Women in Strategic Leadership: How Ethical Climate Mediates the Relationship Between Female Leadership and Firm Performance

Abstract

The present study examines the influence of women in strategic leadership on firm performance through the mediating role of ethical climate while investigating the moderating effects of gender diversity culture and industry dynamism. Drawing upon Upper Echelons Theory, the study proposes that female strategic leaders contribute positively toward ethical organizational environments and organizational performance outcomes. A quantitative explanatory research design was employed using survey data collected from managerial employees in the banking sector. Data were analyzed using SPSS and SmartPLS 4 through Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings revealed that women in strategic leadership positively influence ethical climate and firm performance, while ethical climate significantly enhances organizational performance. Furthermore, gender diversity culture strengthened the relationship between women in strategic leadership and ethical climate, whereas industry dynamism strengthened the relationship between women leadership and firm performance. The study contributes theoretically by extending Upper Echelons Theory through the integration of ethical and contextual mechanisms within leadership-performance relationships.

Keywords: Strategic Leadership, Ethical Climate, Leadership and Firm Performance, Women.