Ethical Leadership and Institutional Convergence in European Management Consulting: A Cluster-Based Comparative Analysis

Abstract

In the context of growing institutional turbulence and digital transformation of the economy, ethical business leadership is increasingly recognized as a key prerequisite for trust, transparency, and sustainable development in knowledge-intensive professional service sectors, particularly the management consulting market. At the same time, existing studies on consulting market development insufficiently explain how ethical leadership and institutional conditions shape structural differences between consulting ecosystems in European transition economies, especially in the case of Ukraine, which remains underrepresented in comparative research on business leadership and professional service industries. The purpose of this study is to identify the institutional determinants of ethical leadership in the management consulting sector and to assess Ukraine's position within the European consulting market structure. The empirical analysis is based on statistical data covering 23 European countries in 2015–2023, combining sectoral indicators of consulting market development from FEACO reports with institutional and macroeconomic indicators from international databases, including the Corruption Perceptions Index (CPI), the Economic Freedom Index, the Digital Economy and Society Index (DESI), as well as data from the World Bank and OECD. The methodological framework integrates hierarchical cluster analysis (Ward’s method), k-means clustering, principal component analysis (PCA), correlation analysis, and forecasting of the Ethical Leadership Index (ELI). Statistical calculations and data modeling were performed using the R statistical environment (RStudio). The results identify three clusters of European consulting markets characterized by different levels of institutional maturity and ethical business leadership across the 23 analyzed countries. The calculated Ethical Leadership Index (ELI) reveals significant cross-country differentiation, with average values of 70.3 in the most institutionally advanced cluster, 65.4 in countries with an intermediate level of development, and 52.7 in Ukraine, confirming the hypothesis of a comparatively lower level of ethical leadership in the Ukrainian consulting ecosystem. Comparative institutional analysis also reveals structural asymmetries between Ukraine and structurally comparable European economies, including a 27-point gap in corruption perception indicators, a 16.1-point difference in economic freedom, and more than a €15,000 difference in average salary levels, which constrain the competitiveness and international integration of the Ukrainian consulting market. The findings extend understanding of the role of ethical business leadership in the development of professional service markets and provide an analytical basis for strengthening institutional transparency, improving ethical governance standards, and supporting the development of consulting ecosystems in economies undergoing structural transformation.