1

The impact of Spiritual Leadership on

employees behavior toward Corporate
Social responsibility
Urooj Khursheed, Abida Hussain, Kishwar Noreen, Hira Mustafa

Abstract
This study investigates and compares the impact of spiritual leadership on employees behavior
towards Corporate Social responsibility in retail service industries to deter mine the possibility of
generalizing and applying spiritual leadership to other industries. This study used multi-sample
analysis of structural equation modeling. The results show that values, attitudes, and behaviors of
leaders have positive effects on meaning/calling and membership of the employees, and further
facilitate employees to perform excellent corporate social responsibility, including the altruism
of assisting colleagues and the responsible conscientiousness toward organization. The effect of
altruism toward colleagues is especially stronger. Finally, the effect of leaders' values, attitudes,
and behaviors on the spiritual survival of employees is stronger in retail service industry.

Key Words: Spiritual Leadership, Spiritual Well-Being, Spirituality at workplace, Corporate

Social Responsibility, Retail Service Industry
 2

Chapter 1
Introduction
1.1 Background of the study:
The rapid development of the spiritual leadership research program shows that the matter
"has the potential to emerge as a powerful and valorous paradigm of innovative management
for the 21st century" (Crossman 2010: 604). Spirituality at work, according to some
scholars, is an alternative to religion, especially in the United States, where there is a
relatively strong discussion on the subject (Kent Rhodes 2006). For other researchers,
however, it is a means of harmonization. For example, for Hicks (2003: 115), spirituality in
the workplace consists of accepting and engaging in a particular way of thinking about
oneself, the meaning of work, the workplace, and finding stability.

Corporate Social Responsibility (CSR) is not a new idea (Smith, 2003) and the evolution of
the CSR construct, beginning in the 1950s, which marks the modern era of CSR (Carroll,
1999). CRS has been an alive and significant issue in recent years and socially responsible
organizations follow very ethical methods in their performance and satisfying their clients
expectations and needs. These organizations especially, pay attention to social responsibility
and the environment in current time and future and promote this viewpoint. The concept of
corporate social responsibility (CSR) has gained the attention both in academics and
business practices (Maignan and Ferrell, 2004; Sen and Bhattacharya, 2001), because CSR
investments lead to higher levels of credibility (Lin et al., 2011), improved image or
reputation (Tewari, 2011), higher employee retention (Kim and Park, 2011) and build
customer relationships (Peloza and Shang, 2011; Matute et al., 2010; Brown and Dacin,
1997). This increasing attention of CSR in literature has resulted in a proliferation of
definitions for this concept (Carroll, 1979; Panwar et al., 2006; van Marrewijk, 2003). CSR
refers to

Companies activities demonstrating the inclusion of social and environmental concerns in

business operations, and in interaction with stakeholders, also according to the ambition
level of corporate sustainability (van and Marrewijk 2003 p. 1)

Leaders play a vital role in organizations. According to the definition of Fry et al. (2005),
spiritual leadership refers to the establishment of a learning organization through the use of
employees' inner motivation for the purpose of achieving organizational transformation.
Furthermore, Fry (2005) referred to workplace spirituality as recognition that employees
have an inner life that nourishes and is nourished by meaningful work that takes place in the
context of community. Leadership studies have paid attention to the concept of spirituality
in the study of leadership. The initial direction has been to determine the spiritual
 3

characteristics of effective leaders. For example, Fairholm (1997) pointed out that effective
leaders have higher intrinsic beliefs and intellectual abilities. They have ability of helping
people escape feelings of subordination. They have personal meanings, personal values and
life purpose.

The key qualities of spiritual leaders are understanding of self and others; strong intuition;
operating based on love; having an interrelated view to tasks, staff and processes; and
clear vision about the future (Altman, 2010). Spiritual leadership includes attitudes, values
and behaviors that are needed to inherently motivate ones self and others, so they have a
sense of spiritual well-being through calling and membership (Fry, 2003; Fry and Cohen,
2009; Fernando et al., 2009)�

Vision:
Vision using three main functions includes clarification of changing direction, simplifying
the decisions and coordinating the actions of different people serves in motivating change
(Fry, 2003)�

Altruistic love:
Fry (2003) defines altruistic love as a sense of wholeness, harmony, and well-being
produced through care, concern, and appreciation for both self and others (p. 712). This
definition is based on the values such as honesty, kindness, lack of envy, mercy, patience,
acceptance, appreciation for both self and others and the ability to control oneself (Fry,
2003; Reave, 2005). Altruistic love has some personal outcomes, such as joy, peace and
serenity, and organizational outcomes, such as high organization commitment, reducing the
stress levels and productivity (Fry, 2003)�

Hope and faith:

Hope is defined as a wish with expectation of fulfillment. Faith increases the possibility that
hope comes true. Faith is based on attitudes, values and behaviors that show what is
expected will occur. Hope/faith gives people an image of where they are going and how to
get there, and gives a belief to the organizations that their vision will be achieved (Fry, 2003;
Fry and Melanre, 2008).�

The spiritual well-being can be defined as a feeling of communicating with the others,
having meaning and goal in life and having belief and relation with an exalted power
(Hawks, et al. 1995). Ellison (1983) states that spiritual well-being includes a psycho-social
and also a religious element. Religious well-being which is a religious element indicates a
relation with a superior power i.e. God. Existential well-being is a psychosocial element and
indicates feeling of a person of who he/she is, what he/she does and why and where he/she
belongs to.

There are various researchers in supporting this theory that spiritual well-being can reinforce
psychological function and adaptation. The significant correlations have been reported
 4

between of spiritual well-being and variables such as religious deeds (Bassett, et al. 1991),
depression, self-esteem and internal religious orientation (Genia,. 2001) emotional well-
being and life satisfaction (Kim, 2000) emotional instability and mood disorders (Leach, &
Lark, 2004) and stress (Woodbury, 1992). According to the importance of Spiritual Well-
Being factor and its role in promoting the actions to serve humanity and helping others build
a strong relationship between Spiritual Leadership and employee behavior toward Corporate
Social Responsibility.

Calling refers to an� experience of how a person can make a difference by serving
others. It leads to a purpose and meaning in life (Fry et al., 2011). People not only look for
competence in their work, but also a feeling about social value or meaning of the work
(Pfeffer, 2003).

Membership:
It includes the social and cultural structures that we are immersed in. Membership is a
feeling of being understood derives from relationships and communications through social
interaction with others (Fry et al., 2011).�

1.2 Gap Analysis:

In the article of the impact of spiritual leadership and organizational citizenship behavior

Authors: Chin-yi chen, Chin-fang Yang

Fry et al suggested that future research consider other outcome variables, such as whether
spiritual leadership influences employee behaviors of executing corporate social
responsibilities.

However, Louis w. fry and malanie p. cohen in their article that is Spiritual leadership
as a paradigm for organizational transformation and recovery from extended work hours
cultures took spiritual well-being as a mediator and study the relationship between
spiritual well-being and organizational commitment and productivity but here we are
going to study the relationship between spiritual well-being and corporate social
responsibility, so that we can see the effect of spiritual leadership on employee behavior
toward corporate social responsibility.

1.3 Problem Statement:

Current studies focused on the relationship between Spiritual Leadership and employee
productivity and performance related variables. There is no study exist that study the
relationship between Spiritual Leadership and Corporate Social Responsibility. It is
necessary to study that how Spiritual Leadership leads the employee behavior toward
Corporate Social Responsibility as everyone knows that Corporate Social Responsibility
is an important factor that increases the value of any organization.
 5

Relationship between Spiritual Leadership and Corporate Social Responsibility exist but
not studied yet.

1.4 Research Questions:

1. Does Spiritual Leadership impact the employee behavior toward Corporate Social
Responsibility?
2. Does Spiritual Well-Being affect the relationship between Spiritual Leadership and
Corporate Social Responsibility? If any exists.
3. Does any relationship exist between Spiritual Well-Being and Corporate Social
Responsibility?
4. Do Spiritual Leadership and Spiritual Well-being both combined have a positive impact
on the employee behavior toward Corporate Social Responsibility?

1.5 Research Objectives:

1. To study the impact of Spiritual Leadership on employee behavior toward Corporate
Social Responsibility.
2. To identify the effect of Spiritual Well-Being on the relationship between Spiritual
Leadership.
3. To identify the relationship between Spiritual Well-Being and Corporate Social
Responsibility
4. To study how Spiritual Leadership builds Spiritual Well-being in employee that in turn
leads to Corporate Social Behavior

1.6 Significance of the study:

In this century, there is a great force for social and organizational change, and this needs
a more holistic leadership that integrates the four basic essence of human existence the
body, heart, mind and spirit (Moxley, 2000). Spirit is originated from the Latin word
Spiritus which means breath (Karadag, 2009). A persons spirit is the vital principle or
animating force traditionally believed to be the intangible, life-affirming force in self and
all human beings (Anderson, 2000; Fry, 2003). Some researchers believe that workplace
spirituality is an important subject for study (Shellenbarger, 2000; Madison and
Kellermanns, 2013; Geh, 2014). Workplace spirituality acknowledges that employees
have an inner life that nourishes and is nourished by meaningful work in the context of
community (Ashmos and Duchon, 2000; Poole, 2009; Robbins and Judge, 2012). Also,
the relationship between spirituality and workplace leadership has been studied in some
papers (Dent et al., 2005), and several authors have linked the spirituality to
organizational leadership (Strack et al., 2002; Fairholm, 1998; Fry, (2003).
 6

The theory of spiritual leadership (Fry, 2003; Fry and Whittington, 2005) is formed in an
intrinsic motivation model that integrates hope/faith, vision and altruistic love, theories of
�spiritual well-being and workplace spirituality. As Fry and Cohen (2009, p. 269)
explained, The purpose of spiritual leadership is to tap into the fundamental needs of
both leader and follower for spiritual well-being through calling and membership, to
create vision and value congruence across the individual, empowered team, and
organization levels and, ultimately, to foster higher levels of organizational commitment
and productivity.

The field of corporate social responsibility has grown exponentially in the last decade.
More than half of the Fortune 1000 companies issue corporate social responsibility (CSR)
reports. A larger number of companies than at any time previous are engaged in a serious
effort to define and integrate CSR into all aspects of their businesses. An increasing
number of shareholders, analysts, regulators, activists, labor unions, employees,
community organizations, and news media are asking companies to be accountable for an
ever-changing set of CSR issues. There is increasing demand for transparency and
growing expectations that corporations measure, report, and continuously improve their
social, environmental, and economic performance. The definition of corporate social
responsibility is not abstruse. According to Business for Social Responsibility (BSR),
corporate social responsibility is defined as achieving commercial success in ways that
honor ethical values and respect people, communities, and the natural environment.
McWilliams and Siegel (2001:117) describe CSR as actions that appear to further some
social good, beyond the interest of the firm and that which is required by law.�
 7

1.7 Proposed Theoretical Framework:

Spiritual Spiritual well- Corporate social

leadership being responsibility
Calling

PARTICULARS DESCRIPTION

INDEPENDENT VARIABLE Spiritual Leadership

DEPENDENT VARIABLE Corporate Social Responsibility

MEDIATOR Spiritual Well Being
 8

Chapter 2
Literature Review
2.1 Literature Review:
2.1.1 Spiritual Leadership:

Fry (2003) defines spiritual leadership (2003: 694) as "understanding the values, the attitudes
and behaviors necessary to motivate oneself and Others so that they have a sense of spiritual
survival through appeal and adherence."Fry proposes a model based on intrinsic, religious
and ethical motivation values, building around three concepts: hope / faith, vision / mission
and altruistic love. Later, Fry et al. (2005) reflected on its definition, considering that
spiritual rights Leadership aims to "create a vision and congruence of value among
individuals, authorized teams and levels of organization and, ultimately, promote higher
levels of both organizational commitment and productivity "(Fry et al., 2005: 183). Sanders
et al. (2003: 40-41) define spiritual leadership in so far as organizations encouraging and
engaging a sense of meaning and interconnection between their employees in peer and
hierarchical arrangements. Moore and Casper (2006:110) see it as an internal value, a belief,
an attitude or an emotion, by attaching a strong Humanistic dimension. Frye et al. (2007:
247) defines it as a relational process aimed at to the construction, coordination and
transformation of self, others and organization. Hackett and Wang (2012: 880) describe
spiritual leadership through attributes Such as honesty, integrity, caring, compassion,
humility, sensitivity, strength, temperance, Love and faith. Nicolae et al. (2013) undertake a
review of the literature Spiritual leadership and define it as this line of leadership based on
moral, ethical, and religious values, embodied in the organizational culture and aimed at
accomplishing both social and commercial, such as improved working conditions, Decision-
making processes and motivation.

2.1.2 Spiritual Well-Being:

The terms spirituality and spiritual well-being are often used interchangeably in many
studies (Ellison, 1983, Paloutzian & Ellison, 2009). Well-being is defined by Merriam
Webster Online as "the state of being happy, healthy or prosperous". Spiritual well-being is
defined as people's perception of the quality of their spiritual life (Paloutzian & Ellision,
1991), while Hawks, Hull, Thalman and Richins (1995) defined spiritual well-being as "
Sense of relationship or connectivity to others, a disposition for meaning and purpose in life,
promotion of well-being (by buffering stress), and a belief and relationship with a higher
power. Spiritual well-being has been conceptualized as a satisfaction for the domain of
 9

spiritual life (Lee, Sirgy, Efraty and Siegel, 2003). In the context of this study, spiritual well-
being is defined as "Perceived state of the degree to which one feels a sense and direction"
(Fry, Vitucci & Cedillo, 2005). Spirituality or spiritual well-being of the individual has been
studied in the context of other dimensions Of the life of the individual, emotionally,
psychologically and physically; As Emmons (1999) found that spiritual well-being is
positively associated with faster disease recovery and overall life satisfaction. The spiritual
well-being of employees is also one of the determinants of leadership effectiveness and
antecedent of job satisfaction (Fry et al., 2005, Malone & Fry, 2003).

Calling: Calling refers to the experience of ascendancy or how one makes a difference
through service to others and in doing so finds meaning and purpose in life. Many people not
only look for competence and mastery to realize their full potential through their work, but
also a sense that work has meaning or social value. The term call has long been used as one
of the determining characteristics of a professional. Professionals generally possess expertise
in a specialized body of knowledge, ethics centered on disinterested service to clients /
clients, the obligation to maintain quality standards within the profession, a commitment or a
vocation in their profession A dedication to their work and a strong commitment to their
careers. They believe that their chosen profession is valuable, indeed essential to society, and
they are proud to be part of it. The challenge for the leaders of the organization, which is
addressed in the spiritual leadership model, is how to develop this same sense of appeal in its
workers through the involvement of tasks and the identification of goals.

Membership: Membership includes a sense of belonging and community; The cultural and
social structures that we are immersed in and by which we seek, what William James, the
founder of modern psychology called the most fundamental need of man - better understood
and appreciated. Having the feeling of being understood and appreciated is largely a matter
of relationships and a connection through social interaction and therefore membership. At
work, people appreciate their affiliations and being connected to feel part of a wider
community. As we dedicate ourselves to social groups, members broaden the sense of our
personality by embracing in a network of social relationships that goes as far as the group has
an influence and power, and backward and forward in the relationships of its history . In the
end, we grow more, live longer, more meaningful as we identify with the broader social life
that surrounds us.

2.1.3 Corporate Social Responsibility:

Although corporate social responsibility has been widely discussed over the last forty years
of the twentieth century, the idea that companies have societal obligations was evident at
least as early as the nineteenth century. The concept of corporate social responsibility is
constantly adapting to the needs of global businesses. Given recent developments in the
ideologies of corporate social responsibility and sustainability, as well as the methodologies
 10

and criteria used to meet the standards of a "responsible" society. However, a specific
connotation of corporate social responsibility (CSR) has not been unified, although CSR
norms and standards are now developing. There is a growing interest in corporate social
responsibility among academics and practitioners. Companies are not only supposed to be
accountable to their shareholders, but also to society in general. From 1972 to 2001,
approximately ninety-five empirical evidence was provided by Margolis and Walsh (2001)
and Orlitzky et al. (2003) on CSR and financial performance. In these studies, CSR was an
independent variable; While financial performance was dependent variable. Fifty-three
percent showed a positive relationship between them, twenty-four percent showed no
relationship between them, nineteen percent showed a mixed relationship with them, and five
percent showed a negative relationship between them. Dam (2008) also provided empirical
evidence about CSR and financial performance, but there was a unique and common
character. The uniqueness of the work was the distribution of empirical results in tabular
form on the basis of asset return (ROA), return on equity (ROE), return on sales (ROS),
Tobin Q and Returns. The empirical results from 1972 to 2001 were tabulated.
Since the semantic part of Bowen (1953) on social responsibility inaugurated the modern
period of thought (Carroll, 1999) on corporate social responsibility (CSR), a broad debate on
the nature of the subject has been developed in the academic literature Management
(Anderson and Frankle, 1980); Academics and practitioners seem to have renewed their
interest in the subject (Angelidis and Ibrahim, 1993), propagating a plethora of theories,
perspectives and terminology, which cause confusion when one tries to understand deeply
the notion. In a bibliometric analysis of a 30-year research period covering CSR from 1972 to
2002, developed and applied a specific methodology based on Content Analysis (CA) to
clarify the direction of CSR epistemological evolution. Even when their results enabled them
to reject that the epistemological evolutionary meaning of CSR had a normativist orientation,
they were not able to distinguish the two possible perspectives, progressive or varied,
prevailing over the other, calling to reproduce their Research within A Distance Future to
provide evidence on this issue (Carroll, 1999).
A modern understanding of CSR has evolved since the 1950s, formalized in the 1960s and
proliferated in the 1970s (Carroll, 1999). On the basis of various literature studies CSR
(Carroll, 1999, Engardio et al., 2007, Hart, 1995, Holme and Watts, 2000, McWilliams and
Siegel, 2001, Nicolau, 2008, Tsoutsoura, 2004) Be broadly defined as activities that make
companies good citizens who contribute to the welfare of society beyond their own personal
interests. In recent decades, many aspects of CSR have been researched in the academic and
business literature, and according to the framework of Schwartz and Carroll (2003),
economic, legal and ethical domains can be embodied as the most common components of
CSR.
 11

2.2 Statements of Hypothesis:

H1- There is a significant positive relationship between spiritual leadership and employee
behavior toward corporate social responsibility.
H2- There is a significant positive relationship between spiritual leadership and spiritual
well-being.
H3- There is a significant positive relationship between spiritual well-being and employee
behavior toward corporate social responsibility.
H4- spiritual well-being mediates the relationship between spiritual leadership and employee
behavior toward corporate social responsibility.
 12

Chapter 3
Research Methodology

3.1 Research Design:

This study is on casual research design in order to study the impact of Spiritual Leadership on
the employees behavior toward Corporate Social Responsibility. That either Spiritual Leadership
style leads the employees behavior toward the Corporate Social Responsibility or not.

3.2 Population:
City of Islamabad is selected as a whole population for this study in order to check the
relationship between Spiritual Leadership and employees behavior toward Corporate Social
responsibility.

3.3 Sampling Techniques and Sample Size:

Through convenient sampling technique, the sample for this study were recruited from retailing
service industries. A total of 8 major companies were participated in the survey and the number
of valid survey was 200.

3.4 Data Collection Method:

Questionnaires were distributed among the selected sample size for the collection of data.

3.5 Measures:
The questionnaire included four parts, including Spiritual Leadership, Spiritual Well-Being and
Corporate Social Responsibility and basic demographic information. Spiritual leadership
includes vision, hope / faith, altruistic love, meaning / appeal and adherence. The questionnaire's
vision section was used to measure whether an organization creates a vision that calls for
feelings of meaning in employees (5 items). Hope / Faith measured employees' assertions for the
expected tasks and the belief that the organization's vision / purpose / mission could be achieved
(5 items). Altruistic love measured the altruistic love of organizations and leaders towards
employees (7 items). The meaning / appeal measured employees' feelings about work (4 items).
Membership led me to understand and apprehend employees (5 items). This study adopted the
Spiritual Leadership Scale created by Fry et al. (2005), totaling 26 items.
 13

Spiritual Well-being includes calling dimension and the scale adopted by this study is created y
Gomez and Fisher (2001). While for Corporate Social responsibility, a 36-item scale is adopted
by this study that is created by Kambiz Heidarzadeh Hanzaee and Amanolla Rahpeima.
 14

References
Ashmos, B.J., and D. Duchon. 2000. Spirituality at Work: A Conceptualization and Measure.
Journal of Management Inquiry 9(2): 134145.

Beazley, H. 1998. Meaning and Measurement of Spirituality in Organizational Settings:

Development of a Spirituality Assessment Scale. Doctoral dissertation, George Washington University.
Dissertation Abstracts International, 9820619.

Abbot W.Monsen R (1979) on the measurement of corporate social responsibility: self reported
disclosure as a measure of corporate social involvement. Acad manage j.

The Impact of Spiritual Leadership on Organizational Citizenship Behavior: A Multi-Sample Analysis

Chin-Yi Chen * Chin-Fang Yan

The relationship between spiritual leadership, Spiritual well-being and job satisfaction in the
Malaysian shipping industry: a pilot study Juhaizi mohd yusof, 2mahadzirah mohamad

The Influence of Spiritual Leadership on Spiritual Well-Being and Job Satisfaction: A Conceptual
Framework
JUHAIZI MOHD YUSOF
School of Maritime Business & Management
Universiti Malaysia Terengganu, 21030 Kuala Terengganu, Malaysia.
Email: juhaizi@gmail.com
MAHADZIRAH MOHAMAD
Faculty of Business Management & Accountancy,
Universiti Sultan Zainal Abidin, 21030 Kuala Terengganu, Malaysia.
Email: mahadzirahmd@unisza.edu.my