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Article

Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective

by
Wei Xuecheng
1 and
Qaisar Iqbal
2,*
1
School of Management, Universiti Sains Malaysia, George Town 11800, Malaysia
2
Centre for China-India-Pakistan Studies, Sichuan University of Science and Engineering, Zigong 643000, China
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(12), 7070; https://doi.org/10.3390/su14127070
Submission received: 29 April 2022 / Revised: 2 June 2022 / Accepted: 6 June 2022 / Published: 9 June 2022
(This article belongs to the Special Issue Sustainable Development Goals: Effective Leadership and Resource-Constraint Innovation)
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Abstract

:
The integrated correlations of ethical leadership, environmental innovation, sustainable performance, and entrepreneurial bricolage were examined using the upper echelons and effectuation theories. The research utilised data from 223 manufacturing firms in north-eastern China, which indicated a 74.33 per cent response rate. The partial least square structural equation modelling (PLS-SEM) analysis exposed the significant positive impact of ethical leadership on environmental innovation and of the latter on sustainable performance. Furthermore, the current findings support the significant indirect effect of ethical leadership on sustainable performance through environmental innovation. The empirical results suggest an amplified impact of ethical leadership on environmental innovation, suggesting increasing bricolage values. Accordingly, the implications and limitations of the present study are elucidated in the final section of this article.

1. Introduction

The United Nations announced the Sustainable Development Goals (SDGs) due to the rise in severe environmental challenges, social distrust, and extreme poverty [1]. The SDG aims to promote socially responsible activities, alleviate poverty, support ecological monitoring, and foster prosperity across the globe [2]. Hence, regulators, governments, non-government organisations and civil societies are urging organisations to implement sustainable policies [3,4]. This approach can be implemented by balancing their social, economic, and environmental performances. Moreover, organisations can obtain a competitive advantage by offering ethical products, ecological conservation, and diversification. Extant literature from the SDG perspective emphasises the vital role of intellectual leadership, strategic choices, and a stakeholder-oriented approach [5,6]. For instance, inter-organisational justice and rational behaviour with employees enhance the investment worth and increase the efficiency of creative production [7].
Extant literature has also investigated the effect of various leadership aspects on sustainable performance: sustainability [8,9], authenticity [10], transformability [11] and responsibility [12]. Compared to other leadership types, ethical leaders infuse a sense of responsibility among stakeholders, possess clear responsibilities and expectations, are open in their communications, and facilitate clear expectations of society and organizations [13,14]. Such leaders are concerned about their stakeholders, fair in treatment, demonstrate integrity and promote ethical conduct among their followers. Recently, practitioners and researchers have taken an interest in the importance of ethical leadership in the context of sustainable development [15,16,17]. In the context of SDG, ethical leadership emerges as the most vital type of leadership, which focuses on justice and motivation, followed by compliance with conventional morality. Correspondingly, managerial attributes such as motivation, personal charm, justice and cognitive inspiration are affiliated with this style of leadership [18,19]. For instance, a study reported that ethical leaders substantially affect social and economic performance but non-significantly affect environmental performance in South African SMEs [18]. Hence, the author suggested further investigating this relationship with sustainable performance [19]. Given these points, this study intends to investigate the role of ethical leadership in sustainable development.
Upper echelons theory denotes that top management affects organisational outcomes through their strategic choices [20]. The extant literature revealed how leadership affects sustainable performance through multiple facets: psychological safety [21], structural empowerment [22], perceived compensation benefits [23], and social innovation [3]. Others include lean manufacturing [24], organisational learning [8], knowledge management [11] and frugal innovation [25]. Regarding this, the inclination of leadership toward environmental innovation vis a vis their understanding and ideas is viewed as a vital factor to promote environmental innovation. Ethical leaders are concerned about their employees, organizations, societies and all stakeholders, and are committed to accomplishing sustainable development goals [13]. Ethical leadership influences employees and organizational performance [26,27]. Environmental innovation is a vital source of competitive advantage in developing countries and to cope with sustainable challenges. Environmental innovation is deemed to be an ideal strategy for ethical leadership to create win–win situations for all stakeholders and enhance sustainable performance [8,28,29]. Along this line, various stakeholders require businesses to adopt environmentally friendly practices, specifically at each operational level, to cope with environmental challenges [30]. Moreover, there is a scarcity of research on the underlying mechanism between ethical leadership and sustainable performance [26]. Furthermore, none have examined the indirect effect of ethical leaders on sustainable performance through environmental innovation. Therefore, the present study aims to examine the indirect effect of ethical leadership on sustainable performance through environmental innovation.
The world is facing limited per-capita natural resources [31,32]; therefore, it is imperative to maximise these resources and improve society’s life quality, which can be achieved through environmental innovation [33]. This offers products and services that reduce the negative impact of businesses’ nature [34,35], making environmental innovation a vital strategy to cope with sustainability challenges [3,36,37,38]. Moreover, Kivimaa et al. (2021) recommended enriching the literature on this concept related to innovation management and sustainable development [39]. Therefore, the current research examines the indirect impact of ethical leaders on sustainable performance through environmental innovation based on the upper echelons perspective.
Organizations always operate in the presence of severe resource constraints [40]. Though some organizations in high-growth industries secure funding to sponsor their innovative activities through public capital markets and joint ventures, such resources are not available on a wider scale [41]. Organizations even find it hard to retain skilled employees, and specific financial or other resources [31]. In this context, effectuation theory posits that top management can expend their resources by employing a unique resource integration to offer new products and services [42]. An example of this method includes entrepreneurial bricolage, which refers to the organisational ability to seize opportunities by integrating available resources [43]. In essence, the concept allows organisations to seize opportunities with minimum resources, especially in emerging economies such as China [31,44,45]. By adopting a bricolage approach, organisations pursue new challenges and survive and even flourish in the presence of resource constraints. Knowledge generation under the bricolage enables organisations to end resource inertia and intensify creativity [46]. Moreover, experimentation and improvisation activities under this concept facilitate organisations to deliver added-value and low-cost products [47].
The extant literature supported bricolage as a moderator in the relationship between market orientation [48] and sustainable leadership [49] with innovation. Bricolage implementation in a resource-constrained market is positively related to eco-innovation [50,51]. Predicated on effectuation theory, ethical leaders can increase environmental innovation by elevating the bricolage level. Thus, the current study aims to examine the conditional role of bricolage in the relationship between ethical leadership and environmental innovation.
Overall, the present study contributes to the literature in several ways, i.e., first, by elucidating the mechanism between ethical leadership and sustainable performance. Past studies have validated ethical leadership as the partial predictor of sustainable performance [19]. Second, the current research enriches the literature on upper echelons theory [20] by clarifying the integrated relationship between ethical leadership, environmental innovation, and sustainable performance. Third, effectuation theory [52] is benefitted by predicting ethical leadership’s varying impacts on environmental innovation in the presence of entrepreneurial bricolage at different levels. Finally, our research contributes to the literature on sustainable development and innovation management, which is due to its cross-sectional approach and focus on an emerging economy, i.e., China.

2. Hypotheses Development

2.1. Ethical Leadership and Environmental Innovation

The extant studies offer sufficient evidence of the positive relationship between leadership and innovation [38,53,54]. Eco-innovation presents new technology and knowledge supporting environmental conservation [55]. However, in any strategy implementation, the experiences and ideologies of policymakers are crucial. Thus, leadership eco-innovation awareness becomes critical in propelling innovation within organisations [9]. This awareness is exemplified by ethical leaders encouraging care, honesty, justice, openness, integrity and collective motivation, which are vital components in fair environmental innovation practices [56]. Additionally, these leaders emphasise the accomplishment of organisational goals by elaborating on the significance of employees’ work [57].
Ethical leaders strive for sustainability [58], where they practice a stakeholder-oriented approach with high morality throughout their interactions [59]. This approach effectively balances the economic and environmental benefits of the enterprise by providing a conducive work environment and acknowledging the interests of stakeholders [60]. Ideally, environmental innovation can be an appropriate option to coordinate responsibilities and the interests of various parties, i.e., adopting a sharing-oriented approach, and encouraging employees to work freely [61]. Such empowerment influences the practical usage of resources, and employees can openly share their ideas about new environmental-friendly products [62]. Therefore, the following hypothesis is developed:
Hypothesis 1 (H1).
Ethical leaders significantly influence environmental innovation.

2.2. Environmental Innovation and Sustainable Performance

Academicians and practitioners presented a strong consensus on the intertwined relationship between environmental pollution and inefficient resource usage [8,37,62]. Environmental innovation enriches organisational capability, reducing the adverse impact of its operations on the environment [63]. Moreover, the concept introduces value-added services [64], which brings long-term positive outcomes to financial performance [65]. Thus, this concept emerges as a solution to improve this usage in business activities [6,66]. Sustainable performance, incidentally, concerns this matter in that it balances the three facets: economic, environmental, and social performance; hence, it is proposed that:
Hypothesis 2 (H2).
Environmental innovation is significantly related to sustainable performance.

2.3. Environmental Innovation as Mediator

In line with upper echelons theory, a leader’s experience and knowledge significantly impact organisational success through strategic choices [21]. Top management, therefore, plays a vital role in developing innovation in organisations [67]. Ethical leaders influence innovation quality by spurring two-way communication and a devolved decision-making process [68]. In eco-innovation, they can contribute to green projects by promoting moral behaviours and environmental consciousness [56]. Notably, employees can emulate exemplary practices from this leadership style, such as honesty, trustworthiness, and fairness [69], which are critical determinants of innovation [70]. In essence, these leaders enhance employees’ additional work commitment and proactiveness [71], indicating positive, innovative behaviour [3].
Creative-culture cultivation is highly dependent on top management’s vision, support for idea generation, experimentation, and stakeholder-oriented approach [72]. Ethical leaders support their workers’ exploration of new ideas, and they believe in open communication and knowledge sharing. Accordingly, this idea fosters a psychologically healthy workplace [22]. In such circumstances, environmental innovation contributes to the SDG by equally improving social well-being and reducing the hazardous environmental impact of business operations [6,70]. Moreover, the concept offers environmentally friendly products, services, processes and business models, resulting in value-added advantages for organisations [56,73]. Based on the above discussion, the following hypothesis is proposed:
Hypothesis 3 (H3).
Ethical leaders indirectly significantly influence sustainable performance through environmental innovation.

2.4. Moderating Role of Entrepreneurial Bricolage

Disruptive and environmental innovation revolves around exploiting resources and transaction governance [49,74]. However, organisations frequently face resource scarcity and severe competition; thus, leaders must strategically employ their limited resources uniquely [75]. Considering this issue, Desa (2012) prompted entrepreneurial initiatives that are based on bricolage [76], which positively impact innovation outcomes [77]. Entrepreneurial bricolage enables individuals and organisations to efficiently utilise their minimum resources [78] via unique methods to exploit opportunities [79]. Moreover, entrepreneurial bricolage also promotes recycling by-products [80], where organisations can deliver cost-effective, value-added products and services in a developing economy [81]. Hence, the following hypothesis is proposed:
Hypothesis 4 (H4).
The higher the entrepreneurial bricolage, the higher the impact of ethical leadership on environmental innovation.
Based on the above hypotheses, the following research framework is drawn (Figure 1).

3. Research Methodology

3.1. Context of Study, Population, and Sample Size

From the perspective of SDG, the manufacturing firms in China face ineffective leadership, organisational justice, information quality, and a traditional manufacturing approach [82]. The manufacturing firms in northeast China adopt a conventional approach in the pharmaceutical, machinery, and energy sectors. However, compared to other parts of China, the region’s natural environment is severely affected by these manufacturing firms [83,84]. Therefore, this study investigates environmental innovation by incorporating employees from manufacturing firms in northeast China, specifically, Jilin and Inner Mongolia. The present insights enable policymakers and practitioners to enhance organisations’ performance sustainably. In China, effective context communication requires personal relationships to acquire quality information and a high response rate [85]. Therefore, we employed professional networking to access the manufacturing firms and data collection.
Next, the present study adopted probability sampling based on random selection from a sampling frame, listing 350 manufacturing firms [86]. In this case, the sampling frame offers complete details about manufacturing firms in this specific region of China. Therefore, we used probability sampling in this study. Initially, we made contact with the HR department of all 350 manufacturing firms. Subsequently, 331 manufacturing firms were left after eliminating firms that refused to participate. Most of these firms deal with machinery, energy, and pharmaceutical products, which contribute heavily to pollution. Hence, a firm-level strategy, i.e., environmental innovation, is employed to cope with environmental issues, enhancing firms’ sustainable performance [6,87]. Subsequently, this study created online survey forms to collect data from manufacturing firms’ representatives. These forms comprise five sections: ethical leadership, environmental innovation, sustainable performance, entrepreneurial bricolage, and demographic information.
Participants were accessed through the HR department concerned, ensuring the privacy of their data and its exclusivity for research purposes. Furthermore, a sample size of 103 was required based on the G* power application [88], where the average response rate in social science studies is 35.50% [89]. Accordingly, survey forms were sent to 300 firm representatives, followed by three friendly reminders via email and social media within seven days. In return, we received 231 filled survey forms and were left with 223 responses after data screening, indicating a 74.33% response rate.

3.2. Demographics Analysis

The present study is dominated by males (n = 149, 66.82%), whereas females comprised 74 participants. Most participants (n = 111, 49.78%) possessed a bachelor’s degree, master’s degree (n = 87, 39.00%), and there were six with PhD degrees. Meanwhile, 134 out of 223 participants were aged between 36–45, followed by 25–35 (n = 52, 23.32%), and three were above 55 years. More than 50% (n = 160, 71.75%) have more than five years’ experience, while 35 participants had acquired fewer than five years’ experience. Most firms comprised between 751–1000 employees (n = 91, 34.47%), 23 had fewer than 500 employees, and 60 exceeded 1000 employees. In this study, most firms were involved in the production of machinery (n = 98, 37.12%), pharmaceuticals (n = 70, 31.39%), and the energy sector (n = 55). The current research is dominated by representatives from manufacturing firms in Inner Mongolia (n = 132, 59.20%); only 91 from Jilin participated in this study. Most managers (n = 137, 61.43%), as firm representatives, participated in this study, followed by line supervisors (n = 47, 21.07%).

3.3. Measures

This study measured ethical leadership based on a 10-item scale [14], which reported high reliability among industrial workers in Hubei, China [56]. We adopted Davidsson et al.’s (2017) nine-item measurement scale of entrepreneurial bricolage to examine its monitoring impact [41], which is highly reliable (α > 0.70) among SMEs in China [49]. Moreover, the present study employed a 15-item scale to measure sustainable performance [49], which comprised three dimensions: economic, social, and environmental performance. Meanwhile, four items of environmental innovation [90] exhibit high reliability (alpha = 0.817) among SMEs in China and India [6]. Moreover, firm size is directly related to firm performance. Therefore, it may cause an endogeneity issue in the present study [91,92]. Thus, this study considered firm size and industry type as control variables based on recommendations from previous studies [93]. Following [92]’s recommendations to cope with endogeneity issue, firm size refers to the number of employees in this study.

3.4. Data Screening

The data-screening process was employed to check the position of missing values, outliers, normality, and common method bias. Moreover, we checked against each item in the online survey form for any missing values in the dataset. By running the Z-score test in SPSS, we found ten cases with Z-values above 3.29 as univariate outliers and removed them from the dataset. Next, the multivariate outliers were determined by applying the Mahalanobis distance test in SPSS, revealing six cases with a significance below 0.001, which were eliminated from the final dataset. Accordingly, the skewness values of ethical leadership, environmental innovation, bricolage, and sustainable performance are found to be in the range of ±3 (see Table 1). Meanwhile, the kurtosis values of all four continuous variables in this study are between 0.163 and 2.121 (see Table 1). Hence, the present dataset presented univariate normality, denoted by skewness and kurtosis values within the range of ±3 [94].
An online Web Power statistical analysis was used to examine the multivariate normality. The data analysis revealed that Mardia’s skewness (β = 22.470, ρ < 0.05) and kurtosis values (β = 81.731, ρ < 0.05) were significant. Therefore, the present study possesses multivariate normality. Nevertheless, the study’s data was collected from a single source, i.e., employees; thus, there is the possibility of bias. Hence, any negative impact of such biases must be critically assessed before testing the hypothesis. We implemented Harman’s single-factor test to evaluate any common method bias, revealing that a single factor only counts for 38.249% of total variations, less than 0.50% [95]. Hence, this data set is free of common method bias. Moreover, Harman’s single factor is viewed as insensitive. Therefore, we also used a correlation matrix procedure and found that correlation among continuous variables is not greater than 0.90. Thus, this study is freer of any common method biases.

3.5. Descriptive Analysis

A five-point Likert scale was used to measure the four continuous variables, and all of them revealed a moderate presence in the manufacturing firms of north-eastern China. This result is based on Sekaran and Bougie’s (2016) criterion for mean-values interpretation [94]. These variables are ethical leadership (M = 3.790), environmental innovation (M = 3.832), sustainable performance (M = 3.847), and entrepreneurial bricolage (M = 3.814) (see Table 1). A study reported a moderate presence of these variables in higher education in China regarding leadership and sustainable performance [3]. However, the mean value of environmental innovation is inconsistent with Iqbal et al.’s (2021) findings, indicating the low-level practices among Asia’s SMEs [6].

3.6. Measurement Model Analysis

The PLS-SEM was preferred considering the complexity of the present framework and prediction-oriented approach [96]. The measurement model analysis examines the indicator reliability, internal reliability, and construct validity. In this matter, an item exhibits acceptable reliability provided that its loading is more significant than 0.50 [97]. One item from ethical leadership, environmental performance, and bricolage were removed from the list because their loadings were below 0.40. Other items exhibited between 0.516 and 0.923 loadings; therefore, all items presented acceptable indicator reliability.
The internal reliability of any construct was decided based on Cronbach’s alpha (α) and composite reliability (CR). In exploratory studies, internal reliability is sufficient if Cronbach’s alpha and CR values are more significant than 0.70 [98]. This study’s Cronbach’s alpha and CR values of ethical leadership, environmental innovation, sustainable performance, and bricolage are higher than 0.70 (see Table 2). Hence, ethical leadership, bricolage, environmental innovation and sustainable performance displayed acceptable construct reliability.
Construct validity concerns convergent and discriminant validity, where a construct demonstrates acceptable convergent validity if the factor loadings of its measurement items are higher than 0.70. Furthermore, its average variance extracted (AVE) must be greater than 0.50 [99]. The measurement model analysis indicated that the AVE values of ethical leadership, environmental innovation, sustainable performance, and bricolage are higher than 0.50 (see Table 2), indicating acceptable convergent validity. Next, we employed the Fornell–Larcker criterion to examine the discriminant validity of all continuous reflective constructs. Acceptable discriminant validity is denoted if the square root of AVE is more significant than its inter-construct correlation values [100]. Table 3 shows that the square root of AVE values of all continuous variables, namely, ethical leadership, environmental innovation, sustainable performance, and bricolage, is more significant than their inter-construct correlations values. Hence, these constructs exhibited acceptable discriminant validity.

3.7. Structural Model Analysis

The structural model analysis exposed the significant impact of ethical leadership on environmental innovation (β = 0.593, ρ < 0.050) (see Table 4), supporting hypothesis H1. Meanwhile, environmental innovation significantly affects sustainable performance (β = 0.515, ρ = 0.000) among China’s manufacturing firms; therefore, hypothesis H2 is supported (see Table 4). Moreover, an indirect effect of ethical leadership was found on sustainable performance (β = 0.294). This result is a product of ethical leadership’s direct impact on environmental innovation (β = 0.593) and environmental innovation on sustainable performance (β = 0.515). Hence, hypothesis H3 is supported, which posited the significant mediating impact of environmental innovation on the ethical leadership–sustainable performance relationship. Moreover, the introduction of environmental innovation reduced the direct effect of ethical leadership on sustainable performance, but is still significant. Therefore, there is the presence of a partial mediating effect of environmental innovation on the ethical leadership–sustainable performance relationship.
Hypothesis H4 posits that a higher entrepreneurial bricolage strengthens the ethical leadership and sustainable performance link. Accordingly, the results demonstrated that ethical leadership and bricolage’s interaction term positively affects environmental innovation (β = 0.146, ρ = 0.039 < 0.050). The conditional effect of entrepreneurial bricolage is exhibited in Figure 2. On the other hand, the interactive terms graph displayed that ethical leadership’s impact on environmental innovation is elevated with the increasing bricolage level.

4. Discussion

In the context of sustainable development goals, business models are deemed as the source of competitive advantage to motivate organizational sustainability [101,102]. Regarding this, sustainable business models are concerned with how an organization creates, offers, and captures value in a sustainable way [103]. Currently, diverse businesses and industries are adopting such business models to satisfy the needs of different stakeholders and enhance their sustainable performance [104]. In this perspective, the present study is the first to provide empirical findings on the integrated correlations of ethical leadership, environmental innovation, sustainable performance, and entrepreneurial bricolage. The five hypotheses were supported, and their empirical findings are explained as follows. The first hypothesis, H1, posits that ethical leadership significantly influences environmental innovation, as proven by the current data analysis. This finding is similar to previous studies [38,56,105,106,107]. For instance, ethical leadership was found to impact various innovation aspects positively: social [105], radical, incremental [106], organisational [107], and employee behaviour [56].
Meanwhile, Shafique et al. (2019), revealed that ethical leadership influences employee creativity at the individual level among Pakistani SMEs [107]. A similar finding revealed the positive impact of sustainable leadership on environmental innovation, conducted on members of the Frontiers Asia region: Pakistani, Bangladesh, and India [6]. Moreover, in the cross-cultural context of Canada and Pakistan, it is found that ethical leaders engender innovative behaviours and reduce occupational stress [108]. These findings are further supported by the significant positive impact of environmental innovation found on multiple performance facets: financial [109], environmental [6] and green innovation performance [110]. Contrary to these findings, there is a more significant positive effect of environmental innovation on environmental performance compared to financial performance [36], while others claim that it does not influence performance-related outcomes [111].
A prominent finding reported the significant positive impact of product innovation on financial performance [112], and this effect is similarly observed between frugal [6] and social innovation [3] with sustainable performance. Concerning upper echelons theory, a mediating effect of environmental innovation is proposed on the relationship between ethical leadership and sustainable performance. The current findings confirmed the mediating hypothesis, H3, consistent with previous studies [38,62,113,114]. Furthermore, ethical leadership is found to directly and indirectly affect employees’ job performance through corporate social responsibility in northern-Italy manufacturing SMEs [115]. In Vietnamese SMEs, ethical leadership, directly and indirectly, influences service-innovative behaviour through intrinsic motivation [116]. In the context of South Korean SMEs, ethical leaders affect firm performance through organizational commitment and job involvement [117]. Top-management support is crucial for green innovation, driving green performance [114]. Hence, they must implement effective environmental management by establishing corporate environmental innovation [113].
A study conducted among Frontier-Asia-region SMEs found a mediating effect of environmental innovation on the relationship between sustainable leadership and environmental performance [118]. Moreover, Liao and Zhang (2020) reported the significant positive impact of responsible leadership on incremental environmental innovation and of the latter on environmental performance among Chinese manufacturing firms [62]. The present empirical findings supported hypothesis H4, positing that entrepreneurial bricolage moderates the significant impact of ethical leadership on environmental innovation, consistent with Yang (2018) [119]. On that account, market leaders should strategically employ bricolage to enhance co-innovation and customer value. Moreover, a higher bricolage is valuable in a resource-constraint situation, where sustainable leaders are perceived to substantially impact frugal innovation [33].
Contrastingly, entrepreneurial bricolage exhibited no significant moderating effect on the leadership–innovation relationship among SMEs in India and Pakistan [49]. The reason behind this inconsistent evidence is potentially due to the target population, sample size, and regional market. The discrepancies are also conceivably because of the different impacts of parallel land-selective bricolage on the leadership–innovation relationship.

5. Conclusions

The current research was intended to investigate how ethical leaders promote sustainable performance through eco-innovation, as well as examine the moderating effect of entrepreneurial bricolage using cross-sectional data collected from manufacturing firms in north-eastern China. The current empirical findings confirmed that ethical leaders indirectly enhance sustainable performance through environmental innovation. Moreover, this study also confirms the moderating impact of entrepreneurial bricolage on the ethnical leadership–environmental innovation relationship.

5.1. Theoretical Implications

Several contributions to the theory and practice were introduced by first enriching the literature on sustainable development. On this matter, this study exposed how a specific leadership approach can establish the processes and mechanisms that improve sustainable performance. Previous studies recommended research on the relationship between specific leadership types and sustainable performance [9,25,38]. Hence, a process model was implemented in this aspect to elucidate how ethical leadership can foster sustainable performance in Chinese manufacturing firms. Furthermore, the vital role of ethical behaviours was identified from the top management, middle-level manager, and employee levels. Therefore, these informative findings regarding the participants and processes enable organisations to accomplish their SDG.
Secondly, we enriched the ethical leadership literature by applying upper echelons theory to examine mechanisms of how top management’s ethical behaviour drives sustainable performance. This mechanism was successfully achieved via environmental innovation. Notably, this outcome differentiates this study from the previous ones, where the authors assessed how external stakeholder pressure forces organisations to indulge in environmental innovation. Thirdly, effectuation theory is enhanced by examining the contingent role of bricolage vis à vis environmental innovation. We confirmed that the effect of ethical leadership on environmental innovation was amplified in the presence of higher entrepreneurial bricolage.

5.2. Practical Implications

Regarding practical implications, the significance of recruiting and developing ethical leaders was highlighted because of their positive impact on the desired outcomes, i.e., environmental innovation. Thus, to become ethical leaders, top management must practice high moral standards. Secondly, ethical leadership was reported to bolster sustainable performance through environmental innovation. Therefore, they must facilitate the psychological safety of their employees, which aligns with the organisation’s environmental vision. Ethical leaders could also arrange environment-related meetings with their employees, to share the impact of their input on crucial environmental assignments.
Top management could also disseminate information about their organisation’s environmental conservation efforts, and enhance employee motivation regarding an ecological vision. Thirdly, current findings suggested that leaders practice bricolage to provide practical environmental innovation. This situation is due to the presence of resource constraints, which require top management to deliver with minimum resources. Similar to eco-innovation, Iqbal et al. (2021) recommended that policymakers and practitioners focus on bricolage ability, ultimately bolstering practical and frugal innovation [33].

5.3. Limitations and Future Direction of the Study

The present research exhibited various limitations, though they are considered opportunities for researchers to enrich the literature in similar areas. Firstly, current findings employed data from northeast China. However, it is challenging to generalise these findings at the national and international levels, considering the country’s substantial diversity and size. Future academicians must, therefore, explore other provinces of China and, subsequently, the rest of the world. Secondly, data was collected and measured from the employee level of manufacturing firms. Thus, future studies should measure ethical leadership at the supervisor, team, and organisational level, ensuring high reliability. Third, we explored ethical leadership vis à vis environmental innovation; thus, future studies should probe other leadership styles and alternative mechanisms driving the SDGs.

Author Contributions

Conceptualization, W.X. and Q.I.; methodology, W.X.; software, W.X.; validation, W.X. and Q.I.; formal analysis, W.X.; investigation, W.X.; resources, W.X.; data curation, W.X.; writing—original draft preparation, Q.I.; writing—review and editing, W.X. and Q.I.; visualization, W.X.; supervision, Q.I.; project administration, Q.I.; funding acquisition, W.X. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 14 07070 g001 550
Figure 1. Research Framework.
Figure 1. Research Framework.
Sustainability 14 07070 g001
Sustainability 14 07070 g002 550
Figure 2. Moderating role of Entrepreneurial Bricolage.
Figure 2. Moderating role of Entrepreneurial Bricolage.
Sustainability 14 07070 g002
Table
Table 1. Descriptive statistics.
Table 1. Descriptive statistics.
Main ConstructsMeanStd. DeviationSkewnessKurtosis
StatisticStatisticStatisticStd. ErrorStatisticStd. Error
Ethical Leadership3.7900.302−0.4710.1380.1630.275
Environmental Innovation3.8320.304−0.3000.1381.8670.275
Entrepreneurial Bricolage3.8140.379−0.5910.1381.3920.275
Sustainable Performance3.8470.3780.0480.1382.1210.275
Table
Table 2. Results of loading, reliability and validity.
Table 2. Results of loading, reliability and validity.
ConstructItemsFactor LoadingαCRAVE
Ethical LeadershipEL100.6090.9240.9320.606
EL020.706
EL030.821
EL040.765
EL050.799
EL060.837
EL070.822
EL080.769
EL090.847
Environmental InnovationEI010.8740.9190.9430.804
EI020.889
EI030.923
EI040.901
Entrepreneurial BricolageEB010.7150.9280.9370.623
EB030.627
EB040.864
EB050.872
EB060.85
EB070.842
EB080.852
EB090.814
Social PerformanceSOP010.890.9310.9440.808
SOP020.894
SOP030.882
SOP040.908
SOP050.921
Economic PerformanceECP010.2910.7630.8440.541
ECP020.805
ECP030.712
ECP040.844
ECP050.868
Environmental PerformanceENP010.9130.8290.8360.573
ENP020.897
ENP030.516
ENP050.623
Sustainable PerformanceSOP0.8440.8290.8320.631
ECP0.923
ENP0.574
Table
Table 3. Fornell–Larcker criterion.
Table 3. Fornell–Larcker criterion.
Construct1234
Entrepreneurial bricolage0.789
Environmental innovation0.7040.897
Ethical leadership0.5640.6330.778
Sustainable performance0.4930.4380.7560.794
* Bold values indicate square root of respective AVE values.
Table
Table 4. Hypotheses testing.
Table 4. Hypotheses testing.
HypothesesβS.DT Statp ValuesLLCIULCI
Ethical Leadership > Environmental Innovation0.5930.1105.4040.0000.4490.768
Environmental Innovation > Sustainable Performance0.5150.0608.5480.0000.4500.648
Ethical Leadership > Environmental Innovation > Sustainable Performance0.2940.0634.6890.0000.1960.423
Ethical Leadership * Bricolage > Environmental Innovation0.1460.0821.7820.0390.0080.258
* is sign of interaction of two variables here.
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Xuecheng, W.; Iqbal, Q. Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective. Sustainability 2022, 14, 7070. https://doi.org/10.3390/su14127070

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Xuecheng W, Iqbal Q. Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective. Sustainability. 2022; 14(12):7070. https://doi.org/10.3390/su14127070

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Xuecheng, Wei, and Qaisar Iqbal. 2022. "Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective" Sustainability 14, no. 12: 7070. https://doi.org/10.3390/su14127070

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