Ethical leadership refers to “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making” (Brown and Treviño, 2006; Pascricha et al., 2018). Ethical leader exemplifies the virtuous role model, exudes moral charisma and influences others by shaping an organization’s ethical culture through the process of ritualization (Yuan et al., 2023). CSR is defined as a company’s sense of responsibility towards the community and environment in which it operates, expressed by achieving economic, social, and environmental benefits considering the expectations of stakeholders (Carrol, 1979; Christensen et al., 2014). CSR can be categorized as philanthropic, integrative, and innovative by content (Halme and Laurila, 2009), reactive and proactive by attitude (Torugsa et al., 2013), and symbolic and substantive by form (Schons and Steinmeier, 2016). In these classifications, the more mainstream classification of reactive and proactive CSR is adopted in this study.

Ethical leadership is closely related to proactive CSR. Proactive CSR illustrates the “corporate integrity and ethical behavior that goes beyond the basic requirements of compliance to proactive initiatives such as innovation, eco-efficiency, and pollution prevention in support of sustainable economic, social, and environmental development” (Torugsa et al., 2013). On the one hand, proactive CSR depends on corporate discretion rather than reflecting governmental authority or broader institutional constraints (Matten and Moon, 2008). Therefore, only ethical leaders who are deeply committed to ethical concepts such as “honesty, integrity, trustworthiness, and caring” can act proactively beyond conventional legitimacy and integrate CSR into the decision-making process without only considering short-term economic interests. On the other hand, ethical leaders communicate their ethical values by establishing clear expectations for ethical behavior (Cheng et al., 2022); promote ethical consistency throughout the organization by cultivating the ethical values of organizational members (Kim et al., 2023); and create an ethical culture within the organization, therefore, encourage organizational members to take responsibility for ethical decisions, consider the sustainability of ethical decisions, put the interests of the organization and society above personal interests, and pay much attention to long-term interests instead of short-term interests (Khan et al., 2021). To sum up, we propose the following hypothesis:

Ethical leadership is also closely related to reactive CSR. Reactive CSR refers to “enterprises passively make their business activities conform to the requirements of existing laws, regulations and procedures and meet the expectations of existing stakeholders in order to obtain and maintain the legitimacy of their operations under the external pressure of the institutional environment and market rules” (Torugsa et al., 2013). On the one hand, ethical leaders emphasize the “ethical individual,” as leaders, they advocate “normative behaviors” such as honesty, fairness, trustworthiness, and caring for others (Brown and Treviño, 2006; Nguyen et al., 2021), which suggests that they do not undermine ethical standards in the pursuit of short-term goals and can take into account the interests of existing stakeholders when pursuing the economic goals (Uppathampracha and Liu, 2022) and these continuous ethical behaviors enable the company to have a demonstration effect of “undertaking social responsibility.” On the other hand, ethical leaders emphasize “ethical others” (Verdorfer and Peus, 2019); that is, as leaders, they formulate and communicate ethical standards through two-way communication, continuous reinforcement, and decision-making and continuously promote ethical behavior among their followers (Brown and Treviño, 2006), while motivating the entire enterprise to comply with the basic requirements of laws and regulations in the course of conducting business activities, to take “social responsibility” in strategic decision-making, and to engage in business activities in a fair and principled manner (Nguyen et al., 2021). To sum up, we proposed:

Harmonious Work Passion (HWP) is “an autonomously internalized work passion of individuals who choose to engage in their favorite activities” which can play a mediating role between ethical leadership and both proactive and reactive CSR strategic decision-making.

Ethical leadership is conducive to the formation of TMT HWP. Ethical leaders with high level of “ethical ego,” their high ethical quality makes them more likely to be respected by TMT members who unconsciously generate HWP through autonomous internalization under the example and inspiration of ethical leaders (Gao and Jiang, 2019). Meanwhile, ethical leaders have distinctive characteristics of ethical communication in the process of communicating with TMT members, and their leadership style of treating people equally, caring for subordinates, and making fair decisions encourages a positive emotional state among TMT members (Al Halbusi et al., 2022), which stimulates TMT members’ emotional identification and motivates them to “choose an activity voluntarily and without any strings attached,” forming an autonomously internalized HWP (Jan et al., 2021). Based on the above arguments, we proposed that:

TMT harmonious work passion facilitates the formation of both proactive and reactive CSR. Harmonious work passion is an autonomously internalized work passion composed of emotional and cognitive elements, which makes it easier for TMT members to accept CSR strategic decisions according to the business operations (Yi et al., 2022). Both reactive and proactive CSR require enterprises to assume social responsibility in addition to economic responsibility, which is a special strategic decision and an “additional” behavior for business organizations in general (Carrol, 1979). In terms of emotion, HWP allows TMT members to form individual commitment to and the will to take action on social responsibility “without any strings attached” (Vallerand et al., 2010) to develop a strong tendency and willingness to carry out CSR activities, and to implement CSR activities autonomously and voluntarily (Martin et al., 2022). In terms of cognition, HWP makes TMT members realize the importance of CSR to the sustainable development of enterprises and make CSR strategy decisions flexibly according to the enterprise’s particular situation. In other words, TMT HWP may lead enterprises to make both reactive and proactive CSR strategic decisions. Based on the above arguments, we propose the following hypothesis:

In summary, under the guidance and inspiration of ethical leaders, TMT members generate harmonious work passion through autonomous internalization. Harmonious work passion represents the positive side of work passion triggered by ethical leadership, accompanied by positive and adaptive results, allowing TMT members to willingly and flexibly carry out CSR strategic decision-making, which is conducive not only to reactive CSR formation but also to proactive CSR decision-making. To sum up, we propose the following hypothesis:

Obsessive work passion (OWP) refers to “the internalization of an activity as part of the self-identity of an individual forced by external pressure, and it causes the individual to be compelled to engage in the activity out of a sense of inner compulsion.” Obsessive work passion plays different mediating roles between ethical leadership and different types of CSR strategic decision-making.

Ethical leadership may also cause TMT members to form an obsessive work passion. Compared to legal norms such as compliance with laws and regulations, ethics is a red-line behavior beyond the legal bottom line (Wu et al., 2015). Unlike law, which uses right and wrong as the standard, ethicality judge things with good and evil, which is a kind of value judgment that is difficult to measure effectively. According to self-determination theory, different people make different judgments when faced with same situation (Deci and Ryan, 1985b). In the presence of a strong ethical benchmark by ethical leaders, TMT members may be inspired to form an HWP by autonomous internalization or form an obsessive work passion by controlled internalization. Ethical leaders practice values-based management by strictly communicating ethical standards to their followers (Amah, 2023), providing clear ethical policies and programs, communicating about ethical issues, and using reinforcement systems to hold followers accountable for their ethical decisions (Pascricha et al., 2018). Therefore, TMT members feel the ubiquitous ethical oppression of ethical leaders and are thus “forced” to engage in an activity (Fu et al., 2020), forming an obsessive work passion by controlled internalization. Thus, we proposed as follows:

TMT obsessive work passion is conducive to reactive CSR decision-making but not to proactive CSR decision-making. As a kind of work passion formed by controlled internalization, obsessive work passion only leads TMT members to engage in CSR activities in a controlled manner. The starting point for CSR decision-making by TMT members is more under the strong ethical pressure from ethical leadership (Sanchez-Famoso et al., 2023), so it becomes a natural strategic choice for TMT members to engage in some superficial work to “cope” (Mageau et al., 2011). The reactive CSR strategic decisions that “conform corporate behavior to the basic requirements of laws and regulations, cater to existing stakeholders, and enhance the legitimacy of the company” become the natural choice of TMT members.

Meanwhile, the obsessive work passion formed through controlled internalization simply fails to create positive emotional outcomes among TMT members, and proactive CSR strategic decisions that “go beyond compliance, proactively reconstruct stakeholders, and support social sustainability” are hardly preferred by TMT members in the context of obsessive work passion (Vallerand et al., 2010). In particular, with big group of TMT members, the limited decision-making power of ethical leaders makes it difficult to implement proactive CSR strategic decisions as a collective choice of all TMT members in the face of many TMT members with obsessive work passion (Zolotoy et al., 2021). Under such circumstances, enterprises are more inclined to engage in reactive CSR, and it is difficult for them to adopt and implement proactive CSR strategic decisions. Thus, we proposed:

In sum, TMT members may develop obsessive work passion under the ethical pressure from ethical leadership. Obsessive work passion represents the negative side of work passion triggered by ethical leadership, accompanied by passive, adaptive outcomes (Nie et al., 2023). It is not the TMT’s job to take social responsibility beyond the rules (Lafrenière et al., 2011), while social responsibility within the rules is the norm must be followed. TMT members under obsessive work passion can only make reactive CSR decisions, and it is difficult for them to make proactive CSR decisions. Therefore, the following hypotheses are proposed:

Economic responsibility is the primary issue of CEO and TMT members (Cheong et al., 2017). In a market-oriented business organization, CSR is always faced with the consideration of economic responsibility, and the direct result of economic responsibility is corporate performance (Qu et al., 2022). Therefore, the performance stress faced by TMTs becomes an important situational factor that affects TMT work passion. Performance stress refers to “the sense of urgency to improve corporate performance to achieve desired outcomes and avoid negative consequences” (Lazarus, 2000). Performance stress plays different moderating roles in the relationship of ethical leadership with different work passion of TMT.

Performance stress positively moderated the relationship between ethical leadership and different TMT work passion. According to the theory of resource conservation (Luan et al., 2022), the signals of resource changes received by individuals significantly affect their subsequent attitudes and behaviors (Hobfoll, 1989). Therefore, when TMT members are faced with large, realistic, and urgent performance stress, they develop a significant sense of being threatened or hurt, which in turn affects their subsequent emotional responses (Folkman and Lazarus, 1985). The greater the performance stress, the higher the self-protection needs of TMT members, which are concentrated in their perception of self-service (Mitchell et al., 2017). Therefore, under the example and inspiration of ethical leaders, it is more likely that control internalization will cause TMT members to develop obsessive work passion. Moreover, the ethical enlightenment and inspiration of ethical leaders appear feeble and futile in the face of realistic performance stress: in the face of performance stress that is closely related to their own positions and pay incentives (Linder et al., 2021), it is almost impossible for TMT members to form autonomously internalized harmonious work passion with heartfelt pleasure. Therefore, we proposed:

In sum, we propose a moderated mediation model for CSR decision making: CEO ethical leadership is related to CSR decision making by enhancing the work passion of TMT. Yet, a low level of performance stress is proposed to form a prerequisite for ethical leadership to translate into CSR decision making via the TMT harmonious work passion. In contrast, under the boundary condition of a high level of performance stress, it’s more likely to transfer ethical leadership to CSR decision making through TMT obsessive work passion. Thus, we propose the following hypotheses:

Based on the above hypotheses, the theoretical model proposed in this study is shown in Figure 1.

The survey data was collected from a questionnaire within three-month. After selecting appropriate scales based on existing literature and incorporating expert opinions, we developed an initial survey questionnaire. To ensure the quality of the questionnaire, we distributed the initial questionnaire to a small group of executives in various companies. Based on their feedback, we further refined and improved the questionnaire, resulting in the final version used for the formal survey. We invited TMT members from six companies (four state-owned and two private enterprises) to participate in the initial questionnaire survey. However, these six companies were not included in the formal research sample. We considered their feedback and incorporated suggestions from domain experts to make appropriate modifications to the wording of the questionnaire items, ultimately creating the final version for the formal survey.

Participants for this study were recruited from Leaders and TMT members of the sample enterprises. The sampling technique employed for this study was convenience sampling. The selection of sample enterprises was mainly based on the following criteria: (1) the sample enterprises regularly publish CSR reports; (2) the sample enterprises have a complete TMT; and (3) the data of the sample enterprises were complete and available. The data were collected using the CEO–other TMT members pairing method. The questionnaire was divided into parts A and B. The CEO completed part A of the questionnaire to evaluate basic personal information, basic corporate information, proactive CSR, and reactive CSR. Four to five other TMT members were randomly selected to fill out part B of the questionnaire to evaluate ethical leadership, HWP, OWP, and performance stress. After the elimination of incomplete, duplicate, and invalidly paired questionnaires and those showing patterned responses, 506 valid questionnaires (including 122 questionnaires in part A and 506 questionnaires in part B) were obtained. The structural characteristics of CEOs and sample are presented in Table 1.

To avoid connotation inconsistency, the scales in this study were all obtained from published English literature and were processed using a strict translation/backtranslation procedure. Except for the control variables, the questionnaire items were measured on a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree).

For the measurement of high-level constructs in this study comes from individuals and are finally obtained through the aggregation of individual data. However, the premise of the aggregation is to ensure that the consistency of the views of team members reaches a certain standard, therefore, aggregation test was used to assess the consistency (James, 1982; Chan, 1998).

Rwg, ICC (l), and ICC (2) are statistics generally used to verify aggregation of data to higher levels of analysis. As shown in Table 2, the mean values of Rwg for each variable are ranged from 0.87 to 0.89, as well as the median values of Rwg are between 0.86 to 0.90, which all greater than the suggested value of 0.70 from LeBreton and Senter (2008). Beyond, ICC (1) for each variable is varied from 0.27 to 0.55, which is greater than the recommended cutoff of 0.12 from LeBreton and Senter (2008). In addition, although there are no strict standards of acceptability for ICC (2) values, Glick (1985) reported an ICC (2) value of 0.60 in the organizational literature. The Values of ICC (2) in this study are ranged from 0.58 to 0,84, most of the values are >0.60, which only one is slightly below the recommended level, it does not seem low enough to prohibit aggregation considering the small size of the tested team. In sum, the above results provided sufficient support for aggregation.

Previously, scholars have emphasized the lack of research on CSR at the micro level (Aguinis and Glavas, 2013; Wu et al., 2015). However, the leadership literature offers a comprehensive process model and explanatory mechanism for understanding how individual leaders influence CSR. Similarly, the CSR literature provides leadership scholars with a focused background to investigate the influence of leaders. Therefore, combining these two areas of literature presents ample opportunities for theoretical development. This study aims to explore the impact of ethical leadership on CSR strategic decision-making, making a valuable attempt to examine the relationship between ethical leadership and CSR strategic decision-making. The main theoretical contributions of this study are as follows.

Firstly, this study draws on self-determination theory to propose a novel mediation mechanism that explains the intricate relationship between ethical leadership and heterogeneous CSR strategic decision-making from the perspective of the top management team (TMT) work passion. While previous studies have explored the relationship between ethical leadership and CSR, most have not provided an explanation for the underlying process, resulting in a lack of research on potential mediation mechanisms between ethical leadership and strategic CSR decision-making. By incorporating TMT harmonious work passion (HWP) and TMT obsessive work passion (OWP) as explanatory variables, this study examines how ethical leadership influences CSR strategic decision-making, integrating leadership, emotion, and behavior. Furthermore, it addresses the question of “how ethical leadership affects different types of CSR strategic decision-making,” enriching the understanding of the mediation mechanism between ethical leadership and CSR from an emotional perspective and providing a new process pathway to explain how ethical leadership differentially influences proactive and reactive CSR strategic decision-making.

Secondly, this study enhances our understanding of the significance of the TMT in CSR strategic decision-making and highlights its crucial role in the process. Previous studies on leadership and CSR have predominantly focused on CEOs, overlooking the TMT as an essential core group within organizations. By considering the TMT as a link between ethical leadership and CSR, this study reveals the internal mechanism of how ethical leadership influences heterogeneous CSR strategic decision-making within enterprises. It addresses the limitations of previous studies that primarily focused on CEO characteristics as the driving force behind CSR, contributing to expanding and deepening existing research. The TMT plays a primary role in designing and implementing stakeholder strategies such as CSR, and CSR practices are influenced by the philosophies and actions of not only the CEO but also the entire TMT. This study responds to the suggestions of Wu et al. (2015), Frynas and Yamahaki (2016), and Ahn (2020) to include the TMT in the explanation of CSR, revealing the TMT’s role in CSR strategic decision-making.

Thirdly, this study reconciles the conflicts between existing literature and corporate practices, refines the differentiated impact of ethical leadership on CSR, and challenges the stereotypical understanding of the positive impact of ethical leadership on CSR by conducting a heterogeneity analysis of CSR. Previous studies have primarily focused on general CSR activities and their determinants, with limited attention given to different types of CSR. This study addresses the call for further research on how managers prioritize and balance different types of CSR activities (Chen et al., 2019) by examining how CEO ethical leadership influences heterogeneous CSR strategic decision-making. By exploring proactive and reactive CSR in a categorical manner, it delves into the distinct generating mechanisms behind different CSR strategic decisions.

Overall, this study contributes to the literature by providing a comprehensive analysis of the relationship between ethical leadership and CSR strategic decision-making. By incorporating the TMT and exploring the mediating role of work passion, it offers new insights into the complex processes underlying this relationship. Additionally, it broadens our understanding of the TMT’s role in CSR decision-making and highlights the importance of considering diverse types of CSR.

This study has offer certain practical implications for corporate leaders, TMTs, and CSR strategic decision-making.

Firstly, leaders are the key influencers of CSR strategic decisions. Although most concepts of CSR refer to corporate behavior, it is the top decision-makers and their management teams within the enterprise who actually create, implement, maintain, or circumvent such policies and behaviors, especially the ethical leaders with distinct ethical traits in the enterprise. The fulfillment of CSR by the enterprise starts with taking effective measures to strengthen the ethical leadership of the CEO. Therefore, in the selection of managers, enterprises should not only evaluate their abilities and other leadership qualities, but also focus on their morality.

Secondly, leaders and TMTs jointly shape CSR practices and results. Ethical leaders should pay careful attention to the role of TMT members in organizational decision-making when promoting the making of CSR strategic decisions, especially proactive ones. TMT members ‘HWP will not only promote their work attitude, motivation and engagement, but also stimulate their sense of awe and responsibility for work decision-making. Ethical leaders need to share values with TMT members and carry out personalized care to promote the autonomous internalization of the motivation of TMT members, mobilize the enthusiasm of TMT members, work together to achieve common goals, and promote corporate growth.

Thirdly, enterprises need to create a relatively relaxed environment for CSR implementation. The moderating effect of performance stress indicates that the higher the performance stress is, the weaker the mediating effect of TMT HWP, the stronger the mediating effect of TMT OWP, the easier it is for enterprises to make reactive CSR strategic decisions, and the more difficult it is to make proactive CSR strategic choices. Therefore, an appropriate reduction in performance stress, especially short-term performance stress, is more helpful to address the balance between economic and social benefits as well as the long-term sustainable development of the enterprise.

We must acknowledge some limitations of our studies that can be addressed by future research.

Firstly, our study relies on cross-sectional data. While we have taken measures to mitigate common method bias and established the absence of significant bias, it would enhance the rigor and robustness of our findings to incorporate longitudinal research designs or experimental methods in future studies.

Secondly, an interesting avenue for future research lies in exploring the relationship between ethical leadership, TMT, and CSR in different industries, organizational sizes, and cultural backgrounds. Additionally, the consideration of other influencing factors such as employee engagement, institutional environment, etc., can provide a more comprehensive understanding. These further studies will contribute to a better understanding of the role of ethical leadership and TMT in promoting both proactive and reactive CSR and offer valuable guidance and recommendations for the future sustainable development of organizations.

Thirdly, it would be valuable to examine the moderating effects of specific variables on the relationship between leadership and CSR. Given the historical influence of Confucianism on Chinese business ethics, exploring variables such as Confucianism, collectivism, socialist ideology, and political association could serve as relevant boundary conditions. These variables, deeply rooted in Chinese culture, may shape the leadership-CSR association in unique ways, and investigating their impact would provide a nuanced understanding of the relationship.

By considering these future research directions, scholars can expand upon our findings and contribute to a more comprehensive understanding of the dynamics between leadership, CSR, and contextual factors.