Impact of Sustainable Leadership on Sustainable Performance with Mediating Role of Structural Empowerment: A Study in SMEs [Manufacturing (Textile) Sector] of Pakistan

Abstract

In an era of awakening consciousness about fast eroding life-supporting planet Earth’s capacity and enabling it to remain habitable for future generations, the world expects corporate organizations to strike a balance among profit, people and the planet (3Ps). This study is intended to ascertain the impacts of sustainable Leadership (SL) through the intervening mechanism of Structural Empowerment (SE) on Sustainable Performance (SP), meant to balance the 3 Ps. This study has been based on a positivist research philosophy, employing a deductive approach, using quantitative/cross-sectional data gathered by drawing sample (convenient method) from the targeted population of Small and Medium Enterprises (SMEs) [Manufacturing (textile) sector] in Pakistan, through relational survey method using closed-end questionnaires and carrying out analysis through Structural Equation Modelling, employing Smart PLS4 software for determining the causal direct and mediation relationships between the variables under study. This study empirically shows that SL significantly impacts SP through SE. Its novelty relates to identifying SE as an intermediary mechanism between SL and SP. It leads to the awareness that an SL can contribute effectively towards SP if it focuses on empowering the employees by providing access to decision-making, information, support and skill-building opportunities. The outcomes bring about fruitful suggestions for the industrial sector, particularly the SMEs, as by acting thereupon, it can achieve the much-emphasised Sustainable Performance meant for balancing the 3Ps.