne University Research contact information.

2. Entitled ‘Part 1 – Biographical information’, this section consisted of a collection of demographic profiles of the respondents (see Appendix 22 – Part 1).

3. Entitled ‘Part 2 and Part 3 – leadership items’, this section provided the various measures used in the study to assess the eight constructs identified in the theoretical framework (see Appendix 22 – Part 2 and Part 3):

3.1 excellent leadership in a management sense (EXL) 3.2 stakeholder relationships (STK) 3.3 long-term-oriented decision-making (LONG) 3.4 employee engagement (EMP) 3.5 the leader’s commitment to change (CHNG) 3.6 sustainable thinking (THINK)

231

3.7 excellent leadership in a sustainability sense, consisting of two sub-dimensions of concern: 3.7.1 environmental and social sustainability (ENV); 3.7.2 financial performance of the firm (FIN).

8.13.1 Early adolescence experience in a nation other than Sri Lanka The cultural values and beliefs that are learned and experienced in early childhood and adolescence often create diverse human behaviours (David et al. 2011). David et al. (2011) suggested that the cultural experience of early childhood is an important aspect when generalising the findings about a particular culture’s influence in a study.

Yet even though early childhood cultural experiences are an important factor affecting human behaviours (David et al. 2011), most cross-cultural leadership researchers have not integrated the concept into their studies. For example, Hofstede (1986), and House and Javidan (2004) overlooked the influence of cultural models, beliefs and values experienced in childhood in their relevant studies. Even though Hofstede (1986) defined culture as a collective programming of the minds of people, he failed to understand and select respondents to reflect early childhood and adolescent cultural experiences. This is one of the major criticisms against Hofstede (1986) findings – that they do not reflect the influence of childhood-cultural experiences on interpreting leadership behaviours. In response to such criticism, David et al. (2011) selected respondents that spent their childhood in the same cultural context in their study’s research sample, to generalise cultural influences on leadership behaviours.

Thus, this study has adopted a similar procedure to David et al. (2011) by selecting managers that spent their childhood in the Sri Lankan cultural context. It was expected that this procedure would improve the generalisability of the findings from the sample to the population.

In selecting respondents that spent their early childhood period (i.e. first 15 years) in Sri Lanka, a relevant question was included in Part 1 of the questionnaire in relation to biographical information (see Appendix 22 – Part 1). Prior to distributing the questionnaire, the respondents were also verbally informed to refrain from responding if they were raised in a country other than Sri Lanka. Responses that did not comply with this condition were removed from the dataset prior to analysing the data. In

232 selecting only respondents raised in Sri Lanka, it was also anticipated that the results would reflect the true influence of cultural values on personality development, perceptions, values and attitudes on leadership behaviours.

8.13.2 Expert evaluation of the questionnaire Stone (1978) and Hinkin (1998) recommended that studies developing new scales should gather feedback from experts in the study field prior to administering the questionnaire. The objective of this expert evaluation of the questionnaire is to seek feedback on the format, length and wording, and to identify potential duplication of items. This study’s questionnaire was therefore evaluated by two senior academics specialised in leadership studies, who evaluated the items in terms of general applicability to the context of the study including redundancy. Further feedback was also sought from four Sri Lankan managers – two that had previously worked at the managerial level in Sri Lankan organisations and now lived in Melbourne, Australia; and two that were managers currently living and working in Sri Lanka.

The feedback received from these experts was used to revise the final version of the questionnaire, including minor adjustments to the wording of the items in the self- developed behavioural statements, as well as revisions to the contents page. It was also decided to add several more questions to the demographics section. Attention was focused on producing items with simple structures or parsimony as recommended by Thurstone (1947). In addition, a professional editor was also hired to proofread the final version of the questionnaire.

Ethical considerations Ethics approval is a Commonwealth legislative requirement in Australia. It specifies that all research projects that involve human as subjects should obtain written approval from an accredited ethics committee. The respondents of this study were Sri Lankan managers working in Sri Lankan organisations. Adhering to these requirements, this study had a duty to apply for ethical approval prior to collecting data.

A significant aspect of ethics approval in a research study is disclosure and informed consent. This means that the researcher should clarify with the respondents agreeing to complete the survey that they have given their informed consent to participate in the

233 survey. As part of this, the researcher is also required to inform the respondents about the purpose and the nature of the research study.

Adhering to these ethical requirements, a statement was included in the questionnaire guaranteeing that the research findings would only be used for future research publications and the completion of the thesis. As a result, anonymity of the respondents was ensured. This information enabled the study’s respondents to decide whether or not to participate in the survey. Addressing the above ethical requirements, this study included a statement at the introduction of the questionnaire, explaining the purpose and the nature of the study to respondents (see appendices 20 and 21 for more detail):

For the purpose of obtaining ethics approval, an application and supporting documents were also forwarded to the Swinburne Ethics Committee for their approval. Such ethics approval applications include information about the procedural requirements, such as reporting of the findings as well as the security of data storage. After reviewing this study’s ethics approval application and other supporting documents, the Swinburne Ethics Committee gave written approval to conduct the data collection (as shown in Appendix 24).

Process for collecting data and analysing 8.15.1 Process used to collect data To collect this study’s data from Sri Lankan managers, the coordinators of Master’s programs of Sri Lankan universities were first formally contacted via email (see Appendix 23 for the relevant request) to ascertain their support for participating in this study. Only those universities that replied granting approval were chosen to collect the data. Among the diverse methods of administering a survey (i.e. face-to-face vs. personal, online vs. postal) (Hair et al. 2011; Malhotra & Birks 2007; Robson 2011), this study selected the face-to-face and postal survey methodology, based on the following reasons:

 As managerial respondents are often busy during normal office hours, a suitable time and place needs to be found where they can gather and participate together. This enables them to willingly allocate time to respond to a questionnaire; in contrast, response rates for online surveys are low in most countries.

234

 Surveys are already a popular data collection method used for managerial respondents in the Sri Lankan context.  Knowledge, experience and preference to use information technology, internet and IT systems skills is lacking in Sri Lanka, especially among public sector employees and those in the SME sector (Rajapakse 2012; Wickramasinghe, Hopper & Rathnasiri 2004).  It has been recognised that personal and face-to-face interactions are the preferred mode of communication in Sri Lankan organisations, rather than email (Yapa 2012). Thus, online surveys were considered a less popular and ineffective method for collecting data from Sri Lankan managerial respondents.  The face-to-face survey method is often perceived as more convenient and less costly (Malhotra & Birks 2007).  Hair et al. (2011) and Malhotra and Birks (2007) contended that postal surveys are suitable to collect data from respondents scattered around a large area. Thus, to improve representativeness of the sample, this study also used a postal survey method for the alumni respondents.

After obtaining ethics approval, this survey was conducted from December 2013 to January 2014, with 1,632 questionnaires (1,332 face-to-face and 300 postal) distributed across the different universities that had granted access to administer the survey. Figure 8.2 in Section 8.7 above showed the regional locations of Sri Lankan universities that were chosen for the survey. The large sample size of 1,632 allowed the deleting of incomplete responses and any that failed to reflect discriminant validity. The selected sample also represented the demographic factors of managers such as age, gender and organisational characteristics of Sri Lanka.

Each survey pack included a cover letter (see appendices 20 and 21) and a questionnaire (see Appendix 22), as well as an envelope with instructions on how to return the completed questionnaire. For the Master’s students, the statement ‘Please insert your filled questionnaires in this envelope and drop it in the drop-box at the entrance to your lecture hall’ was printed on the envelope. Drop-boxes were positioned near the entrance hall on a designated survey desk. As an alternative a pre-stamped and returned envelop was provided at the request of the respondent in instances where they couldn’t fill the questionnaire within a particular day. For the alumni, contact

235 details were obtained from the Master’s program coordinators, and 300 survey packs posted.

Prior to distributing the questionnaires, the respondents were asked to voluntarily participate in the survey. For this purpose, a statement about voluntary participation describing the nature of the study and the assurance of confidentiality and anonymity was included in the cover letter (see appendices 20 and 21). Respondents were also informed at this initial stage to focus on a sustainability leader in their workplace, and using a 5-point Likert-type scale, they were then asked to rank each leadership behavioural item based on its level of importance for achieving sustainability leadership in their organisation.

No information was requested, either personal or organisational, that would enable identification of respondents and their organisation, which ensured the anonymity of respondents. Strict confidentiality was ensured throughout the study, so that disclosure of the respondent’s organisation or the Master’s program could not occur. Overall, the researcher was able to collect 821 questionnaires, with a response rate of 50%. On completing the data collection process, the completed questionnaires were brought back to Swinburne University in Australia for data analysis.

8.15.2 Process used for data analysis Most research studies using mature theories rely on correlation-based analysis consistent with causal inferences that are supported by logic (Edmondson & McManus 2007). Thus, as explained earlier, this study tested the relationships identified in the theoretical framework by analysing data via SEM. New measures were developed, as well as pre-developed measures for the constructs identified in the theoretical framework.

It has been clarified by other scholars that the process of new measurement development requires the sample to be randomly split prior to conducting EFA, CFA and SEM (Hinkin 1998; Krzystofiak, Cardy & Newman 1988; Reisinger & Mavondo 2007). However, in instances where the sample size is not large enough (Joreskog 1993) or when the initial sample is inadequate to split into two independent samples, Krzystofiak, Cardy and Newman (1988) recommended using two independent

236 samples for the purpose of factor exploration via EFA and factor structure confirmation via CFA.

In this study, the EFA was conducted using SPSS Version 23. The objective of EFA is to reduce the observed variables into small sets of variables (Hinkin 1998). EFA is considered most suitable for studies where the researcher has a good knowledge of what items to include to reflect a particular construct (Cunningham 2010). A best factor solution characterising each of its items strongly loaded only on a single factor where the items have near-zero loadings on all the other factors (Swisher, Beckstead & Bebeau 2004). As recommended by Ford, Maccallum and Tait (1986), items in this study that had factor loadings greater than 0.4 were kept for further analysis, and items below 0.4 were removed from the factor. However, the decision to remove an item or to retain it was only decided after theoretical support to confirm that the removal of an item would not substantially influence the theoretical meaning of the construct, as recommended by Cunningham (2010).

Using the results obtained at the EFA stage of this study, the next CFA and SEM stages were conducted using Analysis of Moment Structure (AMOS) Version 23. CFA is a technique that allows a researcher to examine how well the latent constructs are being measured by their observed variables (Hair & Anderson 2010). CFA also helps to test the factor structure that has been previously identified in the literature and redefined in the EFA stage (Hinkin 1998; Joreskog 1993; Schmitt 2011). Thus, the main objective of CFA is to fit the measurement model with the sample data and to test construct validity (Hair & Anderson 2010). Chi-square analysis and other descriptive statistics were also used in this study to examine the hypotheses discussed in the previous chapter.

8.15.3 Model fit statistics To examine the goodness-of-fit, most of the literature suggested using multiple indices rather than relying on one single measure (Conger & Hunt 1999; Kline 2010). Research using the CFA method often involves Chi-square values and its significance value, the comparative fit index (CFI), a goodness-of-fit index (GFI), an adjusted goodness-of-fit index (AGFI), a root mean square residual (RMR), root mean square error of approximation (RMSEA), and the Tuker-Lewis index (TLI) (Byrne 2009;

237

Conger & Hunt 1999). Therefore, this section aims to provide further detail on the indices commonly used to examine a model fit.

The Chi-square test examines whether the predicted correlations and covariances are equal to their observed counterparts (Kline 2010). As the Chi-square test values increase, the difference between the observed and predicted covariances and correlations also increase, indicating a poor model fit. Thus, a smaller difference between the observed and estimated covariances is considered a better indicator. The Chi-square statistic is the only index to measure model fit using significance testing. Hence, it has also been referred to as assessing the statistical fit of the model (Cunningham 2010). P-values greater than 0.05 are generally recommended as they reflect a good model fit. Based on this, a value of p > 0.05 indicates that the difference between the estimated and observed covariance matrices is insignificant. However, the Chi-square test statistic is very sensitive to sample size, because the method assumes that the data is distributed normally (Ullman 2006). It has been suggested that this weakness can be overcome by using a normed Chi-square value (CMIN/df) (Bentler 1990; Hair & Anderson 2010; Kline 2005; Ullman 2006); a value below 5 for CMIN/df is mostly recommended (Hair et al. 1998). In addition, to overcome such weaknesses in the Chi-square test, some researchers have developed other ‘practical fit statistics’ including absolute fit indices and incremental or comparative fit indices (Conger & Hunt 1999).

Another model fit index is the RMR. Based on this method, an RMR value of zero indicates a perfect model fit, whereas higher values reflect a poor model fit (Kline 2010). Generally, an RMR value of less than 0.10 is preferred to confirm a reasonable model fit; an Standardised Root Mean Square Residual (SRMR) value of less than 0.10 indicates a good model fit (Kline 2010). Hair and Anderson (2010) recommended SRMR values to be less than 0.05 to confirm a good model fit. In addition, the value for RMSEA ranges between 0 and 1; a value of zero indicates a perfect fit and a higher value represents a poor fit (Kline 2010). Thus, a value of less than 0.06 indicates a satisfactory level of model fit (Conger & Hunt 1999). In line with this, both Browne and Cudeck (1993) and Byrne (2009) suggested a 0.05 criterion as an approximation for the data. Similarly, Goldsmith, Ulrich and Carter (2005) suggested an RMSEA value below 0.08 as acceptable, and 0.05 as significant. Thus, in summary a value

238 between 0.05 and 0.08 denotes a reasonable model fit. Table 8.10 below summarises the indices used to measure this study’s model fit.

Table 8.10 Summary of the model fit indices used in the study

Fit statistic Recommended General rulings cut of value Chi-square and P > 0.05 P value should not be significant significance level CMIN/df Less than 5 Ratio of χ 2/ df CFI CFI > 0.9 Comparative fit index GFI GFI > 0.9 Values between 0.9 to 0.95 reflect reasonable model fit AGFI AGFI > 0.9 RMR RMR < 0.10 Less value indicates a reasonable model fit SRMR SRMR < 0.05 RMSEA RMSEA < 0.05 Values between 0.05 and 0.08 generally indicate a reasonable model fit TLI TLI > 0.95 Greater values indicates a good model fit

The table above was developed based on Bentler and Bonett (1980); Byrne (2009); Conger and Hunt (1999); Cunningham (2010); Hair and Anderson (2010); Hoyle and Panter (1995); Kline (2010); Reisinger and Mavondo (2007), and Schumacker and Lomax (1996).

CFI is one of the most used and most cited fit statistics in the SEM literature (Cunningham 2010; Kline 2010). A CFI value ranges between 0 and 1; where a value of 1 indicates a perfect model fit (Conger & Hunt 1999). A CFI value above 0.95 often confirms a satisfactory approximation of the model to the data (Conger & Hunt 1999). However, Bentler and Bonett (1980), and Schumacker and Lomax (1996) suggested that a CFI value greater than 0.90 is an adequate level to confirm an acceptable fit. In addition, the value for GFI varies from 0 to 1; where a value greater than 0.90 indicates a good model fit (Kline 2010). The value for AGFI varies between 0 and 1; where an AGFI value above 0.90 indicates a good approximation to the sample data. TLI values vary between 0 and 1; where a value greater than 0.95 usually indicates a better model fit, and a value exceeding 1 represents an over-fitted model (Cunningham 2010).

239

8.15.4 Validity and reliability Validity and reliability are important aspects in a quantitative research study. Validity and reliability are related to each other; thus, the subsections below explain each one’s relevance to the other accordingly. The literature has suggested that different criteria are available to assess the psychometric soundness of a validity and reliability measurement (Hinkin 1998). For example, according to the American Psychological Association (1995), construct validity consists of content validity, criteria-related validity and internal consistency.

8.15.4.1 Validity

The validity of a construct measures the accuracy of the scale to confirm whether the scale measures what it intended to measure (Bagozzi 1994; Veal 2005; Zikmund & Babin 2010). Bagozzi (1994) emphasised that validity of a measure can be established when the following criteria are met:

Theoretical and observational meaningfulness of concepts (or content validity):

Content validity ensures that the measurement actually captures the properties or characteristics of the concept that one desires to measure (Bagozzi 1994; Veal 2005; Zikmund & Babin 2010). There are no quantitative indices to measure the content validity of a measure; thus, one should make one’s judgement by validating the measures (Stone 1978). Accordingly, as recommended by Hinkin (1998), this study followed the criteria proposed by Schriesheim et al. (1993) – to ensure the content validity of the construct new scales had been identified via a comprehensive literature review.

The items in this study were identified by this literature review, and behavioural statements adopted from the validated excellence in leadership (APEL) questionnaire developed by Selvarajah et al. (1995). Definitions of each construct were described at the beginning of the section, introducing each construct in the questionnaire, and respondents were asked to rate their response based on a 5-point Likert-type scale (see

Appendix 22). As per the recommendations of Hinkin (1998) to assure content validity, an exploratory factor analysis using main principal component analysis was first conducted to select factors that were 0.40 or greater. In addition, prior to distribution,

240 the survey instrument was reviewed by two senior academics specialised in leadership studies; and further feedback was received from four Sri Lankan managerial respondents. Based on these evaluations, minor changes were also made to the wording of the construct definitions, as well as the study’s cover letter.

8.15.4.2 Reliability

Bagozzi (1994) defined reliability as ‘the amount of agreement between independent attempts to measure the same theoretical concept’ (p. 17); which has been recognised as an essential component of validity (Kerlinger 1986). Reliability generally consists of two types: 1) internal consistency; and 2) test-retest reliability (or stability). Internal consistency can be measured via two or more dimensions of a single theoretical concept obtained at the same time, with the level of correlation examined between these dimensions. If the correlations among the dimensions obtained from a sample of respondents are high, it can then be concluded that the measures are reliable (Bagozzi (1994). Cronbach’s alpha (Cronbach 1951) is a commonly used method to calculate the reliability of a measure (Price & Mueller 1986).

As recommended by Hinkin (1998), this study used SPSS to calculate Cronbach’s alpha, to assess the internal consistency of each of the scales during the EFA. Based on this method, a score of 1.0 reflects a perfectly reliable measure. At the EFA stage in this study, Cronbach’s alpha was calculated to confirm the reliability of the measures that would be tested in the CFA stage. In addition, construct reliability was assured by using a 5-point Likert-type scale with a mid-point to reflect the neutral opinion of respondents (Veal 2005). To control participant error (e.g. the time of distribution may have an impact on the answers given while completing the survey), this researcher allowed adequate time to complete the questionnaire during the survey period, as recommended by Schaefer and Crane (2005).

8.15.4.3 Convergent validity and discriminant validity:

Convergent validity and discriminant validity are the two aspects of construct validity most commonly used in leadership research (Bagozzi 1994; Hair et al. 2011). Bagozzi, Yi and Phillips (1991) believed that conducting CFA to confirm the construct validity of measures was better, and therefore recommended its use by future researchers. This study therefore conducted CFA following the completion of the EFA stage.

241

In this study, convergent validity was assessed using the Average Variance Extracted (AVE). Fornell and Larcker (1981) proposed that if the squared correlation between a pair of constructs is smaller than the AVE values, discriminant validity is supported. At the construct level, a value of 0.50 or above for AVE is preferred. This means that most of the variance of the construct is due to the variance of the indicator compared with the error variance. As per the suggestions by Cunningham (2008), discriminant validity of this study was examined via SEM analysis by checking if there was a clear distinction between the items in the pattern and the structure coefficients between the factors tested. Thus, if the factors of the model are not exclusively highly correlated with each other, it confirms that the discriminant validity is supported (Cunningham 2008).

Data screening In total, 1,632 questionnaires were distributed among the two sub-samples, of which 821 were returned at a response rate of 50%. In particular, there was a high response rate from the part-time Master’s students (57%). This was in line with the recommendation of Saunders, Lewis and Thornhill (2009), that there needs to be a response rate of 50% or more for face-to-face surveys. Table 8.11 below provides a summary of the survey response rates in this study.

Table 8.11 Summary of the study’s survey responses

Respondent Distribution method Distributed Returned Response rate sub-sample

Master’s Face-to-face survey – 1,332 756 57% students Paper based

Alumni Postal survey – Paper 300 65 22% based

Total 1,632 821 50%

The low response rate (22%) in the postal surveys was expected, as the non-response rate is often high for postal surveys. Change of addresses not updated in the alumni contact registers was also considered one of the main reasons for this low response

242 rate. All of the returned questionnaires were then manually fed into a datasheet using SPSS Version 23.

It is generally recommended that data screening procedures be used to identify any data entry errors, missing data, outliers and normality assumptions prior to any multivariate analysis (Bagozzi 1994; Hair et al. 2006; Tabachnick & Fidell 2001). A systematic checking procedure was therefore used in this study to eliminate any possibility of manual data entering errors, to ensure the datasheet was error-free. Descriptive statistics were obtained using SPSS for each variable to examine the maximum and minimum values. Out-of-range entries were identified and rechecked against the respective original paper-based questionnaires, and corrections made as relevant. In addition, pair-wise correlations were examined, and these results confirmed that all the relationships were in the expected direction as recommended by Bagozzi (1994).

Next, the study identified any respondents who were born and raised for the first 15 years of their lives in a country other than Sri Lanka. Twenty-nine cases were identified, and it was decided to remove them from the analysis. In addition, nine cases were identified as only having high school education, which were also removed. Due to the nature of the sample, it was decided to exclude these 38 cases from the final analysis. The large sample of 783 remaining respondents was considered adequate to examine and generalise Sri Lankan managerial behaviours.

8.16.1 Handling missing data, non-normality of distribution and outliers Missing data, non-normality and datasets with outliers have become a common issue in the social and behavioural sciences, as most studies use the questionnaire method (Hair & Anderson 2010; Yuan, Marshall & Bentler 2002). Although much progress has been made to overcome these issues, complications and lack of clarity on how to handle each of these situations still remains.

8.16.2 Missing data Hair et al. (2006) recommended excluding cases with more than 50% of missing data, and also recommended identifying missing data at the variable level. They also suggested that if a variable has less than 10% of missing data, it can be considered low. In this study, a case-wise and variable-wise identification of missing data confirmed 243 that 100 cases in total did not have sufficient responses (i.e. at least 50% of the questions in the questionnaire). Thus, these 100 cases were excluded from the dataset, leaving 683 responses.

8.16.3 Test of normality The dataset was next examined to confirm the assumptions of normality. The objective of testing for normality of distribution is to confirm whether each individual variable fits approximately with a normal distribution (Hair & Anderson 2010). Skewness, kurtosis, normal probability plots, Kolmogorov-Smirnov and Shapiro-Wilk tests are popular statistical methods to examine the normality of data distribution (Hair & Anderson 2010; Sekaran & Bougie 2013; Tabachnick & Fidell 2001). Kolmogorov- Smirnov and Shapiro-Wilk tests were significant (p < 0.05). In this study, normality test results confirmed that all the variables were negatively skewed (see Appendix 25), and this was mainly because the scores of the Likert-type scales are often identified as negatively skewed (Peterson & Wilson 1992). Normality test statistics were considered and identified as sensitive to a large sample size (Kline 2010; Muthen & Kaplan 2011; Ullman 2006). Absolute skewness values rather than standardised skewness values were therefore used to eliminate the sample size bias (Muthen & Kaplan 2011). An absolute value for skewness greater than 2 is considered an extreme departure from normality (Muthen & Kaplan 2011). The skewness test results of this study did not exceed the criterion of 2, and thus confirm that all variables were approximately normally distributed. In addition, the Kurtosis values had no major issues.

Also in this study, histogram and normal probability plots suggested that the normality assumption was not seriously violated. Although it is recommended that the non- normally distributed data be transformed using a suitable estimation method (Kline 2005), SEM is capable of overcoming the problem of non-normality by using ‘bootstrapping’ methods (Ullman 2006). Thus, as recommended by Ullman (2006), principal axis factoring (PAF) was used in this study at the EFA stage, and maximum likelihood (ML) estimation with a bootstrapping method was used at the CFA and SEM stages.

244

8.16.4 Multicollinearity and linearity In this study, simple linear regressions were run for each variable to examine the relationship between the variables with the proposed dependent variable. For this purpose, a composite variable was calculated using the simple average method which considers the 25 items expected to measure the dependent variable of sustainability leadership.

Variance Inflations Factor (VIF) and tolerance statistics were also examined in this study (see Kline 2005, p. 57 for further detail). The collinearity statistics results showed that all the VIF values were less than the recommended level of 0.3, and that the tolerance values were greater than the recommended level of 0.1 (Kline 2005) for all the variables in the model. Thus, it was confirmed that multicollinearity was not an issue in the dataset. Pair-wise collinearity was also examined using the correlation matrix, and all the correlation values were below the recommended value of 0.85 (Kline 2005). Therefore, as the next step, standardised residual plots were obtained (Z residual vs. Z predicted values) to examine linearity and equal variances. There were no distinct curved patterns observed in the standardised residual scatter plots, and thus it was assumed that the linearity and equal variance assumptions in this study were met.

8.16.5 Univariate and multivariate outliers It has been pointed out by many scholars that it is important to examine outliers in the process of data screening. Using the frequency distributions of Z scores in SPSS, this study’s dataset was first examined for univariate outliers (Kline 2010). Values exceeding +3 and -3 were identified as univariate outliers, and 54 cases were identified and excluded due to univariate outliers. As the next step, the Mahalanobis Distance statistic was calculated to identify multivariate outliers that had p-values of less than 0.001 (Hair et al. 2006; Kline 2010; Tabachnick & Fidell 2007). A total of 33 cases were identified as multivariate outliers, and thus excluded from the dataset.

8.16.6 Missing data imputations Based on the above analysis, there were now 596 cases remaining in this study’s dataset. The randomness of missing data was also examined to identify the suitable missing data imputation method. Hair et al. (2006) recommended that if the missing

245 data was less than 10%, any imputation method could be used. Little’s MCAR test (Roderick 1988) was also used to confirm whether data was missing at random. Based on this test, if the p-value is significant (i.e., p >0.05), data cannot be considered as missing completely at random (Hair et al. 2006; Kline 2010). Little’s MCAR test confirmed there were no patterns in the missing data (i.e. missing at random/MAR). A regression-based imputation method in SPSS was therefore chosen to impute missing data (Cunningham 2010; Hair et al. 2006; Kline 2010).

Chapter summary This chapter has explained the research methodology and design chosen for this study. As part of this process, the constructivism paradigm was chosen. Based on the nature of this study, a cross-sectional survey was chosen to collect data. To achieve the research objectives of this study, a questionnaire was distributed to 1,632 managerial respondents working in organisations located in Sri Lanka. The sample of managerial respondents mainly consisted of part-time Master’s students working full-time at managerial level. To improve the diversity and representativeness of the managerial sample, the survey was also administered to the alumni of Master’s programs via the post. This sampling method enabled the collection of data from managers spread across the different regions of Sri Lanka.

The survey instrument was developed through an extensive literature review. Pre- developed measures as well as self-developed measures were used. A paper-based questionnaire was used, as the response to email has been recognised as inadequate in a Sri Lankan organisational context. A 5-point Likert-type scale was used to collect all responses on leadership behaviours. Prior to ethics approval, the questionnaire was reviewed by a panel of experts including senior academics and several Sri Lankan managerial respondents. Feedback of the expert panel was used to make minor revisions to the questionnaire. After obtaining ethics approval from the SUHREC, the survey was administered during December 2013 – January 2014 to 1,632 managerial respondents, of whom 821 responded. As recommended in the literature that was reviewed, both validity and reliability of the measures used in this study were appropriately tested.

The next chapter discusses the analysis of this study’s data and the subsequent results.

246

PART IV

DATA COLLECTION AND ANALYSIS

247

CHAPTER 9. ANALYSIS AND RESULTS

Introduction

This chapter discusses the data analysis conducted in this study, aimed at providing explanation to the relationships observed between the constructs identified in the theoretical model. Pre-established as well as self-developed measures were used in this study; thus, as explained in Chapter 8, methodologically approved EFA and CFA procedures were included. The validity and reliability of the constructs were examined at the EFA, CFA and SEM stages, and the three research questions and hypotheses outlined in Chapter 7 were tested. Figure 9.1 below presents the flow of the sections in Chapter 9.

248

Figure 9.1 Composition of Chapter 9

9.1 Introduction

9.2 Demographic profiles

9.3 Splitting the sample

9.4 Explanatory factor analysis

9.5 Confirmatory factor analysis Chapter 9: 9.6 Summary of confirmatory Analysis and results factor analysis

9.7 Model validation

9.8 Common method bias

9.9 Developing SEM for sustainability leadership

9.10 Hypotheses testing and discussion

9.11 Mediation analysis

9.12 Standardised total effects of leadership excellence dimensions on sustainability leadership

9.13 Chapter summary

249

Demographic profile This study’s survey was purposive and conducted in various universities located in different provinces of Sri Lanka (see Chapter 8, Figure 8.2). The final dataset consisted of 596 Sri Lankan managers who were examined based on their demographic profiles. An examination of the demographic profiles of respondents helps to confirm whether the sample is representative and free from non-response bias.

The final sample of 596 Sri Lankan managers includes 88.4% Sinhalese, 8.1% Tamils, and 3.5% Burghers and other ethnic groups (see Appendix 26 for further detail on the sample’s demographic profiles). The majority of respondents were Buddhists (79.9%), followed by Christians (10.1%), Hindu (6%), Islam (3.2%), and other religions (0.8%). Of the total sample, 68.8% were male respondents and 30.2% were female. This aligns with public records that male participation in the Sri Lankan labour force was comparatively high from 2012 to 2013 (Central Bank of Sri Lanka 2013b). In addition, the sample consisted of relatively young managers – the majority below 35 years (60.1%). Most were categorised as middle-level managers (48.5%), followed by line managers (28.5%) and senior managers (20.8%). Most of the respondents (48%) had less than five years of managerial experience.

As presented in Appendix 27, the majority of respondents in this survey were employed in the private sector (72.3%); and most were in the banking and insurance sector (19.6%), followed by the manufacturing sector (18.1%). This aligns with public records that indicate that private sector participation in the Sri Lankan economy is relatively high compared with public sector participation (Central Bank of Sri Lanka 2013b). The Sri Lankan economy is an open market economy, which has resulted in national and international private organisations competing with each other and even with public sector organisations. Most of the public-owned enterprises were privatised after the decision to open up the economy in 1977.

The sample of this study varied significantly in relation to organisation size, with 40.1% of respondents working in large organisations with 1,000 or more employees. In addition, most of the respondents in the sample worked in departments with five to nine employees (22.5%).

250

Splitting the sample According to the suggestions of Joreskog (1993) and Hinkin (1998), this study’s sample was split into two independent samples using the random split sample option in SPSS. The first independent sample consisting of 120 responses was named the ‘calibration sample’ and was used for EFA. The second independent sample consisting of 476 responses was referred to as the ‘validation sample’ and was used for CFA. The rule for deciding the minimum number of items in each of these two samples was explained in Chapter 8, Section 8.15.2.

Initial item reduction using exploratory factor analysis As this study’s sample data was non-normally distributed, the principal axis factoring (PAF) method was used to perform the EFA. PAF has been widely used in EFA studies (Schmitt 2011), and has been more frequently recommended than the principal component method (Ford, Maccallum & Tait 1986; Hinkin 1998). It has been recognised that PAF generally offers better results than the principal component method regardless of whether the data is normally or non-normally distributed (Costello & Osborne 2005; Schmitt 2011).

In addition, choosing the factor rotation method to perform EFA is an important decision (Hinkin 1998; Schmitt 2011). Direct Oblimin with Kaiser Normalisation was chosen as the rotation method in this study, because it assumes that the factors in a theoretical model can be correlated with each other (Costello & Osborne 2005). In most social science research, it is common to observe a high degree of correlation among other factors in a model. The Kaiser criterion (i.e. Eigen values greater than 1) and scree plot tests were used to decide the number of factors in this study (Hinkin 1998). Only items that were strongly loaded on a single factor were retained because the objective of EFA is to obtain a simple structure with parsimony for the newly developed scales (Hinkin 1998). Prior to conducting the EFA in this study, the Kaiser- Meyer-Olkin test (KMO test) and Bartlett’s test of sphericity were used to examine each construct. A KMO value greater than 0.5 reflects adequacy; and the p-value should not be significant (p <0.05) for Bartlett’s test of sphericity.

251

Considering all of the above criteria, eight EFAs were performed in this study using the calibration sample that consisted of 120 cases. Table 9.1 below provides a summary of these EFAs.

Table 9.1 Summary of EFAs in the study

EFA Number Item labels Construct name number of items provided in each construct Dependent variables (sustainability leadership) 1 10 EXL1 to EXL10 Excellent leader (EXL) 2 11 ENV1 to Concern for social and environmental ENV11 sustainability (ENV) 3 4 FIN1 to FIN4 Concern for financial performance of the firm (FIN) Mediating variables 4 22 CHNG1 to Leader’s commitment to change CHNG22 (CHNG) 5 19 SUS1 to SUS19 Sustainable thinking (SUSTHINK) Independent variables (leadership dimensions) 6 11 STK1 to STK11 Stakeholder relationships (STK) 7 17 LONG1 to Long-term-oriented (LONG) LONG17 8 11 EMP1 to Employee engagement (EMP) EMP11 9.4.1 EFA1: Excellent leader (EXL) EFA1 was performed for the excellent leader (EXL) construct. There were 10 behavioural statements included in the survey instrument to measure EXL. The KMO value was 0.875, and the p-value of Bartlett’s test of sphericity (Chi-square = 555.725, df = 45) was insignificant (p < 0.05). The results of EFA 1 confirmed a one-factor solution with a Cronbach’s alpha of 0.892, which confirmed that these 10 statements were reliable measures of the EXL construct. In summary, 51.2% of the variance of the excellent leader construct was explained through the 10 leadership behavioural statements (as listed in Table 9.2 below).

252

Table 9.2 Exploratory factor analysis solutions for excellent leader (EXL)

Item Statement Factor Cronb % label loading ach’s variance alpha EXL07 Motivate employees 0.774 0.892 51.2% EXL08 Organise work time effectively 0.770 EXL05 Have confidence in dealing with work and 0.762 with people EXL06 Listen when employees want to say 0.730 something EXL02 Create a sense of purpose and enthusiasm 0.695 in the workplace EXL10 Have a strategic vision for the organisation 0.638 EXL01 Continue to learn how to improve 0.632 performance EXL04 Give recognition for good work 0.607 EXL03 Develop strategies to gain a competitive 0.588 edge in the industry EXL09 Be honest 0.542

9.4.2 EFA2: Concern for social and environmental sustainability (ENV) There were 11 behavioural statements in this study’s survey instrument to measure the ENV construct. EFA2 was performed to examine these 11 statements, which confirmed a one-factor solution. The KMO value was 0.883, and the p-value of Bartlett’s test of sphericity (Chi-square = 751.25, df = 55) was insignificant (p < 0.05). All the items were retained, as they had high factor loadings. The Cronbach’s alpha of 0.910 for the 11 statements confirmed that they were reliable measures of ENV. In summary, 53.57% of the variance of ENV was explained by these 11 statements (see Table 9.3 below).

253

Table 9.3 Exploratory factor analysis solutions for concern for social and environmental sustainability (ENV)

Item Statement Factor Cronbac % label loading h’s alpha varian ce ENV7 Show concern for sustainability issues 0.811 0.910 53.57 % ENV6 Engage in work that makes your community a 0.796 better place ENV8 Be environmentally responsible 0.778 ENV10 Identify the impact of your actions on the 0.764 natural environment ENV3 Promote staff welfare and development 0.741 ENV2 Be socially responsible 0.710 ENV11 Continuously learn how to protect the 0.691 environment ENV4 Establish a friendly working environment 0.668 ENV9 Encourage recycling of items and materials in 0.629 your department ENV5 Work as a volunteer in your community 0.554 ENV1 Be sensitive to people of different backgrounds 0.505

9.4.3 EFA3: Concern for financial performance of the firm (FIN) In this study, EFA3 was performed to examine the leader’s concern for the financial performance of the firm (FIN). EFA3 revealed a one-factor solution, with a Cronbach’s alpha of 0.874, confirming that these statements were reliable measures of FIN. The KMO value was 0.788, and the p-value of Bartlett’s test of sphericity (Chi-square = 268.76, df = 6) was insignificant (p < 0.05). In summary, 73.62% of the variance in FIN was explained by these four statements, as summarised below in Table 9.4.

254

Table 9.4 Exploratory factor analysis solutions for concern for financial performance of the firm (FIN)

Item Statement Factor Cronb % label loading ach’s variance alpha FIN4 Ensure a maximum returns to investors 0.901 0.874 73.62%

FIN2 Achieve financial targets 0.858

FIN3 Focus on maximising productivity 0.789

FIN1 Understand potential financial impacts of 0.673 every decision

9.4.4 EFA4: Leaders’ commitment to change (CHNG) – mediating variable

EFA4 was performed in this study to examine the 22 items identified as measuring the leader’s commitment to change (CHNG). The KMO value was 0.893, and the p-value of Bartlett’s test of sphericity (Chi-square = 491.99, df = 45) was insignificant (p < 0.05). Due to low factor loadings, the following items had to be removed: adjust organisational structure (CHNG1); be an initiator (CHNG2); adaptability (CHNG4); engage in organisational politics (CHNG5); be practical (CHNG7); responsive to political realities (CHNG8); check problems and opportunities (CHNG10); evaluate emerging technologies (CHNG11); persuade others (CHNG17); study laws and regulations (CHNG18); punctuality for meetings (CHNG21); and take risks (CHNG22). In addition, Cronbach’s alpha value for the CHNG was 0.885, and 50% of the variance was explained by the remaining 10 items in the CHNG construct (as shown in Table 9.5 below).

255

Table 9.5 Exploratory factor analysis solutions for leaders’ commitment to change (CHNG)

Item label Statement Factor Cronbac % loading h’s variance alpha CHNG19 Think frequently about the 0.778 0.885 50% practice of management CHNG20 Try different approaches to 0.755 management CHNG15 Keep up-to-date on management 0.717 literature CHNG16 Look for and use the positive 0.715 aspects of other cultures CHNG14 Have formal management training 0.665 CHNG13 Have a multicultural orientation 0.649 and approach CHNG12 Foster an international perspective 0.635 in the organisation CHNG9 Be skilled in work-related 0.603 technology CHNG6 Be knowledgeable about work of 0.552 the industry CHNG3 Be competitive 0.528

9.4.5 EFA5: Sustainable thinking (SUSTHINK) – mediating variable In total, 19 statements were assumed to measure the SUSTHINK construct in this study. However, the initial EFA revealed that seven items were highly cross-loaded with other items; thus, these items were temporarily removed one at a time to check the factor solution’s improvement. Overall, the following seven items were completely removed: cope with work pressure (SUS3); think about details of the problem (SUS6); trustworthy and honest (SUS7); management ethics (SUS10); follow the heart (SUS11); share power (SUS17); and use rank and power (SUS18). The KMO value was 0.876, the p-value of Bartlett’s test of sphericity (Chi-square = 567.38, df = 66) was insignificant (p < 0.05), and the Cronbach’s alpha value was 0.886. In summary, 53.92% of the variance was explained by the remaining 12 items in this construct (as listed below in Table 9.6).

256

Table 9.6 Exploratory factor analysis solutions for sustainable thinking (SUSTHINK)

Item Factor Cronbach’s % label Statement loadings alpha variance SUS14 Speak clearly and concisely 0.750 0.886 53.92% SUS5 Cope with pressures of work 0.710 SUS12 Select work wisely to avoid overload 0.662 SUS2 Accept responsibility for mistakes 0.659 SUS13 Share power 0.654 Choose management ethics before self or 0.638 SUS4 the organization Think about the specific details of any 0.630 SUS15 particular problem SUS1 Be dependent and trustworthy 0.607 SUS9 Have a sense of humour 0.585 Treat most people as if they were 0.584 SUS16 trustworthy and honest SUS19 Write clearly and concisely 0.577 Follow what is morally right – not what 0.508 SUS8 is right for self or the organisation

9.4.6 EFA6: Stakeholder relationships (STK) In this study, EFA6 was performed to examine the 11 behavioural statements measuring the leader’s concern for stakeholder relationships. The KMO value was 0.878, and the p-value of Bartlett’s test of sphericity (Chi-square = 362.836, df = 21) was insignificant (p < 0.05). Due to low factor loadings, the following four items were removed from the EFA analysis: accept others mistakes (STK1); understand others problems (STK5); manipulate people (STK6); and sell professional and corporate image (STK11).

The Cronbach’s alpha value of 0.875 indicated that these seven statements were reliable measures of stakeholder relationships. In summary, 57.34 % of the variance of the STK construct was explained by these seven statements, which are listed in Table 9.7 below.

257

Table 9.7 Exploratory factor analysis solutions for stakeholder relationships (STK)

Item Statement Factor Cronbach % label loading ’s alpha variance STK9 Respect the self-esteem of others 0.789 0.875 57.34%

STK2 Act as a member of a team 0.760

STK4 Be skilled in public relations 0.749

STK8 Negotiate with various professionals and 0.728 interest groups

STK10 Respond to expectations of consumers 0.719

STK3 Be consistent in dealing with people 0.616

STK7 Listen to the advice of others 0.590

9.4.7 EFA7: Long-term-oriented decision-making (LONG) In this study, 17 behavioural statements were included in the survey instrument to measure the single-latent variable of the leader’s long-term-oriented decision-making (LONG). The KMO value was 0.887, and the p-value of Bartlett’s test of sphericity (Chi-square = 422.14, df = 36) was non-significant (p < 0.05). However, the initial solution of EFA7 resulted in four factors while the scree plot confirmed a single factor. Thus, due to the low factor loadings, the following eight items were removed: be objective in solving conflicts (LONG3); prioritise long-term goals (LONG7); prioritise short-term goals (LONG8); identify social trends (LONG9); meeting deadlines (LONG10); early decision-making (LONG11); making decisions without dependency (LONG12); and making quick decisions (LONG13). The Cronbach’s alpha of 0.873 confirmed that the remaining nine statements were reliable measures of the LONG construct. In summary, the remaining nine leadership statements explained 50% of the variance in the LONG construct (see Table 9.8 below).

258

Table 9.8 Exploratory factor analysis solutions for long-term-oriented decision- making (LONG)

Item Statement Factor Cronbach’s % label loading alpha varianc e LONG16 Understand and analyse complex 0.873 50% 0.819 problems LONG15 Think about what may happen in the 0.727 future LONG14 Think about the general implications 0.711 of any problem LONG2 Be logical in solving problems 0.662 LONG17 Use economic indicators for planning 0.623 purposes LONG1 Be consistent in making decisions 0.617 LONG4 Be prepared to compromise on 0.613 important work issues LONG6 Focus on the task-in-hand 0.593 LONG5 Deal with work problems openly and 0.566 honestly

9.4.8 EFA8: Employee engagement (EMP) In total, 11 leadership statements were intended to measure the leader’s concern for employee engagement in this study. However, EFA8 revealed low factor loading for the following four items which were subsequently removed: be formal with employees at work (EMP3); be informal with employees outside work (EMP4); be strict on performance appraisal (EMP5); and give instructions for subordinates (EMP11). After removing these four items, the EFA results confirmed that the remaining seven items (see Table 9.9 below) accounted for 55.14% of the variance, with a Cronbach’s alpha value of 0.862. The KMO value was 0.869, and the p-value of Bartlett’s test of sphericity (Chi-square = 318.25, df = 21) was insignificant (p < 0.05).

259

Table 9.9 Exploratory factor analysis solutions for employee engagement (EMP)

Item Statement Factor Cronbach % label loading ’s alpha variance EMP9 Support decisions made jointly by 0.862 55.14% 0.768 others EMP7 Delegate 0.709 EMP2 Allow subordinates authority and 0.705 autonomy EMP10 Trust those to whom work is 0.691 delegated EMP6 Consider suggestions made by 0.679 employees EMP1 Allow other people time to do 0.668 things EMP8 Make allowances for emotional 0.608 pressure on staff at work

9.4.9 Summary of the exploratory factor analysis results In total, eight EFAs were performed in this study to examine the factor structure of the eight constructs identified in the theoretical framework. Overall, 35 items were removed from the initial 105 items in the questionnaire. The variances explained by the constructs ranged between 50% and 73.62%. In addition, Cronbach’s alpha values were calculated for each factor to examine reliability, which ranged between values of 0.862 and 0.910. All the constructs had three or more items which help to confirm the reliability of this study’s results.

Table 9.10 below summarises the results obtained from the EFA process in this study.

260

Table 9.10 Summary of the exploratory factor analysis results

EFA Construct Original Statements Statements retained Cronbach % variance num statements removed after EFA ’s alpha explained ber value Dependent variables (sustainability leadership) 1 Excellent leader (EXL) EXL 1-10 None EXL 1 to 10 0.892 51.2% 2 Concern for social and environmental ENV 1-11 None ENV 1 to 11 0.910 53.57% sustainability (ENV) 3 Concern for financial performance of the FIN 1-4 None FIN 1 to 4 0.874 73.62% firm (FIN) Mediating variables 4 Leader’s commitment to change (CHNG) CHNG 1-22 CHNG 1, 2, 4, 5, CHNG 3, 6, 9, 12, 13, 0.885 50.00% 7, 8, 10, 11, 17, 14, 15, 16, 19, 20 18, 21, 22 5 Sustainable thinking (SUSTHINK) SUS 1-19 SUS 3, 6, 7, 10, SUS 1, 2, 4, 5, 8, 9, 0.886 53.92% 11, 17, 18 12, 13, 14, 15, 16, 19 Independent variables (leadership dimensions) 6 Stakeholder relationships (STK) STK 1-11 STK 1, 5, 6, 11 STK 2, 3, 4, 7, 8, 9, 10 0.875 57.34% 7 Long-term decision-making (LONG) LONG 1-17 LONG 3, 7, 8, 9, 1, 2, 4, 5, 6, 14, 15, 0.873 50.00% 10, 11, 12, 13 16, 17 8 Employee engagement (EMP) EMP 1-11 EMP 3, 4, 5, 11 EMP 1, 2, 6, 7, 8, 9, 0.862 55.14% 10 Total 105 35 70

261

Confirmatory factor analysis (CFA) This study conducted CFA using AMOS Version 23. Many scholars have contended that the selection of a proper estimation method is a crucial decision in SEM-based studies (Kline 2010; Schmitt 2011; Ullman 2006). The sample data in this study showed a deviation from the normal distribution, which led to the use of ML estimation via the bootstrap method (Kline 2005; Ullman 2006). ML has been proven to offer promising results in analysing non-normally distributed datasets in instances where the method has been combined with the bootstrap method (Kline 2005; Ullman 2006). ML also provides estimations that are generally accurate for non-normal sample distributions that are large in size (Kline 2005).

During this study’s CFA, items that were highly correlated with other factors were deleted (Bagozzi 1994), without damage to the theoretical meaning of the construct. This aligned with the suggestion of Hair and Anderson (2010) to retain at least three items in a construct to conduct an SEM analysis. Modification indices (MIs) were also checked to detect any suggestions for model improvements, but the deletion of items was always guided by literature support (Ford, Maccallum & Tait 1986).

Summary of the confirmatory factor analysis results Using AMOS Version 23, eight CFAs were performed for the eight constructs in this study’s conceptual framework. The validation sample consisting of 476 respondents was considered adequate to analyse and derive the conclusions at the CFA and SEM stages. Table 9.11 below summarises the eight EFAs and CFAs that were conducted in this study, and each respective CFA is further explained in the subsections that follow.

262

Table 9.11 Summary of the exploratory factor and confirmatory factor analyses

EFA CFA Construct name number number

Dependent variable(s) 1 1 Excellent leader (EXL) 2 2 Concern for social and environmental sustainability(ENV) 3 3 Concern for financial performance of the firm (FIN) Mediating variables 4 4 Leaders’ commitment to change (CHNG) 5 5 Sustainable thinking (SUSTHINK) Independent variables(s) 6 6 Stakeholder relationship(STK) 7 7 Long-term decision-making (LONG) 8 8 Employee engagement (EMP)

9.6.1 CFA1: Excellent leadership (EXL) CFA1 was performed based on the results obtained from EFA1. CFA1 started with 10 statements; however, three (EXL 1, 3 and 6) were removed from the construct due to low factor loading and modification indices suggestions. As a result, there were seven behavioural statements used to measure the EXL construct. The descriptive fit statistics confirmed that the final CFA model was a good model fit for the data (see Figure 9.2 below).

263

Figure 9.2 Confirmatory factor analysis for excellent leader (EXL)

Chi-square (df=4) = 38.219 (p=0.000), Bollen-Stine bootstrap p-value=0.075, CMIN/df=2.73, CFI=0.980, GFI=0.976, AGFI=0.953, TLI=0.971, RMSEA=0.06, RMR=0.016, SRMR=0.029

The CFI, GFI and AGFI values were above 0.95, the SRMR was 0.029, and the RMSEA value was less than 0.08, confirming that the above model was a good approximation to the data. In addition, bootstrapping with 1,000 samples confirmed a non-significant p-value (i.e. p > 0.05) of 0.075; and all the regression weights of the EXL construct were significant (as shown in Table 9.12 below). The standardised factor loadings for all the items were above 0.63. The highest loading was for organise work time effectively (EXL8), and the lowest variance was explained by create a sense of purpose and enthusiasm in the workplace (EXL2).

The regression weights for the final EXL model are shown in Table 9.12 below – all were significant at the p < 0.001 level.

264

Table 9.12 Unstandardised regression weights for excellent leader (EXL)

Unstandardised S.E. C.R. P estimate EXL4 <--- EXL 0.531 .032 16.845 *** EXL5 <--- EXL 0.444 .030 14.767 *** EXL7 <--- EXL 0.542 .030 17.938 *** EXL8 <--- EXL 0.608 .032 19.183 *** EXL9 <--- EXL 0.504 .032 15.536 *** EXL10 <--- EXL 0.469 .032 14.790 *** EXL2 <--- EXL 0.449 .031 14.263 ***

9.6.2 CFA2: Concern for social and environmental sustainability (ENV) In this study, EFA2 revealed that the 11 original items in the questionnaire were a good measure of the ENV construct. However, the initial CFA results reflected a poor fit for the data. Further examination of factor loadings and modification indices suggested removing the following six items: sensitive to the diversity (ENV1); be socially responsible (ENV2); staff welfare development (ENV3); friendly work environment (ENV4); community development (ENV6); and concern for sustainability issues (ENV7). After removing these six variables one at a time from the ENV construct, the resultant model indicated a good model fit (see Figure 9.3 below).

All the factor loadings were above 0.51, and the SRMR was 0.0074. The model fit results therefore confirmed a good model fit (as shown in Figure 9.3 below). The lowest loading was for work as a volunteer in your community (ENV5), and the highest loading was for identify impact of your actions on the natural environment (ENV10).

All the regression weights of the final ENV model were significant at p < 0.001 level, as shown in Table 9.13 below.

265

Figure 9.3 Confirmatory factor analysis for concern for social and

environmental sustainability ENV

Chi-square (df =5) = 2.835(p=0.725), Bollen-Stine bootstrap p-value=1.000, CMIN/df=0.567, CFI=1.000, GFI=0.998, AGFI=0.993, TLI=1.000, RMSEA=0.000, RMR=0.005, SRMR=0.0074

Table 9.13 Unstandardised regression weights for concern for social and environmental sustainability (ENV)

Unstandardised S.E. C.R. P estimate ENV5 <--- ENV 0.413 .037 11.285 *** ENV8 <--- ENV 0.594 .031 19.205 *** ENV9 <--- ENV 0.706 .033 21.371 *** ENV10 <--- ENV 0.715 .031 23.215 *** ENV11 <--- ENV 0.691 .034 20.235 ***

266

9.6.3 CFA3: Concern for financial performance of the firm (FIN) The results of EFA3 confirmed that the four original statements in the survey instrument were reliable measures, which were therefore also tested during CFA3. However, the initial CFA test results were insignificant, and all the model fit indices reflected poor model fit results. Based on the modification indices suggestion, the following variable was removed: understand potential financial impacts of every decision (FIN1).

The new CFA model confirmed that the remaining three statements were a good model fit, with CFI, GFI, AGFI and TLI values above 0.9, while the RMSEA was closer to the acceptable threshold level of 0.05. In addition, the SRMR was 0.000. In conclusion, the FIN model fit results confirmed that the modified model was a good approximation to the sample data. All the factor loadings were above 0.74 (as shown in Figure 9.4). The highest loading was for ensure a maximum returns to investors (FIN4), and the lowest for achieve financial targets (FIN2).

Figure 9.4 Confirmatory factor analysis for FIN

Chi-square (df=1) = 1.962 (p=0.16), Bollen-Stine bootstrap p-value=1.000, CMIN/df=1.962, CFI=0.998, GFI=0.997, AGFI=0.984, TLI=0.994, RMSEA=0.045, RMR=0.013, SRMR=0.000

267

The regression results as presented in Table 9.14 below show that all of the regression weights were significant at the p < 0.001 level.

Table 9.14 Unstandardised regression weights for concern for financial performance of the firm (FIN)

Unstandardised S.E. C.R. P estimate FIN2 <--- FIN 0.499 .031 16.300 *** FIN3 <--- FIN 0.551 .030 18.308 *** FIN4 <--- FIN 0.582 .032 18.130 ***

9.6.4 CFA4: Leaders commitment to organisational change (CHNG) In this study, EFA4 confirmed 10 items to measure the (CHNG) construct, which were then used in CFA4. However, the initial CFA showed a poor model fit. Thus, based on the suggestion of standardised residual covariances (or the larger residual values), the following five variables were removed from the CHNG dimension: be competitive (CHNG3); be skilled in technology (CHNG9); up-date management knowledge (CHNG15); revisit the management practices (CHNG19); and apply different management practices (CHNG20). The final CFA4 confirmed a good model fit (as shown in Figure 9.5).

268

Figure 9.5 Confirmatory factor analysis for leaders’ commitment to organisational change (CHNG)

Chi-square (df=5) = 14.910 (p=0.011), Bollen-Stine bootstrap p-value=0.109, CMIN/df=2.982, CFI=0.985, GFI=0.988, AGFI=0.964, TLI=0.970, RMSEA=0.065, RMR=0.016, SRMR=0.023

The Chi-square test value was significant (p < 0.00), while the model fit indices for CFI, GFI, AGFI, RMSEA and TLI were above the recommended threshold levels (as shown in Table 9.15 below). In addition, the SRMR was 0.023. Hence, the final CFA model was confirmed as a good model fit for the sample data. All the regression weights were significant at p < 0.001 level.

269

Table 9.15 Unstandardised regression weights of leaders commitment to organisational change (CHNG)

Unstandardised S.E. C.R. P estimate CHNG6 <--- CHNG 0.350 .034 10.232 *** CHNG12 <--- CHNG 0.617 .037 16.512 *** CHNG13 <--- CHNG 0.708 .038 18.824 *** CHNG14 <--- CHNG 0.485 .040 12.213 *** CHNG16 <--- CHNG 0.581 .036 16.223 ***

9.6.5 CFA5: Sustainable thinking (SUSTHINK) EFA5 confirmed 12 items to measure the (SUSTHINK) construct in this study. However, the initial CFA results revealed a poor model fit for the data. Therefore, based on the suggestion of the modification indices, the following three items were removed from the sustainability thinking construct: dependent and trustworthiness (SUS1); do what is morally right (SUS8); and write clearly and concisely (SUS19). Factor loadings were all greater than 0.5, and the lowest factor loading was 0.53 for share power (SUS13). Figure 9.6 below shows the modified SUSTHINK construct from CFA.

CFA5 results confirmed that the Chi-square statistic was significant at p < 0.05. However, the bootstrap p-value with 1,000 samples was 0.088 and was insignificant. In addition, the CFI, GFI, AGFI and TLI indices were all above 0.95, and the RMSEA was below 0.08 (as shown in Figure 9.6). The SRMR was 0.0315, and all the items had factor loadings greater than 0.5.

270

Figure 9.6 Confirmatory factor analysis for sustainable thinking (SUSTHINK)

Chi-square (df=9) = 25.083 (p=0.00), Bollen-Stine bootstrap p-value=0.088, CMIN/df=2.787, CFI=0.975, GFI=0.983, AGFI=0.960, TLI=0.958, RMSEA=0.061, RMR=0.022, SRMR=0.0315

The regression values of the remaining six items are shown in Table 9.16 below. All the regression weights were significant at the p < 0.001 level.

Table 9.16 Unstandardised regression weights for sustainable thinking (SUSTHINK)

Unstandardised S.E. C.R. P estimate SUS2 <--- SUSTHINK 0.503 .037 13.487 *** SUS5 <--- SUSTHINK 0.518 .034 15.179 *** SUS9 <--- SUSTHINK 0.534 .041 12.903 *** SUS13 <--- SUSTHINK 0.454 .041 11.117 *** SUS15 <--- SUSTHINK 0.434 .035 12.480 *** SUS4 <--- SUSTHINK 0.541 .040 13.499 ***

271

9.6.6 CFA6: Stakeholder relationships (STK) In this study, EFA6 confirmed seven items in the STK construct as reliable measures. CFA6 was therefore conducted using these seven items, but the initial model fit results confirmed a poor model fit. Thus, alternatives were sought to improve the model fit, by examining the modification indices and the standardised residual covariance matrix. The following two variables were subsequently removed based on the values in these matrices: listen to others advices (STK7); and negotiation skills (STK8). The removal of these two items improved the model fit results for all the CFI, GFI, TLI and AGFI values. The bootstrap p-value with 1,000 samples was 0.078. The RMSEA value of 0.072 was below the recommended value of 0.08, the SRMR was 0.028, and all the factor loadings were above 0.5 (see Figure 9.7 below).

Figure 9.7 Confirmatory factor analysis for stakeholder relationships (STK)

Chi-square (df=5) = 17.466 (p=0.004), bootstrap p-value=0.078, CMIN/df=3.493, CFI=0.981, GFI=0.985, AGFI=0.955, TLI=0.963, RMSEA=0.072, RMR=0.015, SRMR=0.028

272

Table 9.17 that follows represents the regression results. All the regression weights were significant at the p < 0.001 level.

Table 9.17 Unstandardised regression weights for stakeholder relationships (STK)

Unstandardised S.E. C.R. P estimate STK2 <--- STK 0.514 .032 16.083 *** STK3 <--- STK 0.538 .034 16.002 *** STK4 <--- STK 0.493 .033 14.989 *** STK9 <--- STK 0.498 .034 14.767 *** STK10 <--- STK 0.435 .033 13.088 ***

9.6.7 CFA7: Long-term-oriented decision-making (LONG) In this study, EFA7 confirmed a one-factor model with nine statements as a reliable measure for the LONG construct. However, when CFA7 was conducted with these same nine statements, the model fit results indicated a poor model fit. Thus, the following two items were removed based on the standard residual covariances and modification indices suggestions: think what may happen in the future (LONG15); and use economic indicators (LONG17). The removal of these two items confirmed a good model fit, with the CFI, GFI, AGFI and TLI values meeting the recommended threshold levels (see Figure 9.8 below). In addition, the RMSEA value was closer to 0.05, all the factor loadings were above 0.54, and the SRMR was 0.0304. Bootstrapping with 1,000 samples confirmed a non-significant p-value (i.e. p > 0.05) of 0.06. The lowest loading was for think about the general implications of any problem (LONG14), and the highest was for be objective when dealing with work conflicts (LONG3).

273

Figure 9.8 Confirmatory factor analysis for long-term decision-making (LONG)

Chi-square (df=4) = 36.45 (p=0.001), Bollen-Stine bootstrap p=value = 0.06, CMIN/df=2.604, CFI=0.978, GFI=0.978, AGFI=0.956, TLI=0.967, RMSEA=0.058, RMR=0.018, SRMR=0.0304

The CFA results of the LONG construct are shown in Table 9.18 below. Of the remaining seven items, the regression weights were significant at the level of p< 0.001.

Table 9.18 Unstandardised regression weights for long-term decision-making (LONG)

Unstandardised S.E. C.R. P estimate LTO2 <--- LONG 0.538 .033 16.148 *** LTO3 <--- LONG 0.578 .033 17.704 *** LTO4 <--- LONG 0.578 .034 17.015 *** LTO5 <--- LONG 0.519 .034 15.235 *** LTO6 <--- LONG 0.438 .034 12.943 *** LTO14 <--- LONG 0.418 .036 11.723 *** LTO1 <--- LONG 0.433 .034 12.684 ***

274

9.6.8 CFA8: Employee engagement (EMP) EFA8 confirmed seven items as a reliable measure of the employee engagement (EMP) construct in this study. CFA8 was therefore performed using these seven items. However, the following two items were removed based on standardised residual covariances and modification indices suggestions: allow others to do things (EMP1); and consider suggestions of employees (EMP6). The removal of these two items confirmed a good model fit, resulting in the CFI, GFI, AGFI and TLI values reaching the threshold levels, while the RMSEA value closer to zero confirmed a good model fit (see Figure 9.9 below). In addition, the SRMR was 0.0173. The lowest loading was for trust those to whom work is delegated (EMP10), and the highest for support decisions made jointly by others (EMP9).

Figure 9.9 Confirmatory factor analysis for employee engagement (EMP)

Chi-square (df=5) = 7.447 (p=0.189), Bollen-Stine bootstrap p-value=0.784, CMIN/df=1.489, CFI=0.996, GFI=0.994, AGFI=0.982, TLI=0.992, RMSEA=0.032, RMR=0.011, SRMR=0.0173

Table 9.19 below shows the unstandardised regression weights for the remaining five statements – all the values were significant at the p < 0.001 level.

275

Table 9.19 Unstandardised regression weights for employee engagement (EMP)

Unstandardised S.E. C.R. P estimate EMP2 <--- EMP 0.504 .034 14.711 *** EMP7 <--- EMP 0.516 .034 14.993 *** EMP8 <--- EMP 0.591 .040 14.835 *** EMP9 <--- EMP 0.543 .034 15.819 *** EMP10 <--- EMP 0.488 .034 14.203 ***

9.6.9 Summary of the model fit statistics for confirmatory factor analysis Using AMOS Version 23, eight CFAs were performed in this study to examine the model fit for the sample data. Table 9.20 below shows the descriptive model fit statistics obtained from each CFA. Table 9.20 also shows that all the CFI, GFI, AGFI and TLI values were above 0.95, which confirmed a good model fit for the sample data. All the RMSEA values were below 0.08, and the SRMR values were closer to zero (or below 0.05), which also confirmed a good model fit (as shown in Table 9.20).

This study’s CFA process started with 70 statements to measure the eight constructs in the proposed sustainability leadership model (see Table 9.10 in Section 9.4.9 above). During the CFA stage, a total of 23 statements were removed from further analysis by examining the output results of the standard residual covariances and modification indices while considering the theoretical justifications.

276

Table 9.20 Summary of the model fit statistics for confirmatory factor analysis

CFA Chi-square Boot-strap CMIN/ CFI GFI AGFI TLI RMSEA RMR SRMR number (df) p-value df and construct name Dependent variable(s) CFA1 38.219 (14) 0.075 (ns) 2.73 0.980 0.976 0.953 0.971 0.06 0.016 0.029 (EXL) CFA2 2.835 (5) 1.000 (ns) 0.567 1.000 0.998 0.993 1.000 0.000 0.005 0.0074 (ENV) CFA3 (FIN) 1.962 (1) 1.000 (ns) 1.962 0.998 0.997 0.984 0.994 0.045 0.013 0.000 Mediating variable(s) CFA4 14.910 (5) 0.109 (ns) 2.982 0.985 0.988 0.964 0.970 0.065 0.016 0.023 (CHNG) CFA5 25.083 (9) 0.088 (ns) 2.787 0.975 0.983 0.960 0.958 0.061 0.022 0.0315 (SUSTHIN K) Independent variable(s) CFA6 17.466 (5) 0.078 (ns) 3.493 0.981 0.985 0.955 0.963 0.072 0.015 0.028 (STK) CFA7 36.45 (14) 0.06 (ns) 2.604 0.978 0.978 0.956 0.967 0.058 0.018 0.0304 (LONG) CFA8 7.447 (5) 0.784 (ns) 1.489 0.996 0.994 0.982 0.992 0.032 0.011 0.0173 (EMP)

277

Model validation The previous sections explained the process used to explore (EFA) and to confirm (CFA) the factor structure of the questionnaire items using the calibration sample and the validation sample. The next step was to establish the construct validity, which is often a focal point of new construct development (Reichers & Schneider 1990). It has been recommended that studies using SEM confirm the reliability and validity of the measures in a model, prior to testing the hypotheses (Bagozzi, Yi & Phillips 1991). Chapter 8 of this thesis has explained the diverse methods available to test construct validity and reliability.

Thus, prior to testing the hypotheses in this study, three measurement models were developed (see figures 9.10, 9.11 and 9.12 below), which were tested for their construct validity and reliability. The first measurement model (Figure 9.10) consists of the three dependent variables (EXL, ENV and FIN), the second model (Figure 9.11) consists of the two mediating variables (CHNG and SUSTHINK), and the third model (Figure 9.12) consists of the three independent variables (STK, LONG and EMP).

The next section explains the process used to assess the construct validity and reliability of these three measurement models.

9.7.1 Measurement model for sustainability leadership (dependent variables) The initial dependent variables measurement model was deemed as a good fit for the data (see Appendix 28 – Part A), with a bootstrap p-value insignificant at p > 0.05. The CFI, GFI, AGFI values were above 0.9, the TLI > 0.95, the RMR < 0.10, and the SRMR and RMSEA < 0.05 (as shown in Figure 9.10 below).

278

Figure 9.10 Final measurement model for sustainability leadership (dependent

variables)

Chi-square=156.371(df= 87), p-value (bootstrap p-value 95% CT with 1,000 samples)=0.000 (0.077), CMIN/DF=1.797, CFI=0.979, GFI=0.958, AGFI=0.942, TLI= 0.974, RMSEA= 0.041, RMR= 0.021, SRMR=0.036 (see Appendix 28 – Part A)

It has been suggested that to confirm the measurement model fit, it is very important to examine the size and sign of the factor loadings and their individual significance (Bagozzi 1994). Bagozzi (1994) believed that positive, significant and sufficiently large factor loadings help to identify a good measurement model. As shown in Table 9.21, all of the factor loadings of the above measurement model were confirmed as greater than 0.522, and were all significant at p < 0.001. This aligned with the recommendation of Hair and Anderson (2010) that factor loadings in an SEM model should be above 0.5 to confirm convergent validity.

279

Table 9.21 Summary of measurement model for sustainability leadership (dependent variables)

Construct Statement Factor Cronbach’s AVE loading alpha EXL Create a sense of purpose and 0.626 0.863 0.476 enthusiasm in the work place (EXL2) Give recognition for good work 0.716 (EXL4) Have confidence in dealing with 0.641 work and with people (EXL5) Motivate employees (EXL7) 0.743 Organise work time effectively 0.775 (EXL8) Be honest (EXL9) 0.669 Have a strategic vision for the 0.647 organisation (EXL10) ENV Work as a volunteer in your 0.522 0.868 0.590 community (ENV 5) Be environmentally responsible 0.775 (ENV 8) Encourage recycling of items and 0.827 materials in your department (ENV 9) Identify the impact of your actions 0.868 on the natural environment (ENV 10) Continuously learn how to protect 0.800 the environment (ENV 11) FIN Achieve financial targets (FIN 2) 0.724 0.813 0.594 Focus on maximising productivity 0.816 (FIN 3) Ensure maximum returns to 0.770 investors (FIN 4)

As shown in Table 9.21, all the Cronbach’s alpha values were above 0.7, indicating the reliability of the measures (Hair & Anderson 2010). In addition, all the factor loadings were above the threshold value of 0.5, as suggested by Nunnally and Bernstein (1994) as an indication of reliability. Internal consistency reliabilities (Field 2005; Kline 2010; Nunnally 1978) were all identified as either acceptable or at a satisfactory level.

280

Table 9.22 Validity, reliability and correlation of the measurement model for sustainability leadership (dependent variables)

Cronbach’s Construct alpha EXL ENV FIN EXL 0.863 0.476 ENV 0.868 0.303 0.590 FIN 0.813 0.282 0.326 0.594 Note: All correlations are significant at p < 0.001 Diagonal values represent the AVE values of the individual variable

As shown in Table 9.22, discriminant validity of this study’s dependent construct was confirmed through the method suggested by Fornell and Larcker (1981). Fornell and Larcker (1981) explained that discriminant validity can be explained by using the squared correlation between a pair of constructs against AVE. When the squared correlation value is smaller than the AVE values of a pair of constructs, this indicates that the constructs confirm discriminant validity. Table 9.22 demonstrated that the AVE values for concern for social and environmental sustainability (ENV) and concern for financial performance of the firm (FIN) were all above the required level of 0.5. However, the AVE value of excellent leader (EXL) was below 0.5 but close to the suggested threshold value of 0.5, which confirmed the convergent validity of the constructs (Hair & Anderson 2010). The correlations between the three constructs were all significant at p < 0.001, and the correlation values ranged between 0.53 and 0.57 (as shown in Figure 9.10). When correlation values are less than 0.9, it can be confirmed that there is no multicollinearity between the constructs as recommended by Tabachnick and Fidell (2001).

9.7.2 Measurement model for mediating variables The second measurement model consists of the two mediating variables (CHNG and SUSTHINK). The initial model showed a poor model fit, with a Chi-square value (df) of 141.441 (43), and significance at p < 0.05 with a bootstrap p-value of 0.001. The values were CMIN/df=3.28, CFI=0.938, GFI=0.948, AGFI=0.920, TLI=0.921 and RMR=0.030, RMSEA=0.069, and SRMR=0.0477. To improve the model fit with valid and reliable measures, four items were removed from the second measurement model: be knowledgeable about work of the industry (CHNG6); sense of humour (SUS9); share power (SUS13); and thorough analysis of the problem (SUS15). 281

The final measurement model for the mediating variables is shown in Figure 9.11 below. The removal of four items from the initial model resulted in a good model fit (see Appendix 28 – Part B). All the fit values for CFI, GFI, AGFI were > 0.9, and TLI was > 0.95. In addition, the RMSEA and SRMR were < 0.05. Table 9.23 below summarises the measurement model for mediating variable.

Figure 9.11 Final measurement model for mediating variables

Chi-square=22.514 (df=13), p-value (bootstrap p-value 95% CT with 1,000 samples) = 0.048 (0.087), CMIN/DF=1.732, CFI=0.990, GFI=0.986, AGFI=0.970, TLI=0.983, RMSEA=0.039, RMR=0.017, SRMR=0.0245 (see Appendix 28 – Part B)

282

Table 9.23 Summary of measurement model for mediating variables

Construct Statement Factor Cronbach’s Variance loading alpha extracted CHNG Foster an international .714 0.795 0.497 perspective in the organisation (CHNG12) Have a multicultural .814 orientation and approach (CHNG 13) Have formal management .560 training (CHNG14) Look for and use the positive .708 aspects of other cultures (CHNG16) SUSTHINK Accept responsibility for .632 0.693 0.439 mistakes (SUS2) Choose management ethics .619 before self or the organisation (SUS4) Cope with pressures of work .732 (SUS5)

As shown in Table 9.23, the Cronbach’s alpha value for CHNG was 0.795, and for SUSTHINK was 0.693, which was closer to 0.7 and indicated the reliability of the two measures as recommended by Hair and Anderson (2010). In addition, all the factor loadings were above the threshold value of 0.5, as suggested by Nunnally and Bernstein (1994) as an indication of reliability. Internal consistency reliabilities (Field 2005; Kline 2010; Nunnally 1978) were all identified as either acceptable or at a satisfactory level.

The variance extract for CHNG and SUSTHINK were 0.497 and 0.439 respectively. Thus, the AVE values for CHNG and SUSTHINK were both 0.468, which was close to the required threshold value of 0.5, confirming the convergent validity of the constructs as suggested by Hair and Anderson (2010). All the CR values were greater than the AVE value, which confirmed the convergent validity of the constructs (as shown in Table 9.23). The correlations between the two constructs were 0.63 and were significant at p < 0.001 (as shown in Figure 9.11). When correlations values are less than 0.9, it can be considered that there is no multicollinearity between the constructs as recommended by Tabachnick and Fidell (2001). The AVE value between the two

283 constructs (i.e. 0.468) was greater than the squared correlations between the variables (i.e. 0.397), which confirmed discriminant validity as recommended by Fornell and Larcker (1981).

9.7.3 Measurement model for the three leadership excellence dimensions (independent variables) The initial measurement model for independent variables consisted of the three constructs of LONG, EMP and STK, which resulted in a poor model fit with a Chi- square value (df) of 225.53 (116), and significance at p < 0.05, with the bootstrap p- value at 0.001. The values were CFI=0.962, GFI=0.948, AGFI=0.931, TLI=0.956, RMSEA=0.045, RMR=0.022 and SRMR=0.0375. Thus, to improve the model fit, the following items were removed from the initial model: consistent decision-making (LONG1); open and honest decision-making (LONG5); focus on task-in-hand (LONG6); identify implications of problems (LONG14); self-esteem (STK9); and customer satisfaction (STK10). Figure 9.12 below shows the final measurement model results.

284

Figure 9.12 Final measurement model for leadership excellence dimensions (independent variables)

Chi-square=60.154 (df= 41), p-value (bootstrap p-value 95% CT with 1,000 samples) = 0.027 (0.305), CMIN/DF=1.467, CFI=0.989, GFI=0.978, AGFI=0.964, TLI= 0.985, RMSEA= 0.031, RMR= 0.017, SRMR=0.028 (see Appendix 28 – Part C)

The final measurement model resulted in a good model fit (see Appendix 28 – Part C), with a Chi-square value (df) of 60.154 (41), which was significant at p < 0.05. The bootstrap p-value was insignificant, the CFI, GFI, AGFI and TLI values were above 0.9, and the SRMR and RMSEA values were less than 0.5.

285

Table 9.24 Summary of measurement model for independent variables

Construct Statement Factor Cronbach’s AVE loading alpha STK Act as a member of a team (STK2) 0.722 0.752 0.504 Be consistent in dealing with people 0.736 (STK3) Be skilled in public relations (STK4) 0.671 LONG Be logical in solving problems 0.704 0.769 0.526 (LTO2) Be objective when dealing with 0.770 work conflicts (LTO3) Be prepared to compromise on 0.699 important work issues (LTO4) EMP Allow subordinates authority and 0.803 0.452 0.670 autonomy (EMP2) Delegate (EMP7) 0.693 Make allowance for emotional 0.654 pressure on staff at work (EMP8) Support decisions made jointly by 0.699 others (EMP9) Trust those to whom work is 0.644 delegated (EMP10)

The final measurement model confirmed the validity and reliability criteria. All the constructs in the final measurement model (as shown in Figure 9.12 above) had at least three or more items in each of them, as suggested by Hair and Anderson (2010).

Table 9.25 Validity, reliability and correlation of the measurement model for independent variables

Cronbach’s LONG EMP STK alpha LONG 0.769 0.526 EMP 0.803 0.434 0.452 STK 0.752 0.482 0.329 0.504 Note: All the correlation values are significant at p < 0.001. Diagonal values represent the AVE values of the individual variable

The final results confirmed the discriminant validity and reliability of the final measurement model. Cronbach’s alpha values were above 0.7 (see tables 9.24 and 9.25 above), indicating the reliability of the measures as recommended by Hair and Anderson (2010). In addition, all the factor loadings were above the threshold value of

286

0.5, as suggested by Nunnally and Bernstein (1994) as an indication of reliability. Internal consistency reliabilities were all identified as either acceptable or satisfactory levels as recommended by Field (2005); Kline (2010), and Nunnally (1978).

Tables 9.24 and 9.25 demonstrate that the AVE values for stakeholder relationships (STK) and long-term orientation (LONG) were all above the required level of 0.5. The AVE values for employee orientation (EMP) were below 0.5 but close to the suggested threshold value of 0.5 (Hair & Anderson 2010), which helped to confirm the convergent validity of the constructs. The correlations between the three constructs were all significant at p < 0.001, and they ranged between 0.57 and 0.69 (as shown in Figure 9.12). When correlation values are less than 0.9, it can indicate there is no multicollinearity between the constructs as recommended by Tabachnick and Fidell (2001). All the AVE values were greater than the squared correlations between the constructs, which helped to confirm discriminant validity as recommended by Fornell and Larcker (1981).

Common method bias The data used in this study is cross-sectional and correlated, and highly vulnerable to common method bias. As a procedural remedy (see Podsakoff et al. 2003, p. 887), the study collected data from two segments of managerial respondents: 1) part-time Master’s students working as full-time managers; and 2) members of the Master’s alumni community. Collecting responses from managerial respondents in an environment different from their usual working environment, and ensuring that the questions are designed in a logical and comprehensive manner in the questionnaire helps to reduce ambiguity, priming effects and item-context educing mood states (Podsakoff et al. 2003). Based on this theory, two separate methods were used to collect data in this study: 1) in class (or face-to-face); and 2) postal. Both methods ensured the anonymity of the respondents and their organisation, including a small description of each construct at the beginning of each section in the questionnaire, to help to eliminate common method bias in the study (Podsakoff et al. 2003).

Several statistical remedies are also recommended to test the severity of method variance (Podsakoff et al. 2003). As the first method in this study, Harman’s single factor model was used to examine common method variance (Podsakoff et al. 2003) –

287 mainly chosen because it is the most widely recommended method for examining common method variance, especially in international business research (Andersen 2010).

First, the SPSS factor analysis (EFA) option was used to test the common method influence on the three measurement models in the study. The purpose was to examine whether the one-factor solution would emerge, and whether the greater part of the variance could be explained by a single factor (Andersen 2010). The first EFA using SPSS was conducted for the first measurement model with three dependent constructs. The EFA results revealed three factors with Eigen values greater than 1, and these three factors explained 62.5% of variance in the final measurement model. The second EFA was conducted using the second measurement model consisting of two mediating variables. The EFA results revealed two factors with Eigen values greater than 1, which accounted for 61.9% of the variance in the mediating measurement model. The third EFA was conducted using the third measurement model that consisted of three independent variables. The EFA results revealed three factors with Eigen values greater than 1, while these three factors accounted for 62.8% of the variance in the final independent measurement model.

Second, Harman’s single factor test was also tested through the CFA method available in AMOS for the three separate measurement models in the study. Items in each measurement model were loaded into a single factor called a ‘common factor’, to determine whether the majority of variances could be explained by this single common factor as recommended by Podsakoff et al. (2003). The output results of the ‘sample moments’ option were also examined. AMOS output confirmed that the first measurement model with three independent variables required three factors, while the mediating measurement model required two factors. The final measurement model with three dependent variables confirmed the need for three variables to represent it. In conclusion, the Harmon’s single factor method using EFA and CFA methods confirmed that each of the three measurement models in this study needed more than one factor to explain the constructs in the final three measurement models.

Third, the severity of method variance was tested using CFA on competing models that increase in complexity (McFarland & Sweeney 1992; Podsakoff & Organ 1986b).

288

This method suggests that if the common method variance is a significant issue, a simple model with a single factor should fit the data as well as the complex model. Hence, three separate Chi-square tests were conducted for the three measurement models in this study. The difference in Chi-square statistics for the final measurement model with three dependent variables was statistically significant (∆ χ 2 (df= 3) = 767.963, and p < 0.05). In addition, the Chi-square difference test result was statistically significant for the measurement model which was consistsent with the two mediating variables (∆ χ 2 (df= 1) = 109.486 and p < 0.05). The improved model fit for the measurement model with three independent variables over the simpler model with a single factor was statistically significant (∆ χ 2 (df=3) = 291.143 and p < 0.05). However, each of the three hypothesised measurement models yielded better model fit of the data than the tested simple model (i.e. single factor).

Fourth, an independent sample t-test was conducted using the two survey returned methods (i.e. personal and postal) to examine whether there was a difference in mean values. Table 9.26 below shows that the differences in mean values for all constructs were less than 0.5, suggesting the common method bias is of little concern.

Table 9.26 Independent sample t-test results for the final measurement model

Construct and returned Std. Std. error method n= Mean deviation mean FIN Personal 226 7.1199 0.94736 0.06302 Mail 250 7.1586 0.88761 0.05614 ENV Personal 226 6.0748 0.95354 0.06343 Mail 250 6.1309 0.95172 0.06019 EXL Personal 226 7.7388 0.94172 0.06264 Mail 250 7.7581 0.93593 0.05919 STK Personal 226 6.9528 0.90699 0.06033 Mail 250 7.0326 0.87711 0.05547 EMP Personal 226 6.7206 0.95172 0.06331 Mail 250 6.7418 0.87320 0.05523 LONG Personal 226 6.6923 0.94988 0.06319 Mail 250 6.7550 0.85932 0.05435 SUSTHINK Personal 226 5.9697 0.89229 0.05935 Mail 250 5.9742 0.83883 0.05305 CHNG Personal 226 5.5849 0.93672 0.06231 Mail 250 5.5767 0.89013 0.05630

289

Although these statistical methods do not eliminate the influence of common method bias, they helps to prove that the inter-item correlation is not purely influenced by the common method variance (Korsgaard & Roberson 1995). Hence, it was concluded that the common method bias was not a significant issue in this study.

Developing structural equation modelling for sustainability leadership Once a measurement model has been confirmed, the next step is to develop the latent model (or structural model) to test the hypotheses (Bagozzi 1994). SEM has been defined as a multivariate technique combining aspects of factor analysis and multiple regression that enables researchers to simultaneously examine a series of interrelated dependent relationships among the measured variables and latent constructs, as well as between several latent constructs (Hair & Anderson 2010). SEM enables researchers to simultaneously examine the relationships between the multiple constructs, which has received much attention from quantitative researchers (Tabachnick & Fidell 2007).

To identify the correlations between the constructs, this study used the ML method. An SEM model consists of a combination of measurements and path models (McDonald & Ho 2002), and path analysis reflects the relationships between the latent variables (McDonald & Ho 2002). Through this study’s extensive literature review as explained in chapters 2 to 5, the relationships between the independent and dependent variables were identified, and the identified paths between the independent and dependent variables were linked in the SEM model.

Based on the literature review, the leader’s commitment to change (CHNG) and sustainable thinking (SUSTHINK) were identified in this study as the mediating variables in the SEM analysis. First, the paths were linked from the three independent variables to the CHNG and SUSTHINK constructs. The literature also indicated direct relationships between the independent and dependent variables in the model. Thus, these paths were also linked between the independent variables and dependent variables to identify the direct effect between the constructs. An assumption in SEM is that the data is normally distributed. Because, the data of this study is non-normally distributed, the bootstrap method as well as the non-parametric method were used in this study’s SEM analysis as recommended by Ullman (2006).

290

The initial SEM analysis provided a satisfactory level of model fit statistics, suggesting no requirements for changes to the SEM model. The Chi-square was 732.681 (df = 469), with significant p-value of 0.000 and a bootstrap 1,000 sample of 0.004. In a complex model such as this, it is often hard to arrive at a non-significant p-value. However, a satisfactory level of other model fit indices helped to confirm a good model fit for this study. Model fit indices of the model were CMIN/DF=1.562, CFI=0.961, GFI=0.916, AGFI=0.900, TLI=0.956, RMR=0.026 and RMSEA=0.034. All the values for CFI, GFI and AGFI were above 0.9, the TLI was above 0.95, and the RMR, SRMR and RMSEA were less than 0.05 and closer to zero, indicating a good model fit for the sample data (see Appendix 28 – Part D for further detail). In addition, the correlations between the three independent constructs of STK, LONG and EMP ranged between 0.70 and 0.58.

Figure 9.13 below presents the final SEM of this study.

291

Figure 9.13 Developing the final SEM for sustainability leadership

Chi-square=732.681 (df = 469) significant p-values of 0.000 and bootstrap 1,000 sample 0.004, CMIN/DF=1.562, CFI=0.961, GFI=0.916, AGFI=0.900, TLI=0.956, RMR=0.026, RMSEA=0.034 (see Appendix 28 – Part D)

292

Table 9.27 Standardised regression weights for the final SEM

Constructs and paths Standardised estimates Independent to mediators 0.245 (ns) a CHNG <--- LONG 0.245 ** b SUSTHINK <--- LONG 0.124 (ns) a/b CHNG <--- EMP 0.408 *** a/b SUSTHINK <--- EMP 0.532 *** a/b CHNG <--- STK 0.139 (ns) a/b 0.227 (ns) a SUSTHINK <--- STK 0.227 ** b Mediators to dependent EXL <--- CHNG 0.068 (ns) a/b ENV <--- CHNG 0.287 *** a/b FIN <--- CHNG 0.122 (ns) a/b EXL <--- SUSTHINK -0.116 (ns) a/b 0.237 (ns) a ENV <--- SUSTHINK 0.237 * b FIN <--- SUSTHINK 0.147 (ns) a/b Direct paths EXL <--- LONG 0.115 (ns) a/b ENV <--- LONG -0.029 (ns) a/b FIN <--- LONG 0.124 (ns) a/b 0.208 (ns) a EXL <--- EMP 0.208 * b ENV <--- EMP -0.022 (ns) a/b FIN <--- EMP 0.139 (ns) a/b EXL <--- STK 0.638 *** a/b ENV <--- STK 0.297 *** a/b 0.220 (ns) a FIN <--- STK 0.220 ** b a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** and ns = not significant b = 95% significance level P < 0.0018 = *** P < 0.01 = ** P < 0.05 = * and ns = not significant

The standardised regression weights indicated that the effect of the EMP construct on the CHNG and SUSTHINK was significant (p < 0.001), while the effects on LONG to SUSTHINK and STK to CHNG were insignificant. The paths from LONG to CHNG and STK to SUSTHINK were only significant at p < 0.01. The path from the 293

CHNG to the ENV dependent variable was significant (p < 0.001), but insignificant with EXL and FIN. The path from SUSTHINK to ENV was also significant but at p < 0.05, suggesting a weak relationship.

However, the paths from SUSTHINK to EXL and FIN were insignificant. In addition, the three direct paths from STK to dependent variables were significant, while the direct paths from LONG to the three dependent variables were insignificant. The only significant direct path of EMP was to EXL, at p < 0.05. These findings are summarised in Table 9.27 above.

Appendix 28 – Part D shows the AMOS output results of regression weights and squared multiple correlations obtained for the final model. The next section discusses the results of the hypotheses testing in this study.

Hypotheses testing and discussion In order to accept or reject the hypotheses, this study examined the SEM output results of regression weights (i.e. beta coefficients) and the corresponding p-values to confirm the hypotheses. Chapter 7 has explained the hypotheses that were tested to confirm the influence of leadership dimensions relating to STK, LONG and EMP on the three dependent variables of excellent leadership (EXL), concern for environment and society (ENV), and concern for financial performance of the firm (FIN). The indirect influence of the three independent variables on the three dependent constructs was also tested, identifying the two mediating constructs of CHNG and SUSTHINK. In total, there were 27 hypotheses to test the relationships between the three independent variables and the three dependent variables and the two mediating variables.

Studies conducting multiple hypothesis tests needs to ensure that the statistical analysis and its results are free from type I errors (i.e. rejecting a true H0) and type II errors (i.e. fail to reject a false H0) (Gordi & Khamis 2004). The Bonferroni method (Morrison 1990) is commonly used to control Type I errors. Since this study decided its overall significance level was at α = 0.05, the p-value for each individual test was compared with 0.05/27 = 0.0018. This means the statistical significance could only be confirmed if p < 0.0018 for a given test result.

294

9.10.1 Testing for relationships between the leader’s concern for stakeholder relationships (STK) and the three dependent variables (EXL, ENV and FIN) In Chapter 7, it was hypothesised that stakeholder relationships has a positive relationship with the three dependent variables and two mediating variables. Table 9.28 below shows the hypotheses results of the STK construct with three dependent variables.

Table 9.28 Hypotheses testing of the STK construct with the dependent variables

Hypothesis Path Standardised C.R. Conclusion number coefficients (β) H1 STK → EXL 0.638 6.967 *** a/b Supported H2 STK → ENV 0.297 3.421 *** a/b Supported H3 STK → FIN 0.220 2.568 (ns) a Not supported a 2.568 ** b Supported b a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** ns = not significant b = 95% significance level P < 0.0018 = *** P < 0.01 = ** P < 0.05 = * ns = not significant

The relationship between STK and EXL had a standardised regression coefficient of 0.638, and was significant at p < 0.0018, which supported the H1. This enabled this author to confirm that there is a strong positive relationship between perceptions of stakeholder relationships and what constitutes an excellent leader in the Sri Lankan organisational context. That is, Sri Lankan managers perceive being stakeholder- oriented as an important aspect of excellent leadership in their organisations.

Hypothesis H2 examined the relationship between STK and ENV. The standardised regression coefficient for the path between the two constructs was 0.297 and was significant (p < 0.0018). Thus, H2 was also supported. In other words, there is a positive, direct and significant relationship between the two constructs. This confirmed that Sri Lankan managers believe that stakeholder relationships enable them to ensure positive impacts on society and the environment.

295

Hypothesis H3 examined the relationship between STK and FIN. The standardised regression coefficient was 0.220 and was not significant at p < 0.0018. However, it was significant at 95% level. Hence, H3 was supported in this study under the less strict significant level. Hence, a p-value of less than 0.01 for the path between STK and FIN confirmed that there is a weak and positive relationship between the two constructs. This indicates that Sri Lankan managers believe that having strong stakeholder relationships will weakly but positively have an influence on their firm’s financial performance. Compared with the other two dependent variables, the coefficient between STK and FIN was the smallest.

9.10.2 Testing for relationships between the leader’s long-term-oriented decision-making (LONG) and the three dependent variables (EXL, ENV and FIN) Table 9.29 below explains the influence of the LONG construct on the three dependent variables.

Table 9.29 Hypotheses testing of the LONG construct with the dependent variables

Hypothesis Path Coefficients C.R Conclusion number (β) H4 LONG → EXL 0.115 1.408 (ns)a/b Not supported H5 LONG → ENV -0.29 -0.322 (ns) a/b Not supported H6 LONG →FIN 0.124 1.296 (ns) a/b Not supported a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** and ns = not significant b = 95% significance level P < 0.0018 = *** P < 0.01 = ** P < 0.05 = * and ns = not significant

The standardised regression coefficients of LONG with the three dependent variables of EXL, ENV and FIN were all insignificant, both at 95% and 99.9%. Thus, H4, H5 and H6 were all rejected. This confirms that there is no positive relationship between long-term-oriented decision-making and what constitutes a sustainability leader in the Sri Lankan organisational context. That is, Sri Lankan managers do not believe that being long-term-oriented in decision-making significantly improves the perceptions of excellent leadership and environmental, social and financial sustainability.

296

9.10.3 Testing for relationships between the leader’s concern for employee engagement (EMP) and the three dependent variables (EXL, ENV and FIN) The next step was to test the hypotheses to examine the relationships between employee engagement and the three dependent variables. Table 9.30 below provides the results obtained in this hypotheses testing.

Table 9.30 Hypotheses testing of the EMP construct with the dependent variables

Hypothesis Path Coefficients C.R. Conclusion number (β) H7 EMP → EXL 0.208 2.309 (ns) a Not supported a 2.309 * b Supported b H8 EMP → ENV -0.022 -0.226 (ns) a/b Not supported H9 EMP → FIN 0.139 1.330 (ns) a/b Not supported a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** and ns = not significant b = 95% significance level P < 0.0018 = *** P < 0.01 = ** P < 0.05 = * and ns = not significant

Hypothesis H7 aimed to test the relationship between the EMP and EXL constructs. The standardised regression coefficient for the paths between EMP and EXL was 0.208 and was not significant at p < 0.0018. Thus, H7 was not supported in this study. However, since the p-value was less than 0.05, this indicates there is a weak, positive and direct relationship between employee engagement and excellent leadership. That is, Sri Lankan managers believe that encouraging employee participation has a positive but weak influence on considering themselves as excellent leaders in their organisations.

Hypothesis H8 aimed to test the relationship between the EMP and ENV constructs. The standardised regression coefficient was -0.022 and was not significant (p > 0.0018). H8 was therefore rejected, indicating there was no notable improvement in the perceptions of environmental and social sustainability that could be achieved by encouraging employee participation in organisational activities.

297

Hypothesis H9 aimed to examine the relationship between the EMP and FIN constructs. The standardised regression coefficient between the two constructs of EMP and FIN was 0.139 and was not significant (p > 0.0018). Thus, H9 was also rejected. This indicates that Sri Lankan managers do not believe that encouraging employee engagement will have an influence on their ability to improve their firm’s financial performance (FIN).

Mediation analysis Iacobucci (2008) identified SEM as most suitable to test the mediation effect of complex models with multiple mediators, and independent and dependent variables. Chapter 7 of this study explained the theoretical background behind proposing the leader’s commitment to change (CHNG) and sustainable thinking (SUSTHINK) as mediating variables in the model. H10 to H27 hypothesised that the CHNG and SUSTHINK mediates the relationships between the three independent variables of STK, LONG and EMP, and the three dependent variables of EXL, ENV and FIN which constitute sustainability leadership.

For models with multiple mediators, and independent and dependent variables, Iacobucci (2008) recommended using SEM rather than the regression method to examine the mediation effect. Also, this study used the bootstrapping approach of Baron and Kenny (1986) with 99% significance level and Chi-square difference test to confirm the mediation effect of CHNG and SUSTHINK.

As highlighted in Chapter 7, the Baron and Kenny (1986) approach is the most widely used method to confirm the basic requirements in mediation testing. As part of this approach, they recommended that first the direct relationships between the independent and dependent variables in the model be tested (see tables 9.31 and 9.32 below). Thus, the direct relationships between the three independent and three dependent variables in this study’s model were tested by removing the mediator from the final SEM model represented in Figure 9.13. However, due to the objections to using the Baron and Kenny (1986) approach and the complexity of the final model of this study, it was decided to support the mediation analysis by using the bootstrapping method and the difference in Chi-square test statistics. Tables 9.31 and 9.32 below show the mediation analysis.

298

Table 9.31 Mediation influence of CHNG on the relationship between independent variables and the dependent variables

Bootstrapping 99.9% a and 95% b

CI, 1000 samples

1) difference ( based on Direct test χ2 Path Indirect Total (2006) ∆

with Support mediator effect effect Hypotheses

mediator square Direct without - Significance 99 % Decision Mathieu and Taylor Chi

H10 STK 0.622 *** 0.612 (ns)a 0.007 (ns) 0.62 (ns) a 64.588 Direct No → a/b 0.612 **b a/b 0.62 ** b *** EXL H11 STK 0.392 *** 0.325***a/b 0.027 (ns) 0.353 *** 16.213 Direct No → a/b a/b a/b *** ENV H12 STK 0.270 *** 0.226 (ns) a 0.012 (ns) 0.237 (ns) a 7.072 Direct No → a/b 0.226 * b a/b 0.237 * b ** FIN H13 LON 0.117 (ns) 0.094 (ns) 0.014 (ns) 0.108 (ns) 1.249 No No G → a/b a/b a/b a/b (ns) mediatio EXL n H14 LON 0.072 (ns) -0.019 (ns) 0.063 (ns) a 0.044 (ns) 0.044 Indirect No G→ a/b a/b 0.063 * b a/b (ns) ENV H15 LON 0.174 (ns) 0.123 (ns) 0.027 (ns) 0.150 (ns) 1.577 No No G → a/b a/b a/b a/b (ns) mediatio FIN n H16 EMP 0.173 (ns) a 0.114 (ns) 0.02 (ns) a/b 0.133 (ns) 2.912 Direct No → 0.173 **b a/b a/b (ns) EXL H17 EMP 0.213 (ns) a 0.024 (ns) 0.08 (ns) a 0.104 (ns) 0.120 Full Ye → 0.213 **b a/b 0.08 * b a/b (ns) s ENV H18 EMP 0.260 *** 0.114 (ns) 0.04 (ns) a/b 0.184 (ns) 2.70 Direct No → a/b a/b a/b (ns) FIN a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** ns = not significant b = 95% significance level P < 0.001 = *** P < 0.01 = ** P < 0.05 = * ns = not significant

H10 tests the mediation effect of CHNG on the relationship between STK and EXL. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 64.588 ***]. This was an indication that the direct effect of STK to EXL was significant (see Table 9.31 above). However, the indirect effect of STK to 299

EXL was not significant [0.007 (ns) a/b], which indicates that the indirect effect of STK to EXL via CHNG was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between STK and EXL was significant. Given that the total effect was also significant, this helped to confirm that there was no mediation effect from CHNG on the relationship between STK and EXL, which did not support the acceptance of H10. Therefore, according to the suggestions of Mathieu and Taylor (2006), it could be concluded that there was only a direct relationship between STK and EXL.

H11 tests the mediation effect of CHNG on the relationship between STK and ENV. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 16.213 ***]. This indicates that the direct effect of STK to ENV was significant (see Table 9.31 above). However, the indirect effect of STK to ENV was not significant [0.027 (ns) a/b]. This indicates that the indirect effect of STK to ENV via CHNG was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between STK and ENV was significant. Given that the total effect was also significant [0.353 *** a/b], this helped to confirm that there was no mediation effect from CHNG on the relationship between STK and ENV, which did not support H11. It could therefore be concluded that there was only a direct relationship between the STK and ENV constructs.

H12 tests the mediation effect of CHNG on the relationship between STK and FIN. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 7.072 **]. This indicates that the direct effect of STK to FIN was significant (see Table 9.31 above). However, the indirect effect of STK to ENV was not significant [0.012 (ns) a/b]. This indicates that the indirect effect of STK to FIN via CHNG was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between STK and FIN was significant. Given that the total effect was only significant at 95% significance level [0.237 * b], this helped to confirm that there was no mediation effect from CHNG on the relationship between STK and FIN, which did not support H12. Therefore, it could be concluded that there was only a direct relationship between STK and FIN constructs.

300

H13 tests the mediation effect of CHNG on the relationship between LONG and EXL. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 1.249 (ns)]. This indicates that the direct effect of LONG to EXL was not significant, which indeed was not as stated in Table 9.31 above. Also, the indirect effect of LONG to EXL was not significant under both significance levels [0.014 (ns) a/b]. In summary, this confirmed that CHNG has no mediation effect on the relationship between LONG and EXL. Hence, H13 was not supported.

H14 tests the mediation effect of CHNG on the relationship between LONG and ENV. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 0.044 (ns)]. This indicates that the direct effect of LONG to ENV was not significant (see Table 9.31 above). However, the indirect effect of LONG to ENV was significant under 95% significance levels [0.063 *b], but not at 99.9% significance level. This indicates that the indirect effect of LONG to ENV via CHNG was significant in this model only under 95% significance level. In summary, it can be concluded that the indirect effect was significant; whereas the direct relationship between LONG and ENV was not significant. Given that the total effect was also not significant, this helped to confirm that there was no mediation effect from CHNG on the relationship between LONG and ENV, which did not support H14. However, as per the suggestions of Mathieu and Taylor (2006) this results further suggest that there was an indirect effect of CHNG on the relationship between LONG and ENV rather than a mediation effect.

H15 tests the mediation effect of CHNG on the relationship between LONG and FIN. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 1.577 (ns)]. This indicates that the direct effect of LONG to FIN was not significant (see Table 9.31 above). The indirect effect of LONG to FIN was also not significant under both significance levels [0.027 (ns) a/b]. In summary, this confirmed that CHNG has no mediation effect on the relationship between LONG and FIN. Hence, H15 was not supported.

301

H16 tests the mediation effect of CHNG on the relationship between EMP and EXL. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 2.912 (ns)]. The direct effect of EMP and EXL was not significant under 99.9%, but was significant at 95% (see Table 9.31 above). However, the indirect effect and total effects of EMP to EXL were not significant. This indicates that the indirect effect of EMP to EXL via CHNG was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between EMP and EXL was significant (under 95% CI). Given that the total effect was also not significant, this helped to confirm that there was no mediation effect from CHNG on the relationship between EMP and EXL, which did not support H16. Because of the significant direct relationship (at 95% significance level), it could be concluded that there was a weak direct relationship between EMP and EXL constructs.

H17 tests the mediation effect of CHNG on the relationship between EMP and ENV. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 0.120 (ns)], indicating no significant improvement between the two nested models. The direct effect of EMP and ENV was only significant at 95% level (see Table 9.31 above). The direct effect with the mediator was not significant [0.024 (ns) a/b], although the indirect effect of EMP to ENV was significant at 95% level. This indicates that the indirect effect of EMP to ENV via CHNG was significant in this model. In summary, the mediations analysis confirmed that the indirect effect was significant; whereas the effect from the EMP to CHNG and the effect of CHNG on the ENV were significant, where the direct effect between EMP and ENV were no longer significant. This helped to confirm that there was full mediation effect from CHNG on the relationship between EMP and ENV, which supported H17.

H18 tests the mediation effect of CHNG on the relationship between EMP and FIN. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 2.70 (ns)], indicating no significant improvement between the two nested models. The direct effect of EMP and FIN was significant (see Table 9.31 above). However, the direct effect with the mediator was not significant [0.114 (ns) a/b], and also the indirect effect of EMP to FIN. This indicates that the indirect effect of EMP to FIN via CHNG was not significant in this model. In summary, the

302 mediations analysis confirmed that the indirect effect was not significant, and hence helped to confirm that the EMP and FIN has only a direct relationship but not a mediation relationship, which did not support H18.

Table 9.32 explains the mediation analysis results testing the influence of the leader’s sustainability thinking on the relationship between independent and dependent variables of the study (hypotheses H19 to H27).

Table 9.32 Mediation influence of SUSTHINK on the relationship between independent and dependent variables

Bootstrapping 99.9% a and 95% b

CI, 1000 samples

test

based on

square - Path χ2 (df=1) Support mediator ∆ significance Chi Hypotheses Direct Mathieu and Taylor (2006) difference Direct without with Indirect Total Decision mediator effect effect H19 STK → 0.622 *** 0.632 (ns) -0.021 (ns) 0.610 (ns) a 66.858 Direct No EXL a/b a a/b 0.610 ** b *** 0.632 ** b H20 STK → 0.392 *** 0.312 *** 0.048 (ns) a 0.360 *** 13.948 Partial Yes ENV a/b a/b 0.048 * b a/b *** H21 STK → 0.270 *** 0.221 (ns) 0.03 (ns) a/b 0.250 (ns) a 6.554 * Direct No FIN a/b a 0.250 * b 0.221 * b H22 LONG 0.117 (ns) 0.088 (ns) -0.008 (ns) 0.080 (ns) 1.011 No No → EXL a/b a/b a/b a/b (ns) mediati on H23 LONG 0.072 (ns) -0.015 (ns) 0.014 (ns) 0.000 (ns) 0.026 No No → a/b a/b a/b a/b (ns) mediati ENV on H24 LONG 0.174 (ns) 0.119 (ns) 0.009 (ns) 0.127 (ns) 1.445 No No → FIN a/b a/b a/b a/b (ns) mediati on H25 EMP 0.173 (ns) 0.162 (ns) -0.049 (ns) 0.113 (ns) 4.685 * Direct No → EXL a a a/b a/b 0.173 **b 0.162 * b H26 EMP 0.213 (ns) 0.009 (ns) 0.094 (ns) a 0.103 (ns) 0.012 Full Yes → a a/b 0.094 * b a/b (ns) ENV 0.213 **b H27 EMP 0.260 *** 0.133(ns) 0.070 (ns) 0.203 (ns) a 1.827 Direct No → FIN a/b a/b a/b 0.203 * b (ns) a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** and ns = not significant b = 95% significance level P < 0.001 = *** P < 0.01 = ** P < 0.05 = * ns = not significant

303

H19 tests the mediation effect of SUSTHINK on the relationship between STK and EXL. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 66.858 ***]. This indicates that the direct effect of STK to EXL was significant (see Table 9.32 above). However, the indirect effect of STK to EXL was not significant [-0.021 (ns) a/b]. This indicates that the indirect effect of STK to EXL via SUSTHINK was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between STK and EXL was still significant. Given that the total effect was also significant, this helped to confirm that there was no mediation effect from SUSTHINK on the relationship between STK and EXL, which did not support H19. Therefore, it could be concluded that there was only a direct relationship between STK and EXL constructs.

H20 tests the mediation effect of SUSTHINK on the relationship between STK and ENV. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 13.948 ***], which indicated there was a significant improvement between the two nested models. This indicates that the direct effect of STK to ENV was significant (see Table 9.32 above). The indirect effect of STK to ENV was only significant at 95% significance level [0.048 * b]. This indicates that the indirect effect of STK to ENV via SUSTHINK was significant but weak in this model. The mediations analysis also confirmed that the direct relationship between STK and ENV with the mediator was also significant [0.312 *** a/b]. These findings are consistent with the mediation hypothesis that helped to confirm that there was a partial mediation effect from SUSTHINK on the relationship between STK and ENV, which supported H20. Therefore, it could be concluded that there was a partial mediation effect from SUSTHINK on the relationship between STK and ENV.

H21 tests the mediation effect of SUSTHINK on the relationship between STK and FIN. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 6.554 *], which indicated there was a significant improvement between the two nested models. This also indicates that the direct effect of STK to FIN was significant (see Table 9.32 above). However, the indirect effect of STK to FIN was not significant [0.03 (ns) a/b]. This indicates that the indirect effect of STK to FIN via SUSTHINK was not significant in this model. However, the total

304 effect was significant at 95% level (0.25 * b). The mediations analysis confirmed that the direct relationship between STK and FIN with the mediator was also still significant [0.221 * b]. These findings confirmed that there was no mediation but only STK and FIN were only directly related. This therefore did not support H21; hence, it could be concluded that there was only direct effect between STK and FIN constructs.

H22, H23 and H24 test the mediation effect of SUSTHINK on the relationship between LONG and the three sub-dimensions of sustainability leadership (EXL, ENV and FIN). The difference in Chi-square test between the ‘full model’ and ‘mediating model’ were not significant (see Table 9.32 above), indicating there was no significant improvement between the ‘mediating’ and ‘full’ models. This also indicated that the direct effect of LONG to EXL, LONG to ENV and LONG to FIN were not significant. Also, the indirect effects of LONG to EXL, ENV and FIN were also not significant, indicating that these three paths were not mediated through SUSTHINK. Therefore, SUSTHINK was identified as not mediating the relationships between LONG and EXL, LONG to ENV and LONG to FIN. Hence, H22, H23 and H24 were not supported.

H25 tests the mediation effect of SUSTHINK on the relationship between EMP and EXL. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was significant [∆χ2 (1) = 4.685 *]. This indicates direct effect of EMP and EXL was significant but weak (see Table 9.31 above), because it was significant only under 95% level. However, the indirect and total effects of EMP to EXL were not significant, which indicated that the indirect effect of EMP to EXL via SUSTHINK was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant; whereas the direct relationship between EMP and EXL was significant (under 95% CI) with the introduction of SUSTHINK (0.162 * b). This helped to confirm that there was no mediation effect from SUSTHINK on the relationship between EMP and EXL, which did not support H25. Based on the significant direct relationship, it could be concluded that there was only a direct relationship between EMP and EXL constructs.

H26 tests the mediation effect of SUSTHINK on the relationship between EMP and ENV. The difference in Chi-square test between the ‘full model’ and ‘mediating

305 model’ was not significant [∆χ2 (1) = 0.012 (ns)], indicating no significant improvement between the two nested models. The direct effect of EMP and ENV was only significant at 95% level (see Table 9.32 above). The direct effect with the mediator was not significant [0.009 (ns) a/b], while the indirect effect of EMP to ENV was only significant at 95% significance level (0.094 * b). This indicates that the indirect effect of EMP to ENV via SUSTHINK was significant in this model. In summary, the mediations analysis confirmed that the indirect effect was significant; whereas the effect from the EMP to SUSTHINK and the effect of SUSTHINK on the ENV were significant, where the direct effect between EMP and ENV was no longer significant. This helped to confirm that there was full mediation effect from SUSTHINK on the relationship between EMP and ENV, which supported H26.

H27 tests the mediation effect of SUSTHINK on the relationship between EMP and FIN. The difference in Chi-square test between the ‘full model’ and ‘mediating model’ was not significant [∆χ2 (1) = 1.827 (ns)], indicating no significant improvement between the two nested models. The direct effect of EMP and FIN was significant (see Table 9.32 above). However, the direct effect with the mediator was not significant [0.133(ns) a/b ], and also the indirect effect of EMP to FIN (0.070 (ns) a/b). This indicated that the indirect effect of EMP to FIN via SUSTHINK was not significant in this model. In summary, the mediations analysis confirmed that the indirect effect was not significant, which hence helped to confirm that the EMP and FIN had only a direct relationship, but not a mediation relationship, which did not supported H27.

In summary, 27 hypotheses were discussed in Chapter 7 to examine the relationships within the proposed sustainability leadership model. The results of the 27 hypotheses that have been tested are summarised in Appendix 29. The Figure 9.12 shown below describes the significance of leadership excellence dimensions influeing sustainability leadership of Sri Lankan managers.

306

Figure 9.14 Sustainability leadership structural model with only significant paths

Leadership excellence Sustainability leadership dimensions dimensions

LONG ** EXL CHNG ***

***

* EMP *** ENV *** *** *** *

STK ** FIN **

SUSTHINK

Note: Only significant paths shown with bootstrap p-values, p < 0.05 = *, p < 0.01 = ** and p < 0.001 = ***

307

Standardised total effects of leadership excellence dimensions on sustainability leadership The standardised total effects summarised in Table 9.33 below show that STK and EMP are the main drivers influencing perceptions of sustainability leadership. In particular, the standardised total effects for STK confirmed that STK is the most important dimension in explaining sustainability leadership in Sri Lankan organisations. Managers’ long-term orientation (LONG) was found to have no impact on perceptions of sustainability leadership.

Table 9.33 Total standardised effect of excellence leadership dimensions on sustainability leadership

Path Standardised total effects LONG → EXL 0.118 (ns)a/b LONG → ENV 0.071 (ns) a/b LONG → FIN 0.172 (ns) a/b

EMP → EXL 0.173 (ns) a 0.173 ** b EMP → ENV 0.221 (ns) a 0.221 ** b EMP → FIN 0.267 *** a/b

STK → EXL 0.621 (ns) a 0.621 ** b STK → ENV 0.391 *** a/b STK → FIN 0.270 (ns) a 0.270 ** b a = 99.9 % significance level (according to Bonferroni method) P < 0.0018 = *** and ns = not significant b = 95% significance level P < 0.0018 = *** P < 0.01 = ** P < 0.05 = * and ns = not significant

308

Chapter summary The main objective of this chapter was to explain and summarise the data analysis results obtained through the sample consisting of 596 Sri Lankan managers. An analysis of the demographic profiles confirmed that the sample consisted of diverse sociodemographic groups of the Sri Lankan managerial population, as well as of the Sri Lankan labour force (Central Bank of Sri Lanka 2013a).

The theoretical framework of this study conceptualised that sustainability leadership was influenced by the three independent variables of stakeholder relationships (STK), long-term-oriented decision-making (LONG) and employee engagement (EMP). Sustainability leadership was also measured by the three constructs of excellent leader (EXL), concern for social and environmental sustainability (ENV), and concern for financial performance of the firm (FIN). The two constructs of sustainable thinking (SUSTHINK) and commitment to change (CHNG) were identified as mediating variables.

The total sample of 596 respondents was split into two independent samples for the purpose of construct development using EFA, CFA and SEM. Eight EFAs were conducted to confirm reliable measures for the eight constructs, and 35 statements were consequently removed from the eight constructs. During the CFA stage, 23 statements were removed from the eight constructs, as these statements had high standard residual covariances and modification indices. Three measurement models were then developed using the independent, mediating and dependent constructs that were confirmed in the CFA stage. This final measurement model consisting of the eight constructs confirmed a satisfactory level of model fit with the data. A structural model was therefore developed based on the final measurement model and the hypotheses were tested.

The next chapter summarises and explains the research findings of this study, including reflecting on the literature discussed in chapters 2 to 5.

309

PART V

DISCUSSION OF RESULTS AND CONCLUSIONS

310

CHAPTER 10. DISCUSSION OF RESULTS

Introduction The main objective of this study was to examine the managerial perceptions of sustainability leadership in Sri Lankan organisations. To this end, three research questions were developed together with a theoretical framework based on an extensive literature review as described in Part I of this thesis. The previous chapters provided the results of the data analysis obtained from the managerial sample using EFA, CFA and SEM. This chapter discusses the findings, also reflecting on the literature that was previously explained in chapters 2 to 7.

Section 10.2 of this chapter revisits the theoretical framework of the study, briefly explains the background of the study and summarises the conceptual framework. Section 10.3 discusses the final model of sustainability leadership of Sri Lankan managers. In Section 10.4, the findings relating to excellent leadership in the Sri Lankan organisational context are discussed, followed by a discussion of sustainability leadership in a Sri Lankan organisational context in Section 10.5. Section 10.6 then summarises this chapter’s findings. Figure 10.1 below presents the flow of this chapter’s sections. Figure 10.1 Composition of Chapter 10

10.1 Introduction

10.2 Revisiting the theoretical framework

10.3 Discussion of the cultural model Chapter 10: 10.4 Excellence leadership in Sri Discussion of results Lankan organisational context - a management perspective

10.5 Excellence leadership in Sri Lankan organisational context - a sustainability perspective

10.6 Chapter summary

311

Revisiting the theoretical framework Sustainability has attracted much attention from management scholars in recent years. In particular, corporate scandals and failures as well as a lack of organisational effort to ensure environmental and social sustainability have raised public awareness of CSR (Avery 2005; Avery & Bergsteiner 2010, 2011b). CSR in support of sustainability issues has become essential for long-term business survival. However, Avery and Bergsteiner (2010) pointed out the inability of CSR alone to address the major issues of sustainability, viewing sustainability as a much broader concept.

The UN has recognised that sustainability issues are common in all countries regardless of their level of economic, political and social development (United Nations 2015a, b). However, as explained in the literature review, sustainability is becoming a strategically more important managerial task in developing countries than in developed countries. Markets in the developing world are often more responsive, vulnerable and exposed to diverse sustainability issues such as environmental pollution, human rights violations, and discriminations than in the developed nations (United Nations 2015a, b). In addition, due to the diversity of sustainability issues, scholars and practitioners have found that a corporate sustainability strategy that has succeeded in one country may not guarantee the best results in another country. For example, protection of human rights has been identified as a global sustainability issue, yet human rights issues in a developed nation are different from those in a developing nation (United Nations 2015a). In addition, sustainable development issues such as child labour have attracted more attention in developing countries than in developed countries (United Nations 2015a).

Thus, organisations operating in developing countries generally face more diverse, robust and complex management challenges than in developed countries. With the rising complexity of such management challenges, contemporary managers in developing countries are often struggling to find an appropriate leadership style that ensures long-term corporate success in a complex environment (Metclaf & Benn 2013). In this regard, some scholars have proposed that sustainable leadership behaviours of managers can help them face complex challenges (Metclaf & Benn 2013).

312

The concept of corporate sustainability has been comprehensively explored, mostly in the Western and developed economic contexts, with little known about sustainability leadership in developing nations (Kantabutra 2011; Kantabutra & Avery 2012; Kantabutra & Saratun 2013). Sri Lanka, identified as a middle-income country, has not escaped from sustainable development challenges, and is still struggling to find its own solutions for issues such as post-war economic development, poverty, human rights violations, corruption, and unbalanced rural and urban development (United Nations Development Programme 2014b). Managers working in a complex, robust and risky market such as Sri Lanka need to ensure that their decisions incorporate sustainability. Such arguments and recommendations justified a context-specific leadership approach in this study.

To develop the conceptual framework and answer the research questions, this study explored cultural frameworks that have supported most leadership studies. Den Hartog et al. (1999) and Scanduraa and Dorfman (2004) explained in their studies that environmental factors such as cultural values, beliefs and accepted social behaviours can influence managerial perceptions. In addition, the individual’s perceptions and beliefs are assumed to be influenced by factors such as the experiences and knowledge that the person holds. Most management studies such as House et al. (2004); House et al. (1999), and Selvarajah et al. (1995) have used this cultural-contingent approach to explain diverse leadership concepts. From a similar perspective, this study has assumed that sustainability leadership is a culturally contingent leadership phenomenon that can be explained through the unique cultural characteristics in the context of the study. This supports the main objective of this study, which was:

To develop an integrated cultural model that provides explanation to the relationship between the diverse dimensions that enable sustainability leadership in Sri Lankan organisations.

To develop a new set of leadership dimensions, this study incorporated leadership behavioural statements from the APEL questionnaire (Selvarajah et al. 1995) and some other measurements on sustainability. The use of the APEL questionnaire’s leadership behavioural statements was justified, as it is a widely used survey instrument to

313 identify and explain the influences of culture-specific values on organisational leadership and has been tested in numerous Asian contexts.

The literature reviewed in this study indicated that contemporary leaders need extraordinary leadership skills to address sustainability issues, especially in complex markets (Metclaf & Benn 2013). The inapplicability and inadequacy of traditional leadership behaviours to address complex issues suggest what constitutes excellence in leadership has changed from what it used to be in the past. To become an excellent leader in complex contemporary organisational settings, a manager needs extraordinary leadership skills that will help them to address not only internal organisational challenges but also external environmental challenges. As a result, the sustainability leadership literature recognises an excellent leader as one who aims to minimise their negative impacts on the economy, environment and society (Elkington 1994, 1997; Fullan 2003, 2005).

Based on this common perspective, it was hypothesised in this study that the dependent variable of sustainability leadership in relation to Sri Lankan managers consists of two leadership dimensions: 1) what constitutes an excellent leader in a management sense; and 2) what constitutes an excellent leader in a sustainability sense (i.e. leadership that shows concern for social, environmental and financial sustainability). Therefore, to develop the dependent variable of sustainability leadership, this study adapted the two concepts of excellent leadership in a management sense (Selvarajah et al. 1995), and excellent leadership in a sustainability sense that aims to minimise the negative impacts on society, environment and economy (Elkington 1997).

After an extensive literature review, three leadership excellence dimensions were identified in this study as independent variables that positively influence sustainability leadership: 1) stakeholder relationship; 2) long-term orientation; and 3) employee engagement. In addition, the literature suggested that two charismatic leadership dimensions of change leadership and sustainable thinking are essential contemporary leadership dimensions to achieve sustainability leadership (Avery & Bergsteiner 2010, 2011c; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003, 2007; Parkin 2010). Based on this essentiality of organisational change leadership and sustainable thinking

314 to ensure sustainability leadership, these two variables were also integrated into this study’s framework as mediating variables.

In this study, questionnaire-based surveys were conducted in different locations in Sri Lanka, with the objective of selecting a diverse and large sample of managers. In total, 821 managerial responses were collected. Following the recommended process for scale development and refinement using EFA, CFA and SEM (Hinkin 1998), the final theoretical model of sustainability leadership was developed. It demonstrated a good model fit for the data and confirmed the two independent variables of stakeholder relationship and employee engagement as the determinants of sustainability leadership in the Sri Lankan organisational context. Mediation analysis tests confirmed that change leadership and sustainable thinking fully mediate the relationships between employee engagement and the leader’s concern for society and the environment. The analysis also revealed that stakeholder relationship was the most influential leadership dimension of sustainability leadership of Sri Lankan managers. The leader’s concern for long-term-oriented decision-making was identified as the weakest of the three leadership excellence dimensions, indicating that managers with long-term-oriented visions have less ability to forecast the sustainability leadership of Sri Lankan managers.

The next section below discusses the cultural model developed to explain the sustainability leadership characteristics of Sri Lankan managers.

Discussion of the cultural model The main research objective of this study was to develop an integrated cultural model that provides explanation to the relationship between the leadership excellence dimensions that enable sustainability leadership in Sri Lankan organisations. To achieve this research objective, three research questions were developed, and hypotheses were then developed to answer those questions. The first group of hypotheses aimed to answer the first research question by exploring the relationship between the three leadership excellence dimensions of leaders’ concern for stakeholder relationships, employee engagement and long-term orientation, with the three sub- dimensions that constitute sustainability leadership. It was anticipated that the nine hypotheses in the first group would have a positive relationship with the three

315 dependent variables that constitute sustainability leadership. The second group of hypotheses aimed to answer the second and third research questions that examine the mediation influence of change leadership and sustainable thinking on the relationships between the independent and dependent variables in the conceptual framework.

The subsections below discuss the analysis results of the cultural model in relation to the influence of the independent variables and mediating variables on sustainability leadership in the Sri Lankan organisational context.

10.3.1 Stakeholder relationships This section discusses results on the hypotheses relating to the first leadership excellence dimension of managerial perceptions of stakeholder relationships on sustainability leadership.

The construct of stakeholder relationships assumes that building stakeholder relationships enables managers to enhance organisational sustainability (Avery & Bergsteiner 2011b; Crawford & Nahmias 2010). Thus, the construct developed in this study aimed to identify diverse perceptions of stakeholder relationships which enable managers to become sustainability leaders in their organisations. The final CFA results confirmed the following three relevant leadership statements as important to Sri Lankan managerial behaviours characterised by stakeholder relationships: 1) act as a member of a team; 2) be consistent in dealing with people; and 3) be skilled in public relations. Among these three leadership behaviours, the most important leadership behaviour was identified as act as a member of a team.

The analysis results explained in Chapter 9, Section 9.10 confirm that Sri Lankan managers’ attitudes towards stakeholder relationships positively influence them to achieve excellent leadership in their organisations. It has been suggested that compared with Western managers, Asian managers generally have a more positive attitude towards developing relationships with diverse stakeholders (Liyanage 1996a, b). However, in regard to developing leader-member relations, it has been recognised that Asian managers often prefer to maintain a distance in their work relationships with their subordinates compared with their Western counterparts (Hofstede 1986). Yet even though Sri Lanka has been identified as a power distance society, the cultural values of trust, honesty, long-term relationships with others, paternalism, empathy and 316 compassion have allowed most managers to attract stakeholders’ attention, motivation and passion (Hewege 2011; Wickramasinghe, Hopper & Rathnasiri 2004). In line with this, Sri Lankan subordinates often perceive managers that care for employees’ needs and show compassion as charismatic leaders (Jayakody 2008).

As a collective society that appreciates strong and long-term relationships, Sri Lankan managers are often recognised for their strong networking skills, collaboration, sharing, appreciating and respecting others – deemed as essential leadership behaviours that strengthen stakeholder relationships (Hewege 2011; Hewege et al. 2008; Ranugge 2000; Wijewardena 1992; Wijewardena & Wimalasiri 1996). Sri Lankans are also well-known for their hospitality, including caring for employees, and for prioritising customer satisfaction as a strategic goal – customer feedback surveys are often identified as a popular survey method to engage customer’s ideas into management decision-making (Hewege 2011; Hewege et al. 2008).

Sri Lankan managers are also generally positive about arranging staff functions, award ceremonies, press conferences and annual staff trips, with the aim of developing strong stakeholder relationships (Hewege 2011). Such opportunities are perceived as enabling Sri Lankan managers to demonstrate their empathy, compassion, appreciation and caring for others. In particular, strong public relationship skills often enable Sri Lankan managers to build vertical and horizontal integration with other stakeholders in the supply chain (Perry 2013). It has been acknowledged that such positive attitudes towards stakeholder engagement and networking have consistently created new opportunities for supply chain partnerships in the Sri Lankan organisational context (Perry 2013).

A colonial education system that has promoted Western cultural values and attitudes such as teamwork, loyalty to superiors, and incorporating performance appraisals as a method of career advancement have possibly influenced Sri Lankan managers’ positive attitudes towards developing strong networks with diverse stakeholders. Such Western management practices in combination with the Sri Lankan collectivistic culture have resulted in modernised attitudes of Sri Lankan managers towards sustainability. For example, Wickramasinghe and De Zoyza (2009) found that

317 contemporary Sri Lankan managers perceive leadership skills such as teamwork, negotiation and collaboration as important for their management career advancement.

Therefore, it can be confirmed that unique Sri Lankan cultural values that value collectivism and trust in stakeholder relations seem to have positively influenced Sri Lankan managers to become stakeholder-oriented in decision-making, to achieve excellent leadership in their organisations.

The significant results in this study regarding the relationship between stakeholder relationships and concern for social and environmental sustainability confirm that Sri Lankan managers perceive that being stakeholder-oriented in decision-making enhances their concern for environmental and social sustainability. That is, strong team management and public relation management skills enable Sri Lankan managers to ensure environmental and social sustainability. These results are also consistent with those of Avery and Bergsteiner (2011b); Caldwell, Hayes and Long (2010b); Cavaco and Crifo (2014); Hargett and Williams (2009); Hind, Wilson and Lenssen (2009); Jaworski (1996); Parkin (2010); Salem (2012), and Van de Loo (2006) whose research suggested that managers’ positive attitudes towards stakeholder relationships improve social and environmental sustainability.

The literature indicates that developing countries are more exposed to environmental pollution issues such as depletion of the ozone layer, global warming, climate change, deforestation and urbanisation (Dasgupta 2010; Dasgupta et al. 2005; National Council for Sustainable Development 2009; United Nations 2005b). In line with this, Fernando and Almeida (2012) confirmed that Sri Lankan managers also believe they can ensure environmental sustainability through collaboration, networking, public relationships and teamwork with diverse groups of stakeholder in their society. It has been recognised that the Sri Lankan corporate sector prefers CSR projects and volunteering activities as sustainability strategies that enhance environmental sustainability (Fernando & Almeida 2012). Recent natural disasters such as the tsunami in 2004 (Fernando & Almeida 2012) and flooding in the Central Province (Churchill & Hutchinson 1984) reflect such CSR projects linking the community, public sector and the corporate sector.

318

Furthermore, according to traditional Sri Lankan values and Buddhist values, the environment is treated as a precious and sacred gift (Kariyawasam 1996). This deep- seated belief also seems to have influenced most Sri Lankan managers to value collective efforts to ensure environment sustainability. For example, the Buddhist ritual of worshipping the Bodhi Tree is common in Sri Lanka, and these prayers and rituals are believed to influence Sri Lankans to consider nature as a precious gift (Kariyawasam 1996). Such cultural experiences might have influenced Sri Lankan managers in this study to consider that better networking skills and stakeholder collaboration will enhance social and environmental sustainability in Sri Lanka.

The significant but weak results ( i.e. the path was only significant at 95% level) of this study regarding the relationship between stakeholder relationships and the firm’s financial performance confirm that Sri Lankan managers believe that being stakeholder-oriented improves their firm’s future prosperity. Cultural values that support better networking with suppliers, customers, employees and other stakeholders are therefore commonly deemed as ways to enhance a firm’s future prosperity (Davis et al. 2014).

Although the significance of results in this study for the path between stakeholder relations and financial performance were weak, it added to the relevance of the studies of Post, Preston and Sachs (2002) and Murphy (2002) in the Sri Lankan organisational context. These scholars suggested that maintaining strong stakeholder relationships would improve the firm’s productivity and financial performance. In line with this, a weak national economy, rising costs of manufacturing, an exports-driven economy that demands cheap manufacturing costs, the impact of international financial crises, and shrinking of the world’s consumption (Central Bank of Sri Lanka 2013a, b) seem to have influenced Sri Lankan managers to be concerned about collaborating with diverse parties as a means of strengthening firms’ financial performances.

The significant results between stakeholder relationship and firm’s financial performance might also be due to the reliance on exports and the international market trend for ethical and environmentally sustainable production within the Sri Lankan organisational context. For example, Sri Lankan manufacturers are keen to implement Japanese style manufacturing methods that encourage teamwork and collaboration

319 with diverse stakeholders as a strategy to improve their firm’s productivity, efficiency and financial returns (Hewege 2011). The positive relationship between stakeholder relationships as a means of enhancing financial performance confirms the ideas proposed by Hillman and Keim (2001) and Cavaco and Crifo (2014) as relevant to the Sri Lankan context, who argued that organisations that prioritise stakeholder relationships are enhancing their firm’s financial performance. In line with this, knowledge of sustainable accounting disclosures relating to environmentally sustainable production methods are popular among Sri Lankan managers for measuring the financial gains of Sri Lankan firms (AsiaPulse News 2009). Their suggested preference for stakeholder wealth maximisation rather than shareholder wealth maximisation may also induce Sri Lankan managers to believe in stakeholder orientation as enhancing future financial benefits of the firm (Fernando & Almeida 2012).

Therefore, the analysis results explained in Chapter 9, Section 9.10.1 clarify that compared with the other two independent variables (i.e. long-term orientation and employee engagement), managers’ preference for stakeholder relationships is the most important leadership excellence dimension in Sri Lankan organisations.

The insignificant results discussed in Chapter 9, Section 9.9 for the relationship between stakeholder relationships and organisational change leadership confirm that Sri Lankan managers do not perceive stakeholder relationships as having a positive impact on their leadership abilities of organisational change. This finding contradicts Crawford and Nahmias (2010) and Euchner and Ganguly (2014) who previously suggested that stakeholder relationships are essential for successful organisational transformation. This study believes that the high influential power of Sri Lankan labour unions, the inefficient public administration system, political corruption (Wickramasinghe, Hopper & Rathnasiri 2004), as well as inequality in the distribution of power and authority between the social classes and among work groups (Chandrakumara & Sparrow 2004) have influenced Sri Lankan managers to pay little attention to engaging stakeholders in their organisational change decisions. In addition, social mistrust due to ethnic conflicts (Somasundaram & Sivayokan 2013), the power distance between castes and the influence of imperialism (Moore 1993; Wijewardena & Wimalasiri 1996) have probably also impacted on Sri Lankan

320 managers’ confidence in partnering with stakeholders to enhance organisational change decisions. Similarly, the preference for autocratic decision-making, especially during organisational changes that clearly reflects disparity in the distribution of power between managers and subordinates (Hewege 2011; Jayawardana, O'Donnell & Jayakody 2013), seems to have also influenced Sri Lankan managers to underestimate the role of stakeholder engagement in organisational change.

Chapter 9, Section 9.9 explains that the relationship between stakeholder relationship and sustainable thinking was only significant at the 95% level (see Table 9.27). However, the weak but significant results of this study confirmed that Sri Lankan managers perceive relations with stakeholders as important for ethical and responsible leadership. This finding helps to apply the ideas of Polansky (1995) and Thompson (2011) to the Sri Lankan organisational context, as they have highlighted that maintaining better stakeholder relationships enables managers to act ethically and responsibly. Similarly, it has also been suggested in the sustainability leadership literature that when managers show compassion and caring for their stakeholders, they link stakeholder interests with their CSR strategies (Avery & Bergsteiner 2011a). Sri Lankan cultural values such as paternalism, collectivism, seniority and religious beliefs relating to trusting others, being honest, caring and sharing (Nanayakkara 1998) have also probably influenced Sri Lankan managers to perceive strong relations with diverse stakeholders as contributing to ethical and responsible actions.

In addition, the end of the 30-year war and the growing political will to promote ethnic harmony have no doubt forced the Sri Lankan corporate sector to engage with diverse stakeholder groups to build social harmony (United Nations Development Programme 2014c). These national attitudes to peace and harmony seem to have motivated Sri Lanka’s corporate leaders to develop new relationships and networking that respect ethical and responsible behaviours, among others.

321

10.3.2 Long-term-oriented decision-making The second leadership excellence dimension in this study is the manager’s long-term- oriented decision-making. The literature has highlighted long-term-oriented decision- making as an essential leadership aspect that ensures sustainability leadership (Fullan 2003; Avery & Bergsteiner 2011b; McKinsey 2010). Sri Lankan culture is traditionally characterised as a long-term-oriented culture (Jayewardene 2000). Managers in femininity-oriented cultures like Sri Lanka prefer to perceive long-term orientation through relationship-building, and caring and sharing with others (Liyanage 1996a).

As was noted in chapters 5 and 7, the literature on long-term orientation is mostly qualitative. Thus, a new construct was developed in this study to explore diverse managerial perceptions of long-term orientation. It was therefore assumed in this study that managerial perceptions of long-term orientation influence managers to become sustainability leaders.

This study’s CFA results indicated that long-term orientation can be measured in terms of three leadership behaviours: 1) being logical in solving problems; 2) being objective when dealing with work conflicts; and 3) being prepared to compromise on important work issues. These three statements suggest that effective and logical problem-solving skills, conflict resolution skills and work management skills are important for managers to make long-term-oriented decisions. Yet even though in-depth analysis of problems that demand managers’ time has been identified as essential for long-term decision-making, promptness in strategic decision-making is also considered more relevant for success in complex and diverse markets (De Bruijn & Ten Heuvelhof 2010).

The insignificant relationship in this study between long-term orientation and excellent leadership reveals that being objective in conflict resolutions, ready to compromise on important work issues, and being able to thoroughly understand complex problems does not necessarily help managers to become excellent leaders in Sri Lankan organisations.

Employees from paternalistic cultures such as Sri Lanka expect their managers to listen to their grievances and offer them personalised attention (Hewege 2011; Hewege et al. 2008). As a result, most Sri Lankan employees choose to seek advice about personal 322 and career problems from their supervisors who often display paternalistic and long- term-oriented leadership behaviours (Hewege 2011; Hewege et al. 2008). Although face-to-face communication methods can take up managers’ time, most Sri Lankan managers prefer face-to-face meetings, as they believe it will enable them to make an unbiased decision that satisfies all parties (Yapa 2012). These Sri Lankan cultural values seem to have influenced respondents of this study to perceive being prepared to compromise on important work issues as an important dimension in their managerial tasks.

Sri Lanka is a multicultural and multiethnic nation that faces a range of sustainability issues such as unequal income distribution, urbanisation and gender inequality (Central Bank of Sri Lanka 2013a; United Nations Development Programme 2013). Gender and race discrimination and labour disputes are also common in Sri Lankan organisations (Sharif 2011). As a result, conflict resolution often makes heavy demands on the time and resources of Sri Lankan managers, while they perceive this as a great opportunity to further strengthen their relationships with subordinates (Hewege 2011). As a result of the diversity and complexity of Sri Lankan society, many Sri Lankan managers spend a great deal of their time on conflict resolution (Wickramasinghe, Hopper & Rathnasiri 2004).

The insignificant results in this study between long-term orientation and the three sub- dimensions of sustainability leadership therefore challenge the common perception that a long-term-oriented vision is important for achieving sustainability, especially in developing countries. Based on this study’s results, it is put forward that managers in an economically less-developed market such as in Sri Lanka prefer to make prompt decisions that are most short-term-oriented compared with long-term orientation in decision-making. This better aligns with the opinion of Kantabutra and Avery (2012), who emphasised the importance of both short-term and long-term orientation in developing countries.

The insignificant results in this study confirm the suggestions of most sustainability leadership scholars about the lower importance of long-term-oriented decision-making in economies of less-developed countries. This change in Sri Lankan managerial perceptions has probably taken place as the result of the prolonged ethnic conflict that

323 only ended recently, as well as economic crises and political turmoil. As a result of such uncertainty, Sri Lankans may have gotten used to making short-term rather than long-term-oriented decisions.

The results of this study have indicated an insignificant relationship between long-term orientation and socioenvironmental sustainability, which contradicts the ideas proposed by Avery and Bergsteiner (2011c); Doppelt (2012), and McKinsey Quarterly (2006), who proposed that the manager’s long-term-oriented vision has a positive impact on ensuring environmental and social sustainability. However, this could be because these studies were mostly based on organisations in developed markets with adequate infrastructure (e.g. time, money, technology, and developed administrative systems, rules and regulations) for management decision-making.

The insignificant results in this study regarding the relationship between long-term orientation and the firm’s financial performance confirm that Sri Lankan managers perceive long-term-oriented decision-making as not having an influence on their concern for the firm’s financial performance. That is, Sri Lankan managers of this study do not believe they can improve their organisation’s performance targets by being long-term-oriented in decision-making. Avery and Bergsteiner (2011c); Barney (1991); Fullan (2005), and Strategic Direction (2011) have all suggested that managers should have the right mix and balance of long-term and short-term orientation in business, especially in complex societies.

It has also been suggested that management decisions relating to production, financials and marketing, which often require deep analysis with much time and effort, may result in losing customers, investors, employees and other stakeholders, especially in developing economies that are more vulnerable to international financial markets (Bloom et al. 2010). The recognised lack of information technology development among Sri Lankan managers (Edirisinghe 2008; Yapa 2012) and the low usage of financial reporting, especially in the public sector (Wickramasinghe, Hopper & Rathnasiri 2004), have probably influenced the perceptions of Sri Lankan managers in believing that long-term orientation does not improve their firm’s financial performance. The above Sri Lankan values and experiences seem to be influencing Sri Lankan managers’ preferences for short-term over long-term orientation.

324

In this study, the only significant relationship of the long-term orientation construct with other variables in the model was its relationship with change leadership. However, this relationship is only significant at 95% significance level (see Chapter 9, Table 9.27). This indicates that Sri Lankan managers believe long-term orientation facilitates but has a weak influence on organisational change initiatives. The manager’s long-term orientation has often been considered an essential management attribute for transforming organisations (Levy & Merry 1986). This is because organisational change often requires managers to spend extensive amounts of time getting employees on board to ensure that changes are implemented as smoothly as possible (Crawford & Nahmias 2010).

Sri Lankans are generally thought to be hesitant towards risk-taking and innovation (Hewege 2011; Nanayakkara 1998). Lack of entrepreneurial experience, aversion to risk, dependence, and respect and obedience to seniors have been identified as a result of the social and welfare security benefits offered by the Sri Lankan Government (Gamage, Cameron & Woods 2003; Nanayakkara 1998). Such negative attitudes that impede change seem to have caused many Sri Lankan managers to spend a great deal of time and resources analysing and communicating the long-term benefits of organisational change to their diverse stakeholders including labour unions (Wickramasinghe, Hopper & Rathnasiri 2004). In addition, it has been recognised that most Sri Lankan managers prefer facilitating meetings with stakeholders to solve conflicts and communicate important decisions such as organisational changes (Hewege 2011; Rajapakse 2012; Wickramasinghe, Hopper & Rathnasiri 2004). Sri Lankan managers are also more vigilant about any possible employee issues that may arise due to ineffective and biased managerial decisions that mitigate against effective organisational transformation. Therefore, communicating the broader picture of long- term prosperity from organisational changes is perceived as important among the managerial respondents of this study.

The insignificant results in this study regarding the relationship between long-term orientation and sustainable thinking confirm that Sri Lankan managers do not believe a long-term vision will positively influence their perceptions of ethical and responsible leadership behaviours. This contradicts the view of scholars like Nevins, Bearden and Money (2007), who argued that long-term orientation significantly influences the

325 individual’s ethical values. However, it should be noted that empirical research on this relationship between the two dimensions is limited.

It would therefore appear that the contemporary Sri Lankan values and attitudes that favour prompt decision-making have influenced this study’s respondents to believe that spending more time and resources to analyse problems have no significant influence on their ethical and responsible decision-making.

10.3.3 Employee engagement The third dimension of leadership excellence is employee engagement which relates to the leadership activities that encourage staff to participate in decision-making. Fullan (2003); Hind, Wilson and Lenssen (2009), and Kets De Vries et al. ( 2010) all suggested that managers who encourage employee participation enable managers to become sustainability leaders. In this study, leadership perceptions about encouraging employee participation were hypothesised as having a positive impact on achieving sustainability leadership. Avery and Bergsteiner (2011c); Galpin and Whittington (2012); Gardner et al. (2005), and Shrivastava (1994a) emphasised that motivated, committed and loyal employees provide a competitive advantage to the organisation. Proactive employee relations have been deemed as a strength of an organisation (Avery & Bergsteiner 2011c; Galpin & Whittington 2012), while employee relations support the emergence of charismatic leadership (Hayibor et al. 2011; Jayakody 2008).

This study’s CFA results revealed the following five leadership behaviours as important for measuring the employee orientation dimension: 1) allowing subordinates authority and autonomy; 2) delegating; 3) making allowance for emotional pressure on staff at work; 4) supporting decisions made jointly by others; and 5) trusting those to whom work is delegated.

The hypotheses results tested at 95% significance level confirmed that Sri Lankan managers recognise that engaging with employees is an important leadership element that will enable them to consider themselves as excellent leaders in their organisations. However, the results of this same path were insignificant when tested at 99.9% significant level, confirming employee engagement only has a significant but weak influence on excellent leadership (see Chapter 9, Section 9.10.3).

326

Sri Lanka has been identified as having a feminist culture characterised by respect for authority and seniority (Liyanage 1996a, b; Ranugge 2000). In addition, the influence of managers’ paternalistic leadership attitudes, the preference for Japanese style management practices, the collectivistic values, and the common empathy, trust and personal responsibility in Sri Lankan culture (Hewege 2011; Yapa 2012) seem to have influenced the managers that participated in this study to perceive encouraging employee engagement as a way of strengthening their excellent leadership.

In contrast, lack of opportunities for employee participation in management decision- making may leverage increased trade union involvement in Sri Lankan organisations (Hewege 2011; Hewege et al. 2008; Wickramasinghe & Hopper 2005; Wickramasinghe, Hopper & Rathnasiri 2004). In general, a management decision that employees perceive as a threat to their future career can often result in disputes between management and trade unions (Hewege et al. 2008; Hewitt and Associates 2001). In addition, employee loyalty to the organisation and the close relations they prefer to maintain with their management staff (Hewege 2011; Hewege et al. 2008; Liyanage 1996b; Ranugge 2000) also seem to be influencing Sri Lankan managers to accept employee engagement as an important leadership aspect for excellent leadership.

The results of this study confirm an insignificant relationship between employee engagement and environmental and social sustainability (see Chapter 9, Section 9.10.3). Cultural values of paternalism, individualism, imperialism and preference for maintaining a power distance between subordinates (Nanayakkara 1993) have probably influenced Sri Lankan managers in this study to have a low preference for employee participation as a way of enhancing social and environmental sustainability. As a result, Sri Lankan managers probably do not conceive enabling authority, autonomy and delegation as a strategy for enhancing socioenvironmental sustainability.

The insignificant results in this study for the path between employee engagement and the firm’s financial performance confirm that Sri Lankan managers do not believe they can enhance the financial performance by encouraging employee engagement. These insignificant results comply with the perception of Wickramasinghe and De Zoyza

327

(2009) that low productivity and efficiency associated with most Sri Lankan organisations is due to management’s lack of concern for employee orientation. This might be a reason for the low competitiveness of most Sri Lankan organisations. In addition, the influential power of most trade unions in Sri Lanka probably underpins the low preference for employee orientation as a means of achieving improved organisational performance outcomes (Chandraprema 1989; Hettige 2000; Moore 1993; Wickramasinghe, Hopper & Rathnasiri 2004).

Despite these findings, Jackson et al. (2012) firmly believed that an organisation can improve its profits, competitiveness and the environmental quality of its products when its managers link sustainability efforts with HR strategies. For example, Cavaco and Crifo (2014) explained that a firm’s financial performance generally improves when managers prioritise employee participation, career development and training, and the quality of working conditions. In addition, Carmeli and Tischler (2004); Fulmer, Gerhart and Scott (2003); Huselid (1995); Huselid and Becker (1996); Ichinowski (1990); Jackson et al. (2012); Lam and White (1998); Levine (1995); OECD (2001b), and Pfeffer (1994) have all argued that the organisational performance can be improved when managers prefer employee participation, empowerment, teamwork in production systems, incentive compensation, and employee training and development.

Subordinates in Sri Lankan organisations often respect and obey their seniors (Wickramasinghe, Hopper & Rathnasiri 2004). In addition, many employees are wary of confronting or disobeying their leaders, believing it could affect their performance evaluations which are mostly conducted by their immediate manager (Wickramasinghe, Hopper & Rathnasiri 2004). As a result, most Sri Lankan employees respect, accept orders and maintain non-confrontational relations with their managers in the hierarchy (Wickramasinghe, Hopper & Rathnasiri 2004). A positive outcome of this is that with most Sri Lankan employees striving to maintain close relations with their managers, as a means of ensuring career progression, they may try to avoid challenges and confrontations by exposing weaknesses in the organisation’s operation systems that could possibly improve the firm’s financial performance.

In contrast, Sri Lankan managers generally prefer to maintain close relations with their peers and senior management rather than with their subordinates (Nanayakkara &

328

Ranasinghe 1984). In line with this, centralised decision-making is still common in Sri Lankan organisations (Edirisinghe 2008; Wickramasinghe, Hopper & Rathnasiri 2004). As an example, strategic-level decisions such as performance targets are decided at the corporate and senior management level, and passed to the lower levels for implementation (Edirisinghe 2008). Such cultural values and behaviours seem to have resulted in Sri Lankan managers perceiving employee engagement as insignificant in relation to maximising organisational performance outcomes.

It can therefore be concluded that managerial perceptions of employee engagement have a positive and direct influence on excellent leadership, but not on managers’ concerns about environmental, social and financial sustainability.

10.3.4 Change leadership The second and third research questions examined the mediating influence of the two mediators identified in this study (change leadership and sustainable thinking) on the relationships between the three independent variables (stakeholder relationships, long- term orientation and employee engagement) and the three dependent variables (excellent leadership, social and environmental sustainability, and financial performance of the firm).

The literature suggests that organisational change is an essential aspect to achieve organisational sustainability (Avery 2005; Avery & Bergsteiner 2010; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003). Traditional management practices in general have been identified as inefficient and incompetent, and as limiting organisations from achieving long-term competitiveness (Avery & Bergsteiner 2010). Dunphy, Griffiths and Benn (2003) believed that managers that prefer organisational change motivate their staff to become more innovative; thus, organisational change enables the firm’s competitiveness and maximises shareholders’ wealth. In Sri Lanka, changes in international management practices, rising oil prices and living costs, a shrinking demand for the country’s exports, a reliance on imports, and the lag in its economic development (Central Bank of Sri Lanka 2013a) are influencing Sri Lankan managers to take on international practices that will enable them to stay competitive.

This study’s CFA results have confirmed that the leader’s commitment to organisational change can be measured through four change-oriented leadership 329 behaviours: 1) fostering an international perspective in the organisation; 2) having a multicultural orientation and approach; 3) having formal management training; and 4) looking for and using the positive aspects of other cultures.

The insignificant results of this study regarding the relationship between change leadership and excellent leadership confirmed that change activities have no positive impact on excellent leadership in Sri Lankan organisations (see Table 9.27). That is, Sri Lankan managers that participated in this study do not believe that being committed to organisational change activities will help them to become excellent leaders in their organisations.

At the international level, change orientation requires managers to change workforce attitudes and values to win the trust and commitment of employees (Armenakis, Harris & Mossholder 1993; Levy & Merry 1986). In contrast, most Sri Lankan managers have negative attitudes towards trade unions (Wickramasinghe, Hopper & Rathnasiri 2004) – a possible factor influencing managers to perceive organisational change as unimportant for succeeding in the Sri Lankan organisational context. Lack of innovation skills, entrepreneurial attitudes, being less open to accepting risk, traditionally being dependent, lack of confidence, accepting the status quo, respecting authority and being reluctant to accept responsibility (Gamage, Cameron & Woods 2003; Hewege 2011; Nanayakkara 1998) would appear to be influencing Sri Lankan managers’ perceptions of not needing change leadership to become excellent leaders in their organisations. Hence, Sri Lankan managers are often wary of transforming their organisations (Wickramasinghe, Hopper & Rathnasiri 2004). Yet some APEL studies conducted in other Asian cultural contexts (Selvarajah, Meyer & Davuth 2012; Selvarajah et al. 2013) have indicated that change leadership behaviours are an important aspect for achieving excellent leadership.

The significant results of this study confirm that change leadership positively influences social and environmental sustainability. This empirical result aligns with the perspectives of Dunphy and Benn (2013); Dunphy, Griffiths and Benn (2003, 2007); Metclaf and Benn (2013), and Senge (2008) that have suggested that change- related leadership attitudes are essential to sustain environmental and social harmony. Therefore, the findings of this study confirm that Sri Lankan managers perceive

330 organisational-change-related activities such as adapting to multiculturalism, keeping up with international market trends and undertaking formal management training to improve management competencies as essential for achieving social and environmental sustainability. For example, Perry (2013) highlighted how the Sri Lankan garment industry has changed its supply chain partnerships to face the international competition in garment manufacturing with socially responsible production methods. Most other Sri Lankan manufacturers have transformed from traditional management practices to international manufacturing standards, such as Japanese management techniques which have resulted in greater environmental efficiency and welfare benefits (Hewege 2011; Yapa 2012).

Due to the common employee resistance to change, most Sri Lankan managers choose to also use international HR practices in implementing change (Hewege et al. 2008; Rajapakse 2012; Wickramasinghe, Hopper & Rathnasiri 2004). In line with this, Sri Lankan managers often prefer to use Japanese management practices both as a motivational tool and a management control technique to promote employee participation (Hewege 2011). Such change-related leadership experiences and perceptions have possibly influenced Sri Lankan managerial perceptions that change leadership is an ideal means of enhancing social and environmental sustainability in the organisation.

The insignificant result in this study, regarding the relationship between change leadership and financial performance, contradict with the suggestion made by Ferguson and Reio (2010) that management’s efforts at organisational change via new management practices, and learning and development opportunities positively influence the firm’s performance. That is, Sri Lankan managers’ attitudes towards organisational change seem to have no influence on organisational financial outcomes. Such managerial adaptations and experiences seem to have no influence on the common Sri Lankan managerial perception that organisational change can maximise an organisation’s financial outcomes.

10.3.5 Sustainable thinking The literature explained in chapters 5 and 7 indicate that the manager’s honesty, trustworthiness and responsible attitudes facilitate sustainability leadership (Doppelt

331

2012; Dunphy & Benn 2013; Fullan 2005). This study’s CFA results revealed that the leader’s sustainable thinking can be best measured via the following three leadership dimensions relating to ethical and responsible leadership: 1) accepting responsibility for mistakes; 2) choosing management ethics before self or the organisation; and 3) coping with the pressures of work.

The insignificant results in this study for sustainable thinking and excellent leadership confirm that ethical and responsible leadership behaviours have no positive impact on managerial perceptions of excellent leadership in Sri Lankan organisations. This goes against the findings of Hewege (2011); Hewege et al. (2008); Wickramasinghe, Hopper and Rathnasiri (2004), and Wijewardena and Wimalasiri (1996), who claimed that ethical and responsible leadership is essential for leadership success in Sri Lankan organisations. Based on this study’s findings, Sri Lankan managers do not perceive that being trustworthy, honest, ethical and responsible in their leadership thinking is essential for excellent leadership in their organisations.

The significant result in this study regarding the relationship between sustainable thinking and social and environmental sustainability confirms that Sri Lankan managerial perceptions relating to ethical and responsible leadership positively influence their perceptions of social and environmental sustainability. However, the results are only significant at 95% level (see Table 9.27). This significant but weak result indicates that the Sri Lankan cultural and religious values that promote caring, sharing, obedience, non-confrontation, peace, respect for seniors and collectivism (Chandrakumara & Sparrow 2004; Chandraprema 1989; Hettige 2000; Hewege 2011; Hewege et al. 2008) have somehow influenced Sri Lankan managers to believe via their organisations they can further improve social harmony, safety, caring and self- discipline, which in turn help to protect their immediate environment and social sustainability.

It has previously been recognised that Sri Lankan employees in particular respect leaders with an exemplary character that conduct ethical practices even in their personal lives (Wijewardena & Wimalasiri 1996). Most Sri Lankan employees prefer to work with these type of ethical and responsible leaders (Hewege 2011; Hewege et al. 2008). Thus, Sri Lankan managers are often careful about any activity that could

332 damage both their personal and professional image (Wijewardena 1992; Wijewardena & Wimalasiri 1996). Such cultural values have no doubt influenced Sri Lankan managers to perceive sustainable thinking as an important leadership dimension for enabling social and environmental harmony. As a result, Sri Lankan managers fear breaching ethical standards that may bring harm to their personal image and which could prevent them from achieving paternalistic leadership relations with their subordinates (Wickramasinghe & Hopper 2005; Wijewardena & Wimalasiri 1996).

The complex organisational context of Sri Lanka based on its social development issues such as poverty, unemployment and human rights violations have created social mistrust among most of its people. Yet the end of Sri Lanka’s 30-year ethnic conflict has probably influenced managerial thinking towards promoting harmony, equitable opportunities, freedom of expression and social justice (United Nations Development Programme 2014c). It has been suggested that the young Sri Lankan generation believes traditional social values such as ethnocentrism, power distance between different levels in the hierarchy, and the male-dominant cultural values of Sri Lankan society are inappropriate and are barriers to social harmony (United Nations Development Programme 2014c).

The need for cultural transitions such as these also seem to have influenced Sri Lankan managers to perceive ethical, fair and responsible behaviours as an important element of management success. Hewege (2011) pointed out that Sri Lankan managers want their organisational cultures to promote loyalty, trust, care and mutual bonds among different employee groups. The young Sri Lankan generation has been identified as conveying positive attitudes towards ethnic harmony by discouraging class inequality, ethnic politics, and structural divisions around class and power relations (United Nations Development Programme 2014c). The agriculture-based Sri Lankan society in particular values environmental protection, as their lives are closely linked with the immediate environment (Hewege et al. 2008).

Both the traditional and Western education systems in Sri Lanka have promoted environmental protection (United Nations Educational Scientific and Cultural Organization 2014), and these values have probably influenced Sri Lankan managers to believe that protecting the environment and social sustainability can both be

333 achieved by enabling sustainable thinking within their organisations. For example, the popularity of CSR programs in Sri Lanka (AsiaPulse News 2009) affirms this managerial preference for ethical and responsible behaviours towards the environment to achieve sustainability. Cultural values and experiences such as these have no doubt influenced Sri Lankan managers to perceive that sustainable thinking with ethical and responsible behaviours is important for ensuring social and environmental sustainability.

The insignificant results in this study regarding the relationship between sustainable thinking and the firm’s financial performance confirm that Sri Lankan managers do not believe they can achieve greater organisational financial performance outcomes by making ethical and responsible decisions. Chapters 5 and 7 highlighted the sparseness of the literature to explain the relationship between ethical leadership and the firm’s financial performance (Trevino, Brown & Hartman 2003). In addition, the insignificant results of this study could not confirm the conceptual ideas of Avery and Bergsteiner (2011c) who argued that the manager’s preference for ethical and responsible actions will enable them to expand the firm’s financial performance targets. Even though CSR investments and sustainability reporting are popular among Sri Lankan organisations (AsiaPulse News 2009; Fernando & Almeida 2012; Munasinghe & Kumara 2013; Wijesinghe 2012), the results of this study could not confirm the hypothesised relationship between sustainable thinking and organisational financial performance.

The next section below extends the discussion of the two sub-dimensions that constitute sustainability leadership: 1) excellent leadership in a management sense; and 2) excellent leadership in a sustainability sense.

334

Excellent leadership in the Sri Lankan organisational context - a management perspective The first sub-dimension of the sustainability leadership construct of this study is excellent leadership in a management sense. The CFA results identified the following as seven important facets of the construct of excellent leadership in Sri Lankan organisations: 1) creating a sense of purpose and enthusiasm in the workplace; 2) giving recognition for good work; 3) having confidence in dealing with work and with people; 4) motivating employees; 5) organising work time effectively; 6) being honest; and 7) developing a strategic vision for the organisation. Among these seven leadership behaviours, organising work time effectively was identified as the most important leadership behaviour.

In recent times, the geopolitical instability and economic challenges prevailing in Sri Lanka have made daily lives of its people complex and unstable (Somasundaram & Sivayokan 2013). Sri Lankan economic challenges such as high production costs, financial instability and dependence on imports have placed many Sri Lankan organisations and their management in a more complex and competitive business environment (Central Bank of Sri Lanka 2013a). Such challenges have probably influenced Sri Lankan managers to perceive managing time and work effectively as an important dimension for success in Sri Lankan organisations. In this study, the least important leadership behaviour in relation to enabling excellent leadership was creating a sense of purpose and enthusiasm in the workplace. The section below explains the influence of each independent and mediating variable identified in this study on excellent leadership in a management sense.

The results of this study have confirmed a significant relationship between stakeholder relationships and excellent leadership in a management sense for Sri Lankan managers, suggesting the manager’s preference for engaging with diverse stakeholders positively impacts on their leadership success. The bootstrap mediation results confirmed there is no mediation influence from change leadership and sustainable thinking on the relationship between stakeholder relationships and excellent leadership (see tables 9.31 and 9.32). In addition, the relationship between change leadership and excellent leadership confirmed an insignificant influence, which indicates that Sri Lankan managers do not believe they can achieve excellent leadership by encouraging

335 organisational change activities. In contrast, the insignificant results regarding the relationship between sustainable thinking and excellent leadership confirm that ethical and responsible leadership behaviours have no positive impact on managerial perceptions of excellent leadership in Sri Lankan organisations. This suggests that Sri Lankan managers do not perceive that being trustworthy, honest, ethical and responsible in their leadership thinking, as well as change leadership, are essential for achieving excellent leadership in their organisations. These results indicate that excellent leadership, from a management perspective, can be achieved in Sri Lankan organisations by promoting stakeholder relationships.

The literature indicates that leadership that engages employees is a useful leadership aspect for management success in a complex and an uncertain environment (Northouse 2007). This study’s significant results regarding the relationship between employee engagement and excellent leadership in a management sense confirm a positive and direct influence between the two variables. Thus, these significant results confirm that transformational leadership behaviours such as listening to the employee’s voice, and creating awareness and acceptance by encouraging employees to look beyond their own self-interest for the good of the groups within the organisation (Bass 1990) are perceived as important for excellent leadership in the Sri Lankan organisational context. In addition, the mediation test results confirmed there was no mediation influence from change leadership and sustainable thinking on the relationship between employee engagement and excellent leadership. This suggests that leadership activities that encourage employee engagement, such as delegation of work, providing authority and autonomy to subordinates, listening to employee feedback, and support for collaborative decision-making, only directly influence managerial perceptions of excellent leadership in Sri Lankan organisations.

However, qualitative studies in other contexts have suggested that the manager’s positive attitudes towards change implementation and the leader’s sustainable thinking enhance the relationship between employee engagement and excellent leadership (Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2007; Salem 2012). The insignificant relationship in this study is probably due to Sri Lankans being less willing to accept change and their general lack of innovation skills. The power of most labour unions also probably influences Sri Lankan managers to perceive organisational

336 change as a personal management threat. That is, any unethical incident that affects the manager’s relationship with employees may impact on their future career success. Therefore, change implementation and maintaining a loyal and trustworthy managerial persona has become a challenge within the Sri Lankan organisational context.

This study’s insignificant results regarding the relationships between long-term orientation and excellent leadership in a management sense suggest that Sri Lankan managers perceive long-term-oriented decision-making as having no impact on achieving excellent leadership in a management sense. Sri Lankan managers probably believe that long-term-oriented decision-making requires more time for analysing the problem objectively, and could even mean they have to forgo other important managerial work. Based on this perception, Sri Lankan managers generally prefer spending as little time as possible on management decisions, which means most of them want to be able to make short-term-oriented and speedy decisions.

This study’s mediation test results revealed that long-term-oriented decision-making has neither a direct nor an indirect influence on excellent leadership in a management sense. These results again confirm Sri Lankan managers’ low preference for spending time on problem analysis. A lack of knowledge of modern management techniques and information technology (Yapa 2012), as well as the essentiality of making prompt responses to complex and unexpected events in a market like Sri Lanka are considered by managers as challenges for their leadership success. As examples of the complexity of Sri Lanka, the country’s lack of national financial independence, post-war reconstruction, economic vulnerability to changes in international markets, high cost of living, government debt, and corruption charges against public administrators and senior politicians (United Nations Development Programme 2014c) may have influenced the Sri Lankan manager’s preference for short-term rather than long-term orientation. These values and experiences have probably influenced Sri Lankan managers to perceive that spending too much time and resources on long-term-oriented decision-making does not guarantee perceptions of excellent leadership in the organisation.

Based on these findings, long-term-oriented leadership is defined as the least important dimension of sustainability leadership in Sri Lankan organisations.

337

Excellent leadership in the Sri Lankan organisational context - a sustainability perspective The second dimension of the dependent variable of sustainability leadership examines the excellent leadership concept defined in a sustainability sense. The sustainability leadership literature recognises an excellent leader as one that prefers to concern themselves with sustainability of the society, environment and economy.

The following subsections discuss the influence of each variable on excellent leadership in a sustainability sense.

10.5.1 Environmental and social sustainability This study’s CFA results revealed that environmental and social sustainability can be measured by using the following five leadership behaviours: 1) works as a volunteer in the community; 2) be environmentally responsible; 3) encourages recycling of items and materials in the departments; 4) identifies the impact of managerial actions on the natural environment; and 5) continuously learns how to protect the environment. Among these behaviours, identifies the impact of managerial actions on the natural environment was deemed the most important leadership behaviour, while works as a volunteer in the community was deemed least important.

This study’s significant results regarding the relationship between stakeholder orientation and social and environmental sustainability confirm that Sri Lankan managers perceive that strong public relationship management and team management skills will enable them to improve their leadership behaviours to ensure social and environmental sustainability. Sri Lanka is a nation that has experienced many civil conflicts in its history; terrorism, and ethnic and religious conflicts have attracted the world’s attention in more recent times (Central Bank of Sri Lanka 2013b). In particular, the civil conflict between the LTTE and the Sri Lankan Government lasted for more than 30 years. It has since been contended that non-acceptance of diversity, unbalanced economic development in the regions of the country, and ethnic discrimination provoked civil unrest, violence, hate, anger and human rights violations (Somasundaram & Sivayokan 2013).

338

Despite this recent violent history, common Sri Lankan cultural values of empathy, respect for diversity, sharing and caring, mutual respect, and trust now seem to have more of on an influence on Sri Lankan manager’s perceptions, as identified in this study. The end of the civil war in May 2009 created hope and appreciation of multiculturalism, ethnic peace and harmony among the diverse social groups of Sri Lanka (Somasundaram & Sivayokan 2013). In general, when social attitudes towards ethnic harmony and diversity are accepted and respected, strong human relations improve in society while trustworthiness and belongingness between diverse groups improves (Salem 2012). Therefore, Global Reporting Initiative (2013a) highlighted that being sensitive to diversity, equal opportunities and social responsibility could be construed as important leadership behaviours that are helping achieve social sustainability in Sri Lanka.

This study’s mediation test results confirmed that stakeholder relationship has no mediation effect via organisational change, which confirms that it only has a direct relationship between the two variables. However, there is a partial mediation influence from stakeholder relationships on social and environmental sustainability through sustainable thinking. The partial mediation indicates that Sri Lankan managers’ stakeholder orientation enhances their decisions for sustainable thinking, which in turn enables them to achieve environmental and social sustainability. The mediation results also reveal that Sri Lankan managers perceive stakeholder relationships as having a significant influence only on sustainable thinking rather than on change leadership as well.

This study’s insignificant results regarding the direct relationship between long-term orientation and social and environmental sustainability confirm that Sri Lankan managers perceive long-term orientation as having no significant effect on protecting the social and natural environment. The findings of this study therefore suggest managerial preference for short-term-oriented solutions that require less time and resources could possibly be beneficial in establishing social and environmental harmony in Sri Lanka. As an example of the relevance, Sri Lankan employees prefer quick solutions from their managers for their grievances (Wickramasinghe, Hopper & Rathnasiri 2004); thus, spending too much time or deep analysis on the problem would probably be perceived as threatening the social and environmental harmony.

339

This study’s insignificant results regarding the direct relationship between employee orientation and social and environmental sustainability confirm that Sri Lankan managers do not believe that being employee-oriented will positively impact on their perceptions of social and environmental sustainability. That is, Sri Lankan managers do not believe transformational leadership behaviours such as delegation, sharing authority and autonomy, and encouraging leader-member communication and employee decision-making have a direct influence on social and environmental sustainability. This is in contrast with research conducted in other contexts, especially in the West (Avery & Bergsteiner 2011b; Galpin & Whittington 2012; Hargett & Williams 2009; Morsing & Oswald 2009; Shrivastava 1994a), which has shown that managers that encourage employee participation are able to achieve environmental and social sustainability. Although others have contended that most contemporary managers lack the necessary HR skills to link employee orientation strategies with social and environmental sustainability (Jackson et al. 2012; Lacy, Arnott & Lowitt 2009), which raised the question in this study of whether Sri Lankan managers lack essential HR skills to promote social and environmental harmony. Future researchers could explore this aspect by using a qualitative research methodology.

This study’s bootstrap mediation results confirm that employee engagement and social and environmental sustainability are fully mediated through the two mediators of change leadership and sustainable thinking. Cultural diversity, ethnic conflict, dependence on export and import markets, risks associated with natural disasters, and financial and economic dependence on developed countries may have previously influenced Sri Lankan managers to believe that employee engagement is not enough to ensure environmental, social and economic sustainability. The cultural, political and economic transformation of Sri Lanka has instead influenced its managers to believe they can enhance environmental, social and economic sustainability by changing their organisational culture, as well as by encouraging sustainable thinking. Thus, the Sri Lankan cultural ethos that values respect, caring for others, humanity and the manager’s moral duty towards society (Hewege 2011; Hewege et al. 2008) seems to have motivated Sri Lanka’s managers to be employee-oriented in achieving environmental and social sustainability.

340

This study’s findings also confirm the relevance of the study of Van Seters and Field (1990) in the Sri Lankan organisational context, based on managers’ perceptions that change in the organisational culture enables employee empowerment. The multicultural organisational culture in Sri Lanka requires employee participation that encourages managers to enhance their attitudes towards social and environmental harmony. Hence, managers perceive that a transformation of employee attitudes and skills could be achieved via organisational change, and training and development.

In conclusion, these results have confirmed that Sri Lankan managers perceive that they can achieve environmental and social sustainability via engagement with stakeholders and employees, but not by being long-term-oriented.

10.5.2 Firm’s concern for financial sustainability The main leadership behaviours deemed relevant for measuring this dimension were: 1) achieving financial targets; 2) focusing on maximising productivity; and 3) ensuring maximum returns to investors. The most important leadership behaviour in this construct was focusing on maximising productivity; the least important was achieving financial targets. Anti-capitalistic ideas and disinclination to pursue profit maximisation have been recognised as highly prevalent in Sri Lanka, especially among modern and young Sri Lankans (Chandraprema 1989; Hettige 2000; Wickramasinghe, Hopper & Rathnasiri 2004). These cultural values seem to have influenced managers to perceive achieving financial targets as less important in relation to leadership.

This study’s significant results regarding the relationship between stakeholder relationships and the firm’s financial performance confirm that Sri Lankan managers believe that stakeholder relationships improve their firm’s future prosperity. Bootstrap mediation test results confirmed that the two mediators have no significant influence on the relationship between the stakeholder relationships and the firm’s financial performance. Hence, Sri Lankan managers believe that stakeholder relationships enable them to enhance their firm’s financial performance; however, they also perceive that neither organisational change nor the leader’s ethical and responsible attitudes will further enhance their perceptions of the firm’s financial sustainability.

This study’s bootstrap mediation results also confirm that the relationship between employee engagement and financial performance is not mediated through 341 organisational change and sustainable thinking. That is, Sri Lankan managers do not believe they can maximise organisational financial performance targets by engaging employees via the encouragement of organisational change and demonstration of sustainable thinking. Therefore, these results indicate that employee engagement only has a direct impact on the firm’s financial performance.

Chapter summary This chapter has discussed this study’s data analysis results with reference to the relevant literature. Detailed explanations were given for each construct in the conceptual framework supported by the literature explained in chapters 2 to 7. Next, the two main dimensions explaining sustainability leadership were explained based on the results obtained for the structural model.

In conclusion, the results have confirmed that the three leadership excellence dimensions of managers’ stakeholder relationships, employee engagement and long- term orientation can be used to identify managerial perceptions of sustainability leadership. However, among these three leadership excellence dimensions, stakeholder relationship has a greater effect on the managerial perceptions of sustainability leadership in the Sri Lankan organisations than the other two leadership excellence dimensions of employee engagement and long-term orientation. Sri Lankan cultural values of collectivism, paternalism, colonial influence and feudalistic cultural values seem to have influenced Sri Lankan managerial perceptions that stakeholder relations is an important leadership aspect to achieve sustainability leadership. Based on this study’s final model, Sri Lankan managers believe that long-term orientation is the least important leadership excellence dimension influencing sustainability leadership. Complexity and risky market conditions as in Sri Lanka, and the resistance to change attitudes, have probably influenced Sri Lankan managerial preferences to make short-term-oriented, prompt decisions.

The proposed mediators of organisational change leadership and their sustainable thinking fully mediated the two relationships between employee engagement and concern for social and environmental sustainability. Reasons such as a high dependence on international economic performances and the end of the ethnic war have demanded a focus on ethic and social harmony to rebuild the nation, which seem

342 to have influenced Sri Lankan managerial perceptions towards demonstrating ethical and responsible thinking, and to prioritise organisational changes to comply with external environmental changes.

The final chapter below presents the conclusions, limitations and recommendations of this study.

343

CHAPTER 11. CONCLUSIONS, LIMITATIONS AND RECOMMENDATIONS

Introduction This final chapter summarises the findings of this study while elaborating on their practical and theoretical implications. Based on the results obtained through the structural model, conclusions are drawn on the most important leadership dimensions that positively influence managerial perceptions of sustainability leadership in Sri Lanka. The limitations of the research and directions for future research are also explained. The findings of the study are then related to the leadership theories and models explained in Part I. Finally, recommendations for future researchers are made based on this study’s findings explained in the previous chapters.

Figure 11.1 below presents the section flow of this chapter.

344

Figure 11.1 Composition of Chapter 11

11.1 Introduction

11.2 Review of the research questions

11.3 Contribution to theory and Chapter 11: practice

Conclusions, 11.4 Limitations of the study limitations and recommendations 11.5 Future research directions

11.6 Recommendations

11.7 Chapter summary

In summarising the findings, the research questions and outcomes of this study are first addressed.

Review of the research questions Here the three research questions that support the study are revisited, and their importance with regard to the outcomes are discussed.

RQ1: What are the leadership excellence dimensions that influence sustainability leadership in the Sri Lankan organisational context?

Based on the first research question, the conceptual framework of this study was developed and identified three leadership excellence dimensions that influence managerial perceptions of sustainability leadership. The final results confirmed that of the three leadership excellence dimensions, managerial perceptions towards 345 stakeholder relationships have the greatest influence on perceptions of sustainability leadership. This finding is in line with the findings of Avery and Bergsteiner (2011c); Murphy (2002); Post, Preston and Sachs (2002), and Yukl (2012) who explained the essentiality of managerial preferences for developing strong networks and teamwork to become sustainability leaders of organisations. The mediation test results have confirmed that managerial perceptions of stakeholder relationships do not exert mediation influence on perceptions of excellent leadership in a management sense and concern for firm’s financial performance. However, the mediation test results have confirmed stakeholder relations partially mediated via the leader’s sustainable thinking on manager’s concern for environmental and social sustainability. The direct and positive impact of stakeholder relationships on excellent leadership supports the research of Follet (1918); Freeman (1984), and Freeman and Evan (1990) in the Sri Lankan organisational context, where they emphasised the importance of stakeholder engagement for management success.

This study’s results have indicated that Sri Lankan managers think they can improve their firm’s financial performance outcomes via increased engagement with diverse stakeholders through networking and collaboration. Sri Lankans have often been identified as collectivistic and comfortable with making collective decisions (Hewege et al. 2008; Liyanage 1996a, b). Successful outcomes that have been experienced and shared by some industries such as the Sri Lankan garment sector seem to have encouraged other Sri Lankan managers to opt for networking and stakeholder management to improve their firm’s financial performance. As an example of the international context, networking strategies such as outsourcing, strategic alliances, joint ventures, and mergers and acquisitions have helped Danish business organisations to outperform other international competitors by developing strong networked relationships with supply chain partners (Danish Ministry of Business and Industry 1996). Similarly, clustering and networking partnerships within the supply chain are also a popular and successful strategy within Sri Lankan organisations, (Perry 2013). Therefore, Sri Lankan social and cultural values that promote the building of strong, trustworthy and mutual relations with diverse stakeholders have an influence on Sri Lankan managers in developing strategic alliance partnerships and other networking relationships.

346

This study’s results also affirmed that managerial perceptions of stakeholder relations positively influence ethical and responsible managerial behaviour in Sri Lanka, only at a less strict (95%) significance level. This finding highlights the applicability of the concepts of Roome (1994) and Frankel (1998) in the Sri Lankan organisational context. These scholars asserted that when managers show strong concern for stakeholders, their competency with holistic vision, and their ability to communicate a single disciplinary meaning to the whole world is enhanced and contributes to the long-term survival of their business. Hence, it can be concluded that Sri Lankan managers’ stakeholder relationships has increased their sustainable thinking and influenced them to act ethically and responsibly. In line with this, the collectivistic attitudes of Sri Lankan culture (Hewege et al. 2008; Liyanage 1996b), as well as paternalistic attitudes (Kamalika 2008; Nanayakkara 1992) and power distance (Liyanage 1996a, b) have influenced Sri Lankan managers to develop strong relationships with diverse stakeholders, often resulting in ethical and responsible behaviour towards the public, the environment and society.

While Crawford and Nahmias (2010) proposed that management’s stakeholder relationships helps to achieve successful organisational transformation, the findings of this study indicate that Sri Lankan managers’ perceptions of stakeholder orientation do not support this concept. This could be due to Sri Lankans’ preference for power distance and respect for authority and power in their personal and working relationships (Hettige 2000; Hewege 2011; Hewege et al. 2008; Wickramasinghe & Hopper 2005; Wickramasinghe, Hopper & Rathnasiri 2004). Such cultural values seem to have influenced Sri Lankan managers to perceive stakeholder relationships as insignificant for successful change implementation. However, managers’ ignorance on the importance of stakeholder relationships is one of the main reasons for common disputes between Sri Lankan managers and labour unions (Wickramasinghe, Hopper & Rathnasiri 2004). Sri Lankan managers’ negative attitudes towards stakeholder relationships, especially with regard to labour unions (Wickramasinghe, Hopper & Rathnasiri 2004), can often create a managerial challenge that impedes the change leadership skills of these Sri Lankan managers. The high political and influential power of most of the Sri Lankan trade unions and public administrative and other industrial unions also seem to have influenced Sri Lankan managers’ perceptions of

347 strong communication skills and team working skills as essential management skills for sustainable leadership in the organisational context.

This study’s results confirm that Sri Lankan managers give limited support to long- term orientation as a means of achieving sustainability leadership in their organisations. This study found that managerial perceptions of long-term orientation was the least important leadership dimension in predicting Sri Lankan managerial perceptions of sustainable leadership. However, the literature indicated that Sri Lankan society generally prefers long-term orientation in decision-making, as reflected in paternalistic and feminist managerial attitudes such as caring for each other, compassion, empathy and dealing with workers’ grievances (Hettige 2000; Jayewardene 2000; Wickramasinghe & Hopper 2005; Wickramasinghe, Hopper & Rathnasiri 2004). The insignificant results in this study could not confirm the positive influence of these cultural and social values on Sri Lankan managerial perceptions of sustainability leadership.

Therefore, the insignificance of long-term-oriented decision-making on perceptions of sustainability leadership raises the question of whether long-term orientation has become a secondary leadership skill among Sri Lankan managers in more recent times. Most literature on Sri Lankan management has highlighted the importance of long- term orientation as a main leadership dimension of managerial success; thus, the low preference for long-term orientation identified in this study might be a result of the increasing complexity of the Sri Lankan organisational context. During the past few decades, Sri Lanka has had to face many political and cultural changes, which have caused volatility and risk in the business sector; thus urging most managers to maintain a mix of short- and long-term orientation in their decision-making.

This study’s results confirm that managers’ long-term orientation only influences their perceptions of change leadership. This suggests that Sri Lankan managers believe that long-term orientation in their decision-making will positively influence their decisions that encourage organisational change. The literature points to the need for effective organisational transformation managers to have conflict resolution skills, ability to win the trust of others and strong communication skills (Dunphy, Griffiths & Benn 2007). Sri Lankan cultural values that prioritise strong mutual relationships, trustworthiness,

348 honesty, compassion, obedience and care for others have probably influenced Sri Lankan managers to perceive themselves as responsible stakeholders for solving crucial employee matters, showing empathy towards employees, and being ready to sacrifice their time. That is, Sri Lankan managers believe that prioritising employee conflict resolution, and showing an ability to prioritise management tasks and to offer unbiased decisions enable them to transform their organisation to overcome international and local market challenges. This study therefore concludes that leadership behaviours relating to conflict resolution, time management, prioritisation of tasks, effective communication, and focus on task and dedication are important for organisational transformation.

It has also been indicated in this study’s results that the manager’s concern for employee engagement influences the perceptions of excellent leadership in a management sense as well as excellent leadership in a sustainability sense. This confirms that Sri Lankan cultural values that accept power distance (Liyanage 1996b) and patriarchy and paternalism (Kamalika 2008; Nanayakkara 1992) influence Sri Lankan managerial perceptions of giving opportunities to employees to engage in decision-making, collaborating with employees, and developing strong leader-member relations. These findings have backed up the study of Wijewardena and Wimalasiri (1996), which indicated that strong mutual bonds with employees is an essential aspect of successful leadership performance in Sri Lankan organisations. This suggests that Sri Lankan managers should demonstrate affection, caring and other paternalistic behaviours to achieve excellent management success in the Sri Lankan organisational context (Hewege 2011). Thus, it can be concluded that pre-colonial cultural values such as collectivistic decision-making, paternalism, caring, sharing, helping others in need, compassion and empathy (Hewege et al. 2008) are still an essential feature of contemporary leadership behaviours in examining the perceptions of Sri Lankan managerial excellence.

This study’s significant total effects (see Chapter 9, Section 9.12, Table 9.33) regarding the relationships between managerial perceptions of employee engagement and concern for environmental, social and financial sustainability suggest that Sri Lankan managers believe they can maximise organisational sustainability by encouraging employee participation. This is in line with the arguments of Friedman

349

(2006); Hawken, Lovins and Lovins (1999), and Senge (1999) that transactional leadership encouraging employee participation enhances organisational sustainability. Sri Lankan cultural values involving acceptance of superiors’ decisions, senior managers considering themselves as responsible stakeholders in achieving firm’s performance outcomes, centralised decision-making, and dependency attitudes of subordinates such as seeking affection and submitting their grievances to the managers have caused many Sri Lankan managers to maintain a close relationship with their employees (Hewege 2011; Hewege et al. 2008). In addition, the attitudes of respect for seniors and respect for the hierarchy mean that most Sri Lankan managers prefer to delegate certain tasks to their employees. This is reflected in this study’s results that Sri Lankan managers believe that delegating power, authority, collective decision- making, and heeding employees’ views have a positive impact on managerial perceptions of social, environmental and financial sustainability.

The mediation results of this study confirm change leadership and sustainable thinking fully mediate the relationship between employee engagement and concern for social and environmental sustainability. These findings suggest that managers’ change leadership skills and sustainable thinking are important leadership aspects that ensure social and environmental sustainability. However, lack of confidence, new innovation, risk acceptance and winning the trust of subordinates are common managerial challenges in organisations in Sri Lanka.

In conclusion, this study’s analysis results suggest that long-term orientation is the least important leadership dimension in achieving sustainability leadership in Sri Lankan organisations, while stakeholder relationship is the most important leadership dimension. Employee engagement has also been perceived as an important aspect in the achievement of sustainability leadership. This is because many Sri Lankan managers believe that employee engagement is important when implementing organisational changes and enhances their sustainable thinking.

350

RQ2: How does the leader’s commitment to change (CHNG) mediate the relationship between the three leadership excellence dimensions of STK, LONG and EMP, and sustainability leadership? and RQ3: How does the leader’s sustainable thinking (SUSTHINK) mediate the relationship between the three leadership excellence dimensions of STK, LONG and EMP, and sustainability leadership?

In reviewing the importance of the second and third research questions, this section discusses the mediation influence of change leadership and sustainable thinking on the relationship between the leadership excellence dimensions (STK, LONG and EMP) and sustainability leadership.

The second research question emphasises the importance of organisational change, innovation and adaptation as novel and important leadership dimensions that ensure sustainability leadership (Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003, 2007; Heifetz 1994; Heifetz, Grashow & Marty 2009; Senge 2008). However, the standardised regression weights (see Chapter 9, Table 9.27) and the mediation analysis results (see Chapter 9, Section 9.11) show that perceptions of the manager’s commitment to organisational change only influence managerial perceptions of environment and social sustainability, and do not influence either the perceptions of excellent leadership in a management sense or concern for financial performance. Hence, the results show that change leadership attitudes are essential for social and environmental sustainability in the Sri Lankan context, confirming that the findings of Heifetz (1994); Heifetz, Grashow and Marty (2009); Komives and Wagner (2012); Metclaf and Benn (2013), and Senge (2008) are applicable to Sri Lankan managers. These scholars have continuously highlighted change-oriented leadership as an essential dimension to achieve organisational sustainability.

To face the complexities of the social, cultural and economic environment of Sri Lanka, it has been deemed important to have change leadership skills (Calarco & Gurvis 2007), particularly to implement relevant changes in Sri Lankan organisations. This study’s results confirm that adapting to multicultural values and changes in the international business environment are essential for sustaining business

351 competitiveness. In addition, Wickramasinghe and De Zoyza (2009) suggested that most Sri Lankan managers feel their staff have inadequate knowledge of skills and modern techniques needed to face new challenges in the globalised market. Sri Lankan managers also perceive that they can enhance their change attitudes via formal management training programs. Therefore, HR units and departments of Sri Lankan organisations should design management training programs to enhance these managerial skills.

The mediation test results have confirmed that the relationship between the manager’s perception of employee engagement and concern for the social and environmental sustainability is fully mediated by the manager’s commitment to organisational change and sustainable thinking. That is, Sri Lankan managers believe they can only enhance social and environmental sustainability by encouraging organisational change and being ethical and responsible. These results validate the essentiality of constantly evaluating trends in the international and local environment, and ensuring organisational change needed to establish environmental and social sustainability in Sri Lankan organisations. Based on this, employee engagement alone will not ensure the sustainability of organisations unless management takes adequate measures to transform their organisations, to keep up with changes in the environment, and behave ethically and responsibly. For this purpose, dialogic leadership skills (Nielsen 1990) that help to reduce fragmentation, frustration, misunderstandings and conflicts are important for establishing the social, and environmental sustainability of organisations.

Contributions to theory and practice This study focused on examining diverse managerial perceptions of sustainability leadership in the Sri Lankan organisational context. In particular, the introduction of SDGs by the UN (United Nations 2015a) has increased interest in organisational-level sustainability. Prioritising sustainability has become an essential organisational management aspect, especially in the developing world. As the main responsible stakeholder in the organisation’s sustainable performance, managers have a moral duty to manage their organisations sustainably. Understanding the criticality of organisational sustainability issues and the dearth of relevant literature on sustainability leadership, especially in developing countries, this study makes

352 numerous contributions to the theory and practice of business management as explained below.

11.3.1 Contributions to theory Leadership for sustainability has been recognised as a developing research area (Bossink 2007). This present study makes a unique contribution to the literature through its development of a structural model to explain the influence of culture- specific values on managerial perceptions. These contributions to the theory are explained in detail below.

First, this study is one of the first pieces of quantitative research that has developed a model to identify diverse managerial perspectives of sustainability leadership in relation to developing countries. Although many leadership models have been referred to in the literature, Ansoff (1979); Chhokar, Brodbeck and House (2008); Dorfman (1996); Harley, Metcalf and Irwin (2014); Lichtenstien et al. (2006); Metclaf and Benn (2013); Scarborough (1998); Western (2008), and Yukl (2012) have all highlighted the inability of these traditional leadership models to find solutions for complex leadership challenges that continuously occur, especially in complex environments such as in developing countries.

Both Barker (2001) and Metclaf and Benn (2013) recommended that future researchers should consider leadership as a process that examines complex relationships between diverse participants in a social system. Further, they suggested that future researchers move their focus away from exploring mere leader-member relationships to more diverse complex relationships in an interconnected social system. As the second contribution, this study has addressed these recommendations with its structural model, reflecting how cultural values impact managerial perceptions, and suggesting the most effective ways to develop favourable relationships between diverse stakeholders to achieve long-term sustainability of the organisation.

Third, this study has aimed to fill some of the gaps in sustainability literature. Berns et al. (2009) and Deborah (2012a) highlighted the pressing need to develop a new business model that helps to implement corporate sustainability to answer unsolved complex problems surrounding sustainability. As explained in the previous literature review chapters, complexity management is even more important in developing 353 countries that have complex business and social environments. Identified as an economically less-developed country that is striving to develop its economy after three decades of ethnic conflict, Sri Lankan organisations operates in one of these diverse and complex environments.

In line with this, this study has confirmed the benefit of considering unique cultural values for managerial decision-making in complex environments. The findings of this study suggest that adapting and respecting local cultural values generally enables organisations to minimise conflicts and to maximise the utilisation of available resources to achieve social and environmental sustainability. Hence, this diversity management challenge requires Sri Lankan managers to develop extraordinary abilities and leadership skills, to remain competitive in a complex marketplace that needs to balance the impacts of the social and environment aspects (Metclaf & Benn 2013).

Fourth, this study has contributed to the literature by examining the concept of sustainability leadership in the less-developed world. Kantabutra and Saratun (2013) noted that most previous studies of sustainability leadership have been based on Western countries or organisations in the developed world. Most of the popular leadership theories are based on Western countries, which have since been identified as inadequate to explore leadership concepts in organisations in Eastern cultures (Peterson & Hunt 1997; Wijewardena & Wimalasiri 1996). As the concept of sustainability has become an essential leadership aspect for managers in less- developed countries, this study bears its own uniqueness, value and contribution to the literature. In particular, the concept of sustainability leadership has never been broadly researched in the South Asian context as a culture-specific leadership concept. To articulate what constitutes sustainability leadership in the Sri Lankan organisational context, this study combined unique culture-specific values with implicit theories of leadership into the development of a cultural model.

Fifth, this study has explored managerial perceptions of sustainability leadership in the Sri Lankan cultural context. This research is one of the first to explore managerial perceptions of sustainability by linking cultural modelling with the Sri Lankan organisational context. Thus, this study has contributed to the implicit leadership

354 theories as well as cultural modelling theories for exploring diverse perspectives of Sri Lankan managerial perceptions.

Hargett and Williams (2009) and Tang, Robinson and Harvey (2011) found ample research on sustainability at the organisational level, but recommended that more research was required about sustainability initiatives at the individual level. In addition, Ferdig (2007) suggested that future researchers should identify what constitutes sustainable leadership and whether sustainability leadership is different from other leadership theories, and what the leadership behaviours of a sustainable leader are. This study’s final model is confirmed to be a representation of individual perceptions about managerial leadership behaviours. Although sustainability challenges are homogenous, the most successful managerial efforts are culture- specific and unique (Barkemeyer 2011).

As the sixth contribution, the conceptual model proposed in this study could be used to explore sustainability leadership behaviours of managers in other developing and less-developed countries and different industries such as manufacturing and services. Cross-country and cross-regional industries, and even those across other developing and emerging economies, could also be compared by applying the sustainability leadership model to explore the diversity of managerial behaviours across the globe. This study also provides directions for future researchers, which will add to the pool of knowledge especially in relation to sustainability leadership.

Seven, this study has supported the concept proposed by Avery and Bergsteiner (2010) that geography does not decide an enterprise’s leadership philosophy – rather it is based on the level of acceptance of cultural values such as capitalism in an organisation. Hence, managerial understanding about national cultural values surrounding social responsibility will likely facilitate the promotion of organisational sustainability (Hargett & Williams 2009). In-depth exploration of the cultural contexts of this study and other context-specific characteristics would contribute to developing an improved sustainability leadership model as recommended by Dunphy, Griffiths and Benn (2003) and Hargett and Williams (2009).

It has been recognised that using secondary data from commonly sourced leadership models such as those of House et al. (2004) can limits researchers’ deep exploration

355 of culture-specific values. Hence, Parboteeah, Addae and Cullen (2012) recommended that future researchers use primary data with a much larger sample to analyse cultural influences on sustainability initiatives. Thus, this study explored how diverse Sri Lankan cultural values, attitudes and behaviours relating to sustainability influence managerial perceptions of sustainable leadership. Similar to the findings of Hargett and Williams (2009) on Norwegian cultural values influencing Norwegian organisations to successfully implement sustainability strategies, this study has identified how Sri Lankan cultural values relating to stakeholder relationships, employee engagement and long-term orientation influence the manager’s sustainability leadership attitudes. However, this present study has strived to avoid the mistake of purely offering a predictive explanation of managerial behaviours as a result of these unique cultural values; instead aiming to cover the diverse cultural values, beliefs and perceptions in Sri Lankan society, and to reflect these cultural models by offering insights into the results obtained.

The eighth contribution of the study is that it has incorporated the essentiality of the manager’s change attitudes, proposed as mediating variables of change leadership and sustainable thinking that ensure the achievement of sustainability leadership. Organisational change has been accepted by many scholars as essential leadership dimensions for retaining organisational competitiveness (Ansoff 1979; Komives & Wagner 2012). It has been suggested that innovation is the only solution to achieve a higher level of sustainability in developing countries (Barkemeyer 2011). Khavul and Bruton (2013) referred to the dearth of literature available on how change-related managerial attitudes influence organisations in the developing countries to successfully respond to social and environmental challenges. Khavul and Bruton (2013) suggested that future sustainability models should include innovation and the natural environmental dimension as essential indicators of sustainability. Yet even though most exploratory studies of sustainability leadership (Avery & Bergsteiner 2010, 2011c; Dunphy, Griffiths & Benn 2003, 2007; Fullan 2003, 2005) have highlighted the importance of change attitudes of managers to achieve organisational sustainability, it has not been empirically tested in an integrated or single conceptual framework.

356

The ninth contribution of this study is that it has identified the manager’s resistance to change as a barrier to achieving sustainability leadership in the Sri Lankan organisational context. However, the study’s mediation results indicated that positive attitudes towards organisational change fully mediated the relationship between employee engagement and social and environmental sustainability. This suggests that to achieve social and environmental sustainability via employee engagement, it is essential for Sri Lankan managers to encourage organisational change with appropriate strategies that allow them to adapt to international and local markets. Hence, the theory of the social change model of leadership development (Komives & Wagner 2012), in relation to the essentiality of change-related attitudes of managers to enhance social and environmental sustainability, is confirmed to be important in the Sri Lankan organisational context. This is an expansion of the existing theory of social change model of leadership.

As the tenth contribution, this study’s findings highlighted (see Table 9.27) two types of managerial behaviours that positively influence the manager’s attitudes towards organisational change: 1) long-term orientation; and 2) employee engagement. In addition, the mediation results of this study confirm the inadequacy of mere leader- member relations to succeed in today’s complex markets, and the need to integrate change leadership attributes via a broad linking and upgrading of the whole organisational system as an essential leadership need for social and environmental sustainability (Western 2008). In this study, Sri Lankan managers’ positive attitudes towards engaging employees to ensure social and environmental sustainability and the preference for organisational change strategies shows the potential of future managers for greater enthusiasm and initiative to achieve organisational sustainability. Hence, developing competitive HR practices while striving for a value-based organisational cultural change will enable organisations to achieve greater sustainable outcomes (Dunphy, Griffiths & Benn 2003).

It has been recognised that managers’ ethical and responsible values positively influence sustainable leadership (Parkin 2010). However, the leader’s moral thinking has not been empirically tested before in sustainability leadership studies. Thus, the eleventh contribution to the knowledge is that this study empirically tested the importance of ethical and responsible leadership behaviours to achieve sustainability

357 leadership. The findings indicate that the manager’s employee orientation will only offer social and environmental sustainable results if they also demonstrate sustainable thinking. This complies with existing theories proposed by Avery and Bergsteiner (2011b); Dunphy and Benn (2013); Fullan (2003); Hind, Wilson and Lenssen (2009); Kociatkiewicz and Kostera (2012); Metclaf and Benn (2013), and Parkin (2010) about the essentiality of the manager’s moral thinking to achieve sustainable leadership.

Long-term orientation has often been studied alongside the individual’s ethical values (Nevins, Bearden & Money 2007). However, empirical studies are sparse on the relationship between long-term orientation and ethical leadership behaviours. In respect to this gap, this study has incorporated the relationship between long-term orientation and sustainable thinking into its conceptual framework, which is identified as the twelfth contribution. However, the final SEM results of this study have failed to confirm the existence of a positive relationship between the two constructs. Future researchers should therefore explore the relationship between the two leadership dimensions in other organisational and cultural contexts.

This empirical finding of this study relating to stakeholder relationship is identified as the thirteenth contribution of this study to the sustainability and other leadership literature. Most of the literature refers to stakeholder relationships as a core strategic leadership competency (Donaldson & Preston 1995; Higgins 1984; Polansky 1995; Porter & Kramer 2006; Post, Preston & Sachs 2002), yet empirical studies on leadership attitudes, values and behaviours that promote managerial perceptions towards stakeholder relationships are limited. As the fourteenth contribution to fill this literature gap, this study has developed the stakeholder relationships construct in its conceptual framework. The data analysis confirmed the validity and reliability of this new construct, and the final results indicated that managerial attitudes towards stakeholder relationship is one of the most important leadership dimensions influencing the sustainability leadership of Sri Lankan managers.

Lev, Petrovits and Radhakrishnan (2010) recommended that future researchers explore how corporate philanthropy such as employee engagement and spurring innovation can enhance a firm’s sustainability. The results of this study have confirmed that Sri Lankan managers perceive organisational change attitudes as a barrier to becoming

358 excellent leaders, but positively influence them to achieve social and environmental sustainability. As a result, Sri Lankan managers have negative attitudes towards transforming the organisational cultures, as they believe it will limit their opportunity to become excellent leaders in their organisations.

As the fifteenth contribution, the findings of this study have extended on the literature by examining whether the concept of sustainability leadership is a universal or culture- specific concept. Schmidheiny (1992) believed that future researchers of sustainability should incorporate cultural perspectives in their models. In line with this suggestion, this study incorporated culture-specific aspects into its conceptual framework by reviewing universal leadership as well as Sri Lankan managerial concepts which are specifically applicable to sustainability leadership of Sri Lankan managers.

It has been suggested that the influence of European colonial and Indian cultural influences have specifically shaped Sri Lankan managers’ perceptions of employee engagement and stakeholder relationships as being more important than profit orientation, which is a capitalistic value popular among most American CEOs (Avery 2005). Thus, the findings of this study show that Sri Lankan managerial behaviours are even different from those of other Asian managers, which is a valuable contribution to the cross-cultural leadership literature.

The APEL framework (Selvarajah et al. 1995) and its dependent variable of excellent leadership was originally designed to explore diverse perceptions of managers in the ASEAN region. The results of this study have confirmed that the construct of excellent leadership can also be used to understand managerial perceptions of excellent leadership in the Sri Lankan organisational context, and has therefore been identified as the sixteenth contribution of this study to the knowledge. The APEL framework was yet to be tested to explore the concept of sustainability leadership, especially in a South Asian context. This study has therefore chosen the excellent leadership dimension together with other leadership theories such as transformational, ethical, responsible, stakeholder and change leadership theories to explain sustainability leadership in Sri Lanka. This is an extension to the literature on excellent leadership.

The seventeenth contribution of this study is that it used pre-developed as well as self- developed constructs for its proposed sustainability leadership model. The validity and

359 reliability of the self-developed constructs were tested and confirmed. Future researchers could use these new constructs and leadership behavioural items to measure perceptions of sustainability using diverse managerial respondents. This is an extension of the extant sustainability leadership literature.

The leader’s role in achieving sustainability of society, environment and economy was previously proposed as a future research direction (Morsing & Oswald 2009). Yet the concept of sustainability has also been described as difficult to define (Dunphy, Griffiths & Benn 2003; Laszlo 2008; Mullins 2006; Rogers 2011). To fill this research gap, this study used the excellent leadership concept of Selvarajah et al. (1995) and the TBL concept of social, environmental and economic sustainabiity (Elkington 1994, 1997) to develop its dependent variable of sustainability leadership. The concept of TBL has often been used to assess the impacts of large projects, especially in non- profit and government sectors, and to develop sustainability standards, certificates and industrial principles (Buckley, Salazar-Xirinachs & Henriques 2009; United Cities and Local Governments 2010); however, it does not appear to have been empirically tested to measure managerial attitudes and perceptions of sustainability. This testing is therefore identified as the eighteenth contribution of this study to the knowledge.

Chapter 4 identified a major limitation of TBL sustainability, which is the lack of measurement for each pillar (Slaper & Hall 2011). As the nineteenth contribution, this gap was also filled in this study by developing the following two constructs to measure the social, environmental and economic dimensions: 1) managerial perceptions of social and environmental sustainability; and 2) managerial perceptions of financial performance of this firm.

360

11.3.2 Contributions to practice First, this study offers a number of insights for managers, policymakers and organisations in developing economies such as Sri Lanka. Many scholars such as Dunphy, Griffiths and Benn (2003) have criticised applying ad hoc sustainability strategies and have suggested that future researchers develop sustainability models that are most suited to the context that managers have to work in. This trend has motivated many scholars and practitioners to explore what constitutes sustainability in different contexts and how to implement sustainability in different contexts (Avery & Bergsteiner 2011b; Mullins 2006; Rogers 2011). Hence, the findings of this study would be helpful for managers and scholars to identify sustainability challenges within Sri Lankan organisations and to develop effective strategies for their organisations.

Second, this study’s results have confirmed that Sri Lankan managers’ attitudes towards employee engagement positively influence their perceptions of change leadership attitudes. That is, Sri Lankan managers believe that formal management education programs will enable them to change their attitudes and to catch up with the national and international competition. In particular, many Sri Lankan managers perceive benefits from formal management training programs on how to improve employee participation and how best to solve employee disputes in their organisations. It was also identified that Sri Lankan managers already spend a decent amount of time on HR activities such as training employees to engage more in business decision- making. Thus, the findings of this study suggest that management trainers, consultants, HR managers and policymakers of government institutions could incorporate advances in technologies, skills and attitudes in their management training programs to indirectly support managers to easily adapt to environmental and social changes.

Third, Sri Lankan managers perceive creating a warm and friendly working environment, providing recognition for good work, possessing confidence in dealing with people, motivating employees, managing time, and being honest as key characteristics of excellent leadership in management sense. Thus, managers, policymakers, postgraduate education course designers and management trainers should find ways to improve leader-member relations, time management skills, employee motivation methods and effective communication methods to win the trust of the employees, to improve excellence in leadership within Sri Lankan organisations.

361

HR managers could use such excellent leadership behaviours to assess the level of managerial excellence and to find areas of leadership development to better achieve excellent leadership in Sri Lankan organisations. Similarly, managers could identify and improve their leadership behaviours that promote better sustainable performance; such managerial efforts will control potential negative managerial behaviours and are likely to minimise negative impacts on the socio and natural environment.

Compared with organisations in the developed world, organisations in the less- developed world are more likely to prioritise short-term financial survival over long- term orientation (Karande, Rao & Singhapakdi 2002). Thus, the fourth finding of this study supports this perception in the Sri Lankan organisation context, where most managers perceive long-term orientation as less important for achieving sustainability. Hence, conflict management issues, task management skills, and unbiased and logical decision-making do not induce them to achieve sustainability leadership, but often facilitate organisational change activities.

Fifth, this study’s results have also shown that Sri Lankan managers who are employee-oriented are better able to become excellent leaders. Delegation of tasks, team decision-making, coping with the emotional pressure of work, seeking employee suggestions, trusting employees, allocating authority and providing autonomy are identified in this study as important aspects that measure perceptions of employee engagement among Sri Lankan managers. Such leadership skills enable managers to become excellent leaders in their organisations. Hence, management training institutes should focus on designing practical structures that match the collectivistic cultural values of the Sri Lankan context.

As the sixth contribution, this study has identified that Sri Lankan managers often perceive achieving financial targets, maximising productivity and providing maximum returns to investors as essential leadership behaviours for achieving financial sustainability of their organisations. This study’s results indicate that enabling organisational change and the leader’s sustainable thinking have no influence on managerial perceptions of the financial sustainability of the organisation. Sustaining financial performance is crucial for organisations in developing economies (Avery & Bergsteiner 2010).

362

As the seventh contribution to the practice, this study has confirmed that sustainability leadership is now a universal management challenge; except that each dimension and the relationship between leadership dimensions are different depending on the cultural context. It has been recognised that the Indian and European colonial philosophies and ideologies have influenced the lifestyles and beliefs of Sri Lankan managers (Hewege 2011; Hewege et al. 2008). Thus, understanding the uniqueness of Sri Lankan culture is highly beneficial for researchers and practitioners that wish to do business in the Sri Lankan organisational context. Management trainers and senior managers need to address these unique Sri Lankan cultural values in their strategic development, employee coordination, organisational transformation, conflict resolution, and training and development. Localising managerial decisions to the Sri Lankan context would be useful for achieving sustainability leadership.

Eighth, the findings of this study have helped to expand some of the leadership theories in the neo-charismatic leadership paradigm (see Chapter 2). In particular, this study’s findings have empirically confirmed that change leadership behaviours are important for enhancing social and environmental sustainability. It also supports the ideas of conservation science leadership (Manolis et al. 2009) by promoting the usefulness of change-oriented leadership skills to solve complex problems surrounding human and biodiversity management issues. This study also contributes to the regenerative leadership theory (Hardman 2011) which proposed the urgency of radical organisational transformation for achieving environmental and social sustainability. It also found that the lack of global leadership skills among contemporary Sri Lankan managers hampers their perceptions of excellent leadership, which supports the argument of Gregersen, Morrison and Black (1998), which highlighted Sri Lanka’s need to adapt to global market changes to perform competitively.

In addition, this study has highlighted the relevance of dialogic leadership theory (Nielsen 1990) to the Sri Lankan organisational context, proposing the generation of strong dialogue by creating an environment that brings together the collective efforts and wisdoms of employees. The importance of employee engagement by providing autonomy and authority, collective decision-making, and allowing for the employee voice in decision-making (Nielsen 1990) were also confirmed in this study. These

363 dialogic leadership behaviours often help to improve social sustainability by minimising conflicts, misunderstandings and frustrations. Thus, this study has contributed to dialogic leadership theory by linking the importance of dialogic leadership behaviours to achieve sustainability of leadership in organisations. The study also highlights the importance of shared visions and values, self-leading, and self-managing and mutual sense-making to achieve organisational sustainability. These findings contribute to expanding the ideas proposed by the organic leadership theories (Kantabutra & Suriyankietkaew 2012).

The ninth contribution of this study is that these findings are helpful for MNCs and other expatriates doing business in Sri Lanka. MNCs may face challenges when seeking ways to adjust their foreign management practices in line with the Sri Lankan organisational culture. For example, an expatriate manager from a task-oriented culture could find their new Sri Lankan peers and subordinates to be non-supportive, as the Sri Lankan workforce strongly values personal relationships and welfare facilities. It has been recognised that national cultural mismatches between the ‘parent’ and the local operations can be barriers to sustainability in global corporations (Hargett & Williams 2009). Such an experience could be overwhelming for an expatriate manager who has been successful in their home country but is struggling for the same success in a country with different cultural values (Bennett, Aston & Colquhoun 2000; Puck, Kittler & Wright 2008; Suutari 1996). Thus, a proper understanding of the foreign country’s cultural values and beliefs would be an essential competitive advantage for an expatriate manager in the new market –knowledge of the unique local management behaviours would enable MNCs’ foreign managers to more easily collaborate with their local managers.

11.3.3 Contributions to methodology The high response rate in this study proved that purposive and targeted distribution of face-to-face questionnaires is suitable for quantitative studies in the Sri Lankan context. This is because face-to-face surveys build trust and motivation to participate in the survey. The researcher was personally present prior to the administration of the surveys, providing a brief introduction to the study and other important information for responding to the survey. Hence, the quantitative data collection method adopted

364 for this study is proposed for future researchers who plan for large and representative samples with diverse respondent characteristics such as in the Sri Lankan context.

Participating in the survey gave managerial respondents an opportunity to self-reflect on their leadership behaviours. These leadership behaviours have contributed to the development of a Sri Lankan managerial model that adds further knowledge to the literature on excellent and sustainability leadership.

Limitations of the study Despite the contributions of this study, as listed above, there are certain limitations that need to be highlighted.

The first limitation of this study is that it only aimed to identify managerial perceptions of sustainability leadership in relation to Sri Lankan managers. In addition, it only collected data from managers who are part-time students of Master’s programs, and managers who have completed a Master’s degree and are now members of an alumni. Yet there is a large amount of managers within Sri Lankan organisations that do not have a Master’s degree. As this sample is limited to the educated managerial population, future researchers could use a representative sample based on other sampling strategies that enable a better generalisation of this study’s findings to the larger managerial community within Sri Lanka. For example, industry and trade association members could also be used to improve the representativeness of the sampling frame.

The second limitation of this study is that it only analysed sustainability leadership attitudes and perceptions of Sri Lankan managers in general. Sri Lankan managerial perceptions could differ based on the diverse demographic characteristics of them and their organisations (e.g. gender, age, industry and location); yet this did not address the possible influence of demographic characteristics on managerial perceptions. Hence, future researchers could use structural invariance testing to examine the model differences between different demographic groups of managerial respondents.

The third limitation is that the study collected data from a single source which is managerial perceptions – one of the main limitations. It has been argued that data collected from a single source is influenced by common method variance (Podsakoff

365

& Organ 1986a). Thus, one solution to minimise common method variance in future studies is to introduce the dependent variable of sustainability leadership by collecting subordinates’ perceptions of their managers’ sustainability leadership . This study only examined managerial perceptions of sustainability leadership because of the perceived difficulty of collecting subordinates’ perceptions of their managers’ sustainability leadership performance. Collecting data from a single source is also common in other leadership studies conducted in similar cross-cultural contexts, such as the GLOBAL study, (Chhokar, Brodbeck & House 2008; House et al. 2004). This reflects the difficulty of collecting responses of the same dimension from diverse groups of respondents. As an alternative solution, Podsakoff et al. (2003) recommended that common method variance be minimised by changing the response format, ensuring the anonymity and openness of respondents.

These common method bias issues were mostly addressed in this research when developing the questionnaire and collecting data. The questionnaire was pre-tested with a small group of volunteer managerial respondents, and their feedback used to improve the structure of the questionnaire. At the data collection stage, openness was encouraged and anonymity ensured. These methods were based on the suggestion of Siemsen, Roth and Oliveira (2010) that when the model includes additional independent variables that are open to common method variance, the effect of common method variance will be reduced. With this objective in mind, this study included three independent variables (i.e. STK, LONG and EMP) in the theoretical framework.

The fifth limitation of this study is that it was constrained to a one-time survey data collection method due to resource and time restraints. Future researchers could use longitudinal research to understand the changes in managerial perceptions over time. The ample availability of qualitative research and the dearth of empirical studies supported the choice of a quantitative methodology in this study. However, as an alternative strategy, future researchers could use qualitative methods to triangulate the findings to explore the most important aspects identified in this study’s final sustainability leadership model, which could also reduce common method variance as suggested by Podsakoff & Organ (1986).

366

As a post-hoc solution, this study analysed the influence of common method variance using Harmon's single factor method. A comparison of mean values for average scales for the data collected using two methods (postal and face-to-face) confirmed that common method variance was not a major issue. Hence, it can be concluded that to a certain extent the influence of common method variance has been controlled in this study. However, future researchers could further eliminate common method variance by using different techniques to improve ratter accuracy, and social desirability could be further included in the questionnaire to control common method variance. Hence, techniques such as standardisation and incorporating different stakeholders such as industry experts, subordinates, peers, customers and government would enhance the quality and accuracy of the data.

Future research directions This study is limited to the Sri Lankan organisational context. Therefore, as the first research direction, future researchers could extend this to other countries to develop a sustainability leadership model that is useful for describing more diverse managerial perceptions of sustainability. As this study reports on research conducted in a developing country, the experience could be easily applied to other developing countries within and beyond South Asia. As most Asian countries are characterised as multicultural and multiethnic, future researchers could conduct invariance testing and cross-cultural comparative studies to analysis managerial perceptions of sustainability leadership.

As the second future direction, management scholars such as Rowley and Warner (2006) suggested that future management scholars explore the tradition of spiritualism, which has been widely ignored by management scholars. Compared to ample studies exploring Confucian and Protestant values in managerial behaviours, there is limited research on influence of Buddhist philosophy-shaping managerial behaviours (Selvarajah, Meyer & Donovan 2013). While this study broadly used Buddhist philosophy to understand the influence of Sri Lankan cultural and religious values on managerial perceptions, another future research direction could be to further explore its influence via invariance testing that concentrates on a larger sample of Buddhist managers.

367

Third, this study only used the following five leadership dimensions to examine sustainability leadership: 1) stakeholder relationship; 2) long-term orientation; 3) employee engagement; 4) commitment to organisational change; and 5) sustainable thinking. Future researchers could expand on these dimensions with new leadership dimensions in the conceptual model and examine their effect on managerial perceptions.

Fourth, exploring managers’ integrity values had already been identified as a potential future research area (Yukl 2012). Accordingly, this study included managers’ ethical and moral leadership behaviours as a new dimension named ‘sustainable thinking’ in its conceptual framework. It also confirmed that positive attitudes towards sustainable thinking enhance managerial perceptions of the social and environmental sustainability. It identified that it is especially essential for Sri Lankan managers to think sustainably to achieve the expected results of engaging employees in regard to social and environmental sustainability (as discussed in Chapter 9, Section 9.11). However, future researchers could further explore the identified leadership behaviours relating to sustainable thinking using qualitative studies. In particular, future researchers could identify how sustainable thinking emerges within oneself, and how these moral attitudes gradually expand to one’s immediate family, and then to society in the Sri Lankan cultural context. For this purpose, future researchers could use moral development theories such as Kohlberg (1981) in their studies.

Fifth, this present study found that Sri Lankan managers perceive ethical and responsible leadership as enabling them to improve social and environmental sustainability. However, Trevino, Brown and Hartman (2003) previously noted that there are limited studies exploring the relationship between ethical and moral leadership to achieve the firm’s financial performance. Hence, future researchers could investigate diverse philosophical and cultural factors that influence management perceptions relating to sustainable thinking that would enhance the social, environmental and financial sustainability of the firm. Future researchers could also link other areas such as leadership for organisational transformation (Brown, Trevin˜o & Harrison 2005; Sharif & Scandura 2014), and corporate ethical culture and corporate ethics programs (Eisenbeiss, van Knippenberg & Fahrbach 2014) that enable improvement of the firm’s performance results (see Chapter 5, Section 5.3.2).

368

Sixth, this study found that managers’ attitudes towards employee engagement are important to achieve excellent leadership in a management sense in the Sri Lankan organisational context. Future researchers could further explore how dialogic leadership skills help Sri Lankan managers to minimise employee conflicts, fragmentation, frustration and misunderstanding, as a means of better engaging with employees to enhance organisational sustainability.

Seventh, this study also identified the essentiality of organisational change leadership attitudes to achieve social and environmental sustainability via employee engagement. It was identified here that Sri Lankan managers’ negative attitudes hinder them from achieving excellence in leadership. Thus, future researchers could explore how change-oriented leadership skills can enhance excellent leadership attitudes of Sri Lankan managers to adapt to global business changes and trends. For instance, the popularity of Japanese management techniques in the Sri Lankan manufacturing sector (Hewege 2011) holds great potential for future researchers to explore its applicability to the Sri Lankan organisational context. Qualitative as well as quantitative methods could be used for this purpose.

Eighth, this study was limited to a cross-sectional survey using quantitative methodology. In future studies, the overall implications of cultural values and the influence of cultural interactions could also be explored via a longitudinal study or a mixed methodology. The conceptual model could be used to examine the change of attitudes and perceptions of managers who have participated in short-term training sessions or a management education program such as an MBA. This would also help management trainers and HR departments to assess the effectiveness of their training programs. Future researchers could also examine the aggregate influence of national cultural values on managerial perceptions via a much larger representative sample using longitudinal design such as the multi-wave method.

Ninth, according to the literature, environmental factors (demographic characteristics such as gender, age, industry and location) influence managerial decision-making on sustainability. Hence, future researchers could explore this aspect further with a larger and more representative managerial sample using invariance testing. Moderating

369 variables such as age and gender could also be included in the proposed conceptual model of sustainability leadership.

Tenth, the results of this study have revealed that long-term orientation has no impact on perceptions of sustainability leadership of Sri Lankan managers. However, since previous literature on Sri Lankan managers has found a managerial preference for long-term orientation, future researchers could further explore this dimension with a much larger and representative managerial sample using either a quantitative or qualitative methodology.

Eleventh, this study revealed that Sri Lankan managers have positive attitudes towards volunteering and CSR activities as a means of achieving sustainable leadership. Exploring the manager’s positive attitudes towards CSR has already been noted as a future research area (Barnea & Rubin 2010). Hence, future researchers could further explore the usefulness of volunteering and CSR activities to achieve sustainability leadership in the Sri Lankan organisational context.

Twelfth, the methodology, questionnaire and the research approach used in this study could be used to explore sustainability leadership in other regions, countries and industries. Comparative studies could also be conducted using larger samples across multiple industries, countries and regions. For this purpose, the research questions and theoretical framework of this study could be redesigned and redeveloped to explore sustainability leadership in other contexts.

Thirteenth, most of this study’s sample represents junior- and middle-level managers. Therefore, it should be questioned whether these lower-level Sri Lankan managers have less faith in long-term orientation than their senior counterparts. As a result of this, future researchers could further explore senior managers’ perceptions of long- term orientation and compare them with junior- and middle-level managers.

Recommendations 11.6.1 Recommendations for managers First, this study has confirmed that managerial attitudes towards stakeholder relationships and employee engagement are principal leadership excellence dimensions to achieve sustainability leadership in Sri Lankan organisations.

370

Organisations that are keen to develop strong relationships with their stakeholders have often been identified as better able to achieve a competitive advantage and outperform others (Murphy 2002; Post, Preston & Sachs 2002). Managing existing stakeholder relationships as well as creating new relationships are considered an essential leadership skill for sustainability in contemporary organisations (Euchner & Ganguly 2014). Hence, improving leadership skills such as team management skills and public relations management skills are important for excellent leadership in a management sense as well as excellent leadership in a sustainability sense in Sri Lanka. For this purpose, HR managers and management consultants could use the modified stakeholder strategy matrix of Polansky (1995), the stakeholder management model of Post, Preston and Sachs (2002), and the social institutional perspective of Lenssen et al. (2007). Identifying and categorising diverse stakeholders such as employees, customers, trade unions, industry associations and supply chain partners based on their potential importance for the organisation, and managing these stakeholders will enhance sustainability in Sri Lankan organisations.

Second, most Sri Lankan organisations prioritise customer satisfaction as the main strategic objective in their corporate mission statement. It has been recognised that Sri Lankan managers often consider their customers as a loyal group willing to provide feedback for the organisation’s development (Wickramasinghe, Hopper & Rathnasiri 2004). Hence, managers could incorporate ways to gather diverse feedback from their customers to improve sustainability (Avery & Bergsteiner 2011c). In particular, it is advisable for firms in the services sector to implement technology-based customer relationship management techniques to sustain their competitiveness (Murphy 2002).

Third, this study found that Sri Lankan managers believe they need better human relation skills such as appreciation, confidence to engage with people and the ability to listen to employee feedback. Also, Sri Lankan managers should seek more ways to gather employee feedback to enhance organisational sustainability. Surveys could also be used to identify employee satisfaction, especially with their immediate managers. Such feedback could be used for managers’ career development decisions.

Fourth, close relations with managers and subordinates is considered an important feature for excellent leadership in Sri Lankan organisations. This study found that

371 developing human relationships, respecting others’ voices, permitting authority and autonomy, and delegating work all play a very important role in the Sri Lankan organisational context. Face-to-face communication is mostly preferred by Sri Lankan managers compared with other technology-based communication methods (Yapa 2012). Hence, managers could use face-to-face communications to develop their public relations, which will help to develop a trustworthy relationship with stakeholders, which is essential for organisational success in Sri Lanka. Expatriates and MNCs thus need to understand this ‘soft side’ of Sri Lankan cultural values to achieve sustainability leadership in the Sri Lankan organisational context.

Fifth, HR managers, management trainers and consultants should acknowledge and support sustainability as a main learning objective of management training and employee development programs at all levels in the organisational hierarchy. Management training programs and workshops aimed at sustainability management skills will enhance managerial attitudes towards sustainable leadership. Management training programs for management trainees, especially at the lower management level, should include ways to develop trust and confidence among their subordinates and to be more employee-oriented in their decision-making.

Sixth, HR departments should strengthen the organisational change leadership skills of managers. For this purpose, familiarisation with new and successful techniques and practices in international markets, and addressing multicultural issues especially in relation to designing marketing strategies would be potential areas to be included in training programs. Organising or sponsoring local and international management forums focused on sharing sustainable business stories of sustainable organisations would probably be beneficial to other managers and organisations.

Seventh, this study’s results have confirmed that conflict resolution, problem analysis and time management skills are essential leadership skills that enable managers to perceive long-term decision making. Hence, Sri Lankan HR managers could train their managers to develop these skills, particularly as they will enable them to enhance organisational transformation strategies.

Eighth, Sri Lankan managers could use the questionnaire of this study to self-assess their leadership behaviours. In particular, organisations that have limited resources to

372 invest in training and development activities could use the questionnaire to assess future development leadership skill needs among their management staff. Managers of these organisations could be encouraged to maintain a profile of their self-assessment of managerial behaviours with benchmarked, best-practice management behaviours for career progression. This will enable them to identify their own managerial performance with standard or acceptable levels of behaviour, and these self- assessment outcomes will benefit both individuals and organisational performance in the future.

Khavul and Bruton (2013) also recommended that managers of organisations in a complex context such as in the developing world should localise sustainability strategies by considering local cultural values, practices and other factors. Thus, as the ninth recommendation, managers should spend time identifying local cultural values surrounding sustainability, CSR and other ethical perspectives, and use these in their strategic decision-making. Doing so will enhance the social and environmental sustainability of Sri Lankan organisations.

11.6.2 Recommendations for policymakers This study has highlighted the importance of management training and development programs for enhancing sustainability leadership among Sri Lankan managers. Hence, as the first recommendation, the policymakers in the Sri Lankan education system should include a knowledge of sustainability values in their primary, secondary and tertiary education curricula. In addition, curriculum developers could use localised approaches when teaching sustainability concepts to the students. Undergraduate and postgraduate course designers should focus on practical components to develop skills in human relationships, teamwork, and delegating responsibility and authority. For this purpose, education institutes could arrange workshops, seminars and conferences that involve the corporate sector, to share practical ways to achieve social, environmental and economic sustainability.

Second, this study found that Sri Lankan managers perceive participating in voluntary activities as an important aspect of social and environmental sustainability. The Sri Lankan Government should therefore encourage organisations to engage more in community development projects, because managers have positive attitudes towards

373 volunteering in community development projects. Awards could be offered to recognise the best social and environmental corporations. In addition, success stories of sustainable corporations and their excellent managers could be identified and used as a promotion method to motivate others towards CSR projects. Public authorities could work as the mediator by identifying true community needs and designing a CSR project opportunity list for the corporate sector to take part in these activities either via sponsoring or volunteering. Proactive coordination between the private and public sector will help to improve the social and environmental sustainability of Sri Lanka, and will help to fulfil real community needs rather than corporations trying to invest in ad hoc CSR projects that do not solve the true problems of society.

Third, the positive attitudes of Sri Lankan managers towards achieving social, environmental and economic sustainability could contribute to policymakers encouraging their local authorities such as the environmental and accounting authorities (e.g. Sri Lanka Accounting Standards, International Accounting Standards) and quality standard bodies such as the International Organisation for Standards to update their standards and disclosure requirements at the international level. Public sector accounting standards and procedures should also be redesigned to ensure sustainable management of local authorities and other government organisations. New developments introduced in International Accounting Standards and other international quality requirements should be effectively communicated and implemented in the corporate sector to ensure sustainability of Sri Lankan organisations.

Chapter summary The objective of this chapter was to review the findings of the study by revisiting the research questions, discussing implications for theory and practice, and the limitations of this study, and making recommendations for managers, policymakers and future research. For this purpose, conclusions were drawn for the three main research questions of this study. They were considered on the basis of the literature explained in Part I of the study, and the results obtained from the SEM. It can thus be concluded that Sri Lankan managerial perceptions of sustainability leadership could be examined using this study’s structural model. Among the three leadership excellence dimensions identified in this study, stakeholder relationships is the strongest predictor of

374 perceptions of sustainability leadership, followed by employee engagement. The dimension with the least influence is managerial perceptions of long-term orientation. Both of this study’s mediators of organisational change leadership and sustainable thinking have been deemed as essential to achieving social and environmental sustainability, but not essential to achieving excellent leadership in a management sense in Sri Lankan organisations or the leader’s concern about the firm’s financial performance.

Certain limitations were identified in this study, especially in relation to the sampling and methodology used. Despite these limitations, this chapter has described some of the main contributions this study has made to the sustainability leadership theory, practice and methodology. Based on the results obtained in this study, including the literature reviewed in Part I of this thesis, a number of future research directions have been identified and recommendations made for the consideration of managers and policymakers in Sri Lankan organisations.

375

References

Abeysekera, R 2007, 'The impact of human resource management practices on marketing executive turnover of leasing companies in Sri Lanka', Contemporary Management Research, vol. 3, no. 3, pp. 233-252.

Ackerson, L 1942, Chidren's behaviour problems:Relative importance and intercorrelations among traits, University of Chicago Press, Chicago.

Adams, FAI, True, SL & Winsor, RD 2002, 'Corporate America's search for the 'right' direction: Outlook and opportunities for family firms', Family Business Review, vol. 15, no. 4, pp. 269-276.

Adams, WM 2006, The future of sustainability: Re-thinking environment and development in the twenty-first century IUCN The World Conservation Union.

Adler, NJ 1991, International dimensions of organizational behavior, 2nd edn., PWS~ KENT, Boston.

Aguinis, H & Kraiger, K 2009, 'Benifits of training and development for individuals and teams,organisations, and Society', Annual Review of Psychology, vol. 60, no. 1, pp. 451-474.

Agut, S, Grau, R & Peiro´, JM 2003, 'Individual and Contextual Influences on Managerial Competency Needs', Journal of Management Development, vol. 22, no. 10, pp. 906 – 918.

Akins, R, Bright, B, Brunson, T & Wortham, W 2013, 'Effective Leadership for Sustainable Development', E-Journal of Organizational Learning and Leadership, vol. 11, no. 1.

Alban-Metcalfe, J & Alimo-Metcalfe, B 2007, 'Development of a private sector version of the (engaging) transformational leadership questionnaire', Leadership and Organisation Development, vol. 28, no. 2, pp. 104 –121.

Alban-Metcalfe, J & Alimo-Metcalfe, B 2009, 'Engaging leadership part one: Competencies are like Brighton Pier', The International Journal of Leadership in Public Services, vol. 5, no. 1, pp. 10 -18.

Alban-Metcalfe, J & Alimo-Metcalfe, B 2013, 'Reliability and validity of the 'leadership competencies and engaging leadership scale'', International Journal of Public Sector Management, vol. 26, no. 1, pp. 56 -73.

Albert, M 1993, Capitalism vs capitalism: how America’s obsession with individual achievement and short-term profit has led It to the brink of collapse, Four Walls Eight Windows, New York.

376

Ali Shurbagi, AM & Zahari, IB 2013, 'The relationship between transformational leadership and organizational culture in National Oil Corporation of Libya', International Journal of Business Administration, vol. 4, no. 4.

Alicia, S 2007, 'Dutch and British colonial intervention in Sri Lanka, 1780-1815 expansion and reform', TANAP monographs on the history of the Asian-European interaction, vol. 22, no. 2.

Alimo-Metcalfe, B & Alban-Metcalfe, J 2008, Engaging leadership: creating organisations that maximise the potential of their people, Chartered Institute for Personnel Development, London.

Alimo-Metcalfe, B & Alban-Metcalfe, RJ 2001, 'The development of a new transformational leadership questionnaire', Journal of Occupational & Organizational Psychology, vol. 74, no. 1, pp. 1-27.

Ameer, R & Othman, R 2012, 'Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations', Journal of Business Ethics, vol. 108, no. 1, pp. 61-79.

American Psychological Association 1995, Standards for educational and psychological testing, Washington, DC.

Anastasia, AK, Pawan, SB, Habte, W & Abdul Basit, A-H 2010, 'Influence of ethical beliefs, national culture and institutions on preferences for HRM in Oman', Personnel Review, vol. 39, no. 6, pp. 728-745.

Andersen, JA 2010, 'Assessing Public Managers' Change-Oriented Behavior: Are Private Managers Caught in the Doldrums?', International Journal of Public Administration, vol. 33, no. 6, pp. 335-345.

Anderson, RC & Reeb, DM 2003, 'Founding-family ownership and firm performance: Evdence from the S & P 500', Journal of Finance, vol. 58, no. 3, pp. 1301-1327.

Andrews, RNL 2012, 'History of environmental leadership', in RG Deborah (ed.) Environmental leadership: a reference handbook, SAGE Publications, Thousand Oaks, California.

Ansoff, HI 1979, 'The changing shape of the strategic problem', Journal of General Management, vol. 4, no. 4, pp. 42 - 48.

Anurit, PJ, Selvarajah, C & Meye, D 2011, 'Exploring Relevant Dimensions to Leadership Excellence In Thailand', International Journal of Academic Research in Business and Social Sciences, vol. 1, no. 3, pp. 47-75.

Ardichvili, A & Gasparishvili, A 2001, 'Socio-cultural values, internal work culture and leadership styles in four-post-communist countries: Russia, Georgia, Kazakhstan

377 and the Kyrgyz Republic', International Journal of Cross Cultural Management, vol. 1, no. 2, pp. 227-242.

Argyris, C 1976, Increasing leadership effectiveness, Wiley, New York.

Armenakis, AA & Bedeian, AG 1999, 'Organizational change: A review of theory and research in the 1990s', Journal of Management, vol. 25, no. 3, pp. 293–315.

Armenakis, AA & Harris, SG 2009, 'Reflections: Our journey in organizational change research and practice', Journal of Change Management, vol. 9, no. 2, pp. 127–142.

Armenakis, AA, Harris, SG & Mossholder, KW 1993, 'Creating readiness for organizational change', Human Relations, vol. 46, no. 6, pp. 681–703.

Armstrong, JC 2005, 'En'owkin: Decision-making as if sustainability mattered', in MK Stone and Z Barlow (eds), Ecological literacy: Educating our children for a sustainable world, Sierra Club Books, San Francisco, CA, pp. 11–17.

Armstrong, JS & Collopy, F 1996, 'Competitor Orientation: Effects of Objectives and Information on Managerial Decisions and Profitability', Journal of Marketing Research, vol. 33, no. 2, pp. 188-199.

Arnal, E, Wooseok, OK & Torres, R 2001, Knowledge, Work Organisation and Economic Growth, Springer Berlin Heidelberg.

Arnett, DB & Hunt, SD 2002, 'Competitive irrationality: The influence of moral philosophy', Business Ethics Quarterly, vol. 12, no. 3, pp. 279-303.

Arrow, K, Dasgupta, P, Goulder, L, Daily, G, Ehrlich, GH, Levin, S, Maler, KG, Schneider, S, Starrett, D & Walker, B 2004, 'Are we consuming too much?', Journal of Economic Perspectives, vol. 18, pp. 147–172.

Asian Development Bank 2015, Asian Development Bank and Sri Lanka: Fact Sheet, Asian Development Bank, Sri Lanka.

AsiaPulse News 2009, 'Sri Lankan firms win awards for sustainability reporting', AsiaPulse News, 2009/03/27.

Astin, AW & Astin, HS 2000, Leadership reconsidered: Engaging higher education in social change, W. K. Kellogg Foundation, Battle Creek, MI.

AusAID 2013, Australian Agency for International Development (AusAID), Canberra, Australia pp. 1-18.

Avery, GC 2005, Leadership for sustainable future, Edward Elgar, Cheltenham, UK.

378

Avery, GC & Bergsteiner, H 2010, Honeybees and Locusts: The business case for sustainable leadership, First edn., Allen & Unwin, NSW, Australia.

Avery, GC & Bergsteiner, H 2011a, Diagnosing leadership in global organisations:Theories,Tools and Cases, 1st edn., Tilde University Press, Parahan, Australia.

Avery, GC & Bergsteiner, H 2011b, 'Sustainable leadership practices for enhancing business resilience and performance', Strategy & Leadership, vol. 39, no. 3, pp. 5-15.

Avery, GC & Bergsteiner, H 2011c, Sustainable Leadership: Honeybee and Locust Approaches, Routledge; New York.

Avolio, BJ & Bass, BM 1988, Transformational leadership, charisma, and beyond, Lexington Books, Lexington, MA.

Avolio, BJ, Bass, BM & Jung, DI 1999, 'Re-examining the components of transformational and transactional leadership using the Multifactor Leadership Questionnaire', Journal of Occupational and Organizational Psychology, vol. 72, no. 4, pp. 441-462.

Avolio, BJ & Gardner, WL 2005, 'Authentic leadership development: Getting to the root of positive forms of leadership', The Leadership Quarterly, vol. 16, pp. 315–338.

Avolio, BJ, Gardner, WL, Walumbwa, FO, Luthans, F & Mayo, DR 2004, 'Unlocking the mask: A look at the process by which authentic leaders impact follower attitudes and behaviors', Leadership Quarterly, vol. 15, pp. 801-823.

Backhaus, KB, Stone, BA & Heiner, K 2002, 'Exploring the relationship between corporate social performance and employer attractiveness', Business and Society, vol. 41, no. 3, pp. 292-318.

Bagozzi, RP 1994, Principles of marketing research, Blackwell Oxford.

Bagozzi, RR, Yi, Y & Phillips, LW 1991, 'Assessing construct validity in organizational research', Administrative Science Quarterly, vol. 56, pp. 421-458.

Banerjee, SB 2007, Corporate Social Responsibility: The Good, the Bad and the Ugly Edward Elgar, Northampton, MA.

Barkemeyer, R 2011, 'Corporate perceptions of sustainability challenges in developed and developing countries: Constituting a CSR divide?', Social Responsibility Journal, vol. 7, no. 2, pp. 257-281.

Barker, RA 2001, 'The nature of leadership', Human Relations, vol. 54, no. 4, pp. 469- 494.

379

Barnea, A & Rubin, A 2010, 'Corporate social responsibility as a conflict between shareholders', Journal of Business Ethics, vol. 97, pp. 71–86.

Barnes, JE, Barnett, M, Schmitt, CH & Lavelle, M 2002, 'How a Titan Came Undone ', U.S. News & World Report, vol. 132 no. 8, p. 26.

Barney, JB 1991, 'Firm resources and sustained competitive advantage', Journal of Management and Organisation, vol. 17, pp. 99–120.

Barney, JB & Wright, PM 1998, 'On becoming strategic: The role of human resources in gaining competitive advantage', Human Resource Management, vol. 37, pp. 31-46.

Baron, RM & Kenny, DA 1986, 'The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations', Journal of Personality and Social Psychology, vol. 51, no. 6, pp. 1173-1182.

Barrow, MJ & McLaughlin, HM 1992 'Towards a learning organisation', Industrial and Commercial Training, vol. 24 p. 6.

Bass, BM 1990, Bass and Stodgill’s handbook of leadership, 3rd edn., Free Press, New York.

Bass, BM 2008, Hand book of leadership: Theory, research,and managerial applications, Free Press, New York.

Bass, BM & Avolio, BJ 1993a, Improving organizational effectiveness through transformational leadership, Sage, Thousand Oaks,CA.

Bass, BM & Avolio, BJ 1993b, Transformational leadership: A response to critiques, Academic Press, San Diego.

Bearden, W, Money, R & Nevins, J 2006, 'A measure of long-term orientation: Development and validation', Journal of the Academy of Marketing Science, vol. 34, no. 3, pp. 456-467.

Bennett, R, Aston, A & Colquhoun, T 2000, 'Cross-cultural training: A critical step in ensuring the success of international assignments', Human Resource Management, vol. 39, no. 2-3, pp. 239-250.

Bennis, W & Nanus, B 1985, Leaders: The strategies for taking charge, Harper & Row, New York.

Bentler, PM 1990, 'Comparative fit indexes in structural models', Psychological Bulletin, vol. 107, pp. 238-246.

Bentler, PM & Bonett, DG 1980, 'Significance tests and goodness of fit in the analysis of covariance structures', Psychological Bulletin, vol. 88, pp. 588–606.

380

Berns, M, Townend, A, Khayat, Z, Balagopal, B, Reeves, M, Hopkins, MS & Kruschwitz, N 2009, 'The business of sustainability: What it means to managers now', MIT Sloan Management Review, vol. 51, no. 1, pp. 20-26.

Berry, JW 1980, Social and cultural change, Allyn and Bacon, Boston.

Bhattacharya, CB, Sen, S & Korschun, D 2008, 'Using corporate social responsibility to win the war for talent', MIT Sloan Management Review, vol. 49, no. 2, pp. 37-44.

Bibile, N 2013, 'JOHN CLIFFORD HOLT (ed.) The Sri Lanka Reader: History, Culture, Politics', Asian Studies Review, vol. 37, no. 1, 2013/03/01, pp. 110-112.

Bird, C 1950, Social Psychology, Appleton-Century, New York.

Black, SE & Lynch, LM 2004, 'What’s Driving the New Economy: The Benefits of Workplace Innovation', The Economic Journal, vol. 114 no. 493, pp. 97-116.

Blake, RR & Mouton, JS 1964, The managerial grid: The key to leadership excellence, Gulf Publishing, Houston.

Bloom, N, Mahajan, A, Mckenzie, D & Roberts, J 2010, 'Why do firms in developing countries have low productivity?', American Economic Review, vol. 100, pp. 619-623.

Blowfield, M 2008, Corporate responsibility: A critical introduction, Oxford University Press, Oxford.

Boiral, O, Cayer, M & Baron, CM 2008, 'The action logics of environmental leadership: A developmental perspective', Journal of Business Ethics, vol. 85, pp. 479– 499.

Bonnerjee, A 2014, Fiscal space in South Asia; Evidence for the welfare state, Taylor and Francis, Hoboken.

Bopage, L 2010, 'Sri Lanka: Is there a way forward for peace and reconciliation?', Global Change, Peace & Security, vol. 22, no. 3, pp. 355-364.

Bordia, P, Hunt, E, Paulsen, N, Tourish, D & DiFonzo, N 2004, 'Uncertainty during organizational change: Is it all about control?', European Journal of Work and Organizational Psychology, vol. 13, pp. 345–365.

Bossink, BAG 2007, 'Leadership for sustainable innovation', International Journal of Technology Management & Sustainable Development, vol. 6, pp. 135–149.

Bowels, S, Durlauf, SN & Hoff, K 2006, Poverty Traps, Princeton University Press Princeton: NJ.

381

Bowers, DG & Seashore, S 1966, 'Predicting organizational effectiveness with a four- factor of leadership', Administrative Sciences Quarterly, vol. 11, pp. 238–263.

Brandt, W 1980, North-South: A programme for survival:Report of the Independent Commission on International Development Issues: Under the chairmanship of Willy Brandt Pan Books, London.

Branson, R 1998, Losing my virginity: The autobiography, Virgin Publishing, London, UK.

Brodbeck, FC, Frese, M, Akerblom, S, Audia, G, Bakacsi, G & Bendova, H 2000, 'Cultural Variation of Leadership Prototypes Across 22 European Countries', Journal of Occupational and Organizational Psychology, vol. 73, pp. 1-29.

Brown, CB & Campbell, B 2001, 'Technical change, wages, and employment in semiconductor manufacturing', Industrial and Labor Relations Review, vol. 54, pp. 450-466.

Brown, ME, Trevin˜o, LK & Harrison, DA 2005, 'Ethical leadership: A social learning perspective for construct development and testing', Organizational Behavior and Human Decision Processes, vol. 97, no. 2, pp. 117–134.

Brown, SL & Eisenhardt, KM 1997, 'The art of continuous change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations', Administrative Science Quarterly, vol. 42, no. 1, pp. 1–34.

Browne, MW & Cudeck, R 1993, Alternative ways of assessing model fit, Sage, Beverly Hills, CA.

Brundtland, C 1987, The Report of the Brundtland Commission Our Common Future Oxford University Press, London.

Bryman, A 1993, 'Charismatic Leadership in Organizations: Some Neglected Issues', Leadership Quarterly, vol. 4, pp. 289–304.

Bryman, A 2004, Social research methods, 2nd edn., Oxford University Press, Oxford.

Bryman, A 2011, Business research methods, 3rd edn., Oxford University Press, Oxford.

Bryman, A 2012, Social research methods, 4th edn., Oxford University Press, Oxford.

Buckley, G, Salazar-Xirinachs, J & Henriques, M 2009, The promotion of sustainable enterprises, ILO, Geneva, Switzerland.

Burnes, B 2004, Managing Change, 2nd edn., FT/Prentice-Hall, London.

382

Burns, JM 1978, Leadership Harper & Row New York.

Burns, JM 1998, 'Transactional and Trasforming Leadership', Leading organizations, pp. 133-134.

Burrell, G & Morgan, G 1979, Sociological paradigms and organizational analysis, Heinemann Educational Books, London.

Bush, T 2010, 'Spiritual leadership', Educational Management Administration and Leadership, vol. 38, no. 4, pp. 402-404.

Byrne, BM 2009, Structural Equation Modeling With AMOS: Basic Concepts, Applications, and Programming, Taylor & Francis, New York.

Calarco, A & Gurvis, J 2007, Adaptability : Responding Effectively to Change, Center for Creative Leadership.

Caldwell, C, Dixon, RD, Floyd, LA, Chaudoin, J, Post, J & Cheokas, G 2012, 'Transformative Leadership: Achieving Unparalleled Excellence', Journal of Business Ethics, vol. 109, pp. 175–187.

Caldwell, C, Hayes, LA & Long, DT 2010a, ' Leadership, trustworthiness, ethical stewardship', Journal of Business Ethics, vol. 96, no. 4, pp. 497–512.

Caldwell, C, Hayes, LA & Long, DT 2010b, ' Leadership,trustworthiness, ethical stewardship', Journal of Business Ethics, vol. 96, no. 4, pp. 497–512.

Cameron, K 2011, 'Responsible Leadership as Virtuous Leadership', Journal of Business Ethics, vol. 98, no. 1, pp. 25–35.

Cameron, KS 2003, Ethics, virtuousness, and constant change, Jossey-Bass, San Francisco, CA.

Cameron, KS 2008, Positive leadership : Strategies for extraordinary performance, Berrett-Koehler San Francisco, California.

Campbell, JP 1976, Psychometric theory, Rand McNally, Chicago.

Cappelli, P, Singh, H, Singh, VJ & Useem, M 2010, How the best Indian companies drive performance by investing in people.

Capra, F 2005, 'Speaking nature’s language: Principles for sustainability', in M Stone and Z Barlow (eds), Ecological literacy: Educating our children for a sustainable world, Sierra Club Books, San Francisco, CA, pp. 18–29.

383

Carmeli, A & Tischler, A 2004, 'The relationships between intangible organizational elements and organizational performance', Strategic Management Journal, vol. 25, pp. 1257-1278.

Carson, R 1962, Silent spring, Houghton Mifflin, New York.

Castello, I & Lozano, J 2009, 'From risk management to citizenship corporate social responsibility: Analysis of strategic drivers of change', Corporate Governance, vol. 9 no. 4, pp. 373-385.

Cavaco, S & Crifo, P 2014, 'CSR and financial performance: Complementarity between environmental, social and business behaviours', Applied Economics, vol. 46, no. 27, pp. 3323-3338.

Central Bank of Sri Lanka 2012a, Annual Report, Central Bank, Colombo, Sri Lanka.

Central Bank of Sri Lanka 2012b, Economic and Social Statistics of Sri Lanka, Central Bank Colombo, Sri Lanka.

Central Bank of Sri Lanka 2013a, Annual Report, Central Bank Colombo, Sri Lanka.

Central Bank of Sri Lanka 2013b, Economic and Social Statistics of Sri Lanka Central Bank Colombo, Sri Lanka.

Chan, AYL 2005, 'Authentic leadership development: Measurement challenges and suggestions', in WL Gardner, BJ Avolio and FO Walumbwa (eds), Authentic leadership theory and practice: Origins, effects and development, Elsevier Science, Oxford, UK.

Chandrakumara, A & Sparrow, PR 2004, 'Exploring Meaning and Values of Work Orientation as an Element of National Culture and Its Impact on HRM Policy-Practice Design Choices: Lessons From Sri Lankan Domestic and Foreign-Invested Firms,' International Journal of Manpower, vol. 25, no. 6, pp. 564–589.

Chandraprema, CA 1989, Ruhuna: A study of the history, society, and ideology of Southern Sri Lanka, Bharat Publishers, Nugegoda, Sri Lanka.

Chen, M 1993, 'Socialism and Confucianism: Problems of Chinese management ', Asian Profile, vol. 21, no. 1, pp. 1-11.

Chhokar, JS, Brodbeck, FC & House, RJ 2008, Culture and leadership across the world: The globe book of in-depth studies of 25 societies, Psychology Press, New York.

Chhokar, JS, Brodbeck, FC & House, RJ 2012, Culture and leadership across the world: The GLOBE book of in-depth studies of 25 societies, Routledge, London, UK.

384

Chiaburu, DS 2006, 'Managing organizational change in transition economies', Journal of Organizational Change Management, vol. 19, no. 6, pp. 738–746.

Choi, JS, Kwak, YM & Choe, C 2010, 'Corporate social responsibility and corporate financial performance: Evidence from Korea', Australian Journal of Management, vol. 35, no. 3, pp. 291-311.

Choi, M 2011, 'Employees’ attitudes toward organizational change: A literature review', Human Resource Management, vol. 50, no. 4, pp. 479–500.

Chou, C & Bentler, P 2002 'Model modification in structural equation modeling by imposing constraints', Computational Statistics & Data Analysis, vol. 41, no. 2, pp. 271-287.

Churchill, GA 1979, 'A paradigm for developing better measures of marketing constructs', Journal of Marketing Research, vol. 16, pp. 64-73.

Churchill, RR & Hutchinson, DM 1984, 'Flood hazard in Ratnapura, Sri Lanka: Individual attitudes vs collective action', Geoforum, vol. 15, no. 4, 1984/01/01, pp. 517-524.

CIA 2013, The world fact book, viewed 15th January 2013, .

Clark, WC 2007, 'Sustainability science: A room of its own', Proceedings of National Academy of Sciences of the United States of America (PNAS), vol. 104, pp. 1737–1738.

Clegg, C, Axtell, C, Damodarant, L, Farbey, B, Hull, R, Lloyd-Jones, R, Nicholls, J, Sells, R & Tomlinson, C 1997, 'Information Technology: A Study of Performance and the Role of Human and Organisational Factors', Ergonomics, vol. 40, no. 9, pp. 851- 871.

Collins, J 2001, Good to Great, Harper Business, New York.

Combs, J, Liu, Y, Hall, A & Ketchen 2006, 'How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance', Personnel Psychology, vol. 59, pp. 501-528.

Commission of the European Communities 2002, Communication from the Commission on Impact Assessment, European Union.

Conger, JA & Hunt, JG 1999, 'From where we sit: An assessment of transformational and charismatic leadership research', The Leadership Quarterly, vol. 10, no. 3, pp. 335- 343.

Conger, JA & Kanungo, RN 1988, Behavioural Dimensions of Charismatic Leadership, Jossey-Bass, San Francisco, CA.

385

Conger, JA & Kanungo, RN 1998, Charismatic Leadership in Organizations, Sage Publications, Thousand Oaks, CA.

Cook, JD, Hepworth, SJ & Warr, PB 1981, The experience of work, Academic Press, Cambridge Cambridge University, San Diego.

Cooper, C, Scandura, TA & Schriesheim, CA 2005, 'Looking forward but learning from our past: Potential challenges to developing authentic leadership theory and authentic leaders', Leadership Quarterly, vol. 16, pp. 474-493.

Corraliza, JA & Berenguer, J 2000, 'Environmental values beliefs and actions: A situational approach', Environment and Behavior, vol. 32, pp. 832–848.

Cortina, JM 1993, 'What is coefficient alpha? An examination of theory and applications', Journal of Applied Psychology, vol. 78, pp. 98-104.

Costanza, R & Wainger, L 1991, Ecological economics: The science and management of sustainability, Colombia University Press, New York.

Costello, AB & Osborne, JW 2005, 'Best Practices in Exploratory Factor Analysis: Four Recommendations for Getting the Most From Your Analysis', Practical Assessment, Research & Evaluation, vol. 10, pp. 1-9.

Covey, SR 2004, The 8th habit: From effectiveness to greatness, Free Press, New York.

Crawford, L & Nahmias, AH 2010, 'Competencies for managing change', International Journal of Project Management, vol. 28, no. 4, pp. 405-412.

Cresswell, JW 2009, Research design: Qualitative,quantitative, and mixed methods approaches, Sage Publications Thousand Oaks: CA.

Crocker, J, Fiske, ST & Taylor, SE 1984, 'Schematic bases of belief change', in JR Eiser (ed.) Attitudinal judgment, Springer-Verlad, New York, pp. 197–226.

Cronbach, LJ 1951, 'Coefficient alpha and the internal structure of tests', psychometrika, vol. 16, no. 3, pp. 297-334.

Cronshaw, SF & Lord, RG 1987, 'Effects of categorization, attribution, and encoding processes on leadership perceptions', Journal of Applied Psychology, vol. 72, no. 1, pp. 97–106.

Culture 21 Agenda 2013, Cultural Policies and Sustainable Development, viewed 10 March 2013,.

386

Cunningham, E 2008, A practical guide to structural equation modelling using Amos, 1 edn., Statsline, Melbourne.

Cunningham, E 2010, A practical guide to structural equation modelling using Amos, 2 edn., Statsline, Melbourne.

D' Andrade, R & Strauss, C 1992, Human Motives and Cultural Models, Cambridge University Press, New York.

D’Amato, A, Henderson, S & Florence, S 2009, Corporate social responsibility and sustainable business, Center for Creative Leadership, Greensboro, NC.

D’Amato, A & Roome, N 2009, 'Toward an integrated model of leadership for corporate responsibility and sustainable development: A process model of corporate responsibility beyond management innovation', Corporate Governance, vol. 9, no. 4, pp. 421-434.

Danish Ministry of Business and Industry 1996, Technological and Organisational Change: Implications for Labour Demand, Danish Ministry of Business and Industry, Denmark.

Dasgupta, P 2010, The place of nature in economic development, North Holland: Amsterdam.

Dasgupta, S, Deichmann, U, Meisner, C & Wheeler, D 2005, 'Where is the poverty- environment nexus?', World Development, vol. 33, pp. 617–638.

David, AR, Carolyn, PE, Emmanuelle, R, Narasimhan, S, Olivier, F, David, B, Ruth, A, Florian, W, Fidel, LnD, Christine, K, Vojko, P, Audra, IM, Erna, S, Jaime, RG, Andre, P, Arif, B, Ian, P, Irina, N, Tomasz, L, Arunas, S, Vu, TH, Tevﬁk, D, Mario, M, Carranza, MaTdlG, Maignan, I, Castro , FB, Moon, Y-l, Terpstra-Tong, J, Dabic, M, Li, Y, Danis, W, Kangasniemi, M, Ansari, M, Riddle, L, Milton, L, Hallinger, P, Elenkov, D, Girson, I, Gelbuda, M, Ramburuth, P, Casado, T, Rossi, AM, Richards, M, Van Deusen, C, Fu, P-P, Wan, Pae, Tang, M, Lee, C-H, Chia, H-B, Fan, Y & Wallace, A 2011, 'A Twenty-First Century Assessment of Values Across the Global Workforce', Journal of Business Ethics, vol. 104, pp. 1–31.

Davis, JM, Mora-Monge, C, Quesada, G & Gonzalez, M 2014, 'Cross-cultural influences on e-value creation in supply chains', Supply Chain Management: An International Journal, vol. 19, no. 2, pp. 187-199.

Dayaratne , GD 2013, Private Hospital Health Care Delivery in Sri Lanka: Some Issues on Equity, Fairness, and Regulation, Institute of Policy Studies of Sri Lanka.

De Bruijn, H & Ten Heuvelhof, E 2010, Process Management: Why Project Management Fails in Complex Decision Making Processes, Springer Science & Business Media Berlin, Heidelberg.

387 de Waal, AA, Heijden, BIJMvd, Selvarajah, C & Meyer, D 2011, 'Characteristics of high performing managers in The Netherlands', Leadership and Organisational Development Journal, vol. 33, no. 2, pp. 131-148. de Waal, AA, van der Heijden, BIJM, Selvarajah, C & Meyer, D 2010, 'Comparing Dutch and British High Performing Managers,' The British Academy of Management (BAM) Management Research in a changing climate, pp.14-16. de Waal, AA, van der Heijden, BIJM, Selvarajah, C & Meyer, D 2012, 'Characteristics of high performing managers in The Netherlands', Leadership and Organizational Development Journal, vol. 33, no. 2, pp. 131-148.

Deborah, RG 2012a, Environmental leadership: A reference handbook, SAGE Publications, Thousand Oaks, California.

Deborah, RG 2012b, 'Why environmental leadership?', in RG Deborah (ed.) Environmental leadership : A reference handbook, SAGE Publications, Thousand Oaks, California.

Deci, EL & Ryan, RM 2000, '“What” and “why” of goal pursuits: Human needs and the self-determination of behavior', Psychological Inquiry, vol. 11, pp. 227-268.

Delaney, J & Huselid, MA 1996, 'The impact of human resource management practices on perceptions of organizational performance', Academy of Management Journal, vol. 39, no. 4, pp. 949-969.

Den Hartog, DN, House, RJ, Hanges, PJ, Ruiz-Quintanilla, SA & Dorfman, PW 1999, 'Culture specific and cross-culturally generalizable implicit leadership theories: Are attributes of charismatic/transformational leadership universally endorsed?', Leadership Quarterly, vol. 10, pp. 219–256.

Den Hartog, DN & Verburg, RM 2004, 'High performance work systems, organizational culture and firm performance', Human Resource Management Journal, vol. 14, pp. 55-78.

DeRue, DS, Nahrgang, J, Wellman, N & Humphrey, SE 2011, 'Trait and behavioral theories of leadership: An integration and meta-analytic test of their relative validity', Personnel Psychology, vol. 64, no. 1, pp. 7-52.

Detert, JR & Burris, ER 2007, 'Leadership behavior and employee voice: Is the door really open?', Academy of Management Journal, vol. 50, pp. 869–884.

Dicksona, MW, Den Hartogb, DN & Mitchelsona, JK 2003, 'Research on leadership in a cross-cultural context: Making progress, and raising new questions', The Leadership Quarterly, vol. 14, no. 6, pp. 729–768.

388

Doh, JP & Stumph, S 2005, Handbook on responsible leadership and governance in global business, Oxford University Press, New York.

Doktor, HR 1990 'Asian and American CEOs. A comparative study', Organisational Dynamics vol. 18, no. 3 pp. 46-56.

Donaldson, T & Preston, L 1995, 'The stakeholder theory of the corporation: Concepts, evidence and implications', Academy of Management Review, vol. 20, no. 1, pp. 65– 91.

Doppelt, B 2009, Leading change toward sustainability : A Change-Management Guide for Business, Government and Civil Society, Greenleaf Publishing England.

Doppelt, B 2012, The power of sustainable thinking : How to create a positive future for the climate, the planet, your organization and your life, Routledge, England.

Dorfman, PW 1996, International and cross-cultural leadership research, Blackwell, Oxford, England.

Dorfman, PW 2003, International and cross-cultural leadership research, 2nd edn., University of Michigan, Ann Arbor, MI.

Dorfman, PW & Howell, JP 1997, 'Leadership in Western and Asian countries: commonalities and differences in effective leadership process across cultures', The Leadership Quarterly, vol. 8, no. 3, pp. 233-74.

Dow Jones Sustainability Indices 2014, Corporate sustainability, viewed 7th December 2014, .

Downton, JV 1973, Rebel Leadership: Commitment and Charisma in the Revolutionary Process, Free Press, New York.

Drenth, PJD & Den Hartog, DN 1998, Culture and organizational differences, Swets and Zeitlinger Publishers, Bristol, PA.

Drucker, PF 1968, The practice of management Pan Books London.

Drucker, PF 1988, 'Management and the world's work ', Harvard Business Review, vol. September-October, pp. 65-76.

Du, S, Swaen, V, Lindgreen, A & Sen, S 2012, 'The roles of leadership styles in corporate social responsibility', Journal of Business Ethics, vol. 114, pp. 155-169.

Dunlap, RE & Van Liere, KD 1978, 'The new environmental paradigm', Journal of Environmental Education, vol. 9, pp. 10–19.

389

Dunlap, RE, Van Liere, KD, Mertig, A & Jones, RE 2000, 'Measuring endorsement of the new ecological paradigm: A revised NEP scale', Journal of Social Issues, vol. 56, pp. 425–442.

Dunphy, D & Benn, S 2013, 'Organisational change, leadership and ethics: Leading organisations towards sustainability: Leadership for sustainable futures', in R Todnem and B Burnard (eds), Routledge, London, pp. 195-215.

Dunphy, D, Griffiths, A & Benn, S 2003, Organisational change for corporate sustainability: A guide for leaders and change agents of the future, 1st edn., Routledge, London.

Dunphy, D, Griffiths, A & Benn, S 2007, Organisational change for corporate sustainability: A guide for leaders and change agents of the future, 2nd edn., Routledge, London.

Duraiappah, AK 1998, 'Poverty and environmental degradation: A review and analysis of the nexus', World Development,no. 26, pp. 2169–2179.

Earley, PC 1997, Face, Harmony, and Social Structure: An Analysis of Organizational Behavior across Cultures, Oxford University Press, New York.

Eden, D & Leviatan, U 1975, 'Implicit leadership theory as a determinant of the factor structure underlying supervisory behavior scales', Journal of Applied Psychology, vol. 60, pp. 736–741.

Edirisinghe, H 2008, Strategic management practices of Sri Lankan commercial banks, PhD thesis, Australian Graduate School of Entrepreneurship, Swinburne University of Technology Melbourne, Australia.

Edmondson, AC & McManus, SE 2007, 'Methodological Fit in Management Field Research', The Academy of Management Review, vol. 32, no. 4, pp. 1155-1179.

Edmondson, AC & Roloff, KS 2009, Overcoming barriers to collaboration: Psychological safety and learning in diverse teams, Routledge/Taylor & Francis Group, New York.

Ehrlich, PL 1968, The population bomb, Ballantine Books, New York.

Eisenbach, RK, Watson, K & Pillai, R 1999, 'Transformational leadership in the context of organizational change', Journal of Organizational Change Management, vol. 12, no. 2, pp. 80–88.

Eisenbeiss, SA 2012, 'Re-thinking ethical leadership: An interdisciplinary integrative approach', Leadership Quarterly, vol. 23, no. 5, pp. 791–808.

390

Eisenbeiss, SA, van Knippenberg, D & Fahrbach, CM 2014, 'Doing Well by Doing Good? Analyzing the Relationship Between CEO Ethical Leadership and Firm Performance', Journal of Business Ethics, pp. 1-17.

Ekvall, G & Arvonen, J 1991, 'Change-centered leadership: An extension of the two- dimensional model', Scandinavian Journal of Management, vol. 7, no. 1, pp. 17-26.

Elkington, J 1994, 'Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development', California Management Review, vol. 36, no. 2, p. 90.

Elkington, J 1997, Cannibals with Forks the Triple Bottom Line of 21st Century Business, Capstone Publishing, Oxford.

Elkington, J 2001, The Chrysalis Economy: How Citizen CEOs and Corporations Can Fuse Values and Value Creation, Capstone Publishing, Oxford.

Elkington, J 2004, Enter the triple bottom line, Earthscan, London.

Elkington, J & Hartigan, P 2008, The Power of Unreasonable People, Harvard Business Press, Cambridge, MA.

Euchner, J & Ganguly, A 2014, 'Business model innovation in practice: A systematic approach to business model innovation can help capture value and reduce risks', Research-Technology Management, vol. 57, no. 6, pp. 33-37.

Faculty of Graduate Studies 2014 Alumni FGS, University of Colombo, (FGS) Alumni Association, viewed 5 January2015 .

Fahr, JL, Podsakoff, PM & Cbeng, BS 1987, 'Culture-free leadership effectiveness versus moderators of leadership behaviors: An extension and test of Kerr and Jermier's 'substitutes for leadership' model in Taiwan', Journal of International Business Studies, vol. 18, pp. 43-60.

Fang, T 2003, 'A Critique of Hofstede’s Fifth Dimension', International Journal of Cross-Cultural Management, vol. 3, no. 3, pp. 347–368.

Ferdig, MA 2007, 'Sustainability Leadership: Co-creating a Sustainable Future', Journal of Change Management, vol. 7, no. 1 pp. 25-35.

Ferguson, KL & Reio, TGJ 2010, 'Human resource management systems and firm performance', Journal of Management Development, vol. 29, no. 5, pp. 471-494.

Fernandez, RM 2001, 'Skill-based technological change and wage inequality: Evidence from a plant re-tooling', The American Journal of Sociology, vol. 107, pp. 273-320.

391

Fernando, M & Almeida, S 2012, 'The organizational virtuousness of strategic corporate social responsibility: A case study of the Sri Lankan family-owned enterprise MAS Holdings', European Management Journal, vol. 30, no. 6, pp. 564- 576.

Fiedler, F 1967, A theory of leadership effectiveness, McGraw-Hill, New York.

Field, A 2005, Discovering statistics using SPSS, SAGE, Thousand Oaks, CA.

Fleishman, EA 1953, 'The measurement of leadership attitudes in industry', Journal of Aplied Psycology, vol. 37, pp. 153-158.

Fleishman, EA & Harris, EF 1955, Leadership and supervision in industry, Ohio State University Bureau of Educational Research, Columbus.

Follet, MP 1918, The New State: Group organisation, the solution of popular government, Long Mans, London.

Ford, JD & Ford, LW 1994, 'Logics of identity, contradiction, and attraction in change', Academy of Management Review, vol. 19, no. 4, pp. 756–785.

Ford, JK, Maccallum, RC & Tait, M 1986, 'The application of exploratory factor analysis in applied psychology: A critical review and analysis', Personnel Psychology, vol. 59, pp. 291-314.

Fornell, C & Larcker, DF 1981, 'Evaluating structural equation models with unobservable variables and measurement error', Journal of Marketing Research, vol. 18, no. February, pp. 39–50.

Frankel, C 1998, In Earth’s Company: Business, Environment and the Challenge of Sustainability, New Society Publishers, Gabriola Island, BC.

Freeman, RE 1984, Strategic Management: A stakeholder Approach, Pitman, Boston, MA.

Freeman, RE & Evan, WM 1990, 'Corporate governance: A stakeholder interpretation', The Journal of Behavioural Economics, vol. 19, pp. 337-359.

Freeman, RE, Harrison, JS & Wicks, AC 2007, Managing for stakeholders: Survival, reputation and success, Yale University Press, New Haven, CT.

French, JRP 1956, 'A formal theory of social power', Psycological Review, vol. 63, pp. 181-194.

French, JRP & Raven, BH 1959, The basis of social power, University of Michigan.

392

French, WL & Bell, CHJ 1999, Organization development: Behavioral science interventions for organization improvement, Prentice Hall, Upper Saddle River, NJ.

Friedman, M 1970, 'The social responsibility of business is to increase its profit', New York Times Magazine, vol. 13 Sept, pp. 122-126.

Friedman, TL 2006, The world is flat: A brief history of the twenty-first century, Penguin, Camberwell, Victoria.

Friedman, TL 2009, Hot, flat, and crowded, Picador Press, New York.

Fry, LW 2003, 'Toward a theory of spiritual leadership', Leadership Quarterly, vol. 14, no. 6, pp. 693-727.

Fullan, M 2003, 'Leadership and sustainability', Plain Talk, vol. 8, pp. 1–3.

Fullan, M 2005, Leadership & sustainability: System thinkers in action, Corwin Press, USA.

Fulmer, IS, Gerhart, B & Scott, KS 2003, 'Are the 100 best better? An empirical investigation of the relationship between being a great place to work and firm performance', Personnel Psychology, vol. 56, pp. 965-993.

Gallup, GJ 2004, American Morality: Is There a Generation Gap?, Gallup Poll Tuesday Briefing, viewed 4 March 2012, .

Galpin, T & Whittington, JL 2012, 'Sustainability leadership: from strategy to results', Journal of Business Strategy, vol. 33, no. 4, pp. 40-48.

Galton, F 1869, Hereditary Genius, Macmillan, London.

Gamage, HR, Cameron, D & Woods, E 2003, 'Are Sri Lankan Entrepreneurs Motivated by the Need for Achievement?,' 9th International Conference on Sri Lanka Studies ,University of Ruhuna, 1-10.

Gardner, WL, Avolio, BJ, Luthans, F, May, DR & Walumbwa, FO 2005, 'Can you see the real me? A self-based model of authentic leader and follower development', The Leadership Quarterly, vol. 16, pp. 343–372.

Gardner, WL, Avolio, BJ & Walumbwa, FO 2005, 'Authentic leadership development: Emergent themes and future directions', in Authentic leadership theory and practice: Origins, effects, and development, Gallup Leadership Institute, University of Nebraska-Lincoln, pp. 387-406.

393

Gardner, WL, Lowe, KB, Moss, TW, Mahoney, KT & Cogliser, CC 2010, 'Scholarly leadership of the study of leadership: A review of The Leadership Quarterly's second decade, 2000–2009', The Leadership Quarterly, vol. 21, no. 6, pp. 922-958.

Garvin, DA 1993 'Building a learning organisation', Harvard Business Review, vol. 71 (July-August), pp. 78-91.

George, B 2003, Authentic leadership: Rediscovering the secrets to creating lasting value, Jossey-Ba, San Francisco.

Gerbing, DW & Hamilton, JG 1996, 'Viability of exploratory factor analysis as a precursor to confirmatory factor analysis', Structural Equation Modeling: A Multidisciplinary Journal, vol. 3, pp. 62-72.

Ghoshal, S 2005, 'Bad management theories are destroying good management practices', Academy of Management Learning & Education, vol. 4, no. 1, pp. 75-91.

Giampalmi, J 2004, ' Leading chaos, paradox, and dysfunctionality in sustainable development', Executive Speeches, vol. 19, no. 2, pp. 6–13.

Gilbert, L, Shaun, T, Simon, P & David, B 2009, Corporate Responsibility and Sustainability Leadership and Organisational Change, Emerald Group Publishing Limited, Bradford.

Girden, ER & Kabacoff, RI 2011, Evaluating research articles from start to finish, 3rd edn., Sage Publications, Thousand Oaks, CA.

Glinskaya, E 2000, An Empirical Evaluation of Samurdhi Program: Background paper to Sri Lanka Poverty Assessment, SASPR, World Bank, Washington, DC, Chicago.

Global Reporting Initiative 2013a, G4 Sustainability reporting guidelines Global Reporting Initiative, Amesterdam, The Netherlands.

Global Reporting Initiative 2013b, GRI: Empowering sustainable decisions viewed 23 January 2013, .

Goldsmith, M, Ulrich, D & Carter, L 2005, Best practices in leadership development and organization change: How the best companies ensure meaningful change and sustainable leadership, Pfeiffer - John Wiley and Sons, San Francisco.

Googins, BK, Mirvis, PH & Rochlin, SA 2007, Beyond Good Company: Next Generation Corporate Citizenship, Palgrave Macmillan, New York.

Gordi, T & Khamis, H 2004, 'Simple solution to a common statistical problem: Interpreting multiple tests', Clinical Therapeutics, vol. 26, no. 5, pp. 780-786.

394

Gordon, JC & Berry, JK 1993, 'Environmental leadership: Who and why', in JK Berry and JC Gordon (eds), Environmental leadership: Developing effective skills and styles, Island Press, Washington D. C, pp. 3–12.

Graf, L, König, A, Enders, A & Hungenberg, H 2012, 'Debiasing competitive irrationality: How managers can be prevented from trading off absolute for relative profit ', European Management Journal, vol. 30, no. 4, pp. 386-403.

Graham, RJ 1981, 'The Role of Perception of Time in Consumer Research', Journal of Consumer Research, vol. 7 (March), pp. 335-342.

Greenleaf, RG 1977, Servant leadership: A journey in the nature of legitimate power and greatness, Paulist, New York.

Greenleaf, RK 1991, The servant as leader, The Greenleaf Center, Indianapolis.

Gregersen, H, Morrison, A & Black, J 1998, 'Developing leaders for the global frontier', Sloan Management Review, vol. Fall, pp. 21–32.

Groom, B 2011, Bosses put profit before principle, Financial Times, viewed 2013 December 15, .

Guadagnoli, E & Velicer, WF 1988, 'Relation of sample size to the stability of component patterns', Psychological Bulletin, vol. 103, pp. 265-275.

Guba, E & Lincoln, Y 1994, Competing paradigms in qualitative research, SAGE Publications, Newbury Park, CA.

Gudmundson, D, Tower, CB & Hartman, EA 2003, 'Innovation in small businesses: Culture and ownership structure do matter', Journal of Developmental Entreprenureship, vol. 8, no. 1, pp. 1-18.

Guerrera, F 2009, 'A need to reconnect', Financial Times, vol. 13, no. 9.

Hair, JF & Anderson, RE 2010, Multivariate data analysis, 7th edn., Prentice Hall Higher Education, New Jersey.

Hair, JF, Anderson, RE, Tatham, RL & Black, WC 1998, Multivariate Data Analysis, Prentice Hall, Upper River Saddle, NJ.

Hair, JF, Black, WC, Babin, BJ, Anderson, RE & Tatham, RL 2006, Multivariate Data Analysis, Pearson Education, New York.

Hair, JF, Celsi, MW, Money, AH, Samouel, P & Page, MJ 2011, Essentials of business research methods, 2nd edn., ME Sharpe, New York.

395

Hall, ET & Hall, MR 1990, Understanding Cultural Differences Intercultural Press, Yarmouth, ME.

Hall, PA & Soskice, D 2001, An introduction to varieties of capitalism, Oxford University Press, Oxford.

Halpin, AW & Winer, BJ 1957, A factorial study of the leader behavior descriptions, Bureau of Business Research, The Ohio State University, Columbus.

Hambrick, DC & Mason, PA 1984, 'Upper echelons: The organization as a reflection of its top managers', Academy of Management Review, vol. 9, no. 2, pp. 193–206.

Hamza-Sendut., Madsen, J & Thong, GTS 1989, Managing in a plural society, Longman, London.

Hanson, D & Middleton, S 2000, 'The challenges of eco-leadership', Greener Management Journal of Applied Corporate Finance, vol. 29, pp. 95–107.

Hardman, J 2010, 'Regenerative leadership: A model for transforming people and organizations for sustainability in business, education, and community', Integral Leadership Review, vol. 10.5, pp. 1-17.

Hardman, J 2011, Leading For Regeneration Going Beyond Sustainability in Business Education, and Community, Taylor and Francis, Hoboken.

Hardoon, D & Heinrich, F 2011, Daily lives and corruption: Public opinion in South Asia, Transparency International, International Secretariat.

Hargett, TR & Williams, MF 2009, 'Wilh. Wilhelmsen Shipping Company: Moving from CSR tradition to CSR leadership', Corporate Governance, vol. 9 no. 1, pp. 73- 82.

Hargreaves, A & Fink, D 2004, 'The seven principles of sustainable leadership', Educational Leadership, vol. 61, no. 7, pp. 8-13.

Harley, C, Metcalf, L & Irwin, J 2014, 'An exploratory study in community perspectives of sustainability leadership in the Murray Darling Basin ', Journal of Business Ethics vol. 124, no. 3, pp. 413-433.

Hart, S 1995, 'A natural resource-based view of the firm', Academy of Management Review, vol. 20, pp. 986–1014.

Hart, S 2005, Capitalism at the crossroads: The unlimited business opportunities in solving the world’s most difficult problems, Wharton School Publishing, Philadelphia, PA.

396

Harvey, RJ, Billings, RS & Nilan, KJ 1985, 'Confirmatory factor analysis of the job diagnostic survey: Good news and bad news', Journal of Applied Psychology, vol. 70, pp. 461-468.

Hawken, P 1993, The ecology of commerce: A declaration of sustainability, Harper Business, New York.

Hawken, P, Lovins, A & Lovins, H, L., 1999, Natural Capitalism: Creating the Next Industrial Revolution, Earthscan, London.

Hawkes, J 2001, The forth pillar of sustainability: Culture’s essential role in public planning, Cultural Development Network Victoria, Australia.

Hayduk, LA 1987, Structural equation modeling with LISREL: Essentials and advances, JHU Press, Baltimore.

Hayes, J, Rose-Quirie, A & Allinson, CW 2000, 'Senior Managers’ Perceptions of the Competencies they Require for Effective Performance: Implications for Training and Development', Personnel Review, vol. 29, no. 1, pp. 92–105.

Hayibor, S, Agle, B, Sears, G, Sonnenfeld, J & Ward, A 2011, 'Value Congruence and Charismatic Leadership in CEO-Top Manager Relationships: An Empirical Investigation', Journal of Business Ethics, vol. 102, no. 2, pp. 237–254.

Healy, M & Perry, C 2000, 'Comprehensive criteria to judge validity and reliability of qualitative research within the realism paradigm', Qualitative Market Research: An International Journal, vol. 3, no. 3, pp. 118-126.

Heffes, EM & Sinnett, WM 2006, 'Private companies: In pursuit of sustainable growth', Financial Executive, vol. October, pp. 36-42.

Heifetz, RA 1994, Leadership without easy answers, Belknap Press, Cambridge, Massachusetts.

Heifetz, RA, Grashow, A & Marty, L 2009, The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World, Harvard Business Review Press, Boston.

Hemphill, JK & Coons, AE 1957, Development of the leader behaviour description questionnaire, Bureau of Business Research, Ohio State University, Colombus.

Henderson, H 1996, Creating Alternative Futures: The End of Economics, Kumarian Press, West Hartford, CT.

Henderson, H 2006, 'Twenty-first century strategies for sustainability', Foresight, vol. 8, no. 1, pp. 21-38.

397

Herring, RJ 1987, 'Economic Liberalisation Policies in Sri Lanka: International Pressures, Constraints and Supports', Economic and Political Weekly, vol. 22, no. 8, pp. 325-333.

Hersey, P & Blanchard, KH 1977, The management of organizational behavior, Prentice Hall, Englewood Cliffs, NJ.

Hetland, H & Sandal, GM 2003, 'Transformational leadership in Norway: Outcomes and personality correlates', European Journal of Work and Organizational Psychology, vol. 12, no. 2, pp. 147-170.

Hettige, S 2000, Dilemmas of post-colonial society after 50 years of independence: A critical analysis, Macmillan India Limited, Colombo.

Hewege, CR 2011, 'Acculturation and Management Control - Japanese Soul in Sri Lankan Physique', Contemporary Management Research, vol. 7, no. 1, pp. 3-20.

Hewege, CR, Teicher, J, Alam, Q & VanGramberg, B 2008, Postmortem of Post- Liberalisation SOE Governance in Sri Lanka: The Duality of Rational-Legal and Feudal-Patrimonial, Faculty of Business, Queensland University of Technology, Brisbane, Qld.

Hewitt and Associates 2001, Survey highlights: Best employers to work for in Australia study 2001, AON Hewitt, Sydney.

Hicks, J 1946, Value and Capital, Clarendon, London.

Higgins, JM 1984, Strategy: Formulation, implementation and control (The Dryden Press Series in Management), Dryden Press, Chicago, IL.

Hilb, M 2006, New Corporate Governance: Successful Board Management Tools, Springer, Berlin, Heidelberg.

Hillman, AJ & Keim, GD 2001, 'Shareholder value, stakeholder management and social issues: whats the bottom line?', Strategic Management Journal, vol. 22, pp. 125– 139.

Hilton, AL 1998, 'Why did I kill?: The Cambodian genocide and the dark side and face honor', Journal of Asian Studies, vol. 57, no. 1, pp. 93–122.

Hind, P, Wilson, A & Lenssen, G 2009, 'Developing leaders for sustainable business', Corporate Governance, vol. 9, no. 1, pp. 7-20.

Hinkin, TR 1998, 'A brief tutorial on the development of measures for use in survey questionnaires', Organizational Research Methods, vol. 1, no. 1, pp. 104-121.

398

Hoelter, JW 1983, 'The analysis of covariance structures: Goodness-of-fit indices', Sociological Methods and Research, vol. 11, pp. 325-344.

Hofstede, G 1980, Culture’s Consequences, SAGE Publications, Beverly Hills, CA.

Hofstede, G 1986, Culture’s consequences: International differences in work-related values, SAGE, London.

Hofstede, G 1993, 'Cultural constraints in management theories', Academy of Management Executive, vol. 7, no. 1, pp. 81-94.

Hofstede, G 1998, 'A case for comparing apples with oranges—International differences in values', International Journal of Comparative Sociology, vol. 39, no. 1, pp. 16–31.

Hofstede, G 2001a, Cultural Consequances:International differences in work-related values, SAGE Publication, Thousand Oaks, CA.

Hofstede, G 2001b, Culture’s Consequences 2, SAGE Publication, Beverly Hills, CA.

Hofstede, G & Bond, M, H., 1988, 'The Confucian connection: From cultural roots to economic growth', Organizational Dynamics, vol. 16 (Spring), pp. 5-21.

Hogan, R & Hogan, J 2001, 'Assessing leadership: A view from the dark side', International Journal of Selection & Assessment, vol. 9, no. 1/2, pp. 40-51.

Holland, D & Naomi, Q 1987, Cultural Models in Language and Thought, Cambridge University Press, Cambridge.

Hosmer, LT 2007, The ethics of management, 6th ed edn., McGraw-Hill, New York.

House, R, Javidan, M & Dorfman, P 2001, 'Project GLOBE: An Introduction', Applied Psychology: An International Review, vol. 50, no. 4, pp. 489-505.

House, RJ 1971, 'A path-goal theory of leader effectiveness', Administrative Science Quarterly, vol. 16, pp. 321-333.

House, RJ & Aditya, RN 1997, 'The social scientific study of leadership: Quo Vadis?', Journal of Management, vol. 23, pp. 409-473.

House, RJ & Baetz, ML 1979, Leadership: Some empirical generalizations and new research directions, JAI Press, Greenwich, CT.

House, RJ, Hanges, PJ, Javidan, M, Dorfman, PW & Gupta, V 2004, Culture,Leadership and Organisations, the GLOBE study of 62 societies, SAGE Publications, Thousand Oaks, CA.

399

House, RJ, Hanges, PJ, Ruiz-Quintanilla, SA, Dorfman, PW, Javidan, M, Dickson, M & Gupta, V 1999, Cultural influences on leadership and organizations: Project GLOBE, JAI Press, Stamford, CT.

House, RJ & Javidan, M 2004, Overview of GLOBE, SAGE, Thousand Oaks, CA.

Hoyle, RH & Panter, AT 1995, Writing about structural equation models, SAGE Thousand Oaks, CA.

Hu, HC 1982, 'The Chinese concepts of face', American Anthropology, vol. 46, no. 4, pp. 45-64.

Human Rights Watch 2015, Sri Lanka: Rajapaksa Legacy of Abuse; Assaults on Activists, Resistance to International Investigation in 2014, viewed 30 January 2015, .

Huselid, MA 1995, 'The impact of human resource management practices on turnover, productivity, and corporate financial performance', Academy of Management Journal, vol. 38, pp. 635-372.

Huselid, MA & Becker, BE 1996, 'High Performance Work Systems and Firm Performance: Cross Sectional vs Panel Results', Industrial Relations, vol. 35, no. 3, pp. 400-422.

Iacobucci, D 2008, Mediation Analysis in Quantitative Applications in the Social Sciences, SAGE, Los Angeles.

Ichinowski, C 1990, Human Resource Management Systems and the Performance of U.S. Manufacturing Businesses, National Bureau of Economic Research, Inc (NBER), Cambridge, MA.

Jackofsky, EF, Slocum, JWJ & McQuaid, SJ 1988, 'Cultural values and the CEO: Alluring companions?', Academy of Management Executive, vol. 2, no. 1, pp. 39-49.

Jackson, SE, Deniz, SO, Dilchert, S & Kraiger, K 2012, Managing Human Resources for Environmental Sustainability, John Wiley & Sons, Hoboken.

James, W 1880, Great Men and Their Environment, Kessinger Publishing, Kila, MT.

Jarrel, SL & Easton, GS 1996, An Exploratory Empirical Investigation of the Effects of Total Quality Management on Corporate Performance, Harvard University Press, Boston.

Javidan, M, Dorfman, PW, de Luque, MS & House, RJ 2006, 'In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE', The Academy of Management Perspectives, vol. 20, no. 1, pp. 67-90.

400

Javidan, M & House, RJ 2001, 'Cultural acumen for the global manager: Lessons from Project GLOBE', Organizational Dynamics, vol. 29, no. 4, pp. 289–305.

Jaworski, J 1996, Synchronicity: The inner path of leadership, Berrett-Koehler, San Francisco, CA.

Jayakody, JASK 2008, 'Charismatic leadership in Sri Lankan business organisations', Journal of Management Development, vol. 27, no. 5, pp. 480-498.

Jayawardana, AKL, O'Donnell, M & Jayakody, JASK 2013, 'Job involvement and performance among middle managers in Sri Lanka', The International Journal of Human Resource Management, vol. 24, no. 21, pp. 4008-4025.

Jayewardene, VK 2000, Nobodies to somebodies: Rise of the colonial bourgeoisie in Sri Lanka, Sri Lanka Social Scientist Association and Sanjiva Books, Colombo.

Jayne, V 2004, 'Sustainable and responsible now a fact of management life?', New Zealand Management, vol. 51, no. 3, pp. 26–33.

Jean, L 2010, Vol. May 24 The Wall Street Journal.

Jebarajakirthy, C, Lobo, A & Hewege, C 2013, 'Light at the end of the Tunnel–War affected Youth’s Purchase Intention of Microcredit,' Australia and New Zealand Marketing Academy Conference, ANZMAC, Auckland, New Zealand, pp. 1-7.

Jenkins, WO 1947, 'A review of leadership studies with particular reference to military problems', Psychological Bulletin, vol. 44, pp. 54-79.

Johnson, JR 1998, 'Embracing change: A leadership model for the learning organisation', International Journal of Training and Development, vol. 2, no. 2, pp. 141-150.

Joreskog, KG 1993, Testing structural equation models, SAGE, Newbury Park.

Joshi, A, Pandey, N & Han, GH 2009, 'Bracketing team boundary spanning: An examination of task-based, team-level, and contextual antecedents', Journal of Organizational Behavior, vol. 30, pp. 731-759.

Judge, TA, Piccolo, RF & Hies, R 2004, 'The forgotten ones? The validity of consideration and initiating structure in leadership research', Journal of Applied Psychohgy, vol. 89, no. 1, pp. 36-51.

Kalshoven, K, Den Hartog, DN & De Hoogh, AH 2011, 'Ethical leadership at work questionnaire (ELW): Development and validation of a multidimensional measure', The Leadership Quarterly, vol. 22, no. 1, pp. 51-69.

401

Kamalika, P 2008, 'Home and family in ancient and medieval Sri Lanka', The Island online: Saturday Magazine, vol. satmag6, 2008/08/02, p. 1.

Kantabutra, S 2011, 'Sustainable leadership in a Thai healthcare services provider', International Journal of Health Care Quality Assurance, vol. 24, no. 1, pp. 67-80.

Kantabutra, S & Avery, G 2012, 'Sustainable leadership at Siam Cement Group', Journal of Business Strategy, vol. 32, no. 4, pp. 32-41.

Kantabutra, S & Saratun, M 2013, 'Sustainable leadership: Honeybee practices at Thailand's oldest university', International Journal of Educational Management, vol. 27, no. 4, pp. 356-376.

Kantabutra, S & Suriyankietkaew, S 2012, 'Examining Relationships Between Organic Leadership and Corporate Sustainability: A Proposed Model', Journal of Applied Business Research, vol. 28, no. 1, p. 67.

Kanter, RM 1991, 'Transcending business boundaries: 12,000 world managers view change', Harvard Business Review, vol. 69, no. 3, pp. 151–164.

Kanter, RM, Stein, BA & Jick, TD 1992, The challenge of organizational changes, Free Press, New York.

Kaplan, RE 1984, 'Trade routes: The manager's network of relationships', Organizational Dynamics, vol. Spring, pp. 37-52.

Karande, K, Rao, CP & Singhapakdi, A 2002, 'Moral Philosophies of Marketing Managers: A Comparison of American, Australian, and Malaysian Cultures', European Journal of Marketing, vol. 36, no. 7/8, pp. 768-791.

Kariyawasam, AGS 1996, Buddhist Ceremonies and Rituals of Sri Lanka, viewed 2 December 2013, .

Katz, D & Kahn, RL 1978, The social psychology of organizations, 2nd edn., John Wiley, New York.

Kaufman, CF, Lane, PM & Lindquist, JD 1991, 'Exploring More Than 24 Hours a Day: A Preliminary Investigation of Polychronic Time Use', Journal of Consumer Research, vol. 18 (December), pp. 392–401.

Kelegama, S 2003, 'The Poverty Situation and Policy in Sri Lanka', in CM Edmonds (ed.) Reducing poverty in Asia: Emerging issues in growth, targeting, and measurement, Edward Elgar Publishing, UK, pp. 298.

402

Kennedy, AA 2000, The End of Shareholder Value: The Real Effects of the Shareholder Value Phenomenon and the Crisis it is Bringing to Business, Orion Business Books, London.

Kenney, RA, Schwartz-Kenney, BM & Blascovich, J 1996, 'Implicit leadership theories: Defining leaders described as worthy of influence', Personality and Social Psychology Bulletin, vol. 22, pp. 1128-1143.

Kerlinger, F 1986, Foundations of behavioral research, 3rd edn., Holt, Rinehart & Winston, New York.

Kerr, S & Jermier, JM 1978, 'Substitutes for leadership:Their meaning and measurement', Organizational Behavior and Human Performance, vol. 18, pp. 329- 345.

Kets De Vries, MFr, Vrignaud, P, Agrawal, A & Florent-treacy, E 2010, 'Development and application of the Leadership Archetype Questionnaire', The International Journal of Human Resource Management, vol. 21, no. 15, pp. 2848-2863.

Khan, FR & Lund-thomsen, P 2011, 'CSR As Imperialism: Towards a Phenomenological Approach to CSR in the Developing World', Journal of Change Management, vol. 11, no. 1, pp. 73-90.

Khavul, S & Bruton, GD 2013, 'Harnessing Innovation for Change: Sustainability and Poverty in Developing Countries', Journal of Management Studies, vol. 50, no. 2, pp. 285-306.

Kirkman, BL, Lowe, KB & Gibson, CB 2006, 'A Quarter 'Century of Culture's Consequences': A Review of Empirical Research Incorporating Hofstede's Cultural Values Framework', Journal of International Business Studies, vol. 37, no. 3, pp. 285- 320.

Kiron, D, Kruschwitz, N, Haanaes, K & von Streng Velken, I 2012, 'Sustainability nears a tipping point', MIT Sloan Management Review, vol. 53, no. 2, pp. 69-74.

Kline, RB 2005, Principles and practice of structural equation modeling, 2nd edn., Guilford Press, New York.

Kline, RB 2010, Principles and practice of structural equation modeling, 3rd edn., Guilford Press, New York.

Kling, J 1995, 'High Performance Work Systems and Firm Performance', Monthly Labor Review, vol. 118 (May), no. 5, pp. 29-36.

Ko, G & Gentry, JW 1991, The development of time orientation measures for use in cross-cultural research, Association for Consumer Research, Provo, UT.

403

Kociatkiewicz, J & Kostera, M 2012, 'The Good Manager: An Archetypical Quest for Morally Sustainable Leadership', Organization Studies, vol. 33, no. 7, pp. 861–878.

Koehler, G 2014, 'Approaching developmental welfare states: A "welfare geography" of South Asia', in G Koehler and D Chopra (eds), Development and welfare policy in South Asia, Taylor and Francis, Hoboken, pp. 25-39.

Koehler, G & Chopra, D 2014, Development and Welfare Policy in South Asia, Taylor and Francis, Hoboken.

Kohlberg, L 1981, The Philosophy of Moral Development: Moral Stages and the Idea of Justice, Harper and Row, San Francisco.

Komives, SR & Wagner, W 2012, Leadership for a Better World: Understanding the Social Change Model of Leadership Development, John Wiley & Sons, Hoboken.

Korsgaard, MA & Roberson, L 1995, 'Procedural Justice in Performance Evaiuation: The Role of instrumental and Non-lnstrumental Voice in Performance Appraisal Discussions', Journal of Mangement, vol. 21, no. 4, pp. 657-669.

Kotter, JP 1982, The general managers, Free Press, New York.

Kotter, JP 1995, 'Leading change: Why transformational efforts fail', Harvard Business Review, vol. 73, no. 2 (March/April), pp. 59–67.

Kouzes, JM & Posner, BZ 2010, The leadership challenge; How to keep getting extraordinary things done in organizations, 4th edn., Pfeiffer, San Francisco, CA.

Krzystofiak, F, Cardy, RL & Newman, J 1988, 'Implicit personality and performance appraisal: The influence of trait inferences on evaluation behavior', Journal of Applied Psychology, vol. 75, pp. 515-521.

Lacy, P, Arnott, J & Lowitt, E 2009, 'The challenge of integrating sustainability into talent and organization strategies: Investing in the knowledge, skills and attitudes to achieve high performance', Corporate Governance, vol. 9, no. 4, pp. 484-494.

Lam, LW & White, LP 1998, 'Human resource orientation and corporate performance', Human Resource Development Quarterly, vol. 9, pp. 351-364.

Laszlo, C 2008, Sustainable Value: How the World’s Companies are Doing Well by Doing Good, Stanford University Press, Stanford, CA.

Laurent, A 1986, 'The cross cultural puzzle of international human resource management', Human Resource Management, vol. 25, no. 1, pp. 91-102.

Lavrakas, PJ 2008, Encyclopedia of survey research methods, SAGE Publications.

404

Law, KS, Wong, C & Mobley, WH 1998, 'Toward a taxonomy of multidimensional constructs', Academy of Management Review, vol. 23, pp. 741-755.

Lawton, A & Páez, I 2014, 'Developing a Framework for Ethical Leadership', Journal of Business Ethics, vol. 130, no. 3, pp. 639-649.

Lee, J 2004, 'The effect of family ownership and management on firms', SAM Advanced Management Journal, vol. 69, no. 4, pp. 46-53.

Lenssen, G, Perrini, F, Tencati, A & Lacy, P 2007, 'Corporate responsibility, strategic management and the stakeholder view of the firm', Corporate Governance, vol. 7, no. 4, pp. 344–354.

Lev, BI, Petrovits, C & Radhakrishnan, S 2010, 'Is doing good good for you? How corporate charitable contributions enhance revenue growth', Strategic Management Journal, vol. 31, no. 2, pp. 182-200.

Levine, DI 1995, Reinventing the workplace: How business and employees can both win, Brookings Institution, Washington, DC.

Levitan, SA & Werneke, D 1984, 'Worker participation and productivity change', Monthly Labour Review, vol. 107, no. 9, pp. 28-33.

Levy, A & Merry, U 1986, Organizational transformation: Approaches, strategies, theories, Praeger, New York.

Lewin, K & Lippit, R 1938, 'An experimental approach to the study of autocracy and democracy: A preliminary note', Sociometry, vol. 1, pp. 292-300.

Lewin, K, Lippit, R & White, RK 1939, 'Patterns of aggresive behavior in experimentally created social climates', Journal of Social Psychology, vol. 10, pp. 271- 279.

Li, L 2005, 'The effects of trust and shared vision on inward knowledge transfer in subsidiaries’ intra- and inter-organizational relationships', International Business Review, vol. 14, pp. 77–95.

Lichtenstien, BB, Uhl-Bien, M, Marion, R, Seers, A & Orton, JD 2006, 'Complexity leadership theory: An interactive perspective on leading in complex adaptive systems', Emergence:Complexity and Organisation, vol. 8, no. 4, pp. 2-12.

Likert, R 1961, New patterns of management, McGraw-Hill, New York.

Lim, B 1997, 'Transformational leadership in the UK management culture', Leadership & Organization Development Journal, vol. 18, no. 6, pp. 283-289.

405

Lin, X & Mowen, JC 1994, Time Orientation and Consumer Behavior: Theoretical and Scale Development.

Liyanage, U 1996a, 'Femininity as a managerial value ', Sri Lankan Journal of Management vol. 1, no. 1 (January-March), pp. 37-47.

Liyanage, U 1996b, 'Proﬁling the Emerging Sri Lankan Culture', Sri Lankan Journal of Management, vol. 2, no. 1, pp. 35–52.

Loewenstein, G & Prelec, D 1993, 'Preferences for Sequences of Outcomes', Psychological Review, vol. 100, pp. 91–108.

Lord, RG 1985, 'An information processing approach to social perceptions, leadership and behavioral measurement', in LL Cummings and BM Staw (eds), Research in organizational behavior, vol. 7, JAI Press, Greenwich, Conn, pp. 87–128.

Lord, RG, Foti, R & Phillips, JS 1982, 'A theory of leadership categorization', in JG Hunt, U Sekaran and C Schriesheim (eds), Leadership: Beyond establishment views, Southern Illinois University Press, Carbondale, Ill, pp. 104–121.

Lord, RG & Maher, KL 1990, Perceptions of leadership and their implications in organizations, Erlbaum, Hillsdale, NJ.

Louis, MR 2014, Designing and Conducting Survey Research A Comprehensive Guide, Wiley, Hoboken.

Louis, WF & Melissa, SN 2013, Maximizing the triple bottom line through spiritual leadership, Stanford Business Books, Stanford University Press, Stanford, California.

Ludema, JD & Cox, CK 2007, Leadership for world benefit: New horizons for research and practice, Stanford Business Books, Palo Alto, CA.

Lueneburger, C & Goleman, D 2010, 'The change leadership sustainability demands', MIT Sloan Management Review, vol. 51, no. 4, pp. 49-56.

Luthans, F & Avolio, BJ 2003, 'Authentic leadership: A positive developmental approach', in KS Cameron, JE Dutton and RE Quinn (eds), Positive organizational scholarship, Barrett-Koehler, San Francisco, pp. 241–261.

Magun, S 1998, Restructuring in Canadian Industries: A Micro-Analysis, Industry Canada working paper 23.

Malhotra, NK & Birks, DF 2007, Marketing research: An applied approach, Financial Times: Prentice Hall.

Manolis, JC, Chan, KM, Finkelstein, ME, Stephens, S, Nelson, CR, Grant, JB & Dombeck, MP 2009, 'Leadership: A new frontier in conservation science',

406

Conservation biology: The Journal of the Society for Conservation Biology, vol. 23, no. 4, pp. 879-886.

Manz, C & Sims, HP 2001, The New Superleadership, Koehler Publishers Inc.

Marrone, JA 2010, 'Team boundary spanning: A multilevel review of past research and proposals for the future', Journal of Management Development, vol. 36, pp. 911- 940.

Martin, S & Jucker, R 2005, 'Educating earth-literate leaders', Journal Of Geography In Higher Education, vol. 29, no. 1, pp. 19-29.

Mathieu, JE & Taylor, SR 2006, 'Clarifying conditions and decision points for mediational type inferences in Organizational Behavior', Journal of Organizational Behavior, vol. 27, no. 8, pp. 1031-1056.

Mavrinac, S & Siesfeld, T 1998, Measures that Matter: An Exploratory Investigation of Investors’ Information Needs and Value Priorities, in Enterprise Value in the Knowledge Economy: Measuring Performance in the Age of Intangibles, Butterworth Heinemann, Boston.

Maxwell, JA 2013, Qualitative research design: An interactive approach, 3rd edn., SAGE, Thousand Oaks.

McConaughy, DL, Matthews, CH & Fialko, AS 2001, 'Founding family controlled firms: Performance, risk, and value', Journal of Small Business Management, vol. 39, no. 1, pp. 31-49.

McDonald, RP & Ho, MHR 2002, 'Principles and practice in reporting structural equation analyses', Psychological methods, vol. 7, no. 64.

McDonough, W & Braungart, M 2002, Cradle to Cradle: Remaking the Way We Make Things, North Point Press, New York.

McFarland, DB & Sweeney, PD 1992, 'Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes', Academy of Management Journal, vol. 35, no. 3, pp. 626-637.

McGill, ME, Slocum, JW & Lei, D 1992, 'Management Practices in Learning Organisations', Organisational Dynamics, vol. 21 (Summer), p. 10.

McGregor, D 1960, The human side of enterprise, McGraw-Hill, New York.

McKinsey 2010, How companies manage sustainability. McKinsey Global Survey Results, sustainability McKinsey Global Survey results 2558, viewed 5 November 2013, .

407

McKinsey Quarterly 2006, 'The McKinsey Global Survey of Business Executives: Business and Society', vol. 2, pp. 33-39.

McSweeney, B 2002, 'Hofstede’s model of national cultural differences and their consequences: A triumph of faith a failure of analysis', Human Relations, vol. 55, no. 1, pp. 89–118.

McWilliams, A & Siegel, D 2000, 'Corporate social responsibility and financial performance: Correlation or misspecification?', Strategic Management Journal, vol. 21, pp. 603–609.

Metclaf, L & Benn, S 2013, 'Leadership for sustainability: An evolution of leadership ability', Journal of Business Ethics, vol. 112, pp. 369-384.

Miles, MB & Huberman, AM 1994, Qualitative data analysis: An expanded sourcebook, 2nd edn., SAGE, Thousand Oaks.

Miles, S 2012, 'Stakeholder: Essentially Contested or Just Confused?', Journal of Business Ethics, vol. 108, no. 3, pp. 285-298.

Miller, D & Le-Breton-Miller, I 2003, 'Challenge verses advantage in family business', Strategic Organisation, vol. 1, no. 1, pp. 127-134.

Miller, VD, Johnson, JR & Grau, J 1994, 'Antecedents to willingness to participate in a planned organizational change', Journal of Applied Communication Research, vol. 26, pp. 59–80.

Millman, GJ 2002, 'New Scandals, Old Lessons', Financial Ethics After Enron, vol. Financial Executive, no. 18 (July–August), pp. 16–19.

Ministry of Education 2008, School Census Report - Pleminary Report, Ministry of Education, Statistical Department, Sri Lanka.

Ministry of Environment 2012, Country Report of Sri Lanka-UN conference on Sustainable Development: Sri Lanka’s Middle Path to Sustainable Development through ‘Mahinda Chintana – Vision for the Future’, Ministry of Environment, Battaramulla, Sri Lanka.

Ministry of Finance and Planning 2010, Sri Lanka Emerging wonder of Asia: Mahinda chinthana-vision for the future, The development policy framework, Department of national planning, Colombo, Sri Lanka.

Minnesota Planning Environmental Quality Board 2000, Smart Signals: An Assessment of Progress Indicators, Minnesota Planning.

Mintzberg, H 1989, Mintzberg on management: Inside our strange world of organizations, Free Press, New York.

408

Mintzberg, H 1999, 'Managing quietly', Leader to Leader vol. 12 (Spring), pp. 24–30.

Mitchell, LE 2001, Corporate Irresponsibility: America’s Newest Export, Yale University Press, New Haven.

Mitchell, TR 1979, 'Organisational Behaviour', Annual Review of Psychology, vol. 30 pp. 243-281.

Monga, RC 2000, Managing Enterprise Productivity and Competitiveness, International Labour Office.

Mooij, Md 2013, 'On the misuse and misinterpretation of dimensions of national culture', International Marketing Review, vol. 30, no. 3, pp. 253-261.

Moore, M 1993, 'Thoroughly modern revolutionaries: The JVP in Sri Lanka', Modern Asian Studies, vol. 27, no. 3, pp. 593-642.

Morimoto, R 2013, 'Incorporating socio-environmental considerations into project assessment models using muti-criteria analysis: A case study of Sri Lankan hydropower projects', Energy Policy, vol. 59, pp. 643-653.

Morrison, AJ 2000, 'Developing a global leadership model', Human Resource Management, vol. 39, no. 2–3, pp. 117–131.

Morrison, DF 1990, Multivariate Statistical Methods, McGraw-Hill, New York.

Morsing, M & Oswald, D 2009, 'Sustainable leadership: Management control systems and organizational culture in Novo Nordisk A/A', Corporate Governance, vol. 9, no. 1, pp. 83-99.

Mosakowski, E & Earley, C 2000, 'A Selective Review of Time Assumptions in Strategy Research', Academy of Management Review, vol. 25, no. 4, pp. 796–812.

Mukherjee, K 2004, 'Effects of leadership styles on followers’ satisfaction and perceived effectiveness', South Asian Journal of Management, vol. 11, no. 1, pp. 7-19.

Mullins, RG 2006, 'Sustainability: From Fringe to Mainstream', Annals of the New York Academy of Sciences, vol. 969, no. 1.

Munasinghe, MATK & Kumara, DCU 2013, 'Impact of Disclosure of Corporate Social Responsibility on Corporate Financial Performances of Plantations Companies in Sri Lanka', Journal of Emerging Trends in Economics & Management Sciences, vol. 4, no. 3, p. 371.

Murdoch, G 1967, Ethnographic atlas, University of Pittsburgh Press, Pittsburgh, PA.

409

Murphy, HM, McBean, EA & Farahbakhsh, K 2009, 'Appropriate technology – a comprehensive approach for water and sanitation in the developing world', Technology in Society, vol. 31, pp. 158–167.

Murphy, M 2002, Organisational Change and Firm Performance, OECD Publishing, Paris.

Muthen, BO & Kaplan, D 2011, A Comparison of Some Methodologies for the Factor Analysis of Non-Normal Likert Variables: A Note on the Size of the Model, Department of Statistics, UCLA.

Nahavandi, A 2009, The art and science of leadership, 5th edn., Prentice Hall, Upper Saddle River, NJ.

Nanayakkara, G 1988, Culture and management in Sri Lanka, Postgraduate Institute of Management, Univerity of Sri Jayawardenapura, Sri Lanka.

Nanayakkara, G 1992, Culture and Management in Sri Lanka, Postgratuate Institute of Management, University of Sri Jayewardenepura, Sri Lanka.

Nanayakkara, G 1993, 'The Negative Leader: An Analysis of Sri Lankan Cases,' Conference on Management Studies, Postgratuate Institute of Management, 141-153.

Nanayakkara, G 1998, Culture and Management in Sri Lanka, Project Report to the United States AID Mission, University of Sri Jayawardenapura, Postgraduate Institute of Management, Sri Lanka.

Nanayakkara, G & Ranasinghe, S 1984, Management in a socio-cultural context, German Cultural Institute, Colombo-Sri Lanka.

Nancy, F 2007, Triple Bottom Line Approach Growing in Nonprofit Sector, Causeplanet, Colarado, USA.

National Council for Sustainable Development 2009, National Action Plan for Haritha Lanka Programme Ministry of Environment and Natural resources, Battaramulla, Sri Lanka.

Navarro, P 1988, 'Why do corporations give to charity?', Journal of Business & Economics Research, vol. 61, pp. 66–75.

Neuman, WL 2011, Social research methods: Qualitative and quantitative approaches, 7th edn., Allyn and Bacon, Boston: Pearson.

Nevins, JL, Bearden, WO & Money, B 2007, 'Ethical values and long-term orientation', Journal of Business Ethics, vol. 71, pp. 261-274.

410

Newsletter, WI, Feldstein, MJ & Newcomb, TM 1938, Group adjustment, Western Researve University Press, Clevelands, OH.

Nidumolu, R, Prahalad, CK & Rangaswami, MR 2009, 'Why sustainability is now the key driver of innovation', Harvard Business Review, vol. 87, no. 9, pp. 57–64.

Nielsen, RP 1990, 'Dialogic leadership as ethics action (praxis) method', Journal of Business Ethics, vol. 9, no. 10, pp. 765-783.

Nirenberg, J 2002, Global leadership, Capstone, Oxford.

Northouse, PG 2007, Leadership: Theory and Practice, SAGE, Thousand Oaks.

Nunnally, JC 1978, Psychometric theory, 2nd edn., McGraw-Hill, New York.

Nunnally, JC & Bernstein, IH 1994, Psychometric theory, McGraw-Hill, New York.

NUTEK, B 1996, Towards Flexible Organisations, NUTEK, Cornell University, Stockholm.

O' Reilly, I, Charles, A & Chatman, JA 1994, 'Working smarter and harder: A longitudinal study of managerial success', Administrative Science Quarterly, vol. 39, no. 4, p. 603(25).

OECD 1998, High-Performance Workplaces and Intangible Investment, Technology, Productivity and Job Creation: Best Policy Practices, OECD Publishing.

OECD 2001a, Main Results from the NIS Focus Groups, OECD Publishing.

OECD 2001b, The New Economy: Beyond the Hype: Final Report of the OECD Growth Project, OECD Publishing.

Orlitzky, M, Schmidt, FL & Rynes, SL 2003, 'Corporate social and financial performance: a meta-analysis', Organization Studies, vol. 24, no. 3, pp. 403-441.

Ouchi, WG 1981 Theory Z: How American business can meet the Japanese challenge Avon, New York.

Oyserman, D, Coon, HM & Kemmelmeier, M 2002, 'Rethinking individualism and collectivism: Evaluation of theoretical assumptions and meta-analyses', Psychological Bulletin, vol. 128, pp. 3–72.

Padgett, BL 2005, 'After Dot-Com, After WorldCom, After Enron, After Capitalism', Business Ethics Quarterly, vol. 15, no. 2, pp. 329–340.

Paine, LS 2003, Value shift: Why companies must merge social and financial imperatives to achieve superior performance, McGraw-Hill, New York.

411

Parboteeah, KP, Addae, HM & Cullen, JB 2012, 'Propensity to Support Sustainability Initiatives: A Cross-National Model', Journal of Business Ethics, vol. 105, no. 3, pp. 403-413.

Parker, WN & Daly, HE 1978, Steady-state economics: The economics of biophysical equilibrium and moral growth, San Francisco.

Parkin, S 2010, The Positive Deviant Sustainability Leadership in a Perverse World, Earthscan, London.

Parson, T 1951, The Social System, Free Press, New York.

Perry-Smith, JE & Blum, TC 2000, 'Work-family human resource bundles and perceived organizational performance', Academy of Management Journal, vol. 43, pp. 1107-1118.

Perry, P 2013, 'Garments without guilt?: A case study of sustainable garment sourcing in Sri Lanka', Sustainability in Fashion and Textiles, vol. 14, pp. 294-307.

Perucci, R 2009, America at risk: The crisis of hope, trust, and caring, Rowman & Littlefield Publishers, Lanham, MD.

Peterson, MF & Hunt, JG 1997, 'International perspectives on international leadership', The Leadership Quarterly, vol. 8, no. 3, pp. 203–231.

Peterson, RA & Wilson, W 1992, 'Measuring customer satisfaction: Fact and artifact', Journal of the Academy of Marketing Science, vol. 20, pp. 61–71.

Pettigrew, AM, Woodman, RW & Cameron, KS 2001, 'Studying organizational change and development: Challenges for future research', Academy of Management Journal, vol. 44, no. 4, pp. 697–713.

Pfeffer, J 1977, 'The ambiguity of leadership', Academy of Management Journal, vol. 2, pp. 104-112.

Pfeffer, J 1994, Competitive advantage through people, Harvard Business School Press, Boston.

Pfeffer, J 1998, The human equation: Building profits by putting people first, Harvard Business School Press, Cambridge, MA.

Pless, NM 2007, 'Understanding responsible leadership: Role identity and motivational drivers', Journal of Business Ethics, vol. 74, pp. 437–456.

Podsakoff, PM, MacKenzie, SB & Bommer, WH 1996, 'Transformational leader behaviors and substitutes for leadership as determinants of employee satisfaction

412 commitment, trust, and organizational citizenship behaviors', Journal of Management, vol. 22, pp. 259–298.

Podsakoff, PM, MacKenzie, SB, Lee, JY & Podsakoff, NP 2003, 'Common method biases in behavioural research: a critical review of the literature and recommended remedies', Journal of Applied Psychology, vol. 88, no. 5, pp. 879-903.

Podsakoff, PM & Organ, DW 1986a, 'Self-Reports in Organizational Research: Problems and Prospects', Journal of Management, vol. 12, no. 3, pp. 531–544.

Podsakoff, PM & Organ, DW 1986b, 'Self-reports in organizational research: Problems and prospects', Journal of Management, vol. 12, pp. 531-544.

Polansky, MJ 1995, 'Incorporating the natural environment in corporate strategy: A stakeholder approach', The Journal of Business Strategies, vol. 12, no. 2, pp. 151-168.

Porras, JI & Robertson, PJ 1992, Organizational development: Theory, practice, and research. In Handbook of Industrial and Organizational Psychology, 2nd edn., Consulting Psychologists Press, Palo Alto, CA.

Porter, ME 1985, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, London.

Porter, ME & Kramer, MR 2006, 'Strategy and society: The link between competitive advantage and corporate social responsibility', Harvard Business Review, vol. 84, no. 12, pp. 78–92.

Post, J, Preston, L & Sachs, S 2002, 'Managing the extended enterprise: The new stakeholder view', California Management Review, vol. 45, pp. 6–28.

Postgraduate Institute of Management 2015, MBA Programme Handbook 2016-2017, University of Sri Jayewardenepura, Colombo 8, Sri Lanka.

Postgraduate Institute of Management Alumni 2015, PIM Alumni, Postgraduate Institute of Management Alumni, viewed 4 January 2015, .

Prelec, D & Loewenstein, G 1998, 'The Red and the Black: Mental Accounting of Savings and Debt', Marketing Science, vol. 17, no. 1, pp. 4–28.

Price, JL & Mueller, CW 1986, Handbook of organizational measurement, Pitman, Marshfield, MA.

Puck, JF, Kittler, MG & Wright, C 2008, 'Does it really work? Re-assessing the impact of pre-departure cross-cultural training on expatriate adjustment', The International Journal of Human Resource Management, vol. 19, no. 12, pp. 2182-2197.

413

Pye, A 2005, 'Leadership and Organizing: Sensemaking in Action', Leadership, vol. 1, no. 1, pp. 31-49.

Quinn, L & Dalton, M 2009, 'Leading for sustainability: Implementing the tasks of leadership', Corporate Governance, vol. 9, no. 1, pp. 21-38.

Quintana, SM & Maxwell, SE 1999, 'Implications of recent developments in structural equation modeling for counseling psychology', Counseling Psychologist, vol. 27, no. 4, pp. 485-527.

Rajapakse, J 2012, 'Can ERP Adoptions Change Organisational Culture in Developing Countries in Asia? An Empirical Investigation,' 45th Hawaii International Conference on System Sciences, 5093-5101.

Rama, M 2012, 'Corporate Governance and Corruption: Ethical Dilemmas of Asian Business Groups', Journal of Business Ethics, vol. 109, no. 4, pp. 501-519.

Ranugge, S 2000, State, bureaucracy and development, Macmillian, Delhi.

Rathnayake, CV 2011, 'An empirical investigation of fashion consciousness of young fashion consumers in Sri Lanka', Young Consumers, vol. 12, no. 2, pp. 121-132.

Raymond, RB 2013, 'Sri Lanka textile industry's public private partnership project: A case study', International Journal of Public Sector Management, vol. 26, no. 2, pp. 153-162.

Reichers, AE & Schneider, B 1990, Climate and culture: An evolution of constructs?, Jossey-Bass, San Francisco.

Reisinger, Y & Mavondo, F 2007, 'Structural Equation Modeling: Critical Issues and New Developments', Journal of Travel & Tourism Marketing, vol. 21, no. 4, pp. 41- 71.

Resick, CJ, Hanges, PJ, Dickson, MW & Mitchelson, JK 2006, 'A cross-cultural examination of the endorsement of ethical leadership', Journal of Business Ethics, vol. 63, no. 4, pp. 345-359.

Revans, R 1982, The origins and growth of action learning, Beckley, Kent, England.

Roach, CF & Behling, O 1984, Functionalism: Basis for alternate approach to the study of leadership, Pergamon Press, Elmsford, NY.

Robbins, SP, Bergman, R & Stagg, I 1997, Management, Prentice-Hall., Sydney.

Robert, KH 1989, Det Naturaliga Steget: Programmet Orn Va˚r Natur Fo¨r Landlets Alla Hem Och Skolor, Karolinska Institutet, Sweden.

414

Robson, C 2002, Real world research: A resource for social scientist and practitioners-researchers, 2nd edn., Blackwell, Oxford.

Robson, C 2011, Real world research: A resource for users of social research methods in applied settings, John Wiley & Sons, Chichester,West Sussex.

Roderick, JAL 1988, 'A Test of Missing Completely at Random for Multivariate Data with Missing Values', Journal of the American Statistical Association, vol. 83, no. 404, pp. 1198–1202.

Rogers, K, S., 2011, 'Leading Sustainability', Advances in Global Leadership, vol. 6, pp. 137–153.

Rok, B 2009, 'Ethical context of the participative leadership model: Taking people into account', Corporate Governance, vol. 9 no. 4, pp. 461-472.

Roof, R 2014, 'Authentic leadership questionnaire (ALQ) psychometrics', Asian Journal of Business Ethics, vol. 3, no. 1, pp. 57-64.

Roome, N 1994, Environmental Responsibility: An Agenda for Further and Higher Education, Pluto Press, London.

Roome, NJ & Bergin, R 2006, 'Sustainable development in an industrial enterprise: The case of Ontario Hydro', Business Process Management, vol. 12, no. 6, pp. 696– 721.

Rost, JC 1991, Leadership for the twenty-first century, Praeger, New York.

Rowley, C & Warner, M 2006, 'Business and Management in South East Asia: Studies in Diversity and Dynamism: Introduction: Setting the Scene', Asia Pacific Business Review, vol. 12, no. 4, pp. 389-401.

RSF Social Finance 2015, Focus Areas, viewed 4th January 2014, .

Rummel, RJ 1970, Applied factor analysis, Northwestern University Press, Evanston, IL.

S & P Dow Jones Indices 2015, Dow Jones sustainability world index, viewed 4 May 2013, .

Salem, AAH 2012, 'Leading to heal: A view of sustainability leadership', in DR Gallagher (ed.) Environmental leadership a reference handbook, SAGE Publications, Thousand Oaks, California.

415

Salkind, NJ 2010, Encyclopedia of research design, SAGE, Thousand Oaks, California.

Samarakoon, M & Rowan, J 2008, 'A Critical Review of Environmental Impact Statements in Sri Lanka with Particular Reference to Ecological Impact Assessment', Environmental Management, vol. 41, no. 3, pp. 441-460.

Samarasinghe, V 2000, 'Subverting Patriarchy? Leadership and Participation of Women in Politics in South Asia', Ethnic Studies Report, vol. XVIII, no. 2.

Samy, M, Odemilin, G & Bamption, R 2010, 'Corporate social responsibility: A strategy for sustainable business success. An analysis of 20 selected British companies', Corporate Governance, vol. 10, no. 2, pp. 203–217.

Sanderatne, N 2000, Economic Growth and Social Transformations: Five Lectures on Sri Lanka, Tamarind, Colombo.

Santhidran, S, Chandran, VGR & Borromeo, J 2013, 'Enabling organizational change – leadership, commitment to change and the mediating role of change readiness', Journal of Business Economics and Management, vol. 14, no. 2, pp. 348-363.

Saunders, C, Slyke, CV & Vogel, DR 2004, 'My Time or Yours? Managing Time Visions in Global Virtual Teams', Academy of Management Executive, vol. 18, no. 1, pp. 19–31.

Saunders, M, Lewis, P & Thornhill, A 2009, Research methods for business students, 5th edn., Prentice Hall, Harlow.

Scanduraa, T & Dorfman, P 2004, 'Leadership research in an international and cross- cultural context', The Leadership Quarterly vol. 15, pp. 277–307.

Scarborough, J 1998, The origins of cultural differences and their impact on management, Quorum Books, Westport, CT.

Schaefer, A & Crane, A 2005, 'Addressing sustainability and consumption', Journal of Macromarketing, vol. 25, no. 1, pp. 76-92.

Schein, EA 2010, Organizational culture and leadership, Wiley, San Francisco, CA.

Schenk, C 1928, 'Leadership ', Infantry Journal, vol. 33, pp. 111-122.

Schilling, M 2000, 'Decades Ahead of Her Time: Advancing Stakeholder Theory Through the Ideas of Mary Parker Follett', Journal of Management History, vol. 6, no. 5, pp. 224-242.

Schmidheiny, S 1992, Changing course: A global business perspective on development and the environment, MIT Press, Boston, MA.

416

Schmitt, TA 2011, 'Current Methodological Considerations in Exploratory and Confirmatory Factor Analysis', Journal of Psycholoeducational Assessment, vol. 29, pp. 304–321.

Schraa-Liu, T & Trompenaars, F 2006, 'Toward responsible leadership through reconciling dilemmas', in Maak. and NM Pless (eds), Responsible leadership, Routledge, Abingdon, Oxon, pp. 138–154.

Schriesheim, CA, Powers, KJ, Scandura, TA, Gardiner, CC & Lankau, MJ 1993, 'Improving construct measurement in management research: Comments and a quantitative approach for assessing the theoretical content adequacy of paper- andpencil survey-type instruments', Journal of Management, vol. 79, pp. 385-417.

Schumacher, EF 1973, Small is beautiful: A study of economics as if people mattered, Blond & Briggs, London.

Schumacker, RE & Lomax, RG 1996, A beginner’s guide to structural equation modeling, Lawrence Erlbaum Associates, Mahwah, NJ.

Schwab, DP 1980, Construct validity in organization behavior, JAI, Greenwich, CT.

Schwartz, SH 1992, Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries, Academic Press, New York.

Schwartz, SH 1994, Cultural dimensions of values: Towards an understanding of national differences, SAGE, Thousand Oaks, CA.

Schwartz, SH & Blisky, W 1987, 'Toward a psychological structure of human values', Journal of Personality and Social Psychology, vol. 53, pp. 550–562.

Schyns, B & Meindl, JR 2005, Implicit Leadership Theories: Essays and Explorations, Information Age Publishing Inc, USA.

Schyns, B & Schilling, J 2011, 'Implicit Leadership Theories: Think Leader, Think Effective?', Journal of Management Inquiry, vol. 20, no. 2, pp. 141-150.

Secretariat General EU 2009, Memo: The Main Changes in the 2009 Impact Assessment Guidelines Compared to 2005 Guidelines, European Commission, Brussels.

Sekaran, U 2003, Research Methods for Business A Skill Building Approach, 4th edn., John Wiley and Sons, Inc, USA.

Sekaran, U & Bougie, R 2013, Research methods for business: A skill-building approach, 6th edn., John Wiley & Sons.

417

Selvarajah, C 2008, Cultural diversity management in Malaysia: A study of Indian, Chinese and Malay business leadership, Taj McGraw Hill, New Delhi.

Selvarajah, C, Duignan, P, Suppiah, C, Lane, T & Nuttman, C 1995, 'In Search of the ASEAN Leader: An Exploratory Study of the Dimensions That Relate to Excellence in Leadership', MIR: Management International Review, vol. 35, no. 1, pp. 29-44.

Selvarajah, C & Meyer, D 2006, 'Archetypes of the Malaysian manager: Exploring dimensions that relate to leadership', Journal of Management and Organisation, vol. 12, no. 3, pp. 251–269.

Selvarajah, C & Meyer, D 2008a, 'One nation, three cultures: Exploring dimensions that relate to leadership in Malaysia', Leadership and organisation development journal, vol. 29, no. 8, pp. 693–712.

Selvarajah, C & Meyer, D 2008b, 'Profiling the Chinese manager: Exploring dimensions that relate to leadership', Leadership and Organisation Development Journal, vol. 29, no. 4, pp. 359–375.

Selvarajah, C, Meyer, D & Davuth, D 2012, 'The effect of cultural modelling on leadership profiling of the Cambodian manager', Asia Pacific Business Review, vol. 18, no. 4, pp. 649–674.

Selvarajah, C, Meyer, D & Donovan, J 2013, 'Cultural context and its influence on managerial leadership in Thailand', Asia Pacific Business Review, vol. 19 no. 3, pp. 356-380.

Selvarajah, C, Meyer, D, Robert, JN & Donovan, JD 2013, 'Flowers in a Greenhouse: Profiling excellence in leadership in Singapore', Leadership & Organization Development Journal, vol. 34, no. 8, pp. 784-804.

Selvarajah, RJTC 2005, 'Perceptions of Leadership Excellence in ASEAN Nations', Leadership & Organization Development Journal, vol. 1, pp. 299-322.

Senge, PM 1990, The Fifth Discipline: The Art and Practice of the Learning Organisation, Currency Doubleday, New York.

Senge, PM 1999, The Dance of Change: The Challenges of Sustaining Momentum in Learning Organisations, Nicholas Brearley, London.

Senge, PM 2008, The neccesary revolution: How individuals and organisations are working together to create a sustainable world, Doubleday, New York.

Sharif, IA 2011, 'Does political competition lessen ethnic discrimination? Evidence from Sri Lanka', Journal of Development Economics, vol. 94, no. 2, pp. 277-289.

418

Sharif, MM & Scandura, TA 2014, 'Do Perceptions of Ethical Conduct Matter During Organizational Change? Ethical Leadership and Employee Involvement', Journal of Business Ethics, vol. 124, no. 2, pp. 185-196.

Shaw, JB, Erickson, A & Harvey, M 2011, 'A method for measuring destructive leadership and identifying types of destructive leaders in organizations', Leadership Quarterly, vol. 22, no. 4, pp. 575-590.

Sheriffdeen, I 2012, Sri Lanka's youth unemployement challenge, Wijeya Newspapers, viewed .

Shore, BR 1996, Culture in Mind: Cognition, Culture, and the Problem of Meaning, Oxford University Press, New York.

Shrivastava, P 1994a, 'Ecocentric leadership in the 21st century', The Leadership Quarterly, vol. 5, no. 3, pp. 223-226.

Shrivastava, P 1994b, Greening business: Towards sustainable corporations, Thompson Executive Press, Cincinnati, OH.

Shrivastava, P 1995, 'The role of corporations in achieving ecological sustainaility', The Academy of Management Review, vol. 20, no. 4, p. 936.

Shrivastava, S, Selvarajah, C, Meyer, D & Dorasamy, N 2014, 'Exploring excellence in leadership perceptions amongst South African managers', Human Resource Development International, vol. 17, no. 1, pp. 47-66.

Siemsen, E, Roth, A & Oliveira, P 2010, 'Common Method Bias in Regression Models with Linear, Quadratic, and Interaction Effects', Organizational Research Methods, vol. 13, no. 3, pp. 456-476.

Singh, N 2002, From cultural models to cultural categories: A framework for cultural analysis, Association for Consumer Research, Valdosta, GA.

Slaper, TF & Hall, TJ 2011, The Triple Bottom Line: What Is It and How Does It Work?, Indiana University Kelley School of Business, Indiana Business Research Center, USA.

Slater, CL, Boone, M, Price, L, Martinez, D, Alvarez, I, Topete, C & Olea, E 2002, 'A cross-cultural investigation of leadership in the United States and Mexico', School Leadership & Management, vol. 22, no. 2, pp. 197-209.

Smith, A 1761, Theory of Moral Sentiments, 2 ed edn., A. Kincaid & J. Bell, Strand & Edinburgh: A. Millar.

Smith, PB 2002, 'Culture’s consequences: Something old and something new', Human Relations, vol. 55, no. 1, pp. 119–135.

419

Smith, PB & Bond, MH 1999, Social psychology across cultures: Analysis and perspectives, Harvester Wheatheaf, London.

Smith, PB & Peterson, MF 1988, Leadership, organizations and culture: An event management model, SAGE, Beverly Hills, CA.

Sohal, AS, Gordon, J, Fuller, G & Simon, A 1999, 'Manufacturing Practices and Competitive Capability: An Australian Study', Technovation, vol. 19, no. 5, pp. 295- 304.

Somasundaram, D & Sivayokan, S 2013, 'Rebuilding community resilience in a post- war context: Developing insight and recommendations-a qualitative study in Northern Sri Lanka', International Journal of Mental Health Systems, vol. 7, no. 1, pp. 1-25.

Sosik, JJ, Juzbasich, J & Chun, JU 2011, 'Effects of moral reasoning and management level on ratings of charismatic leadership, in-role and extra-role performance of managers: A multi-source examination ', The Leadership Quarterly, vol. 22, no. 2, pp. 434-450.

Spears, N, Lin, X & Mowen, JC 2001, 'Time Orientation in the United States, China, and Mexico: Measurement and Insights for Promotional Strategy', Journal of International Consumer Marketing, vol. 13, no. 1, pp. 57–75.

Spillane, JP 2006, Distributed leadership, Jossey-Bass, San Francisco, CA.

Spiritual Leadership Institute 2015, What is spiritual leadership?, viewed 27 January 2014, .

Sri Lanka Business Development Center 2002, Survey on E-Commerce implementation in the SME sector of Sri Lanka, Asia Foundation, Sri Lanka.

Stark, N & Markley, D 2011, Rural Entrepreneurship Development II: Measuring Impact on the Triple Bottom Line, Wealth Creation in Rural America, viewed 7 August 2012, .

Statistics Department 2012, Doing Business Becomes Easier in Sri Lanka, Central Bank of Sri Lanka, Colombo, Sri Lanka.

Stavrou, E, Kanssinis, G & Filotheou, A 2007, 'Downsizing and stakeholder orientation among the Fortune 500: Does family ownership matter?', Journal of Business Ethics, vol. 72, no. 2, pp. 149-162.

Stern, PC, Dietz, T & Guagnano, GA 1995, 'The new ecological paradigm in social– psychological context', Environment and Behavior, vol. 27, pp. 723–743.

Stogdill, RM 1948, 'Personal factors associated with leadership: A survey of the literature', Journal of Psychology, vol. 25, pp. 35-71.

420

Stogdill, RM 1974, Handbook of leadership: A survey of the literature, Free Press, New York.

Stokke, K 1995, 'Poverty as politics: The Janasaviya Poverty Alleviation Programme in Sri Lanka', Norsk Geografisk Tidsskrift - Norwegian Journal of Geography, vol. 49, no. 3, pp. 123-135.

Stone, E 1978, Research methods in organizational behavior, Goodyear Publishing Company, Glenview, IL.

Strategic Direction 2011, 'Becoming more sustainable: The role of leadership and innovation', Emerald Group Publishing Limited, vol. 27, no. 7, pp. 24-27.

Strauss, C & Naomi, Q 1997, A Cognitive Theory of Cultural Meaning, Cambridge University Press, Cambridge.

Sustianable Development Commission 2011, Governing for the Future The opportunities for mainstreaming sustainable development, Sustianable Development Commision, United Kingdom.

Suutari, V 1996, 'Leadership ideologies among European managers: A comparative survey in a multinational company', Scandinavian Journal of Management, vol. 12, no. 4, pp. 389-409.

Swisher, LL, Beckstead, JW & Bebeau, MJ 2004, 'Factor analysis as a tool for survey analysis using a professional role orientation inventory as an example', Physical Therapy, vol. 84, pp. 784-799.

Tabachnick, BG & Fidell, LS 2001, Using multivariate statistics, 4th edn., Allyn and Bacon, Boston, Mass.

Tabachnick, BG & Fidell, LS 2007, Using multivariate statistics, Pearson/Allyn & Baco, Boston.

Talberth, J, Cobb, C & Slattery, N 2007, 'The Genuine Progress Indicator 2006: A Tool for Sustainable Development', Redefining Progress—the nature of economics, p. 31.

Tang, K, Robinson, DA & Harvey, M 2011, 'Sustainability managers or rogue mid- managers?; A typology of corporate sustainability managers', Management Decision, vol. 49, no. 8, pp. 1371-1394.

Taormina, R & Selvarajah, C 2005, 'Perceptions of Leadership Excellence in ASEAN Nations Leadership', Leadership, vol. 1 no. 3, pp. 299-322.

The natural step 2008, The four system conditions of a sustainable society, viewed 3 January 2014, .

421

The President of Sri Lanka 2015, 100 days program, official website of the President of the Democratic Socialist Republic of Sri Lanka, viewed .

Thomas, C 1907, On Heroes, Hero-Worship and the Heroic in History, Boston Houghton, Mifflin and Company, London.

Thompson, MJ 2011, 'Managing sustainability for economic return in the multinational enterprise ', in H William, ML Mobley and Y Wang (eds), Advances in Global Leadership, vol. 6, pp. 117–135.

Thurstone, LL 1947, Multiple-factor analysis, University of Chicago Press, Chicago.

Tilakasiri, KK 2012, Corporate Social Responsibility and Company Performance: Evidence from Sri Lanka, PhD thesis, Faculty of Business and Law, Victoria University, Australia.

Tjosvold, D, Sun, HF & Wan, P 2005, 'An experimental examination of social contexts and the use of power in a Chinese sample', The Journal of Social Psychology, vol. 145, no. 6, pp. 645-661.

Todnem, R & Burnes, B 2012 Organisational change, leadership and ethics: Leading organisations towards sustainability Routledge, Abingdon Oxon, New York.

Tomaka, LA 2001, 'Workforce development in the midwestern region', Spectrum, vol. 74, pp. 26-27.

Torres, R & Reeves, M 2011, 'Adaptive Leadership', Leadership Excellence, vol. 28, no. 7, p. 8.

Transparency International 2014, Corruption measurement tools, viewed 20 February 2015 .

Trevino, LK, Brown, M & Hartman, LP 2003, 'A qualitative investigation of perceived executive ethical leadership: Perceptions from inside and outside the executive suite', Human Relations, vol. 56, no. 1, pp. 5-37.

Triandis, HC 1993, The contingency model in cross-cultural perspective, Academic Press, San Diego, CA.

Triandis, HC 1995, Individualism and Collectivism, Westview Press, Boulder, CO, US.

Triandis, HC, Bontempo, R, Bond, M, Leung, K, Brenes, A, Georgas, C, James.,, Hui, H, Marin, G, Setiadi, B & Sinha, J 1986, 'The measurement of the etic aspects of

422 individualism and collectivism across cultures', Australian Journal of Psychology, vol. 38, no. 3, pp. 257-267.

Trompenaars, F 1993, Riding the waves of culture: Understanding cultural diversity in business, Breatley, London.

Trompenaars, F 1994, Riding the waves of culture, Irwin Professional Publishing, Chicago, IL.

Trompenaars, F & Hampden-Turner, C 1998, Riding the Waves of Culture – Understanding Diversity in Global Business, McGraw-Hill, New York.

Trompenaars, F & Hampden-Turner, C 2011, Riding the waves of culture: Understanding cultural diversity in business, Nicholas Brealey Publishing, New York.

Turker, D 2009, 'How corporate social responsibility influences organizational commitment', Journal of Business Ethics, vol. 89, no. 2, pp. 189-204.

Turner, JR, Grude, KV & Thurloway, L 1996, The project manager as change agent: Leadership influence and negotiation, McGraw-Hill, London.

Ullman, JB 2006, 'Structural equation modeling: Reviewing the basics and moving forward', Journal of Personality Assessment, vol. 87, pp. 35-50.

UN-Habitat 2012, City development strategies: Lessons from the Urban Management Programme and UN –Habitat Experience, UN-Habitat.

United Cities and Local Governments 2010, Culture: Fourth Pillar of Sustainable Development, Committee on Culture, Executive Bureau Barcelona (España).

United Nations 1998, Kyoto protocol to the United Nations framework convention on climate change United Nations, United States.

United Nations 2000, United Nations General Assembly - Resolution adopted by the General Assembly, United Nations.

United Nations 2005a, General Assembly: 2005 World Summit Outcomes, United Nations, USA.

United Nations 2005b, Millenium Development Goals viewed .

United Nations 2012, What is Rio+20, viewed 28 March 2013, .

United Nations 2015a, Genral Assembly -Transforming our world: the 2030 Agenda for Sustainable Development United Nations, New York, United States.

423

United Nations 2015b, Millennium Development Goal 8: Taking Stock of the Global Partnership for Development, United Nations, New York.

United Nations Development Programme 2013, United Nations Human Development Report (UNDP)-Sri Lanka, United Nations Developement Programme (UNDP).

United Nations Development Programme 2014a, Human Development Report 2014, United Nations Developement Programme (UNDP), New York, USA.

United Nations Development Programme 2014b, Human development report 2014: Sustaining Human Progress, Reducing vulnerabilities and building resilience, United Nations Development Programme (UNDP), New York, USA.

United Nations Development Programme 2014c, Sri Lankan National Human Development Report, United Nations Developement Programme (UNDP), Sri Lanka.

United Nations Educational Scientific and Cultural Organization 2014, Biodiversity and sustainability education in Sri Lanka, viewed 6 February 2014, .

United Nations Environment Programme 1972, Declaration of the United Nations Conference on the Human Environment, viewed November 2nd .

United Nations Environmental Protection Agency 2012, Promoting education, public awareness and training, viewed 6 January 2012, < http://www.unep.org/documents.multilingual/Default.asp?DocumentID=52&ArticleI D=4415&1=en >.

United Nations General Assembly 1987, Report of the World Commission on Environment and Development: Our Common Future: Transmitted to the General Assembly, United Nations General Assembly.

United Nations. 1992, United Nations Conference on Environmental and Development (Earth Summit) UNCED, viewed 3rd November .

University Grant Commission 2012, Annual Report, University Grant Commision, Sri Lanka.

Van de Loo, F 2006, 'Responsible leadership at ABN AMRO Real', in T Maak and NM Pless (eds), Responsible leadership, Routledge, Abingdon, Oxford, pp. 68–92.

424

Van Marrewijk, M 2003, 'Concepts and definitions of CSR and corporate sustainability: Between agency and communion', Journal of Business Ethics, vol. 44, no. 2–3, pp. 95–105.

Van Seters, DA & Field, RHG 1990, 'The Evolution of Leadership Theory', Journal of Organizational Change Management, vol. 3, no. 3, pp. 29-45.

Veal, AJ 2005, Business Research Methods: A Managerial Approach, 2nd edn., Pearson Education, Sydney.

Veal, AJ & Ticehurst, B 2005, Business Research Methods: A Managerial Approach, 2nd edn., Pearson Education, Sydney.

Waddock, S 2007, 'Leadership integrity in a fractured knowledge world', Academy of Management Learning and Education, vol. 6, no. 4, pp. 543-557.

Wakabayashi, M & Green, G 1984, 'The Japanese career progress study: A seven year follow-up', Journal of Applied Psychology, vol. 69, pp. 603-614.

Waldman, DA & Javidan, M 2009, 'Alternative Forms of Charismatic Leadership in the Integration of Mergers and Acquisitions', Leadership Quarterly, vol. 20, pp. 130– 142.

Waldman, DA, Ramirez, GG, House, RJ & Puranam, P 2001, 'Does leadership matter? CEO leadership attributes and profitability under conditions of perceived environmental uncertainty', Academy Management Journal, vol. 44, no. 1, pp. 134– 143.

Walumbwa, FO, Avolio, BJ, Gardner, WL, Wernsing, TS & Peterson, S 2008, 'Authentic leadership: Development and validation of a theory-based measure', Journal of Management, vol. 34, no. 1, pp. 89–126.

Watkins, KE & Marsick, VJ 1993, Sculpting the learning organisation:Lessons in the art and practice of a systemic change, Jossey-Bass, San Francisco.

Watson, CE 1991, 'Managing with integrity:Social responsibilities of business as seen by America's CEOs', Business Horizons, vol. 34, no. 4, p. 99.

Wattage, P & Mardle, S 2005, 'Stakeholder preferences towards conservation versus development for a wetland in Sri Lanka', Journal of Environmental Management, vol. 77, no. 2, pp. 122-132.

WBCSD 2013, World Business Council for Sustainable Development, viewed January 23, .

Weber, M 1947, The Theory of Social and Economic Organizations, Free Press, New York.

425

Western, S 2008, Leadership: A critical text, SAGE Publications, Los Angeles & London.

Wheatley, M 2007, Finding our way: Leadership for an uncertain time, Berrett- Koehler, San Francisco, CA.

Whelan-Berry, KS, Gordon, JR & Hinings, CR 2003, 'Strengthening organizational change processes: Recommendations and implications from a multi-level analysis', Journal of Applied Behavioral Science, vol. 39, pp. 186–207.

Whitely, A & Whitely, J 2007, Core Values and Organizational Change: Theory and Practice, World Scientific, London.

Wickramasinghe, D & Hopper, T 2005, 'A cultural political economy of management accounting controls: A case study of a textile mill in a traditional Sinhalese village', Critical Perspectives on Accounting, vol. 16, no. 4, pp. 473-503.

Wickramasinghe, D, Hopper, T & Rathnasiri, C 2004, 'Japanese cost management meets Sri Lankan politics: Disappearance and reappearance of bureaucratic management controls in a privatised utility', Accounting Auditing & Accountability Journal, vol. 17, no. 1, pp. 85-120.

Wickramasinghe, V & De Zoyza, N 2009, 'An assessment of managerial competency needs: Empirical evidence from a Sri Lankan telecommunication service provider', The International Journal of Human Resource Management, vol. 20, no. 12, pp. 2547- 2567.

Wijesinghe, KN 2012, 'Current Context of Disclosure of Corporate Social Responsibility in Sri Lanka', Procedia Economics and Finance, vol. 2, pp. 171-178.

Wijewardena, H 1992, 'Management practices in the United States and Japan, and their relevance to Sri Lanka', Vidyodaya Journal of Social Science, vol. 6, no. 1-2, pp. 1-18.

Wijewardena, H & Wimalasiri, JS 1996, 'In search of an Asian Style of Management', Sri Lankan Journal of Management, vol. 1, no. 2 (April-June).

Wilkinson, IF 2003, 'On generalising: Seeing the general in the particular and the particular in the general in marketing research,' Australia New Zealand Marketing Academy Annual Conference (ANZMAC), University of South Australia, pp. 1-3.

Willard, B 2009, The sustainability champion's guidebook how to transform your company, New Society Publishers, Gabriola Island, B.C.

Wolfgramm, R, Flynn-Coleman, S & Conroy, D 2013, 'Dynamic interactions of agency in leadership (DIAL): An integrative framework for analysing agency in sustainability leadership', Journal of Business Ethics, vol. 126, no. 4, pp. 649-662.

426

Wong, JY & Lee, WH 2012, 'Leadership through service: An exploratory study of the leadership styles of tour leaders', Tourism Management, vol. 33, no. 5, pp. 1112-1121.

Wong, L & Avery, GC 2009, 'Transforming organisations towards sustainable practices', International Journal of the Interdisciplinary Social Sciences, vol. 4 no. 1, pp. 397-408.

World Bank 2015, Sri Lanka overview, viewed 20 April 2015, .

World Business Council for Sustainable Development 2010, Vision 2050 The new agenda for business, viewed 7th January 2015, .

World Commission on Environment and Development 1987, Our Common Future, Oxford University Press, Oxford.

World Economic Forum 2014, Global Agenda Council on Measuring Sustainability 2012-2014, viewed 13 April 2014, .

World Wild Life Fund for Nature 2008, Living Planet report, viewed 10th Jane 2013, .

Wren, JT 1995, The leader’s companion: Insights on leadership through the ages, Free Press, New York.

Wua, M & Wang, J 2012, 'Developing a charismatic leadership model for Chinese organizations: The mediating role of loyalty to supervisors', The International Journal of Human Resource Management:Special Issue: Whither Chinese HRM? Paradigms, models and theories, vol. 23, no. 19.

Yamada, H 1992, American and Japanese business discourse: A comparison of interaction styles, Ablex Publishing Company Norwood, N.J.

Yapa, S 2012, 'Total quality management in Sri Lankan service organizations', The TQM Journal, vol. 24, no. 6, pp. 505-517.

Young, C 1986, Africa's colonial legacy, University of California Press, Berkeley.

Yuan, KH, Marshall, LL & Bentler, PM 2002, 'A unified approach to exploratory factor analysis with missing data, nonnormal data, and in the presence of outliers', Psychometrika, vol. 67, pp. 95-121.

Yukl, G 1999a, 'An evaluation of conceptual weaknesses in transformational and charismatic leadership theories', Leadership Quarterly vol. 10, pp. 285-305.

427

Yukl, G 1999b, 'An Evaluation of Conceptual Weaknesses in Transformational and Charismatic Leadership Theories', Leadership Quarterly, vol. 10, pp. 285–305.

Yukl, G 1999c, 'An evaluative essay on current conceptions of effective leadership', European Joumal of Work and Organizaticmal Psychology, vol. 8, pp. 33-34.

Yukl, G, Gordon, A & Taber, T 2002, 'A hierarchical taxonomy of leadership behavior: Integrating a half century of behavior research', Journal of Leadership & Organizational Studies, vol. 9, pp. 15–32.

Yukl, G & Van Fleet, DD 1990, Theory and research on leadership in organizations, Consulting Psychologists Press, Palo Alto, CA.

Yukl, GA 1994, Leadership in organizations, Prentice-Hall, Englewood Cliffs, NJ.

Yukl, GA 1998, Leadership in organizations, Prentice Hall, Englewood Cliffs, NJ.

Yukl, GA 2004, Tridimensional leadership theory: A road map for flexible, adaptive leaders, Blackwell, Oxford.

Yukl, GA 2010, Leadership in organizations, 7th edn., Prentice-Hall, Upper Saddle River, NJ.

Yukl, GA 2012, 'Effective Leadership Behaviour: What we know and what questions need more attention', Academy of Management Perspectives, vol. 26, no. 4, pp. 66-85.

Zikmund, WG & Babin, BJ 2010, Business research methods, 8th edn., South-Western Cengage Learning, Mason, Ohio.

Zubair, L 2001, 'Challenges for environmental impact assessment in Sri Lanka', Environmental Impact Assessment Review, vol. 21, no. 5, pp. 469-478.

428

Appendices

Appendix 1: Future research areas for sustainability leadership

Author(s) Future research areas Ferdig (2007) Who counts for sustainability implementation? What are the roles and characteristics of a sustainability leader? Does sustainability leadership differ from other leadership theories? What are the behaviours of a sustainability leader?

Morsing and Oswald (2009) To explore more on the leadership role in promoting sustainability in an organisation’s triple bottom line. Hargett and Williams (2009) To explore sustainability leadership as a value-based leadership approach and to explore more on what leadership practices, perspectives and behaviours are effective levers for implementing sustainability in different contexts.

Hargett and Williams (2009); Invited future researchers to explore sustainability initiatives at the individual level. Tang, Robinson and Harvey (2011) Parboteeah et al. (2012) Pointed the limitations of using House et al. (2004) cultural model and suggested future researchers to use primary data than secondary data with much larger sample

429

Schmidheiny (1992) Has recommended that future models of sustainability should incorporate cultural perspective in their models.

Kantabutra and Saratun (2013). To explore corporate sustainability in non-western or in less-developed economies. Barker (2001); Metclaf and Benn New leadership theories need to consider leadership as a process that contains complex (2013) relationships with diverse participants in a social system.

Lev, Petrovits and Radhakrishnan Future studies should explore being socially good through corporate donations are at an optimal, (2010) suboptimal and excessive level; how corporate philanthropy (such as employee relations and spurring innovation) enhance firm’s competitiveness; how different corporate philanthropy programs and strategies are enhancing firm’s performance; exploring issues to confirm whether CSR activities does indeed enhance social welfare. Barnea and Rubin (2010) “Analysing the relative advantage of firms in promoting social responsibility is a promising venue for future research” (pg. 84)

Barnea and Rubin (2010); Black Whether work place innovation strategies such as employee engagement in decision making and Lynch (2004) enhance sustainable benefits to the organisation in the long term.

Cavaco and Crifo (2014) Explore in depth on the three dimensions constituting multi-dimensional CSR construct (i.e. human relations, environment and business relationships with customers and suppliers) and their influence on firm performance

430

Appendix 2: Leadership behavioural statements measuring EXL

Relevant statements that measure excellent Statement(s) Scale used leadership in management sense (EXL)

Anurit, Selvarajah and Meye (2011); de Waal 1. Continue to learn how to improve performance et al. (2011); de Waal et al. (2010); 2. Create a sense of purpose and enthusiasm in the work 5-point Likert Selvarajah (2008); Selvarajah et al. (1995); place scale from highly Selvarajah and Meyer (2006, 2008a, 2008b); 3. Develop strategies to gain a competitive edge in the importance to Selvarajah, Meyer and Davuth (2012); industry low importance. Selvarajah et al. (2013); Selvarajah (2005); 4. Give recognition for good work Shrivastava et al. (2014); Taormina and 5. Have confidence in dealing with work and with people Selvarajah (2005) 6. Listen when employees want to say something 7. Motivate employees 8. Organize work time effectively 9. Be honest 10. Have a strategic vision for the organisation

431

Appendix 3: Relevant studies that explore corporate social responsibility efforts to ensure sustainability

Author(s) Statement (s) or dimensions of Leadership characteristics (such as skills, attitudes, competencies, Scale (if any) and behaviours) Global Employee diversity, intangible values & knowledge, employee and customer retention rates, complaints GRI Reporting and lawsuits against the company, employee injuries and health benefits, employee education and recommendations Initiative development opportunities for dimensions (2013a) relating to disclosure

Ameer and Has the company demonstrated its commitment to diversity through representation of women? , Does ‘ The Diversity Othman the company actively hire and promote minorities, women, and the disabled on boards of directors, in Index’ (This is a (2012) top management and or among the company’s highest paid employees? , Does the company have check list) programmes to train women for advancement?, Does the company have a board or staff task force or committee set up to address diversity-related issues? Does the company demonstrate a commitment to workforce diversity? , Does the company have gender equity in wages? , Does the company have an understanding of the need for minority constituencies to have more of a voice in business?

432

Does the company have a written Code of Business Conduct used as a guide to help employees live up The ‘Ethical

to the company’s ethical standards? , Does the code go beyond the legal minimums? , Does the code Index’ (this is a include corporate policies dealing with business conduct specifically related to Equal Employment check list to Opportunity? , Does the code include corporate policies dealing with business conduct specifically measure CSR) related to health, safety, and environment? Does the company have exceptional volunteer programs? , Does the company have employee volunteer The ‘Community programmes? , Does the company have a charitable foundation and if so how much was given during Index’ (this is a the most recent fiscal year? , Does the company have exceptional or particularly innovative charitable check list) giving programs? , Do the company’s volunteer programmes involve a large portion of the company’s current and former workforce?

What community programmes does the company have in place? , Does the company participate in public/private partnerships related to education, job training, or urban revitalisation and if so, what is the nature of the company’s commitment to them? , Does the company have partnerships with local schools or community-based groups? , Does the company have a corporate giving programme and if so, how much was given during the most recent fiscal year? , Is the company committed to donating a given percentage of its pre-tax profits to charitable organisations and if so, what percentage is the target goal? Hind, Commitment to the growth and development of employees, respect for employees at all levels ,respect 1-5 Likert scale (1 Wilson and for diversity and equal opportunities for all, Will not make unrealistic demands on self and others (e.g., being very Lenssen not working all hours), A management style of empowerment rather than control important and 5 (2009)

433

being little or no importance)

Cavaco and Business behaviour towards customers and suppliers: customers (product safety, information to Crifo (2014) customers, responsible contractual agreements); suppliers and sub-contractors ( sustainable relationship with suppliers, integration of environmental factors in the supply chain, integration of social factors in the supply chain); business integrity (prevention of corruptive and anti-corruptive practices)

434

Appendix 4: Relevant studies that explore ecological responsibility efforts to ensure corporate sustainability

Author(s) Statement (s) or dimensions of Leadership characteristics (such as skills, attitudes, competencies, and behaviours

Parkin (2010) - ‘Resilience’. This could be tested through self-checking whether “Am I enhancing the capacity of any ecological ‘Four habits of or social system to stay strong or become stronger so as to absorb large shocks yet remain fundamentally thoughts’ model unchanged”

Rogers (2011) The third principle of this sustainability model is ‘action-based development’. This aspect suggests developing leaders by encouraging them to learn about ecologically-based frameworks and to use them in their leadership

actions in the organisation. Ecologically based frameworks include areas such as ecological footprint, the natural step, natural capitalism, industrial ecology, cradle to cradle and biomimicry.

Global Reporting Renewable or non-renewable resources used, re-using waste, resource use efficiently (productivity), Initiative (2013a) health risk of products and facilities, environmental technologies and environmental management.

Cavaco and Crifo Integration of environmental values in to corporate strategy (environmental strategy and eco-design, pollution (2014) prevention and control-soil, accidents, development of green products, and services, protection of bio-diversity); incorporation of environmental consideration in to the manufacturing and distribution of production (protection of water resources, minimising environmental impacts from energy use, management of atmospheric emissions,

435

waste local pollution and environmental impacts from transportation); management of environmental impact from the use and disposal of products.

Ameer and Does the company have voluntary programmes in place including recycling? What are the company’s recycling Othman (2012) efforts?

Is the company dedicated to the conservation of energy and natural resources, with emphasis on the impact of operations on the local community? Is the company proactive in its environmental efforts? Has the company taken positive steps towards preserving our environment? What are the company’s levels of emission? Does the company have environmental remediation liabilities?

Do all company operations (including those abroad) comply with environmental statutes? What assets have the company obtained for pollution remediation? What is the effectiveness of the company’s environmental policies, specifically are the company’s established programmes and/or goals actually improving its environmental performance?

Is the company acting in compliance with environmental laws and regulations? Does the company have an environmental report, including quantitative data on emissions, pollution? What is the nature and amount of EPA violations and fines paid? What are the company’s levels of environmental data?

436

Learning to improve environmental protection (Has the company adopted new technologies and / or redesigned products to conserve the use of energy, water, materials, and /or land? Is the company involved in the new development or use of clean energy, sustainable renewable energy, or natural foods?

437

Appendix 5: Relevant studies that explore firm’s financial performance in establishing sustainability

Author(s) Statement (s) or dimensions of Leadership characteristics (such as skills, attitudes, competencies, and behaviours) Delaney and Huselid (1996) A statement that questions : Compared to other organisations that do the same kind of work, how would you compare the organisational performance over the last three years in terms of; 1. Marketing; 2. Growth in sale?; 3. Profitability?; and 4. Market share?

Huselid (1995) Identified three dimensions to measure its dependent variable (1) Turnover; ‘What is your average annual rate of turnover?’ (2) Productivity : The logarithm of sales per employee (3) Corporate financial performance: market based measures (Tobin q) and accounting measures (gross rate of return on capital or GRATE) Ameer and Othman (2012) Return on assets, profit before taxation, and cash flow from operations

Economic value generated (i.e. revenue)

438

Global Reporting Initiative economic value distributed (such as payment to providers of capital, operating cost, and payments to (2013a) government)

financial implications and other risks and opportunities for the organisation’s activities due to climate change (i.e., a description of the risk and opportunity posed , description of the impact, financial implications, cost of actions, methods used to manage the risk)

financial assistance received from government (i.e. tax, royalty, awards)

Development and impact of infrastructure investment and services supported, significant indirect economic impacts, including the extent of impacts

439

Appendix 6: Relevant leadership studies that measure stakeholder relationships to ensure corporate sustainability

Author(s) Leadership characteristics (attitudes, values, skills, qualities, competencies and behaviours) Polansky (1995) Identifying important stakeholders, evaluating their stakes, identifying ways to satisfy stakeholders, developing strategies linking stakeholder interest. Jaworski (1996). Listening to what others have to say with empathy, enabling bringing out diverse creative ideas and suggestions to problem solving. Parkin (2010) The second habit ‘relationship’ is concerned with maintaining a long-term relationship among the units of the social system. ‘Relationships’ could be tested through self-checking “Am I creating and protecting the good and many relationships that underpin resilience in individuals and in systems” (p. 147), Post, Preston and Sachs To understand the changing characteristics and preferences of stakeholders, leaders need to (2002) continuously learn, network and interact with other stakeholders. Van de Loo (2006) Organizing diverse people together; communicating values and convictions; relating and continuously discussing matters with the people around the leader. Hargett and Williams Being customer-centred to ensure optimal and mutually beneficial solutions. (2009) Hind, Wilson and Treating suppliers fairly; being interested in the impact of the business on surrounding local Lenssen (2009) communities; building relations with external stakeholders; engaging in consultation and balancing demands; building capacity and external partnerships and creating strategic networks and alliances.

440

Caldwell, Hayes and Balancing stakeholder interests while maximising employee commitment and trust Long (2010b); Pfeffer (1998) Avery (2005); Avery and Valuing people; stakeholder approach; strong shared vision; meeting customer requirements that Bergsteiner (2010, improves the brand reputation in the longer term; gaining stakeholder commitment; and gaining 2011c) shareholder wealth maximisation. Crawford and Nahmias Use communication to engage stakeholders, sell change, enlist champions, facilitate political (2010) diffusion, and manage stakeholder expectations.

Yukl (2012) Networking and collaborating with diverse stakeholders. Cavaco and Crifo (2014); Identifying the interconnectedness between different levels in the community. Post, Preston and Sachs (2002) Salem (2012) Caring and sharing; true empathetic listening to diverse perspectives in problem solving; facilitating an open, un-biased, true and honest dialogue without any coercion; command or control exerted from the leader over diverse parties; accepting diversity in the community; giving equal attention to diverse groups of the community; reasoning with emotionality; developing a stage for diversity to enhance creativity and innovation; accepting that others also make mistakes; creating strong interconnected relationships between diverse parties in the community. Euchner and Ganguly Managing existing stakeholder relationships while creating new relationships; winning the trust of (2014) and being accepted by all stakeholders.

441

Cavaco and Crifo (2014) Business behaviour towards customers and suppliers: customers (product safety, information to customers, responsible contractual agreements); suppliers and sub-contractors ( sustainable relationship with suppliers, integration of environmental factors in the supply chain, integration of social factors in the supply chain); business integrity (prevention of corruptive and anti-corruptive practices) (Cavaco & Crifo 2014)

442

Appendix 7: Relevant studies that explore leader’s long-term orientation in decision-making to achieve corporate sustainability

Author(s) Leadership characteristics (attitudes, values, skills, qualities, competencies and behaviours) Fullan (2003) Leaders who think of the long-term consequences of their short-term decisions are able to achieve sustainability. Fullan (2005) Dual commitment to short-term and long-term results; The longer lever of leadership Hind, Wilson (developed a 5 point scale to measure leadership skills that consider the long-term perspective) and Lenssen a belief that bottom line success can be achieved in an ethical way; does not focus exclusively on cost and (2009) budgets; recognises that business doesn’t have responsibilities to the broader society; understanding the role of each player in society – government, business, trade union, NGO and civil society; and taking a strategic view of the business environment. Parkin (2010) The third habit ‘reflection’ is concerned with systematically thinking of what happened and was experienced through past actions, behaviours and learning lessons which help to better perform future actions. Rogers (2011) The first aspect of ‘cognitive development’ includes aspects such as moving from short-term thinking to taking a long view of decision making, moving from thinking of the economy as something from outside nature to an economy as integrated with nature, and inculcating systems thinking through moving from thinking about a linear flow of resources to thinking about the ways resources flow through a system. Avery and Identifying long-term business trends, balancing short-term and long-term objectives, developing long- term Bergsteiner objectives in strategic planning, developing long-term relationships with diverse stakeholders, retaining and (2011c). developing staff even in periods of financial difficulties, long-term investments in developing knowledge capital and innovation, developing a devolved decision-making culture (pp. 85-88)

443

Appendix 8: Relevant studies that explore employee engagement to achieve corporate sustainability

Author(s) Leadership characteristics (attitudes, values, skills, qualities, competencies and behaviours) Hargett and Williams Empowering employees (2009); Shrivastava (1994a) Hind, Wilson and Lenssen Commitment to the growth and development of employees, respect for employees at all levels, (2009) respect for diversity and equal opportunities for all, will not make unrealistic demands on self and others (e.g. not working long hours),a management style of empowerment rather than control Huselid (1995) A scale with 13 practices for measuring high performance work practices (pg. 646): Personnel selection; performance appraisals; incentive compensation; job design; grievance procedure; information sharing; attitude assessment; labour management; intensity of recruiting efforts (selection ratio); the average number of hours of training per employee per year; and firm’s promotion criteria (seniority versus merit). Hargett and Williams Committed to get the full involvement of employees through motivating, inspiring and generating (2009) energy, engage with its expert workforce of different levels to contribute their knowledge, ideas and opportunities, while paying attention to their contribution, teaming and collaboration to share a broad set of expertise and new knowledge distribution around the organisation D’Amato and Roome Establish individual employee level goals, including them in performance development and (2009) evaluation plans in order to succeed in sustainability efforts

444

Morsing and Oswald Clear communication and measuring the established goals to make sure employees are carrying (2009) out sustainability initiatives Salem (2012); Willard Encouraging trust and commitment through developing strong interpersonal relations between (2009) leader and follower Lacy, Arnott and Lowitt Incorporate sustainability as a regular component in their performance management process (2009) measuring individual employee’s performance against sustainability targets Avery and Bergsteiner Distribute adequate power, rewards and resources to employees; create favourable organisational (2011c). environment to implement sustainability lead strategies Avery and Bergsteiner Developing a strong trusted leader-follower relationship and open to sharing ideas to achieve (2011b); Galpin and sustainability leadership Whittington (2012)

Galpin and Whittington Design more meaningful work through creating job enrichment considering the five core job (2012) dimensions ( task identity, task variety, task significance, autonomy, and feedback) to motivate the workforce towards successfully implementing sustainability in organisations

445

Idealised vision ( role modelling behaviour of transformational leader), inspirational motivation ( envisioning and articulating an attractive future that provides meaning and challenge for followers), intellectual stimulation ( questioning and assumptions, reframing of problems, approaching existing situations from a fresh perspective), individualised consideration ( leader’s mentoring role) are as important to develop the trust between a leader and follower that is essential for high employee engagement in sustainability initiatives . Aguinis and Kraiger Investments in training and development will improve employees’ skills and attitudes enabling (2009); Avery and them to perform better in the face of the challenging business goals Bergsteiner (2010).

Edmondson and Roloff Facilitate learning and open climate to engage followers to achieve successful performance (2009); Salem (2012)

Euchner and Ganguly Excellent communication skills (2014) Cavaco and Crifo (2014) Integration of human resources issues in to corporate strategy; promotion of labour relations and employee participation; career development and training; quality of working conditions (remuneration systems, health and safety conditions and working hours) would enhance firm’s financial performance.

446

Appendix 9: Relevant studies that explore change leadership behaviours to achieve organisational sustainability

Author(s) Leadership characteristics (attitudes, values, skills, qualities, competencies and behaviours) Senge (1990) Enriching learning within the organisation to enhance change and innovation.

Barrow and Leaders must work as teachers by creating a vision, creating an atmosphere of trust, scanning the environment for McLaughlin threats and opportunities, and developing employees as essential to create a learning organisation. (1992 ) McGill, Creating a learning organisation by learning from their past experiences. Slocum and Lei (1992) Watkins and Creating knowledge, disseminating knowledge, instituting change, and institutionalising change as important Marsick components in their model. (1993) Watkins and Creating a learning organisation through continuous learning to enable successful adaption to environmental changes Marsick needs long-term commitment of its management that should start from the top management rather than from the (1993) bottom level. Johnson Visioning (leaders need to cooperatively create and communicate a shared vision for the future), empowering (1998) (empower those who follow) and leading-learning (leaders must assume a strong role relative to learning) to facilitate learning in organisations are three important qualities.

447

Yukl, Gordon Four different change-oriented leadership behaviours, namely, 1) monitoring the external environment 2) proposing and Taber an innovative strategy or new vision (Yukl, Gordon & Taber 2002)3) encouraging innovative thinking 4) taking risks (2002) to promote necessary changes. Doppelt Empower followers to take responsibility for own tasks; improve commitment to implementing sustainability. (2009) Dunphy, Know where you are now, develop the vision - the dream organisation, identify gaps, assess the readiness for change, Griffiths and set the scene for action, secure basic compliance first, move beyond compliance, establish the performance criteria for Benn (2003) ‘compliance plus’, launch and manage the transformational change programme, and maintain the range. Dunphy, Identified eight steps involved in creating sustainable organisations through ‘incremental change strategies’ including Griffiths and future workshops and search conferences; assess the organisation’s current position in relation to sustainability; Benn (2003) evaluate the type of change programme needed; identify change agents; pilot new practices and innovation; harness further resources; communicate and extend the programme; and align organisational systems required to achieve change through incremental change processes. Fullan (2005) Commitment to changing contexts at all levels, lateral capacity building through networking, new vertical relationships that co-depend encompassing both capacity building and accountability, deep learning. Dunphy, Self-leadership; communication; opportunity making and taking; direction setting (visioning); influencing and Griffiths and networking; delegate; develop, mentor and coach; performance monitoring and management; team building; Benn (2007) resourcing; problem solving; updating techniques and organisational knowledge. Murphy, Use local skills and capabilities together with available resources to implement change. McBean and

448

Farahbakhsh (2009) Willard Seven leadership practices for sustainability 1) wake up and decide, 2) inspire shared vision, 3) assess current (2009) realities, 4) develop strategies, 5) build the cases for change, 6) mobilise commitment, and 7) embed and align. Seven leadership practices for sustainability change, namely, (1)get credible, stay credible, (2) dialogue, (3) collaborate, educate, network, (4) meet them where they are, (5) piggyback existing initiatives, (6) influence the influencers, and (7) practice “painful opportunism”. Seven paradoxes, namely, (1) you have to do it yourself, you can’t do it alone, 2) to get “hard results” work on the “soft stuff”, 3) motivators inhibit commitment, 4) one person’s dream is another person’s nightmare, 5) go small to go fast, 6) go small to go big, and 7) things need to get worse before they can get better. ‘Seven derailers’, namely, 1) displaying hubris, 2) mishandling office politics, 3) being a “problem child”, 4) failing to produce results, 5) succumbing to stress, 6) changing everything at once, and 7) getting off to a bad start. Hargett and All the local and international employees need to be properly trained to establish a common perception about Williams sustainability goals. This will make employees less confused on what to do for novel and “sticky” problems such as (2009) CSR implementation, understanding new customer expectations, new solutions, and new technologies. Need formal management training to instil sustainability leadership competencies. Hargett and Cultural mismatch could be avoided through developing a common communication platform, developing best Williams practices for diverse national cultures, implementing a systematic approach to integrating triple bottom line in a (2009) company’s internal and external practices, enhancing employee’s knowledge about CSR, increasing diversity at the organisation especially at the headquarters level, developing a sponsoring strategy that highlights main areas the company will support and fund, and the reason behind these sponsoring choices.

449

Hargett and Represent diversity of its workforce especially at the headquarters, facilitate open communication to attract diverse Williams cultural values across hierarchy, enhance skills of the workforce, and develop a clear CSR sponsoring strategy. (2009) D’Amato and Combine upper level management, the executive team, or other groups within and across the organisational Roome (2009) boundaries. (Crawford & Change management competencies such as leadership, team management and development, stakeholder management Nahmias and engagement, communication, cross-cultural skills, decision making and problem solving, planning; governance, 2010) risk management are enhancing organisational transformation. Strategic Offer an influential and convincing argument for the need for change, use persuasive powers to implement change, Direction identify and understand different motivating factors of stakeholders, awareness of potential barriers for change, (2011) emphasise realised commercial rewards through change, use extra financial and social data available for decision making, delegate operational responsibilities to business unit managers, integrate sustainability into the strategic direction of the firm, develop a long-term focus within the firm, create and exploit additional opportunities by engaging with external stakeholders, be flexible to adapt any new ways of running the business, concern for the pay- offs for the long term required to achieve sustainability.

Yukl (2012) Introduced four aspects of change-oriented behaviours, namely, advocating change (explaining why change is urgently needed), envisioning change ( to build commitment to new strategies and initiatives with appealing vision of what can be attained through implementation), encouraging innovation ( intellectual stimulation or encouraging innovative thinking), and facilitating collective learning ( improvement of current strategies and work methods or discovering new ones).

450

Dunphy and Hard intervention skills (managing mergers, re-structuring, technology change) and soft intervention skills (work Benn (2013) design, human system design, cultural change). Dunphy and Self-change skills (skills associated with managing one’s own personal change), interpersonal change skills (skills Benn (2013) associated with leading change in interpersonal relationships), and change project leadership skills (skills of change project leadership including skills for leading organisational change interventions). Khavul and Understand local customers’ mind, their networks of closely linked people, and local business ecosystem Bruton (2013) Metclaf and Organisations require leaders with extraordinary qualities such as reading and predicting through complexity, Benn (2013) thinking through complex problems, engaging groups through complex adaptive organisational change and managing emotions appropriately.

Metclaf and Technical skills, ability to adapt to a wider social and environmental context, new ways to accomplish tasks, Benn (2013) creativity and innovation, flexibility, attitude towards learning , attention to feedback, and organising production management produces to reduce waste.

451

Appendix 10: Relevant studies that explore leader’s sustainable thinking to achieve organisational sustainability

Author(s) Leadership characteristics (attitudes, values, skills, qualities, competencies and behaviours) Hind, Wilson and Integrity- a high level of ethical awareness/moral reasoning, always challenging unethical behaviours, Lenssen (2009) honesty and trustworthiness, willingness to explore ethical dilemmas, willingness to take ethical action without a clear picture of the final outcome. Demonstrating ethical behaviour - Ethical behaviours are embedded in personal actions and day- to-day behaviours, willingness to take the organisation beyond minimum legal standards, willingness to be a ‘public role model’ for ethical behaviour, ability to change beliefs of followers consistent with one’s own high values. Open minded - Willingness to act on criticisms from insiders or outsiders of the organisation, will not be complacent and assume things cannot be improved, questioning business as usual by being open to new ideas, challenging others to adopt new ways of thinking. Communication – listen to others with respect for diverse views, a broad model of communication ( a two- way dialogue with staff), being honest and open with staff in the organisation, a belief in the principles of accountability (e.g. measuring and publicly reporting on company progress with regard to social and environmental issues). Parkin (2010) The fourth habit of this model is ‘reverence’. This habit could be tested with the question “Am I demonstrating a ‘respectful awe’ for the power of the natural world and the intimacy of our biological relationship with it” (p. 152).

452

Schraa-Liu and Building public trust, sustaining an impeccable reputation, walking the talk, managing with integrity, Trompenaars (2006) making profits with principles, delivering on the triple bottom line, creating value for stakeholders, mobilizing people and teams, coaching and reinforcing employees, creating incentives to encourage respectful collaboration, safeguarding freedom of speech, ensuring adherence to employment standards, providing fair and equal employment opportunities, making sure that products and services meet customer needs, ensuring that ethical standards are respected, being driven by a value-based vision of the future, having a fundamental values base, maintaining personal and professional integrity, making principled decisions, using values as a moral compass, promoting active citizenship inside and outside the organisation, being rooted in an ethics of care, being driven by a desire to serve others, humility and modesty, an inclination to support others and to care for their interests and needs, being connected and close to stakeholders, growing and sustaining a web of stakeholder connections, having a drive to realize the vision in and through stakeholder engagement, being cooperative, being inclusive, being empathetic, creating a values- based sense of identify among stakeholders, and combining cognitive, emotional, relational, and moral qualities. Elkington (2001) (Essential characteristics to become a responsible leader) - Strength, vision, stamina, appreciation of diversity, readiness to walk the talk, desire to learn, learning from failures, and a healthy sense of humour. Rogers (2011) The second principle of ‘building a knowledge-based sustainability approach’ includes areas such as being committed to understanding environmental science, creating ethically sustainable guidelines, working deliberatively towards sustainability and developing systems thinking competency.

453

Morsing and Oswald Communication skills to establish sustainability goals and to clearly convey them to employees. (2009). Googins, Mirvis and Setting high standards, promoting dialogue and engagement, and balancing social and economic factors are Rochlin (2007). identified as important to establish organisational citizenship.

Waddock (2007) (Important skills to become an excellent social responsible leader) - Natural intelligence, network analysis, holistic systems thinking, cross-cultural understanding, power-sharing and reflection. Fullan (2005) Public service with a moral purpose, cyclical energizing.

Fullan (2003) (Important aspects ensuring sustainability leadership that directly focuses on the leader’s self-discipline towards sustainability thinking) - Sense of moral purpose, emotional intelligence, creating coherence around chaotic situations, commitment to new knowledge and sharing knowledge.

Rogers (2011) Moving from thinking about a linear flow of resources to thinking about the ways resources flow though a system.

Giampalmi (2004) (Leadership qualities) Courage, business acumen, question definition, passion for life and work, compassion, sense of humour, and vision for a legacy.

Van de Loo (2006) (Key success factors to achieve responsible leadership) - Mobilising people, strong conversation and relations with people around the leader, articulating values and passions.

454

Appendix 11: Summary of hypotheses developed

Hypothesis RQ 1: Testing the relationship between the three leadership excellence dimensions and sustainability leadership H1: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with the excellent leader (EXL) in Sri Lankan organisations. H2: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with concern for social and environmental sustainability (ENV) in Sri Lankan organisations. H3: The leader’s consideration for stakeholder relationships (STK) exhibits a positive relationship with concern for financial performance (FIN) in Sri Lankan organisations H4: The leader’s consideration for long-term decision making (LONG) exhibits a positive relationship with excellent leadership (EXL) in Sri Lankan organisations. H5: The leader’s consideration for long-term decision making (LONG) exhibits a positive relationship with concern for social and the environmental sustainability (ENV) in Sri Lankan organisations. H6: The leader’s consideration for long-term decision making (LONG) exhibits a positive relationship with concern for financial performance (FIN) in Sri Lankan organisations. H7: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with excellent leader (EXL) in the Sri Lankan organisational context. H8: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with concern for social and the environmental sustainability (ENV) in the Sri Lankan organisational context. H9: The leader’s consideration for employee engagement (EMP) exhibits a positive relationship with concern for firm’s financial performance (FIN) in the Sri Lankan organisational context. RQ 2: Testing the mediation effect of CHNG H10: The leader’s commitment to organisational change (CHNG) mediates the relationship between concern for stakeholder relationship (STK) and excellent leadership (EXL) in the Sri Lankan organisational context. H11: The leader’s commitment to organisational change (CHNG) mediates the relationship between concern for stakeholder relationship (STK) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context.

455

H12: The leader’s commitment to organisational change (CHNG) mediates the relationship between concern for stakeholder relationships (STK) and concern for financial performance (FIN) in the Sri Lankan organisational context. H13: The leader’s commitment to organisational change (CHNG) mediates the relationship between long-term decision making (LONG) and excellent leadership (EXL) in the Sri Lankan organisational context. H14: The leader’s commitment to organisational change (CHNG) mediates the relationship between long-term decision making (LONG) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H15: The leader’s commitment to organisational change (CHNG) mediates the relationship between long-term decision making (LONG) and concern for financial performance (FIN) in the Sri Lankan organisational context. H16: The leader’s commitment to organisational change (CHNG) mediates the relationship between employee engagement (EMP) and excellent leadership (EXL) in the Sri Lankan organisational context. H17: The leader’s commitment to organisational change (CHNG) mediates the relationship between employee engagement (EMP) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H18: The leader’s commitment to organisational change (CHNG) mediates the relationship between employee engagement (EMP) and concern for financial performance (FIN) in the Sri Lankan organisational context. RQ 3: Testing the mediation effect of SUSTHINK H19: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between concern for stakeholder relationship (STK) and excellent leadership (EXL) in the Sri Lankan organisational context. H20: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between concern for stakeholder relationship (STK) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H21: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between concern for stakeholder relationship (STK) and concern for financial performance (FIN) in the Sri Lankan organisational context. H22: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between long-term decision making (LONG) and excellent leadership (EXL) in the Sri Lankan organisational context. H23: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between long-term decision making (LONG) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H24: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between long-term decision making (LONG) and concern for financial performance (FIN) in the Sri Lankan organisational context.

456

H25: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between employee engagement (EMP) and excellent leadership (EXL) in the Sri Lankan organisational context. H26: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between employee engagement (EMP) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context H27: The leader’s sustainable thinking (SUSTHINK) mediates the relationship between employee engagement (EMP) and concern for financial performance (FIN) in the Sri Lankan organisational context.

457

Appendix 12: Summary of leadership studies that have used excellent leadership (EXL) constructs

Author(s) EXL statements (in the order of importance) Study Characteristics Sample size Scale context of the respondents Selvarajah 1. Be honest. Six Practicing Over 350 Nine-point et al. 2. Have a strategic vision for the organisation. Southeast managers (or managers from Likert scale (1= (1995) 3. Give recognition for good work. Asian student- 6 ASEAN low important 4. Have confidence in dealing with people. countries managers) countries and 9= high 5. Motivate employees. studying for importance) 6. Continue to learn how to improve performance. their MBA 7. Organise work time effectively. program 8. Develop strategies to gain a comparative edge in the industry. 9. Create a sense of purpose and enthusiasm in the workplace. 10. Listen when employees want to say something. Selvarajah 1. Continue to learn how to improve performance. Malaysia 30 600 distributed Five-point and Meyer 2. Have a strategic vision for the organisation. organisations 320 received Likert scale (2006) 3. Give recognition for good work. identified in the and 292 usable (1=not at all 4. Create a sense of purpose and enthusiasm in the Klang Valley (48.6% Return important and workplace. rate) 5=extremely 5. Have confidence in dealing with people. important) 6. Be honest. 7. Develop strategies to gain a comparative edge in the industry. 8. Motivate employees. 9. Organise work time effectively. Selvarajah 1. Give recognition for good work. Mainland MBA student 671 managers Five-point and Meyer 2. Have a strategic vision for the organisation. China from North from Likert scale (2008b) 3. Create a sense of purpose and enthusiasm in the China Electric Electricity grid (1=not at all workplace. Power industry important and 4. Develop strategies to gain a comparative edge in University 5=extremely the industry. important)

458

5. Continue to learn how to improve performance. 6. Have confidence in dealing with people. 7. Motivate employees. 8. Be honest.

Selvarajah 1. Continue to learn how to improve performance. Malaysia 30 600 distributed Five-point and Meyer 2. Motivate employees. organisations 320 returned, Likert scale (2008a) 3. Develop strategies to gain a comparative edge in identified in the 292 usable (1=not at all the industry. Klang Valley (48.6% important and 4. Organise work time effectively. effective return 5=extremely 5. Have confidence in dealing with people. rate) important) 6. Create a sense of purpose and enthusiasm in the workplace. 7. Give recognition for good work. 8. Be honest. Anurit, 1. Continue to learn how to improve performance. Thailand Practising 800 distributed, Five-point Selvarajah 2. Develop strategies to gain a comparative edge in managers in 412 returned, Likert scale and Meye the industry. MBA and 401 usable (1=not at all (2011) 3. Organise work time effectively. programmes in (50.1% important and 4. Have confidence in dealing with people. three effective return 5=extremely 5. Give recognition for good work. universities rate) important) 6. Be honest. located in Bangkok, North Thailand, and East Thailand de Waal et 1. Have confidence in dealing with people. Netherlands Invitation to Distributed Five-point al. (2011) 2. Give recognition for good work. participate in amount is Likert scale 3. Create a sense of purpose and enthusiasm in the the survey was unknown as it (1=not at all workplace. sent through an was online, important and 4. Motivate employees. online website 808 usable 5=extremely 5. Continue to learn how to improve performance. (Management questionnaires important) 6. Have a strategic vision for the organisation. Team) and were returned 7. Organise work time effectively. several other 8. Be honest. organisations

459

known to the author. Selvarajah, 1. Motivate employees. Cambodia Managers of 1000 managers Five-point Meyer and 2. Have a strategic vision for the organisation. alumni in the randomly Likert scale Davuth 3. Give recognition for good work. largest selected from (1=not at all (2012) 4. Continue to learn how to improve performance. university in alumni of the important and 5. Be honest. Cambodia and largest 5=extremely 6. Create a sense of purpose and enthusiasm in the MBA student- university in important) workplace. practising Cambodia and 7. Develop strategies to gain a comparative edge in managers 76 practising the industry. MBA student- 8. Have confidence in dealing with people. managers. 226 9. Organise work time effectively. returned and 217 usable (effective return rate 20%) Selvarajah, 1. Organise work time effectively. Thailand Practicing 800 distributed, Five-point Meyer and 2. Have confidence in dealing with people. managers in 412 returned, Likert scale Donovan 3. Continue to learn how to improve performance. MBA programs and 401 usable (1=not at all (2013) 4. Develop strategies to gain a comparative edge in in three (50.1% important and the industry. universities effective return 5=extremely 5. Be honest. located in rate) important) 6. Give recognition for good work. Bangkok, North Thailand, and East Thailand Selvarajah 1. Have confidence in dealing with people. Singapore Managers Using a Five-point et al. 2. Create a sense of purpose and enthusiasm in the representing database of Likert scale (2013) workplace. wide range of organisation in (1=not at all 3. Continue to learn how to improve performance. industries Singapore 600 important and 4. Have a strategic vision for the organisation. managers 5=extremely 5. Give recognition for good work. randomly important) 6. Develop strategies to gain a comparative edge in selected, 249 the industry.

460

7. Organise work time effectively. returned (41% 8. Motivate employees. response rate) 9. Be honest. Shrivastava EL contrast consist with two factors South Managers of 800 distributed, Five-point et al. People-oriented Africa public and 550 usable Likert scale (2014) 1. Create a sense of purpose and enthusiasm in the private surveys (1=not at all workplace. organisations in received important and 2. Have a strategic vision for the organisation. different (effective 5=extremely 3. Give recognition for good work. provinces. response rate important) 4. Be honest. Organisations 69%) 5. Motivate employees. were selected by either the Task-oriented professional 1. Develop strategies to gain a comparative edge in relationships the industry. had with either 2. Continue to learn how to improve performance. universities/ 3. Have confidence in dealing with people. students or 4. Organise work time effectively. authors.

461

Appendix 13: Identifying leadership behavioural statements to measure ENV construct

Leadership behavioural statement (s) used in the survey Relevant studies that have highlighted each leadership behaviour as important instrument item 1. Be sensitive to people of different background (Ameer & Othman 2012; Global Reporting Initiative 2013a; Hind, Wilson & Lenssen 2009; Selvarajah et al. 1995) 2. Be socially responsible (Ameer & Othman 2012; Selvarajah et al. 1995) 3. Promote staff welfare and development (Ameer & Othman 2012; Global Reporting Initiative 2013a; Hind, Wilson & Lenssen 2009; Selvarajah et al. 1995) 4. Establish a friendly working environment (Ameer & Othman 2012; Hind, Wilson & Lenssen 2009) 5. Work as a volunteer in your community (Ameer & Othman 2012) 6. Engage in work that makes your community a better place (Ameer & Othman 2012) 7. Show concern for sustainability issues (Ameer & Othman 2012; Kalshoven, Den Hartog & De Hoogh 2011; Parkin 2010) 8. Be environmentally responsible (Ameer & Othman 2012; Avery & Bergsteiner 2011c; Global Reporting Initiative 2013a; Kalshoven, Den Hartog & De Hoogh 2011; Parkin 2010; Rogers 2011; Selvarajah et al. 1995) 9. Encourage recycling of items and materials in your department (Ameer & Othman 2012; Global Reporting Initiative 2013a; Kalshoven, Den Hartog & De Hoogh 2011) 10. Identify impact of your actions on the natural environment (Ameer & Othman 2012; Global Reporting Initiative 2013a; Parkin 2010; Rogers 2011) 11. Continuously learn how to protect the environment (Ameer & Othman 2012; Rogers 2011)

462

Appendix 14: Identifying leadership behavioural statements to measure FIN construct

Leadership behavioural statement (s) used in the survey Relevant studies that have highlighted each leadership behaviour as important item instrument 1. Understand potential financial impacts of every decision (Avery & Bergsteiner 2011b; Global Reporting Initiative 2013a) 2. Achieve financial targets (Ameer & Othman 2012; Avery & Bergsteiner 2011b; Delaney & Huselid 1996; Global Reporting Initiative 2013a; Huselid 1995) 3. Focus on maximising productivity (Global Reporting Initiative 2013a; Huselid 1995; Selvarajah et al. 1995) 4. Ensure a maximum returns to investors (Avery & Bergsteiner 2011b; Delaney & Huselid 1996; Global Reporting Initiative 2013a; Huselid 1995)

463

Appendix 15: Identifying leadership behavioural statements to measure STK construct

Leadership behavioural statement (s) used in the Relevant studies that have highlighted each leadership behaviours as important survey instrument item 1. Accept that others will make mistakes (Euchner & Ganguly 2014; Jaworski 1996; Salem 2012) 2. Act as a member of a team (Avery & Bergsteiner 2010; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006) 3. Be consistent in dealing with people (Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Jaworski 1996; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006) 4. Be skilled in public relations (Avery & Bergsteiner 2010; Caldwell, Hayes & Long 2010a; Cavaco & Crifo 2014; Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006) 5. Listen to and understand the problems of others (Avery & Bergsteiner 2010; Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Jaworski 1996; Polansky 1995; Salem 2012; Van de Loo 2006) 6. Manipulate people to achieve work goals (Avery & Bergsteiner 2010; Caldwell, Hayes & Long 2010a; Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006) 7. Listen to the advice of others (Avery & Bergsteiner 2010; Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Jaworski 1996; Salem 2012; Van de Loo 2006) 8. Negotiate with various professionals and interest (Avery & Bergsteiner 2010; Caldwell, Hayes & Long 2010a; Cavaco & Crifo 2014; groups Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006) 9. Respect the self-esteem of others (Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Jaworski 1996; Salem 2012; Van de Loo 2006) 10. Respond to expectations of consumers (Hargett & Williams 2009) 11. Sell the professional image or corporate image to the (Avery & Bergsteiner 2010; Caldwell, Hayes & Long 2010a; Cavaco & Crifo 2014; public Euchner & Ganguly 2014; Hind, Wilson & Lenssen 2009; Polansky 1995; Post, Preston & Sachs 2002; Salem 2012; Van de Loo 2006)

464

Appendix 16: Identifying leadership behavioural statements to measure LONG construct

Leadership behavioural statement (s) used in the Relevant studies that have highlighted each leadership behaviours as important survey instrument item Be consistent in making decisions (Parkin 2010; Rogers 2011) Be logical in solving problems (Avery & Bergsteiner 2011c; Parkin 2010; Rogers 2011) Be objective when dealing with work conflicts (Avery & Bergsteiner 2011c; Parkin 2010) Be prepared to compromise on important work issues (Bearden, Money & Nevins 2006; Parkin 2010) Deal with work problems openly and honestly (Avery & Bergsteiner 2011c; Parkin 2010) Focus on the task-in-hand (Avery & Bergsteiner 2011c; Fullan 2005; Spears, Lin & Mowen 2001) Give priority to long-term goals (Avery & Bergsteiner 2011c; Bearden, Money & Nevins 2006; Fullan 2005; Rogers 2011; Spears, Lin & Mowen 2001) Give priority to short-term goals (Avery & Bergsteiner 2011c; Fullan 2005; Spears, Lin & Mowen 2001) Identify social trends which may have an impact on (Avery & Bergsteiner 2011c; Parkin 2010; Spears, Lin & Mowen 2001) work Keep to work deadlines (Avery & Bergsteiner 2011c; Fullan 2005; Spears, Lin & Mowen 2001) Make decisions earlier rather than later (Avery & Bergsteiner 2011c; Fullan 2005; Spears, Lin & Mowen 2001) Make decisions without depending too much on others (Avery & Bergsteiner 2011c; Bearden, Money & Nevins 2006; Parkin 2010; Rogers 2011; Spears, Lin & Mowen 2001) Make work decisions quickly (Avery & Bergsteiner 2011c; Fullan 2005; Spears, Lin & Mowen 2001) Think about the general implications of any problem (Avery & Bergsteiner 2011c; Bearden, Money & Nevins 2006; Fullan 2003; Rogers 2011; Spears, Lin & Mowen 2001) Think about what may happen in the future (Avery & Bergsteiner 2011c; Bearden, Money & Nevins 2006; Fullan 2003, 2005; Parkin 2010; Spears, Lin & Mowen 2001) Understand and analyse complex problems (Avery & Bergsteiner 2011c; Parkin 2010; Rogers 2011) Use economic indicators for planning purposes (Avery & Bergsteiner 2011c; Rogers 2011)

465

Appendix 17: Identifying leadership behavioural statements to measure EMP construct

Leadership behavioural statement (s) used in Relevant studies that have highlighted each leadership behaviours as important item the survey instrument Allow other people time to do things (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Shrivastava 1994a) Allow subordinates authority and autonomy (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Shrivastava 1994a) Be formal when dealing with employees at work (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Hargett & Williams 2009; Morsing & Oswald 2009; Salem 2012; Willard 2009) Be informal when with employees outside work (Avery & Bergsteiner 2011c; Cavaco & Crifo 2014; Edmondson & Roloff 2009; Galpin & Whittington 2012; Hargett & Williams 2009; Salem 2012; Willard 2009) Be strict in judging the competence of employees (Cavaco & Crifo 2014; D’Amato & Roome 2009; Lacy, Arnott & Lowitt 2009; Morsing & Oswald 2009) Consider suggestions made by employees (Avery & Bergsteiner 2011c; Cavaco & Crifo 2014; Edmondson & Roloff 2009; Euchner & Ganguly 2014; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Salem 2012; Willard 2009) Delegate (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Shrivastava 1994a) Make allowance for emotional pressure on staff (Avery & Bergsteiner 2011c; Cavaco & Crifo 2014; Galpin & Whittington 2012; Hargett & at work Williams 2009; Hind, Wilson & Lenssen 2009) Support decisions made jointly by others (Avery & Bergsteiner 2011c; Cavaco & Crifo 2014; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009) Trust those to whom work is delegated (Avery & Bergsteiner 2011c; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Salem 2012; Willard 2009) Tell subordinates what to do and how to do it (Aguinis & Kraiger 2009; Avery & Bergsteiner 2011c; D’Amato & Roome 2009; Edmondson & Roloff 2009; Euchner & Ganguly 2014; Galpin & Whittington 2012; Hargett & Williams 2009; Hind, Wilson & Lenssen 2009; Morsing & Oswald 2009)

466

Appendix 18: Identifying leadership behavioural statements to measure SUSTHINK construct

Leadership behavioural statement(s) used in the Relevant studies that have highlighted each leadership behaviours as survey instrument important to measure sustainable thinking Be dependent and trustworthy (Hind, Wilson & Lenssen 2009; Rogers 2011; Schraa-Liu & Trompenaars 2006) Accept responsibility for mistakes (Elkington 2001; Hind, Wilson & Lenssen 2009; Rogers 2011; Schraa-Liu & Trompenaars 2006) Cope with pressures of work (Elkington 2001; Fullan 2003; Giampalmi 2004; Hind, Wilson & Lenssen 2009; Schraa-Liu & Trompenaars 2006; Van de Loo 2006; Waddock 2007) Deal calmly in tense situations (Elkington 2001; Fullan 2003; Giampalmi 2004; Hind, Wilson & Lenssen 2009; Schraa-Liu & Trompenaars 2006; Van de Loo 2006) Speak clearly and concisely (Googins, Mirvis & Rochlin 2007; Morsing & Oswald 2009; Rogers 2011; Schraa-Liu & Trompenaars 2006; Van de Loo 2006) Think about the specific details of any particular (Elkington 2001; Giampalmi 2004; Rogers 2011; Schraa-Liu & Trompenaars problem 2006; Waddock 2007) Treat most people as if they were trustworthy and (Schraa-Liu & Trompenaars 2006; Van de Loo 2006) honest Write clearly and concisely (Googins, Mirvis & Rochlin 2007; Morsing & Oswald 2009; Rogers 2011; Schraa-Liu & Trompenaars 2006; Van de Loo 2006) Behave in accordance with his or her religious (Hind, Wilson & Lenssen 2009; Schraa-Liu & Trompenaars 2006) beliefs Choose management ethics before self or the (Hind, Wilson & Lenssen 2009; Rogers 2011; Schraa-Liu & Trompenaars 2006) organization Follow the heart – not the head – in compassionate (Fullan 2003, 2005; Giampalmi 2004; Hind, Wilson & Lenssen 2009; Schraa-Liu matters & Trompenaars 2006)

467

Follow what is morally right – not what is right for (Fullan 2003, 2005; Hind, Wilson & Lenssen 2009; Parkin 2010; Rogers 2011) self or organization Have a sense of humour (Elkington 2001; Giampalmi 2004; Schraa-Liu & Trompenaars 2006; Van de Loo 2006) Ignore personal morality in the interest of the (Fullan 2005; Hind, Wilson & Lenssen 2009; Schraa-Liu & Trompenaars 2006) organisation Return favours (Schraa-Liu & Trompenaars 2006) Select work wisely to avoid overload (Elkington 2001; Fullan 2003; Giampalmi 2004; Rogers 2011; Schraa-Liu & Trompenaars 2006; Van de Loo 2006) Share power (Hind, Wilson & Lenssen 2009; Schraa-Liu & Trompenaars 2006; Van de Loo 2006; Waddock 2007) Use rank and power to get things done (Elkington 2001; Schraa-Liu & Trompenaars 2006; Van de Loo 2006; Waddock 2007) Work long hours (Giampalmi 2004; Schraa-Liu & Trompenaars 2006)

468

Appendix 19: Identifying leadership behavioural statements to measure CHNG construct

Leadership behavioural statement(s) Relevant studies that have highlighted each leadership behaviours as important item used in the survey instrument Adjust organizational structures and rules (Barrow & McLaughlin 1992 ; D’Amato & Roome 2009; Dunphy, Griffiths & Benn 2003; Hargett to realities of practice & Williams 2009; Metclaf & Benn 2013; Murphy, McBean & Farahbakhsh 2009; Watkins & Marsick 1993; Willard 2009; Yukl, Gordon & Taber 2002; Yukl 2012) Be an initiator – not a follower (Barrow & McLaughlin 1992 ; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Willard 2009; Yukl 2012) Be competitive (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Willard 2009; Yukl 2012) Be adaptable (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Khavul & Bruton 2013; McGill, Slocum & Lei 1992; Metclaf & Benn 2013; Murphy, McBean & Farahbakhsh 2009; Watkins & Marsick 1993; Willard 2009; Yukl, Gordon & Taber 2002; Yukl 2012) Be involved in organisational politics (D’Amato & Roome 2009; Hargett & Williams 2009; Metclaf & Benn 2013; Murphy, McBean & Farahbakhsh 2009; Willard 2009) Be knowledgeable about work of the (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Senge 1990; industry Watkins & Marsick 1993; Willard 2009) Be practical (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Khavul & Bruton 2013; Metclaf & Benn 2013; Watkins & Marsick 1993; Willard 2009) Be responsive to political realities in the (Barrow & McLaughlin 1992 ; D’Amato & Roome 2009; Dunphy, Griffiths & Benn 2003; Hargett environment & Williams 2009; Metclaf & Benn 2013; Murphy, McBean & Farahbakhsh 2009; Watkins & Marsick 1993; Willard 2009) Be skilled in work related technology (Barrow & McLaughlin 1992 ; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Senge 1990; Watkins & Marsick 1993; Willard 2009) Check constantly for problems and (Barrow & McLaughlin 1992 ; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; opportunities McGill, Slocum & Lei 1992; Metclaf & Benn 2013; Strategic Direction 2011; Watkins & Marsick 1993; Willard 2009; Yukl, Gordon & Taber 2002)

469

Constantly evaluate emerging (Barrow & McLaughlin 1992 ; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; technologies Johnson 1998; McGill, Slocum & Lei 1992; Metclaf & Benn 2013; Murphy, McBean & Farahbakhsh 2009; Senge 1990; Willard 2009; Yukl, Gordon & Taber 2002; Yukl 2012) Foster an international perspective in the (D’Amato & Roome 2009; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Khavul & organisation Bruton 2013; Metclaf & Benn 2013; Strategic Direction 2011; Watkins & Marsick 1993) Have a multicultural orientation and (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Khavul & Bruton 2013; Metclaf & approach Benn 2013; Strategic Direction 2011; Watkins & Marsick 1993) Have formal management training (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Senge 1990; Watkins & Marsick 1993) Keep up-to-date on management literature (Barrow & McLaughlin 1992 ; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Johnson 1998; Metclaf & Benn 2013; Senge 1990; Watkins & Marsick 1993) Look for and use the positive aspects of (Barrow & McLaughlin 1992 ; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Khavul other cultures & Bruton 2013; Metclaf & Benn 2013; Strategic Direction 2011; Yukl, Gordon & Taber 2002) Persuade others to do things (Barrow & McLaughlin 1992 ; Doppelt 2009; Hargett & Williams 2009; Johnson 1998; Strategic Direction 2011; Willard 2009; Yukl 2012) Study laws and regulations which may (Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Metclaf & Benn 2013; Senge 1990; have an impact on work Watkins & Marsick 1993) Think frequently about the practice of (Barrow & McLaughlin 1992 ; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; management Johnson 1998; McGill, Slocum & Lei 1992; Metclaf & Benn 2013; Senge 1990; Strategic Direction 2011; Watkins & Marsick 1993; Willard 2009) Try different approaches to management (Barrow & McLaughlin 1992 ; Dunphy & Benn 2013; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Johnson 1998; Khavul & Bruton 2013; Metclaf & Benn 2013; Senge 1990; Strategic Direction 2011; Willard 2009; Yukl 2012) Turn up for a 3 p.m. meeting at 3 p.m. (Doppelt 2009; Dunphy, Griffiths & Benn 2007; Willard 2009) (commitment to change) Use initiative and take risks (Doppelt 2009; Dunphy, Griffiths & Benn 2003; Hargett & Williams 2009; Johnson 1998; Metclaf & Benn 2013; Willard 2009; Yukl, Gordon & Taber 2002; Yukl 2012)

470

Appendix 20: Cover letter – Master’s students

Consent Information Statement

An examination of business leadership in Sri Lanka: Cultural modelling of sustainable leadership Investigators: Student Researcher :Mrs. Ayoma Sumanasiri, PhD Candidate, Faculty of Business and Enterprise, Swinburne University of Technology, PO Box 218, Hawthorn, VIC 3122, Australia. Email: [email protected]

Principal Coordinating Supervisor :Prof. Christopher Selvarajah, Faculty of Business and Enterprise, Swinburne University of Technology, PO Box 218, Hawthorn, VIC 3122, Australia. Email: [email protected]

Associate Supervisor :Dr. Aron Perenyi, Faculty of Business and Enterprise, Swinburne University of Technology, PO Box 218, Hawthorn, VIC 3122, Australia. Email: [email protected]

I am a Sri Lankan academic studying for a Doctoral Degree at Swinburne University, Australia. My research study aims to examine sustainable leadership behaviours of Sri Lankan managers and the unique cultural values and characteristics that enable the conceptualisation of a unique Sri Lankan leadership model. To achieve this objective I kindly invite you to voluntarily participate in this research project to develop an ‘excellent leadership model’ in the Sri Lankan organisational context. There are no right or wrong answers to these questions; rather we request you to identify the level of importance of each of the leadership behaviours for you whilst performing your duties as a leader in your organisation. Therefore, the responses you provide are not attributable to you or your organisation. This study is only concerned with identifying leadership behaviours important in the Sri Lankan organisational context. We expect that you will need to spend about 30 minutes to complete this questionnaire. The findings of this study will be published in a PhD dissertation and in journal articles. Completing the questionnaire will be taken as your informed consent to participate in this study. This means you understand that your privacy, anonymity and confidentiality are assured because at no time will the names of individuals or organisations be used in reporting this research. Informed consent also means that you understand that your participation is voluntary and that you understand the purpose of the study. Once completed please insert and seal your filled questionnaire in the envelope provided and drop your sealed envelopes in the drop box located at the entrance door of your lecture hall. Your cooperation and participation in this survey is highly appreciated. This would help me to successfully complete my research project as well as to develop a business leadership model that would generate sustainable leadership in the Sri Lankan organisational context. Thank you very much. Yours sincerely, Ayoma Sumanasiri

This project has been approved by or on behalf of Swinburne’s Human Research Ethics Committee (SUHREC) in line with the National Statement on Ethical Conduct in Human Research. If you have any concerns or complaints about the conduct of this project, you can contact: Research Ethics Officer, Swinburne Research (H68), Swinburne University of Technology, P O Box 218, HAWTHORN VIC 3122. Tel (03) 9214 5218 or +61 3 9214 5218 or [email protected]

471 This project has been approved by or on behalf of Swinburne’s Human Research Ethics Committee (SUHREC) in line with the National Statement on Ethical Conduct in Human Research. If you have any concerns or complaints about the conduct of this project, you can contact: Research Ethics Officer, Swinburne Research (H68), Swinburne University of Technology, P O Box 218, HAWTHORN VIC 3122. Tel (03) 9214 5218 or +61 3 9214 5218 or [email protected] Appendix 21: Cover letter – Alumni members

Consent Information Statement An examination of business leadership in Sri Lanka: Cultural modelling of sustainable leadership Investigators: Student Researcher :Mrs. Ayoma Sumanasiri, PhD Candidate, Faculty of Business and Enterprise,Swinburne University of Technology, PO Box 218, Hawthorn, VIC 3122, Australia. Email: [email protected]

Associate Supervisor :Dr. Aron Perenyi, Faculty of Business and Enterprise, Swinburne University of Technology, PO Box 218, Hawthorn, VIC 3122, Australia. Email: [email protected]

I am a Sri Lankan academic studying for a Doctoral Degree at Swinburne University, Australia. My research study aims to examine sustainable leadership behaviours of Sri Lankan managers and the unique cultural values and characteristics that enable the conceptualisation of a unique Sri Lankan leadership model. To achieve this objective I kindly invite you to voluntarily participate in this research project to develop an ‘excellent leadership model’ in the Sri Lankan organisational context. There are no right or wrong answers to these questions; rather we request you to identify the level of importance of each of the leadership behaviours for you whilst performing your duties as a leader in your organisation. Therefore, the responses you provide are not attributable to you or your organisation. This study is only concerned with identifying leadership behaviours important in the Sri Lankan organisational context. We expect that you will need to spend about 30 minutes to complete this questionnaire. The findings of this study will be published in a PhD dissertation and in journal articles. Completing the questionnaire will be taken as your informed consent to participate in this study. This means you understand that your privacy, anonymity and confidentiality are assured because at no time will the names of individuals or organisations be used in reporting this research. Informed consent also means that you understand that your participation is voluntary and that you understand the purpose of the study. Once completed, please return the questionnaire in the pre-stamped returned addressed envelope. Your cooperation and participation in this survey is highly appreciated. This would help me to successfully complete my research project as well as to develop a business leadership model that would generate sustainable leadership in the Sri Lankan organisational context. Thank you very much. Yours sincerely, Ayoma Sumanasiri This project has been approved by or on behalf of Swinburne’s Human Research Ethics Committee (SUHREC) in line with the AppendixNational Statement 22: onQuestionnaire Ethical Conduct in Human Research. If you have any concerns or complaints about the conduct of this project, you can contact: Research Ethics Officer, Swinburne Research (H68), Swinburne University of Technology, P O Box 218, HAWTHORN VIC 3122. Tel (03) 9214 5218 or +61 3 9214 5218 or [email protected]

This project has been approved by or on behalf of Swinburne’s Human Research Ethics Committee (SUHREC) in line with the National Statement on Ethical Conduct in Human Research472. If you have any concerns or complaints about the conduct of this project, you can contact: Research Ethics Officer, Swinburne Research (H68), Swinburne University of Technology, P O Box 218, HAWTHORN VIC 3122. Tel (03) 9214 5218 or +61 3 9214 5218 or [email protected] Appendix 22: Survey questionnaire

Part 1: Biographical information

Below we ask a number of questions about you and your organisation. Please read each question and tick in front of the response which, for you, is correct. If there is a line beside the question, we want you to write in the answer or the information requested.

Ethnicity: o Sinhalese Gender: o Male o Tamil o Female o Burger o Other (Specify)……… Religion: o Buddhist Country of Birth: o Sri Lanka o Hindu o Other (Specify) o Islam ……………… o Christian o Other (Specify)……... Highest o High school Early adolescent (first 15 o Sri Lanka education o Diploma level years) experience in: o Other (Specify) achieved: o Bachelor’s Degree ………… o Postgraduate level (Diploma/Degree) o Doctorate Province o Central Position: o Senior o Eastern management o North Central o Middle o Northern management o North Western o Line o Sabaragamuwa management o Southern o Uva o Western Industry: o Private sector o Government o NGO sector Industry o Agriculture, livestock, forestry and o Wholesale trade sector: fishing o Retail trade o Mining and quarrying o Hotels and restaurants o Manufacturing o Cultural and recreational o Utility (Electricity, gas and water) services o Construction o Transport and storage o Real estate o Communication services o Education, Health and community o Banking and insurance service o Government administration and defense o Personal and other services Age of the o Under 35 Management o Under 5 respondent: o 35 to 39 experience in years: o 5 to 9 o 40 to 44 o 10 to 14 o 45 to 49 o 15 to 19 o 50 to 54 o 20 and above o 55 to 59 o 60 and above Size of o Under 10 Size of department o Under 5 organisation o 10 to 49 (Employees) o 5 to 9 (Employees) o 50 to 99 o 10 to 19 o 100 to 499 o 20 to 49 o 500 to 999 o 50 to 99 o 1000 and above o 100 and above

473

Part 2: Excellence in Leadership Items

The following section seeks your perception with regard to leadership behaviours that help to achieve “Excellent Leadership” in your organisation. “Excellence in leadership” refers to a combination of leadership behaviours and attitudes desirable to surpass other managers of your organisation. Please rate the level of importance of

each statement below in achieving excellent leadership in your organisation.

Low Importance High

To be an excellent leader in your organisation how 1 2 3 4 5 important is to Low Importance High 1. Continue to learn how to improve performance 2. Create a sense of purpose and enthusiasm in the work place 3.Develop strategies to gain a competitive edge in the Low Importance High industry 4. Give recognition for good work

5. Have confidence in dealing with work and with people Low Importance High 6. Listen when employees want to say something 7. Motivate employees 8. Organise work time effectively 9. Be honest 10. Have a strategic vision for the organisation

474

Part 3: Leadership Dimensions and items

3.1 Stakeholder relations:

The following section seeks your perception with regard to leadership behaviours that help to develop and maintain strong relations with the stakeholders of your organisation. “Stakeholders” refer to individuals and constituencies (such as suppliers, customers, competitors and government institutes) having an interest in and are affected by your organisational activities. Please rate the level of importance of each statement below in achieving excellent leadership in your organisation.

Low Importance High

To be an excellent leader in your organisation how important is 1 2 3 4 5 to Low Importance High 1. Accept that others will make mistakes

2. Act as a member of a team 3. Be consistent in dealing with people Low Importance High 4. Be skilled in public relations 5. Listen to and understand the problems of others Low Importance High 6. Manipulate people to achieve work goals 7. Listen to the advice of others 8. Negotiate with various professionals and interest groups 9. Respect the self-esteem of others 10. Respond to expectations of consumers 11. Sell the professional image or corporate image to the public

475

3.2 Long term perspective:

The following section seeks your perception with regard to the long term perspective of your leadership decisions and activities performed in your organisation. Please rate the level of importance of each statement below in achieving excellent leadership in

your organisation.

Low Importance High

To be an excellent leader in your organisation how important is to 1 2 3 4 5 Low Importance High 1.Be consistent in making decisions 2. Be logical in solving problems

3. Be objective when dealing with work conflicts Low Importance High 4. Be prepared to compromise on important work issues

5. Deal with work problems openly and honestly 6. Focus on the task-in-hand Low Importance High 7. Give priority to long-term goals 8. Give priority to short-term goals 9. Identify social trends which may have an impact on work 10. Keep to work deadlines 11. Make decisions earlier rather than later 12.Make decisions without depending too much on others 13. Make work decisions quickly 14. Think about the general implications of any problem 15. Think about what may happen in the future 16. Understand and analyse complex problems 17. Use economic indicators for planning purposes

476

3.3 Employee engagement:

The following section seeks your perceptions with regard to leadership behaviours that encourage employee engagement in your organisation. “Employee engagement” means any leadership activity that would encourage your staff to participate in decision making and recognise employee’s feedback. Please rate the level of importance of

each statement below in achieving excellent leadership in your organisation.

Low Importance High

To be an excellent leader in your organisation how important is 1 2 3 4 5 to Low Importance High 1.Allow other people time to do things 2.Allow subordinates authority and autonomy

3.Be formal when dealing with employees at work Low Importance High 4.Be informal when with employees outside work

5.Be strict in judging the competence of employees 6.Consider suggestions made by employees Low Importance High 7.Delegate 8.Make allowance for emotional pressure on staff at work 9.Support decisions made jointly by others 10.Trust those to whom work is delegated 11.Tell subordinates what to do and how to do it

477

3.4 Operational Performance:

The following section seeks your perception with regard to leadership behaviours concerned with the operational performance of your organisation. “Operational performance” means any leadership activity that strives to improve organisational performance against prescribed standards or indicators such as productivity, efficiency, effectiveness, cycle time, waste management and environmental responsibility.

Please rate the level of importance of each statement below in achieving excellent leadership in your organisation. Low Importance High

To be an excellent leader in your organisation how important is to 1 2 3 4 5 1.Adjust organisational structures and rules to realities of practiceLow Importance High 2.Be an initiator – not a follower 3.Be competitive Low Importance High 4.Be adaptable 5.Be involved in organisational politics

6.Be knowledgeable about work of the industry Low Importance High 7.Be practical 8.Be responsive to political realities in the environment 9.Be skilled in work related technology 10.Check constantly for problems and opportunities 11.Constantly evaluate emerging technologies 12.Foster an international perspective in the organisation 13.Have a multicultural orientation and approach 14.Have formal management training 15.Keep up-to-date on management literature 16.Look for and use the positive aspects of other cultures 17.Persuade others to do things 18.Study laws and regulations which may have an impact on work 19.Think frequently about the practice of management 20.Try different approaches to management 21.Turn up for a 3 p.m. meeting at 3 p.m. 22.Use initiative and take risks

478

3.5 Sustainable thinking:

The following section seeks your perceptions with regard to leadership behaviours that help to promote sustainable thinking in your organisation.

“Sustainable thinking” includes leadership activities aimed to develop the individuals’ and organisation’s beliefs and visions that always promote the well-being of organisational stakeholders, the natural environment and the economy.

Please rate the level of importance of each statement below in achieving excellent

leadership in your organisation.

Low Importance High

To be an excellent leader in your organisation how important is 1 2 3 4 5 to Low Importance High 1.Be dependent and trustworthy 2.Accept responsibility for mistakes Low Importance High 3.Behave in accordance with his or her religious beliefs 4.Choose management ethics before self or the organisation

5.Cope with pressures of work Low Importance High 6.Deal calmly in tense situations 7.Follow the heart – not the head – in compassionate matters 8.Follow what is morally right – not what is right for self or

organisation 9.Have a sense of humour 10.Ignore personal morality in the interest of the organisation 11.Return favours 12.Select work wisely to avoid overload 13.Share power 14.Speak clearly and concisely 15.Think about the specific details of any particular problem 16.Treat most people as if they were trustworthy and honest 17.Use rank and power to get things done 18.Work long hours 19.Write clearly and concisely

479

3.6 Concern for sustainability:

The following section seeks your perceptions with regard to concern for sustainability. “Concern for sustainability” refers to leader’s long term consideration for economic success, welfare of the society and the environmental protection.

Please rate the level of importance of each statement below in achieving excellent leadership in your organisation.

Low Importance High

To be an excellent leader in your organisation how important 1 2 3 4 5 is to Low Importance High 1. Be sensitive to people of different background 2. Be socially responsible Low Importance High 3. Promote staff welfare and development

4. Establish a friendly working environment 5. Work as a volunteer in your community Low Importance High 6. Engage in work that makes your community a better place 7. Show concern for sustainability issues 8. Be environmentally responsible 9. Encourage recycling of items and materials in your

department 10. Identify impact of your actions on the natural environment 11. Continuously learn how to protect the environment 12.Understand potential financial impacts of every decision 13. Achieve financial targets 14. Focus on maximising productivity 15. Ensure a maximum returns to investors

Thank you!

480

Appendix 23: Draft email- Request to collect data from Master’s students

Dear Sir/Madam,

Request to collect data from part-time master’s students and access to the Alumni Association members

I am a full-time PhD student in the Faculty of Business and Enterprise, Swinburne University of Technology, Australia. My research field is Leadership and International Business. The topic of my thesis is An examination of business leadership in Sri Lanka: Cultural modelling of sustainability leadership.

As the thesis title suggests, the PhD study is to investigate what constitutes ‘Leadership Excellence’ in Sri Lankan organisations. Sri Lanka is a developing economy and after years of civil unrest the country is poised to accelerate its economic development in a sustainable manner. Thus, developing an organisational leadership model to enhance the nation’s managerial capacity and facilitate its efforts in the industrialisation process is a contribution that this study hopes to achieve. To achieve this objective my PhD study aims to understand sustainable leadership behaviours perceived as important to achieving excellent leadership in the Sri Lankan context.

It is in this regard that I would like to seek your support and assistance in collecting the data for the PhD research. In this research, I have decided to use full-time managers studying for their master’s degrees and members of Alumni Associations as the respondents in my study.

The survey questionnaire will be administered in the following steps. The student researcher will personally administer the paper-based questionnaire to the student population of your master’s programme. A brief introduction to the study and how to complete and return the questionnaire will be presented prior to the distribution of the questionnaires. Drop-boxes will be placed at the entrance each lecture hall for the student-respondents to easily return their completed questionnaires anonymously. Further we would like to seek your assistance in making available your Alumni list for the purpose of forwarding by mail a survey pack consisting of a covering letter, questionnaire and a return envelope each individual Alumni member.

481

The confidentiality and anonymity of your University, Faculty, Master’s programme, Alumni Associations, managerial respondents and their organisations are secured at every instance.

I am happy to provide an overall analysis of the findings if you so wish. I firmly believe that not only your programme and I will benefit from this research but also it will contribute to the development of sustainable Sri Lankan managerial practices that would ensure greater sustainable economic development in the country.

If you are happy to participate, please email back your approval. Your support will be most appreciated. Should you have any queries, please do not hesitate to contact either the principal researcher or me. Contact information is given below:

Student Researcher: Senior Researcher:

Mrs.Ayoma Sumanasiri, Prof. Christopher Selvarajah,

Faculty of Business and Enterprise, or Faculty of Business and Enterprise,

Swinburne University, Swinburne University,

PO Box 218, PO Box 218,

Hawthorn, Melbourne, VIC 3122, Hawthorn, Melbourne, VIC 3122,

Australia. Australia.

Warm Regards

Ayoma Sumanasiri

482

Appendix 24: Ethics approval letter

From: Sheila Hamilton-Brown On Behalf Of RES Ethics Sent: Friday, 17 January 2014 5:11 PM To: Ayoma Gayathri Sumanasiri; Christopher Selvarajah Cc: RES Ethics; Aron Perenyi Subject: SUHREC Project 2013/292 Ethics Clearance

To: Chris and Ayoma

SUHREC Project 2013/292 An examination of business leadership in Sri Lanka: Cultural modelling of sustainable leadership Professor Christopher Selvarajah, Ms Ayoma Gayathri Sumanasiri, Dr Aron Perenyi; FBE Approved Duration: 17/01/2014 To 30/01/2015 [Adjusted]

I refer to the ethical review of the above project protocol undertaken by a SUHREC Subcommittee (SHESC3). Your responses to the review, as e-mailed on 3 January 2014, were put to a SHESC3 delegate for consideration and feedback sent to you. Your responses, as e-mailed 16 January 2014 were mostly positive with one outstanding issue. Your response, as emailed on 17 January 2014 , accords with the feedback.

I am pleased to advise that, as submitted to date, the project must proceed in line with standard on-going ethics clearance conditions here outlined.

- All human research activity undertaken under Swinburne auspices must conform to Swinburne and external regulatory standards, including the current National Statement on Ethical Conduct in Human Research and with respect to secure data use, retention and disposal.

- The named Swinburne Chief Investigator/Supervisor remains responsible for any personnel appointed to or associated with the project being made aware of ethics clearance conditions, including research and consent procedures or instruments approved. Any change in chief investigator/supervisor requires timely notification and SUHREC endorsement.

- The above project has been approved as submitted for ethical review by or on behalf of SUHREC. Amendments to approved procedures or instruments ordinarily require prior ethical appraisal/clearance. SUHREC must be notified immediately or as soon as possible thereafter of (a) any serious or unexpected adverse effects on participants any redress measures; (b) proposed changes in protocols; and (c) unforeseen events which might affect continued ethical acceptability of the project.

- At a minimum, an annual report on the progress of the project is required as well as at the conclusion (or abandonment) of the project.

- A duly authorised external or internal audit of the project may be undertaken at any time. Please contact the Research Ethics Office ([email protected]) if you have any queries about ongoing ethics clearance. The SUHREC project number should be quoted in communication. Chief Investigators/Supervisors should retain a copy of this e-mail as part of project record- keeping.

Best wishes for the project.

483

Kind regards, Sheila

******************************************* Sheila Hamilton-Brown | Research Funding Coordinator (FHAD & NHMRC) | Swinburne Research Swinburne University of Technology PO Box 218, Hawthorn, VIC 3122 Tel: +61 3 9214 5935 | Fax: +61 3 9214 5267 | Internal Mail: H68

484

Appendix 25: Summary of mean, median and SD for each of the statement in the questionnaire

Statement Item Mean SD Median label Excellent leadership (EXL) continue to learn how to improve EXL1 4.35 0.78 5.00 performance Create a sense of purpose and enthusiasm in EXL2 4.27 0.72 4.00 the work place Develop strategies to gain a competitive EXL3 4.28 0.79 4.00 edge in the industry Give recognition for good work EXL4 4.41 0.73 5.00 Have confidence in dealing with work and EXL5 4.42 0.70 5.00 with people Listen when employees want to say EXL6 4.37 0.74 5.00 something Motivate employees EXL7 4.44 0.72 5.00 Organize work time effectively EXL8 4.38 0.77 5.00 Be honest EXL9 4.46 0.75 5.00 Have a strategic vision for the organisation EXL10 4.40 0.73 5.00 Stakeholder Relationships (STK) Accept that others will make mistakes STK1 3.68 0.96 4.00 Act as a member of a team STK2 4.42 0.73 5.00 Be consistent in dealing with people STK3 4.20 0.76 4.00 Be skilled in public relations STK4 4.29 0.74 4.00 Listen to and understand the problems of STK5 4.37 0.73 5.00 others Manipulate people to achieve work goals STK6 3.77 1.10 4.00 Listen to the advice of others STK7 3.99 0.79 4.00 Negotiate with various professionals and STK8 4.13 0.76 4.00 interest groups Respect the self-esteem of others STK9 4.23 0.76 4.00 Respond to expectations of consumers STK10 4.39 0.74 5.00 Sell the professional image or corporate STK11 4.21 0.85 4.00 image to the public Long-term perspective (LONG) Be consistent in making decisions LONG1 4.17 0.77 4.00 Be logical in solving problems LONG2 4.27 0.78 4.00 Be objective when dealing with work LONG3 4.10 0.77 4.00 conflicts Be prepared to compromise on important LONG4 4.08 0.78 4.00 work issues Deal with work problems openly and LONG5 4.25 0.78 4.00 honestly Focus on the task-in-hand LONG6 4.16 0.75 4.00 Give priority to long-term goals LONG7 4.02 0.86 4.00

485

Give priority to short-term goals LONG8 3.89 0.91 4.00 Identify social trends which may have an LONG9 3.98 0.80 4.00 impact on work Keep to work deadlines LONG10 4.31 0.76 4.00 Make decisions earlier rather than later LONG11 4.17 0.81 4.00 Make decisions without depending too LONG12 3.77 0.91 4.00 much on others Make work decisions quickly LONG13 3.93 0.90 4.00 Think about the general implications of any LONG14 3.96 0.77 4.00 problem Think about what may happen in the future LONG15 4.11 0.78 4.00 Understand and analyse complex problems LONG16 4.18 0.75 4.00 Use economic indicators for planning LONG17 3.94 0.87 4.00 purposes Employee engagement (EMP) Allow other people time to do things EMP1 3.82 0.83 4.00 Allow subordinates authority and autonomy EMP2 3.84 0.77 4.00 Be formal when dealing with employees at EMP3 3.79 0.87 4.00 work Be informal when with employees outside EMP4 3.59 1.01 4.00 work Be strict in judging the competence of EMP5 3.70 0.88 4.00 employees Consider suggestions made by employees EMP6 4.16 0.77 4.00 Delegate EMP7 4.13 0.76 4.00 Make allowance for emotional pressure on EMP8 3.71 0.86 4.00 staff at work Support decisions made jointly by others EMP9 4.04 0.76 4.00 Trust those to whom work is delegated EMP10 4.04 0.75 4.00 Tell subordinates what to do and how to do EMP11 3.95 0.92 4.00 it Leader’s commitment to change (CHNG) Adjust organizational structures and rules to CHNG1 3.88 0.92 4.00 realities of practice Be an initiator – not a follower CHNG2 4.17 0.82 4.00 Be competitive CHNG3 4.19 0.75 4.00 Be adaptable CHNG4 4.24 0.75 4.00 Be involved in organisational politics CHNG5 2.96 1.23 3.00 Be knowledgeable about work of the CHNG6 4.38 0.72 5.00 industry Be practical CHNG7 4.46 0.67 5.00 Be responsive to political realities in the CHNG8 3.53 1.05 4.00 environment Be skilled in work related technology CHNG9 4.27 0.75 4.00 Check constantly for problems and CHNG10 4.18 0.75 4.00 opportunities Constantly evaluate emerging technologies CHNG11 4.14 0.81 4.00

486

Foster an international perspective in the CHNG12 3.96 0.84 4.00 organisation Have a multicultural orientation and CHNG13 3.89 0.87 4.00 approach Have formal management training CHNG14 3.90 0.85 4.00 Keep up-to-date on management literature CHNG15 3.90 0.84 4.00 Look for and use the positive aspects of CHNG16 3.93 0.79 4.00 other cultures Persuade others to do things CHNG17 3.85 0.86 4.00 Study laws and regulations which may have CHNG18 4.04 0.85 4.00 an impact on work Think frequently about the practice of CHNG19 4.02 0.81 4.00 management Try different approaches to management CHNG20 3.99 0.78 4.00 Turn up for a 3 p.m. meeting at 3 p.m. CHNG21 3.74 1.16 5.00 (commitment to change) Use initiative and take risks CHNG22 4.13 0.78 4.00 Sustainable thinking (SUSTHINK) Be dependent and trustworthy SUS01 3.99 0.93 4.00 Accept responsibility for mistakes SUS02 4.18 0.81 4.00 Behave in accordance with his or her SUS03 3.50 1.11 4.00 religious beliefs Choose management ethics before self or SUS04 3.83 0.85 4.00 the organization Cope with pressures of work SUS05 4.12 0.76 4.00 Deal calmly in tense situations SUS06 4.15 0.77 4.00 Follow the heart – not the head – in SUS07 3.39 1.02 3.00 compassionate matters Follow what is morally right – not what is SUS08 3.66 0.99 4.00 right for self or organization Have a sense of humour SUS09 3.92 0.88 4.00 Ignore personal morality in the interest of SUS10 3.35 1.09 3.00 the organisation Return favours SUS11 3.28 1.07 3.00 Select work wisely to avoid overload SUS12 3.88 0.88 4.00 Share power SUS13 3.83 0.84 4.00 Speak clearly and concisely SUS14 4.34 0.71 4.00 Think about the specific details of any SUS15 4.18 0.76 4.00 particular problem Treat most people as if they were SUS16 3.94 0.84 4.00 trustworthy and honest Use rank and power to get things done SUS17 3.47 1.05 4.00 Work long hours SUS18 3.15 1.14 3.00 Write clearly and concisely SUS19 4.17 0.79 4.00 Concern for sustainability Concern for environmental and social sustainability (ENV) Be sensitive to people of different ENV1 3.99 0.83 4.00 background

487

Be socially responsible ENV2 4.19 0.73 4.00 Promote staff welfare and development ENV3 4.21 0.74 4.00 Establish a friendly working environment ENV4 4.40 0.71 5.00 Work as a volunteer in your community ENV5 3.98 0.83 4.00 Engage in work that makes your community ENV6 4.11 0.79 4.00 a better place Show concern for sustainability issues ENV7 4.11 0.78 4.00 Be environmentally responsible ENV8 4.25 0.79 4.00 Encourage recycling of items and materials ENV9 4.11 0.84 4.00 in your department Identify impact of your actions on the ENV10 4.14 0.82 4.00 natural environment Continuously learn how to protect the ENV11 4.13 0.84 4.00 environment Concern for financial performance of the firm (FIN) Understand potential financial impacts of FIN1 4.21 0.76 4.00 every decision Achieve financial targets FIN2 4.29 0.68 4.00 Focus on maximising productivity FIN3 4.44 0.68 5.00 Ensure a maximum returns to investors FIN4 4.30 0.73 5.00

488

Appendix 26: Demographic characteristics of the sample

Sample Labour Population Force 2012+ Demographic characteristic n % 2012+ (%) (%) Gender Male 410 68.8 49.6 66.8 Female 180 30.2 50.4 29.9 Missing 6 1.0 Age of the respondent Under 35 358 60.1 35 to 39 95 15.9 40 to 44 71 11.9 45 to 49 29 4.9 50 to 54 21 3.5 55 to 59 14 2.3 60 and above 5 0.8 Missing 3 0.5 Religion Buddhist 476 79.9 70.2 Hindu 36 6.0 12.6 Islam 19 3.2 9.7 Christian 60 10.1 7.4 Other 5 0.8 0 Ethnicity Sinhalese 527 88.4 74.9 Tamil 48 8.1 15.4 Burger 3 0.5 0.2 Other 18 3.0 9.4 Highest education achieved Diploma level 41 6.9 Bachelor's degree 309 51.8 Postgraduate level 241 40.4 Doctorate 3 0.5 Missing 2 0.3 Position Senior management 124 20.8 Middle management 289 48.5 Line management 170 28.5 Missing 13 2.2 Management experience in years Under 5 286 48.0 5 to 9 151 25.3 10 to 14 75 12.6 15 to 19 25 4.2 20 and above 36 6.0 Missing 23 3.9 Province Central 60 10.1 12.6 Eastern 19 3.2 7.6 North central 23 3.9 6.2 Northern 13 2.2 5.2 North western 34 5.7 11.7 Sabaragamuwa 22 3.7 9.5 Southern 42 7.0 12.2 Uva 7 1.2 6.2 Western 375 62.9 28.8 Missing 1 0.2 + Central Bank of Sri Lanka (2013b)

489

Appendix 27: Industrial and organisational characteristics

Demographic characteristic n % Industry Private sector 431 72.3 Government sector 150 25.2 NGO 3 0.5 Missing 12 2.0 Industry sector Agriculture, livestock, forestry and fishing 29 4.9 Mining and quarrying 3 0.5 Manufacturing 108 18.1 Utility (electricity, gas and water) 8 1.3 Construction 22 3.7 Real estate 11 1.8 Education, health and community service 66 11.1 Wholesale trade 10 1.7 Retail trade 20 3.4 Hotels and restaurants 10 1.7 Transport and storage 17 2.9 Communication services 55 9.2 Banking and insurance 117 19.6 Government administration and defense 42 7.0 Personal and other services 68 11.4 Missing 10 1.7 Size of the organisation (employees) Under 10 18 3.0 10 to 49 60 10.1 50 to 99 58 9.7 100 to 499 142 23.8 500 to 999 77 12.9 1000 and above 239 40.1 Missing 2 0.3 Size of the department (employees) Under 5 86 14.4 5 to 9 134 22.5 10 to 19 123 20.6 20 to 49 115 19.3 50 to 99 56 9.4 100 and above 66 11.1 Missing 16 2.7

490

Appendix 28: CFA results of final measurement modesls and SEM results of Sustainability leadership model

Part A – CFA results for the final measurement model for sustainability leadership construct (dependent variable)

Model fit summary

CMIN

Model NPAR CMIN DF P CMIN/DF Default model 33 156.371 87 .000 1.797 Saturated model 120 .000 0 Independence model 15 3353.857 105 .000 31.941 RMR, GFI Model RMR GFI AGFI PGFI Default model .021 .958 .942 .695 Saturated model .000 1.000 Independence model .215 .320 .222 .280 Baseline Comparisons NFI RFI IFI TLI Model CFI Delta1 rho1 Delta2 rho2 Default model .953 .944 .979 .974 .979 Saturated model 1.000 1.000 1.000 Independence model .000 .000 .000 .000 .000 Parsimony-Adjusted Measures Model PRATIO PNFI PCFI Default model .829 .790 .811 Saturated model .000 .000 .000 Independence model 1.000 .000 .000 RMSEA Model RMSEA LO 90 HI 90 PCLOSE Default model .041 .030 .051 .926 Independence model .255 .248 .263 .000 AIC Model AIC BCC BIC CAIC Default model 222.371 224.672 359.830 392.830 Saturated model 240.000 248.366 739.850 859.850 Independence model 3383.857 3384.902 3446.338 3461.338 SRMR = 0.036

491

Part B - CFA results for the final measurement model for mediating variables

Model fit summary

CMIN Model NPAR CMIN DF P CMIN/DF Default model 15 22.514 13 .048 1.732 Saturated model 28 .000 0 Independence model 7 951.966 21 .000 45.332 RMR, GFI Model RMR GFI AGFI PGFI Default model .017 .986 .970 .458 Saturated model .000 1.000 Independence model .232 .531 .374 .398 Baseline Comparisons NFI RFI IFI TLI Model CFI Delta1 rho1 Delta2 rho2 Default model .976 .962 .990 .983 .990 Saturated model 1.000 1.000 1.000 Independence model .000 .000 .000 .000 .000 Parsimony-Adjusted Measures Model PRATIO PNFI PCFI Default model .619 .604 .613 Saturated model .000 .000 .000 Independence model 1.000 .000 .000 RMSEA Model RMSEA LO 90 HI 90 PCLOSE Default model .039 .004 .066 .717 Independence model .305 .289 .322 .000 AIC Model AIC BCC BIC CAIC Default model 52.514 53.028 114.995 129.995 Saturated model 56.000 56.959 172.632 200.632 Independence model 965.966 966.205 995.124 1002.124 SRMR = 0.0245

492

Part C – CFA results for the final measurement model for leadership excellence dimensions (independent variables)

Model Fit Summary

CMIN Model NPAR CMIN DF P CMIN/DF Default model 25 60.154 41 .027 1.467 Saturated model 66 .000 0 Independence model 11 1750.873 55 .000 31.834 RMR, GFI Model RMR GFI AGFI PGFI Default model .017 .978 .964 .607 Saturated model .000 1.000 Independence model .201 .423 .308 .353 Baseline Comparisons NFI RFI IFI TLI Model CFI Delta1 rho1 Delta2 rho2 Default model .966 .954 .989 .985 .989 Saturated model 1.000 1.000 1.000 Independence model .000 .000 .000 .000 .000 Parsimony-Adjusted Measures Model PRATIO PNFI PCFI Default model .745 .720 .737 Saturated model .000 .000 .000 Independence model 1.000 .000 .000 FMIN Model FMIN F0 LO 90 HI 90 Default model .127 .040 .005 .093 Saturated model .000 .000 .000 .000 Independence model 3.686 3.570 3.290 3.866 RMSEA Model RMSEA LO 90 HI 90 PCLOSE Default model .031 .011 .048 .973 Independence model .255 .245 .265 .000 AIC Model AIC BCC BIC CAIC Default model 110.154 111.450 214.290 239.290 Saturated model 132.000 135.421 406.918 472.918 Independence model 1772.873 1773.443 1818.693 1829.693 SRMR = 0.028

493

Part D - Model Fit Summary- Final SEM results of sustainability leadership model

CMIN Model NPAR CMIN DF P CMIN/DF Default model 92 732.681 469 .000 1.562 Saturated model 561 .000 0 Independence model 33 7306.402 528 .000 13.838 RMR, GFI Model RMR GFI AGFI PGFI Default model .026 .916 .900 .766 Saturated model .000 1.000 Independence model .195 .222 .174 .209 Baseline Comparisons NFI RFI IFI TLI Model CFI Delta1 rho1 Delta2 rho2 Default model .900 .887 .961 .956 .961 Saturated model 1.000 1.000 1.000 Independence model .000 .000 .000 .000 .000 Parsimony-Adjusted Measures Model PRATIO PNFI PCFI Default model .888 .799 .854 Saturated model .000 .000 .000 Independence model 1.000 .000 .000 FMIN Model FMIN F0 LO 90 HI 90 Default model 1.542 .555 .409 .718 Saturated model .000 .000 .000 .000 Independence model 15.382 14.270 13.696 14.858 RMSEA Model RMSEA LO 90 HI 90 PCLOSE Default model .034 .030 .039 1.000 Independence model .164 .161 .168 .000 AIC Model AIC BCC BIC CAIC Default model 916.681 930.867 1299.899 1391.899 Saturated model 1122.000 1208.503 3458.799 4019.799 Independence model 7372.402 7377.491 7509.861 7542.861

494

Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label CHNG <--- LONG .276 .103 2.685 .007 SUSTHINK <--- LONG .121 .093 1.300 .193 CHNG <--- EMP .503 .094 5.338 *** SUSTHINK <--- EMP .570 .089 6.380 *** CHNG <--- STK .165 .096 1.719 .086 SUSTHINK <--- STK .234 .089 2.637 .008 EXL <--- CHNG .050 .046 1.076 .282 ENV <--- CHNG .199 .052 3.845 *** FIN <--- CHNG .099 .061 1.615 .106 EXL <--- SUSTHINK -.099 .076 -1.291 .197 ENV <--- SUSTHINK .189 .080 2.353 .019 FIN <--- SUSTHINK .138 .097 1.420 .156 EXL <--- LONG .096 .068 1.408 .159 ENV <--- LONG -.023 .070 -.322 .748 FIN <--- LONG .114 .088 1.296 .195 EXL <--- EMP .189 .082 2.309 .021 ENV <--- EMP -.019 .084 -.226 .821 FIN <--- EMP .140 .105 1.330 .184 EXL <--- STK .558 .080 6.967 *** ENV <--- STK .245 .072 3.421 *** FIN <--- STK .213 .083 2.568 .010 LTO2 <--- LONG .990 .076 12.975 *** LTO3 <--- LONG 1.083 .079 13.779 *** LTO4 <--- LONG 1.000 EMP2 <--- EMP 1.000 EMP7 <--- EMP 1.040 .082 12.609 *** EMP8 <--- EMP 1.120 .094 11.896 *** EMP9 <--- EMP 1.074 .083 12.864 *** EMP10 <--- EMP .982 .081 12.150 *** STK2 <--- STK 1.000 STK4 <--- STK .941 .072 13.061 *** STK3 <--- STK 1.046 .075 13.903 *** EXL5 <--- EXL .979 .081 12.074 *** EXL7 <--- EXL 1.175 .088 13.378 *** EXL8 <--- EXL 1.302 .095 13.730 *** EXL9 <--- EXL 1.099 .089 12.357 *** EXL10 <--- EXL 1.036 .086 12.111 *** ENV5 <--- ENV 1.000 ENV8 <--- ENV 1.385 .121 11.444 *** ENV9 <--- ENV 1.630 .138 11.796 *** ENV10 <--- ENV 1.641 .136 12.038 ***

495

Estimate S.E. C.R. P Label FIN2 <--- FIN 1.000 FIN3 <--- FIN 1.097 .072 15.326 *** FIN4 <--- FIN 1.114 .075 14.888 *** ENV11 <--- ENV 1.597 .138 11.602 *** CHNG12 <--- CHNG 1.000 CHNG13 <--- CHNG 1.136 .075 15.227 *** CHNG14 <--- CHNG .781 .070 11.191 *** CHNG16 <--- CHNG .930 .067 13.857 *** SUS2 <--- SUSTHINK .997 .083 12.001 *** SUS4 <--- SUSTHINK .935 .087 10.752 *** SUS5 <--- SUSTHINK 1.000 EXL2 <--- EXL 1.000 EXL4 <--- EXL 1.164 .089 13.026 *** Standardized Regression Weights: (Group number 1 - Default model)

Estimate CHNG <--- LONG .245 SUSTHINK <--- LONG .124 CHNG <--- EMP .408 SUSTHINK <--- EMP .532 CHNG <--- STK .139 SUSTHINK <--- STK .227 EXL <--- CHNG .068 ENV <--- CHNG .287 FIN <--- CHNG .122 EXL <--- SUSTHINK -.116 ENV <--- SUSTHINK .237 FIN <--- SUSTHINK .147 EXL <--- LONG .115 ENV <--- LONG -.029 FIN <--- LONG .124 EXL <--- EMP .208 ENV <--- EMP -.022 FIN <--- EMP .139 EXL <--- STK .638 ENV <--- STK .297 FIN <--- STK .220 LTO2 <--- LONG .707 LTO3 <--- LONG .771 LTO4 <--- LONG .692 EMP2 <--- EMP .666 EMP7 <--- EMP .686 EMP8 <--- EMP .640

496

Estimate EMP9 <--- EMP .703 EMP10 <--- EMP .656 STK2 <--- STK .726 STK4 <--- STK .673 STK3 <--- STK .722 EXL5 <--- EXL .649 EXL7 <--- EXL .739 EXL8 <--- EXL .765 EXL9 <--- EXL .668 EXL10 <--- EXL .651 ENV5 <--- ENV .529 ENV8 <--- ENV .775 ENV9 <--- ENV .826 ENV10 <--- ENV .866 FIN2 <--- FIN .732 FIN3 <--- FIN .809 FIN4 <--- FIN .770 ENV11 <--- ENV .797 CHNG12 <--- CHNG .727 CHNG13 <--- CHNG .798 CHNG14 <--- CHNG .565 CHNG16 <--- CHNG .709 SUS2 <--- SUSTHINK .671 SUS4 <--- SUSTHINK .586 SUS5 <--- SUSTHINK .720 EXL2 <--- EXL .637 EXL4 <--- EXL .714

Covariances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label LONG <--> EMP .184 .022 8.204 *** EMP <--> STK .152 .020 7.700 *** LONG <--> STK .201 .023 8.609 *** Correlations: (Group number 1 - Default model)

Estimate LONG <--> EMP .660 EMP <--> STK .576 LONG <--> STK .696

497

Squared Multiple Correlations: (Group number 1 - Default model)

Estimate SUSTHINK .615 CHNG .491 FIN .398 ENV .429 EXL .690 SUS5 .519 SUS4 .343 SUS2 .450 CHNG16 .502 CHNG14 .320 CHNG13 .637 CHNG12 .529 ENV11 .635 FIN4 .594 FIN3 .655 FIN2 .535 ENV10 .750 ENV9 .682 ENV8 .601 ENV5 .280 EXL10 .424 EXL9 .446 EXL8 .585 EXL7 .546 EXL5 .421 EXL4 .510 EXL2 .406 STK3 .521 STK4 .453 STK2 .528 EMP10 .430 EMP9 .495 EMP8 .409 EMP7 .471 EMP2 .443 LTO4 .478 LTO3 .595 LTO2 .500

498

Appendix 29: Summary of hypotheses results

Hypothesis Supported significance level 0.0018 H1: The leader’s consideration for stakeholder relationships (STK) Yes exhibits a positive relationship with the excellent leader (EXL) in Sri Lankan organisations. H2: The leader’s consideration for stakeholder relationships (STK) Yes exhibits a positive relationship with concern for social and environmental sustainability (ENV) in Sri Lankan organisations. H3: The leader’s consideration for stakeholder relationships (STK) Not supported exhibits a positive relationship with concern for financial performance (but supported (FIN) in Sri Lankan organisations at p < 0.05 level) H4: The leader’s consideration for long-term decision making (LONG) Not supported exhibits a positive relationship with excellent leadership (EXL) in Sri Lankan organisations. H5: The leader’s consideration for long-term decision making (LONG) Not supported exhibits a positive relationship with concern for social and the environmental sustainability (ENV) in Sri Lankan organisations. H6: The leader’s consideration for long-term decision making (LONG) Not supported exhibits a positive relationship with concern for financial performance (FIN) in Sri Lankan organisations. H7: The leader’s consideration for employee engagement (EMP) Not supported ( exhibits a positive relationship with excellent leader (EXL) in the Sri but supported at Lankan organisational context. p < 0.05 level) H8: The leader’s consideration for employee engagement (EMP) Not supported exhibits a positive relationship with concern for social and the environmental sustainability (ENV) in the Sri Lankan organisational context. H9: The leader’s consideration for employee engagement (EMP) Not supported exhibits a positive relationship with concern for firm’s financial performance (FIN) in the Sri Lankan organisational context. Testing the mediation effect of CHNG and SUSTHINK H10: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between concern for stakeholder relationship (STK) and excellent leadership (EXL) in the Sri Lankan organisational context. H11: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between concern for stakeholder relationship (STK) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H12: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between concern for stakeholder relationships

499

(STK) and concern for financial performance (FIN) in the Sri Lankan organisational context. H13: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between long-term decision making (LONG) and excellent leadership (EXL) in the Sri Lankan organisational context. H14: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between long-term decision making (LONG) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H15: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between long-term decision making (LONG) and concern for financial performance (FIN) in the Sri Lankan organisational context. H16: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between employee engagement (EMP) and excellent leadership (EXL) in the Sri Lankan organisational context. H17: The leader’s commitment to organisational change (CHNG) Yes mediates the relationship between employee engagement (EMP) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H18: The leader’s commitment to organisational change (CHNG) Not supported mediates the relationship between employee engagement (EMP) and concern for financial performance (FIN) in the Sri Lankan organisational context. H19: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between concern for stakeholder relationship (STK) and excellent leadership (EXL) in the Sri Lankan organisational context. H20: The leader’s sustainable thinking (SUSTHINK) mediates the Yes relationship between concern for stakeholder relationship (STK) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H21: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between concern for stakeholder relationship (STK) and concern for financial performance (FIN) in the Sri Lankan organisational context. H22: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between long-term decision making (LONG) and excellent leadership (EXL) in the Sri Lankan organisational context. H23: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between long-term decision making (LONG) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context. H24: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between long-term decision making (LONG) and concern

500 for financial performance (FIN) in the Sri Lankan organisational context. H25: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between employee engagement (EMP) and excellent leadership (EXL) in the Sri Lankan organisational context. H26: The leader’s sustainable thinking (SUSTHINK) mediates the Yes relationship between employee engagement (EMP) and concern for social and environmental sustainability (ENV) in the Sri Lankan organisational context H27: The leader’s sustainable thinking (SUSTHINK) mediates the Not supported relationship between employee engagement (EMP) and concern for financial performance (FIN) in the Sri Lankan organisational context.

501