Strategic Leadership Ethical Practices and Organizational Performance of Pharmaceutical Companies in Kenya
DOI:
https://doi.org/10.70641/ajbds.v1i1.57Keywords:
Strategic Leadership, Ethical Practices, Organizational Performance, Pharmaceutical IndustryAbstract
This study sought to determine the extent to which strategic leadership ethical practices influence the organizational performance of pharmaceutical companies in Kenya. A positivism research philosophy and descriptive correlational research design guided the study. A stratified random sampling technique was used to select a sample size of 390 from the target population of 1,746 senior managers. Primary data was collected using a self-administered questionnaire and analysed using descriptive and inferential statistics. The inferential statistics used included Pearson correlation analysis, Chi-square test, one-way ANOVA, and ordinal logistic regression for hypothesis testing. The results of ordinary logistic regression (Nagelkerke Pseudo R-Square) showed that strategic leadership ethical practices explained a variation of 5.4% in organizational performance, R2 =.054. Additionally, the ordinal logistic parameter estimates established strategic leadership ethical practices predicted organizational performance, β = .247, p ≤ .05. The study concluded that strategic leadership ethical practices significantly influenced the organizational performance of pharmaceutical companies in Kenya. The study recommends that pharmaceutical companies prioritize the development of ethical leadership skills among their top executives and managers. This can be achieved through leadership training programs, mentorship, and fostering a culture of ethics and integrity. The management of pharmaceutical companies should review and update their code of conduct to align with ethical principles and best practices. The code should clearly outline expected behaviours, ethical standards, and consequences for non-compliance. The management of pharmaceutical companies implements reward systems that incentivize and recognize ethical behaviour.
References
Alatailat, M., Elrehail, H., & Emeagwali, O. L. (2019). High-performance work practices, organizational performance, and strategic thinking. International Journal of Organizational Analysis. 48(3), 227-244.
Amayreh, K. (2020). The role of strategic leadership in increasing ethical practices among pharmaceutical organizations in Jordan. Management Science Letters, 10(10), 2371–2378.
Angulo, G. (2020). How Ethical Leadership Influences Moral Disengagement and Encourages Employees to Engage in Ethical Practices (Doctoral dissertation, Grand Canyon University).
Aryati, A. S., Sudiro, A., & Noermijati, N. (2018). The influence of ethical leadership on deviant workplace behavior mediated by ethical climate and organizational commitment. International Journal of Law and Management. 22(3), 250-260.
Ayios, A., Jeurissen, R., Manning, P., & Spence, L. J. (2014). Social capital: A review from an ethics perspective. Business Ethics: A European Review, 23(1), 108-124.
Beeri, I., Dayan, R., Vigoda-Gadot, E., & Werner, S. B. (2017). Advancing ethics in public organizations: The impact of an ethics program on employees’ perceptions and behaviors in a regional council. Journal of Business Ethics, 112(1), 59-78.
Berrone, P., Surroca, J., & Tribó, J. A. (2017). Corporate ethical identity as a determinant of firm performance: A test of the mediating role of stakeholder satisfaction. Journal of Business Ethics, 76(1), 35-53.
Buzduga, I. (2020). Performance Measurement Using Performance Indicators within the Company. The USV Annals of Economics and Public Administration, 20(1 (31)).
Capano, G., & Lippi, A. (2017). How policy instruments are chosen: Patterns of decision makers’ choices. Policy Sciences, 50(2), 269-293.
Cheng, C. C., Yang, C. L., & Sheu, C. (2017). The link between eco-innovation and business performance: a Taiwanese industry context. Journal of Cleaner Production, 6(4), 81-90.
Civelek, M. E., Çemberci, M., & Günel, D. (2018). Business Ethics as a Strategy for Long-Term Sustainability. Business Ethics as a Strategy for Long-Term Sustainability.
Çora, H. (2019). Strategic Perspective in Millennium Companies. TURAN-SAM, 11(41), 335-346.
Deshpande, S. P., Joseph, J., & Shu, X. (2018). Ethical climate and managerial success in China. Journal of Business Ethics, 99(4), 527–534.
Dzomonda, O., & Fatoki, O. (2017). The Impact of Ethical Practices on the Performance of Small and Medium Enterprises in South Africa. Journal of Economics and Behavioral Studies, 9(5), 209-218.
Gangloff, K. A., Connelly, B. L., & Shook, C. L. (2016). Of scapegoats and signals: Investor reactions to CEO succession in the aftermath of wrongdoing. Journal of Management, 42(6), 1614–1634.
Hennink, M., Hutter, I., & Bailey, A. (2020). Qualitative research methods. SAGE Publications Limited.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic Management: Competitiveness and Globalization (Concepts and Cases) (8th ed.). South-Western, a part of Cengage Learning.
Inklaar, R., & Papakonstantinou, M. (2020). Vintage effects in human capital: Europe versus the United States. Review of Income and Wealth, 66(1), 1-25.
Iqbal, N., Bhatti, W. A., & Zaheer, A. (2017). Corporate Ethical Values, Group Creativity, Job Commitment and Performance: The Effect of Work Response on Work Context. Management & Marketing, 8(1). 42-59
Kasolowsky, B., & Gadodia, S. (2017). What Does the Future Hold for Foreign Pharmaceutical Companies in India: Investment Arbitration for Pharmaceutical Companies in the Indian Context. Indian Journal of Arbitration and Legals. 6(1), 59-67.
Khan, M. A., Chaudhry, H. A. I. S., & Khan, M. F. A. (2019). Impact of organizations mission an encouraging factor for overall performance. African Journal of Business Management, 4(13), 2652-2658.
Kliuchnikov, A. (2018). Leaders’ authenticity influence on followers’ organizational commitment. Emerging Leadership Journeys, 4(1), 70-90.
KPSDS (2020). Kenya Pharmaceutical Sector Development Strategy. Retrieved on 10.11.2021 from www.unido.org
Lasater, K. B., Jarrín, O. F., Aiken, L. H., McHugh, M. D., Sloane, D. M., & Smith, H. L. (2019). A Methodology for Studying Organizational Performance. Medical care, 57(9), 742–749.
Ledley, F. D., McCoy, S. S., & Cleary, E. G. (2020). Profitability of large pharmaceutical companies compared with other large public companies. The Journal of the American Medical Association, 323(9), 834–843.
Maharaj, I., & Sunjka, B. P. (2019). A strategic framework for start-up medical device manufacturers in South Africa. South African Journal of Industrial Engineering, 30(3), 63-76.
Munyao, S. M, Chiroma, Nathan. H. & Ongeti, Walter. J. (2019). Effects of Strategic Direction on the Performance of Africa Inland Church Theological Training Institutions in Kenya. International Journal of Scientific and Research Publications. 10(3), 43–71.
Olaka, M. H., Lewa, P., & Kiriri, P. (2017). Strategic leadership and strategy implementation in commercial banks in Kenya. Journal of Strategic Management, 2(1), 70-91.
Olow, R. M., Abdi, N. B., Malicha, F. A., Mohamed, M. H., Mwangangi, M., Magutu, P. O., & Mutunga, J. W. (2020). Stock management practices and supply chain performance of pharmaceutical companies in Nairobi, Kenya. Noble Academic Publisher.
Oluoch, F. O., K'Aol, G., & Koshal, J. (2021). Influence of Strategic Direction on Financial Sustainability of NGOs in Kenya. Kabarak Journal of Research & Innovation, 11(1), 21-33.
Pharmacy and Poisons Board (2018). Retrieved on 11.11.2021 from https://pharmacyboardkenya.org/downloads.
Riley, S. M., Michael, S. C., & Mahoney, J. T. (2017). Human capital matters: Market valuation of firm investments in training and the role of complementary assets. Strategic Management Journal, 38(9), 1895-1914.
Ryan, G. (2018). Introduction to positivism, interpretivism and critical theory. Nurse researcher, 25(4), 41–49.
Saragih, S. (2018). The effects of job autonomy on work outcomes: Self-efficacy as an intervening variable. International Research Journal of Business Studies, 92(4), 65–68.
Schwartz, M. S. (2016). How to minimize corruption in business organizations: Developing and sustaining an ethical corporate culture. In Crime and Corruption in Organizations (pp. 293-316). London: Routledge.
Siedlecki, S. L. (2020). Understanding descriptive research designs and methods. Clinical Nurse Specialist, 34(1), 8-12.
Sihag, V., & Rijsdijk, S. A. (2019). Organizational controls and performance outcomes: A meta‐analytic assessment and extension. Journal of Management Studies, 56(1), 91-133.
Skarbek, D. (2020). Qualitative research methods for institutional analysis. Journal of Institutional Economics, 16(4), 409–422.
Sözbilir, F. (2018). The interaction between social capital, creativity, and efficiency in organizations. Thinking Skills and Creativity, 27(3), 92–100.
Wakhisi, W. (2021). Effect of strategic leadership on organization performance of state-owned sugar manufacturing firms in Western Kenya. International Journal for Innovation Education and Research, 9(9), 1-55
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Evelyn Njoki Ngaruiya, George K’Aol, Kefah Njenga
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
This work is licensed under a 