CEO Servant Leadership and Organizational Profitability: A Social Exchange Perspective

Abstract

Servant leaders emphasize serving others before themselves. Emerging evidence indicates that servant leadership results in a variety of positive outcomes, including favorable job attitudes and enhanced job performance. Extending this line of research, we examine how and when CEO servant leadership benefits the organizational bottom line (e.g., organizational profitability). Drawing upon multisource data from 102 organizations, our ordinary least squares regression analyses reveal that CEO servant leadership is associated with workforce obligation, subsequently leading to enhanced organizational profitability, particularly when workforce exchange ideology is high. The findings suggest that workforce obligation serves as an important mediating mechanism, while workforce exchange ideology acts as a critical boundary condition for the performance effect of CEO servant leadership. This research provides new insights as to how and why servant leadership relates to organizational financial performance.