Leadership, Social Trust, and Organizational Performance: A Structural Equation Modeling Approach
DOI:
https://doi.org/10.66635/6h6psy15Keywords:
Sustainable entrepreneurship, Social trust, Leadership, Organizational performance, Emerging Asian economiesAbstract
The paper focuses on exploring the connections between leadership, social trust, and organizational performance through a Structural Equation Modeling (SEM) method and sustainable results in the context of emerging Asian economies. Based on primary data of 250 employees and mid-level managers in the various organizational environments; the study uses Partial Least Squares SEM (PLS-SEM) to assess both the direct and indirect relationships between the major constructs. The results show that leadership positively significantly impacts social trust which further has a significant impact on the performance of the organization. Also, leadership shows a direct yet a weaker impact on performance outcomes. Mediation study establishes that social trust is partially mediating the relationship between leadership and organizational performance, thus its important position as a relationship process. The research is relevant to the literature in that it combines the views of sustainable entrepreneurship, ethical leadership, relational governance in terms of the significance of trust in the realization of the effectiveness of an organization in the long term. Trust-based leadership practices are especially relevant in the emerging Asian economies in which institutional frameworks are mostly in a state of development. The results can be of great use to managers and policymakers because they reveal the potential of trust-building leadership styles to contribute to organizational resilience and sustainable performance.
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