Unrequited profit: How stakeholder and economic values relate to subordinates' perceptions of leadership and firm performance

Mary Sully de Luque, Nathan T. Washburn, David Waldman, Robert J. House

Research output: Contribution to journalReview article

169 Scopus citations

Abstract

The purpose of the current study was to examine the indirect effects of executives' stakeholder and economic values on firm performance through their followers' perceptions of leadership and followers' extra effort. Analyses of data collected from separate surveys of chief executive officers (CEOs) and two subsets of followers in 520 firms in 17 countries show that CEOs' emphasis on economic values is associated with followers' perceptions of autocratic leadership, whereas CEOs' emphasis on stakeholder values is associated with followers' perceptions of visionary leadership. Additionally, visionary leadership relates positively to employees' extra effort, which in turn relates to firm performance; however, no relationship is found for autocratic leadership. We discuss how predominant decision-making values that are oriented toward a range of stakeholders may yield more favorable out-comes for leaders than values that focus primarily on economic-based issues.

Original languageEnglish (US)
Pages (from-to)626-654
Number of pages29
JournalAdministrative Science Quarterly
Volume53
Issue number4
DOIs
StatePublished - Dec 1 2008

ASJC Scopus subject areas

  • Arts and Humanities (miscellaneous)
  • Sociology and Political Science
  • Public Administration

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