The Effects of an Ambidextrous Leadership on the Relationship between Governance Mechanism and Social Sustainability

Abstract

The objective of this study was to investigate the effects of transactional and relational governance on firm social sustainability when transactional and transformational leaders exhibit a strong influence on governance mechanism. This study offers insight on how ambidextrous leaders alternate between a relational contract and a relational governance mechanism and tune their approach to meeting the demands of social sustainability. Data was collected using structured survey questionnaires from manufacturing industries in Pakistan. A structural equation model was used for data analysis. The research findings indicate that ambidextrous leadership and contractual governance mechanism at time servers the needs of manufacturing firms and also serve as a tool to enhance the social sustainability. The results reveal that it is important for the manufacturing firms to take the transactional leadership into account during the design and implement of contract governance mechanism for the improvement of the social sustainability. The research into ambidextrous leadership is, although limited, a promising field of interest. The study also discusses limitation and managerial implications.