Go where the winners go – examining the impact of sustainable leadership on firms’ sustainable performance through mediation and moderation analysis

Abstract

Purpose This study aims to investigate the mediating effect of organizational learning (OL) between sustainable leadership (SL) and sustainable performance (SP) and examine the moderating role of knowledge management capabilities (KMC) on SL and OL and the moderating effect of entrepreneurial bricolage (EB) on OL and sustainable performance. Design/methodology/approach Data were collected from 303 employees working in the textile industry in Pakistan. PLS-SEM was applied to test the proposed hypotheses. Findings The findings of this study reveal that SL is positively related to OL and SP. Furthermore, OL positively mediates the relationship between SL and SP. The results reveal that knowledge management capabilities positively moderate the relationship between SL and OL. Moreover, these results elucidate that SL nurtures out-of-the-box thinking and fosters a go-getting attitude by providing OL, thus leading to SP. At the same time, the results discovered that EB negatively moderates the relationship between OL and SP. Entrepreneurial bricoleurs may try to provide solutions to fulfill short-term benefits, hindering long-term sustainability in the manufacturing industry. Research limitations/implications SL is a vital tool for achieving firms’ SP by facilitating manufacturing organizations to learn to remain competitive in the hostile business environment in emerging markets such as Pakistan. Moreover, current findings facilitate policymakers and leaders in designing effective strategies for achieving SP. Originality/value This is one of the critical studies to highlight the role of SL in an organization’s SP, contributing to identifying organization learning as a potential mediator and KMC and EB as a possible moderator in the association between SL, organization learning and SP. Leaders who use these traits promote a work environment in which sustainability and innovation are interlinked, allowing employees to constantly acquire and implement eco-friendly practices that bring about lasting advantages for the organization in emerging economies like Pakistan.

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