Making Our Firm More Sustainable: The Role of CEO Vision Communication of Sustainability on Sustainability Performance

Abstract

Despite awareness of the importance and value of sustainability for organizations, how sustainable development can be achieved remains poorly understood. This article aims to address this issue by examining the role of vision communication in promoting organizational sustainability. Drawing on the Upper Echelon Theory (UET) and existing literature on sustainability, we propose that sustainable vision communication can enhance sustainability performance by promoting and facilitating organizational change. Furthermore, we argue that CEO’s dialectical leadership behavior can supplement the efforts of leaders in achieving sustainable development, thereby strengthening the aforementioned relationship. Through a field study of 130 CEOs and their 562 top management team members, we tested our model and found evidence to support the hypotheses. This study thus advances our understanding of the processes underlying organizational sustainability and highlights the crucial role of leadership in this regard. We also discuss the theoretical implications of our findings and outline potential avenues for future research.

Introduction

Being environmentally and socially sustainable could not only beneficial for natural outgrowth but also facilitate organizations’ survival and development. Empirical studies have demonstrated that sustainable operations can increase the profitability of firms (Giannetti et al., 2013; Zhu & Sarkis, 2004) and reconcile the often-competing economic, social, and environmental goals of organizations (Hengst et al., 2020; Kolk & Pinkse, 2005; Soderstrom & Weber, 2020; Wagner, 2015). As a result, scholars from diverse disciplines, including operations management (Sarkis et al., 2010), supply chain management (Chowdhury et al., 2023; Marshall et al., 2015), and marketing management (Chakrabarti et al., 2020; Wijethilake & Upadhaya, 2020), have devoted significant attention to organizational sustainability.

Although the value of sustainability is widely acknowledged, the practical strategies for achieving it are still not well comprehended, particularly from the perspective of decision-makers (i.e., CEOs) and those in positions of authority (Gelhard & von Delft, 2016; Jia et al., 2021). This is a strong omission, because firstly, CEOs typically hold considerable power and influence within their organizations, and they bear the responsibility of establishing the company’s tone and direction. As a result, their behaviors and decisions can have a substantial effect on the sustainability initiatives of the organization (Hambrick, 2007; Hambrick & Mason, 1984). Additionally, CEOs possess both the resources and authority to enact significant changes within the company, including the adoption of sustainable practices (Byrne et al., 2021; Gover & Duxbury, 2018; Sajko et al., 2021; Zhu et al., 2020). Examining their actions toward sustainability will help understand how they catalyze changes in mindsets and behaviors across the company.

In the current study, we aim to answer the following question: How can CEOs make their firm sustainable? It is theoretically argued that achieving firm sustainable development and managing firm sustainable performance should follow a sustainability vision (Kantabutra & Ketprapakorn, 2020). Therefore, we focus on vision communication of sustainability and investigate how this particular CEO leadership behavior affects organizational sustainability performance. Drawing on the Upper Echelon Theory (UET) (Hambrick & Mason, 1984), we argue that vision communication of sustainability can foster a shared awareness of the significance of sustainability and the necessity of integrating sustainable practices into their mission, values, and operations (Rafferty et al., 2013; Stam et al., 2014; Venus, Stam, & van Knippenberg, 2019). This, in turn, can facilitate positive organizational change and contribute to improved sustainability performance.

Beyond that, UET further suggests that effective leadership behavior plays a crucial role in vision communication as it has the potential to inspire, motivate, and guide team members toward a common objective (Nor-Aishah et al., 2020; Preller et al., 2020). Thus, we further argue that CEOs’ dialectical leadership behavior would accelerate the positive effect of vision communication on sustainability performance. Dialectical leadership, a strategic leadership behavior deeply embedded in Chinese culture, has been observed in various cultural business contexts (H. Wang et al., 2023). By prioritizing the management of change, contradiction, and connection, this leadership style enables top leaders to effectively adapt to environmental changes and synergistically integrate different organizational functions, contributing to the success of sustainability implementation through vision communication and organizational change.

This study makes several contributions. First, by narrowing the focus of vision communication to sustainable development, we fill up the vacancy of how vision communication generates firm performance in terms of sustainability (Ikram et al., 2020; Kantabutra, 2020; Stam et al., 2010a, 2010b; Venus et al., 2013). We provide a different perspective for CEOs to achieve organizational sustainability. Second, this study provides a refined conceptual framework by focusing on the mechanism of enacted organizational change for understanding the relationship between vision communication of sustainability and sustainability performance. Hence, we contribute by understanding the “black box” between CEO characteristics and firm performance (Carpenter et al., 2004; Hambrick & Mason, 1984). Finally, by revealing the boundary condition of dialectical leadership behavior in enabling and strengthening the implementation of sustainability vision communication, we offer some perspective on the ongoing discussion in the upper-echelon theory field regarding how CEOs can overcome potential obstacles that may exist in implementing their visions, highlight the salient role of leadership in addressing these concerns (Giangreco & Peccei, 2005; Stouten et al., 2018).

Theory and Hypotheses

Vision Communication of Sustainability

Vision communication is a powerful tool for conveying a compelling and forward-looking image to members of an organization. By appealing to the values and expectations that are most desirable to them, leaders can effectively transfer an abstract vision into concrete action. This process has been studied extensively by researchers such as Van Knippenberg and Stam (2014) and Venus, Johnson et al. (2019), who have shown that effective vision communication is crucial for inspiring and motivating organizational members toward achieving shared goals. In fact, the effectiveness of vision communication is widely regarded as a key indicator of outstanding leadership behavior and performance. Scholars, such as House and Shamir (1993) and Stam et al. (2014), have proposed that the ability to successfully communicate a powerful and inspiring vision is a hallmark of exceptional leadership. As a result, the ability to craft and communicate a compelling vision has become an important factor in evaluating leadership effectiveness in many organizations.

Scholars have joined the trend to unravel the mystery of how executives could perform well with effective vision communication (Stam et al., 2014; Venus, Stam, & van Knippenberg, 2019; Venus, Johnson et al., 2019), among which they differentiate vision communication (expression) from vision content (Awamleh & Gardner, 1999; Den Hartog & Verburg, 1997; Stam et al., 2014). Vision communication (expression) emphasizes “the expression of a vision with the aim of convincing followers that the vision is valid and worthwhile,” whereas vision content refers to “the information that is embedded in the vision itself: the image of the collective future” (Stam et al., 2014, p. 5). Recently, the content of vision communication has gradually become prosperous (Stam et al., 2010a, 2010b; Venus, Stam, & van Knippenberg, 2019; Vongariyajit & Kantabutra, 2021). Previous findings have shown that leaders could effectively boost followers’ motivation by framing and communicating the specific content of the vision (Berson et al., 2015). This is because the specific content of vision communication reflects how executives evaluate the current environment and react in the near future (Venus, Stam, & van Knippenberg, 2019). Besides, communicating a vision with a specific focus enables CEOs to proactively convey their values and priorities to top management team members and employees, which is a crucial step in turning the vision into a reality within the organization (Kantabutra & Ketprapakorn, 2020).

Based on the previous discussion, the focus of our current study is on a particular aspect of communication, which is “vision communication of sustainability.” This type of vision communication emphasizes the sustainability features of an organization’s direction, future opportunities, and strategic goals. Essentially, it indicates the extent to which CEOs demonstrate a genuine concern for sustainability in their strategic decision-making, which can have significant implications for the organization’s overall sustainability performance.

Vision Communication of Sustainability and Sustainability Performance

Firm sustainability refers to management notions that an organization embraces to simultaneously deliver social, environmental, and economic outputs (Kantabutra, 2020). Achieving a balance between environmental and economic performance is crucial for firms to attain superior profitability, adapt to a dynamic environment (particularly with emerging environmental regulations), and address the significant conflict between economic growth and environmental concerns (Shahab et al., 2020; Zhang et al., 2019). However, a firm’s sustainability strategy should follow a sustainability vision (Baumgartner, 2014). In essence, sustainability requires the complete integration of social and environmental dimensions into organizational vision, culture, and operations, indicating that vision of sustainability would compass an organization’s prospect and function as essential ingredients to sustainability (Paraschiv et al., 2012). Therefore, it may come as no surprise that leader vision communication of sustainability has been identified as a critical factor in motivating followers toward sustainability (Venus, Stam, & van Knippenberg, 2019; Yukl, 2010).

UET predicts that firm performance results from CEOs’ construal of reality (G. Wang et al., 2016). Due to the axiomatical concept of hierarchy, CEOs own more discretion than subordinate managers to have the flexibility for adjusting; and their behaviors can affect entire firms, not just subunits (Crossland et al., 2014; Fanelli et al., 2009; Gupta et al., 2018; Hambrick & Quigley, 2014). Like past studies, we argue that executives’ construal could be mirrored by various orientations and decision choices involving vision modifications (Carpenter et al., 2004). Vision communication of sustainability promotes convergence of collective sustainability among members’ heterogenous thoughts and cognitive modes regarding the overall strategic direction of sustainability (Mihalache et al., 2012). In this process, vision communication of sustainability could generate firm process improvements and followers’ behaviors by providing followers with perception of motivating sustainability (Kearney et al., 2019). Besides, communication processes on sustainability would lubricate the implementation of vision on sustainability since vision communication can motivate followers’ acceptance of firm sustainability and change-oriented attitudes (Van Knippenberg & Stam, 2014; Venus, Stam, & van Knippenberg, 2019). Therefore, CEOs’ vision communication of sustainability would be blended with the vision to redirect organizational members’ cognition and behaviors to improve sustainability performance. Thus, we propose that:

• Hypothesis 1: CEO vision communication of sustainability is positively related to firm sustainability performance.

The Mediating Role of Organizational Change

Visions communication emphasizes the status quo’s deficiency and provides a discrepant and idealized future, eliciting a need for change (e.g., Conger & Kanungo, 1998). The process of implementing vision entails change (Venus, Stam, & van Knippenberg, 2019), in which organizations change internal systems and accommodate organizational functioning in response to environmental changes (Chemers, 2001). Thus, we stand from the perspective of organizational change and consider it an underlying mechanism between CEO vision communication of sustainability and sustainability performance.

Following previous research, we define organizational change as the phenomenon of bracketing changeable elements together (i.e., practices, processes, structures, etc.) (Jeong & Shin, 2019). Tsoukas (2005) believed that “organizational change is the process of constructing and sharing new meanings and interpretations of organizational activities.” (p. 98). As stated before, organizational visions contain organizational core values and ideal future goals (Kirkpatrick & Locke, 1996), implicitly but effectively guiding and modifying overall aspects of organizations through reshaping organizational members’ mindsets. Thus, we believe that organizational change is the explicit manifestation of a specific vision of CEOs and phasic consequences after vision communication.

According to UET, CEOs as the decision-makers of organizations could simultaneously make changes by establishing adaptive structures and rules and influencing managerial practices to realize strategic goals (Hambrick, 2007). Organizational changes include changes in strategic decision-making, structure, and organizational members’ behavioral changes (Bordia et al., 2003; Kantabutra, 2009). First, CEOs need to release a series of strategic directions and regulations to accelerate the vision implementation process (Larwood et al., 1995; Neugebauer et al., 2016). The vision of sustainability would mirror production, marketing, and operation processes, guided by sustainability transition on strategic decision-making (Jeong & Shin, 2019), including endorsing new production techniques, escalating service, and eliminating outdated skills. Second, organizational structural adjustments are typically another institutional modification promulgated by superior managers (Hinings et al., 1996), such as changing the reporting structures and functions of different work units and adopting a firm sustainability strategy. Finally, organizational members’ behavioral changes due to vision communication are also notable and imperative in the organizational change process (Kantabutra, 2009). As Cole et al. (2006, p. 1) noted, “Organizational change begins with the individual, as resistance or support are ultimately individual decisions and behaviors.” Organizational members are not passive receivers but active participants in organizational change (Venus, Stam, & van Knippenberg, 2019). Through vision communication, organizational members will be identified with the sustainable vision proactively, display favorable attitudes, and invest effort to push organizational change (Armenakis et al., 1993). Hence, we believe that vision communication of sustainability will be positively related to organizational change.

Past studies have identified the positive effects of organizational change on organizational performance mainly because of adjusting organizational structures, optimizing production processes, improving the quality of products or services (Jeong & Shin, 2019). Generally, the organizational change would bring magnitude influence to firm performance. For instance, Brauer and Laamanen (2014) tested the relationship between the downsizing workforce and firm performance via routine changes. Process innovations could bring multiple benefits and foster competitive edges and firm performance (Baer & Frese, 2003).

Scholars on organization studies point out that organizational change is an observable characteristic of flexible strategies, equipping organizations with better adaptation to externally dynamic environments by reallocating resources for optimal benefits (Nadkarni & Herrmann, 2010). Similar studies reveal that superiors utilizing flexible strategies to improve firm-relevant capability and routine efficiency could positively affect sustainability performance (Gelhard & von Delft, 2016). We, therefore, assert that organizational change, encompassing product-related techniques innovations, organizational structure modifications, etc., could foster organizations with better capabilities to improve sustainability performance. Based on the discussion above, we propose that:

• Hypothesis 2: Organizational change mediates the positive relationship between CEO vision communication of sustainability and sustainability performance.

Dialectical Leadership Behavior as the Moderator Between Vision Communication of Sustainability and Organizational Change

UET proposes that CEOs may encounter potential hurdles when implementing their strategic decisions, particularly concerning their sustainability vision. This is where leadership can play a pivotal role in addressing such concerns, as highlighted by various studies (e.g., Giangreco & Peccei, 2005; Stouten et al., 2018). The vision itself aims to challenge the status quo and bring about transformative changes within the organization, which can often face resistance from within (Venus, Stam, & van Knippenberg, 2019). In addition, research on strategic leadership underscores the critical role that upper-level managers’ leading behaviors play in shaping managerial practices and creating an environment that is conducive to organizational changes (Cortes & Herrmann, 2021; Grojean et al., 2004). Building on these insights, we propose that executives’ dialectical leadership behavior, in line with the strategic leadership literature, may significantly moderate the relationship between sustainability vision communication and sustainability performance by facilitating organizational change.

Dialectical leadership behavior is rooted in the Chinese philosophy of dialectical thinking, which includes three basic principles: contradiction, connection, and change (Nisbett et al., 2001; Peng & Nisbett, 1999). The “change” principle states that nothing is static, and everything is constantly changing. Change makes reality a process, which moves continuously and doesn’t stop at particular spots. The “contradiction” principle believes there are contradictions everywhere. Contradictions are “bipolar opposites that are mutually exclusive and interdependent such that the opposites define and potentially negate each other” (Putnam et al., 2016). The “connection” principle is a perspective of seeing and approaching issues holistically and synergistically. This principle believes opposites that appear mutually exclusive and interdependent are linked in a “push-pull” relationship (Putnam et al., 2016). While dialectical leadership behavior is drawn from Chinese philosophy, past research has found that basic principles and dialectical leadership behaviors are not limited to the Chinese context (H. Wang et al., 2023). And it is a comprehensive illustration and detailed interpretation of dialectical thinking in leadership behavior, significantly influencing top managers to cope with the current complex environment characterized as dynamic and complex among worldwide managerial practice.

Specifically, dialectical leadership behavior is a kind of strategic leadership behavior with the timely adaptation of organizational strategy and managerial practices responding to environmental changes, understanding and balancing between management contradictions, and holistic coordination of different departments and resources (Lin et al., 2018). The behaviors associated with dialectical leadership include: (1) timely adjusting organizational strategy to the environment, (2) individualized mentoring of different types of employees, (3) balancing between kindness and strictness when interacting with employees, (4) weighing contradictions concerning the development of the organization, (5) promoting coordination among different departments and tasks, and (6) holistically managing the overall company (H. Wang et al., 2023). Among these behaviors, timely adjusting and individualized mentoring are related to the change principle of dialectic thinking, balancing between kindness and strictness and weighing contradictions manifest the contradiction principle while promoting coordination and holistically managing is related to the connection principle. Research showed that CEO’s dialectical leadership could positively influence firm performance (H. Wang et al., 2023). We believe that dialectical leadership behaviors could amplify the positive relationship between vision communication of sustainability and sustainability performance.

First, from the “change” perspective, vision communication is the premise and start of change. Dialectical leaders are sensitive to environmental changes, facilitating communication in the following vision evolution. Strategic leaders make strategic decisions by scanning, analyzing, and diagnosing (Clapham & Schwenk, 1991). Dialectical leadership behavior involves constantly assessing opportunities and threats brought by sustainable requirements. Through steadily assessing opportunities and threats, dialectical CEOs reshape vision into what could better adapt to current situations and be accepted by organizational members.

Second, from the “contradiction” perspective, responding to social, organizational, and environmental demands creates contradictions for the organization (Hengst et al., 2020; Wagner, 2015). Changes in visions will unavoidably deliver conflicts to multi-parties, even producing maladaptive consequences (Hooijberg & Quinn, 1992). Specifically, the vision of sustainability is a long-term and environmentally friendly strategy and is commonly implemented at the cost of short-term economic benefits. Effective leadership must deal with these demands, choosing different behaviors in different situations to improve organizational performance (Denison et al., 1995). Dialectical leadership behavior can help leaders deal with contradictions effectively, pay attention to both short-term and long-term goals and then promote the development and innovation of the organization. Dialectical CEOs would favor the vision communication process to reduce resistance, such as negotiating with multiple actors to deal with demands, restating the weight of vision on sustainability, and discussing specific modifications to organizational change (Denison et al., 1995). As a result, dialectical leaders would resolve coexisting disagreements and smoothly promote vision communication to sustainability performance through organizational change.

Third, from the “connection” perspective, the transformation from vision communication to organizational change requires coordination among different departments. Dialectical leaders could effectively promote coordination among different departments (H. Wang et al., 2023). When CEOs adjust corporate strategy according to environmental demands, they can push the top management team to consider, connect, and integrate different situations of all procedures, branches, and departments within the organization. CEOs are inclined to reallocate resources, consort businesses of various departments, and adjust both institutional and behavioral aspects to act in concert with the distribution of vision communication of sustainability (Lin et al., 2018), consolidating the results of vision communication. According to what has been discussed above, we put up with the third hypothesis:

• Hypothesis 3: Dialectical leadership behavior moderates the positive relationship between vision communication of sustainability and sustainability performance through organizational change, such that the positive relationship is stronger for higher (vs. lower) dialectical leadership behavior.

Our conceptual model is shown in Figure 1.

Figure 1.

Conceptual model.

Method

Sample and Procedure

We collected data from EMBA students who hold CEO positions at a large university in Northern China. The data collection process included two phases. In phase one, we first sent 164 CEOs an email with a web link to the CEO questionnaire and a cover letter for participation and requested them to provide at least five names and the email addresses of their top management team (TMT) members. If the number of their TMT is smaller than five, they may provide all of their names and email address of them. In total, we received the email addresses of 634 TMTs. In phase two, about 1 week later, we emailed all of the CEOs and TMTs two seperate web links to their survey questionnaires. In the CEO survey, CEOs accessed organizational change and sustainability performance. In the TMT survey, the TMTs rated CEOs’ vision communication of sustainability and dialectical leader behavior. All participants were required to provide their demographic variables.

In total, we received valid responses from 130 CEOs (response rate: 79.27%) and their 562 TMT members (response rate: 88.64%). It should be noted that the final sample size was determined after excluding participants from the TMT group whose respective CEO did not complete the phase 2 survey, as well as those who themselves did not complete the phase 2 survey, resulting in the final sample size. The CEOs in our sample averaged 40.98 years of age (SD = 5.11) and have been CEOs for 8.08 years (SD = 4.72). Besides, 79.23% of these CEOs are male, and 100% have received a bachelor’s or higher degree. Their TMTs averaged 4.98 years in their TMT tenure (SD = 3.88) and have been co-working with their CEO for 4.61 years on average (SD = 3.18). The median firm size, as measured by the number of employees, was 100.

Measures

The original scales are in English except for the dialectical leadership scale. However, as all the participants are from mainland China, we translated the original English version scales into Chinese following the translation and back-translation procedure (Brislin, 1980). We also unified the scales into 7-point Likert scales. The detailed item for each scale is listed in Appendix A.

CEO Vision Communication of Sustainability

We adopted a three-item scale of vision communication from Venus, Stam, and van Knippenberg (2019) and asked TMTs to provide ratings for this construct on a 7-point Likert scale (1 = never, 7 = always). The original scale was intended to measure general vision communication behavior. To serve our research purpose, we specified this scale on vision communication of sustainability. A sample item is “CEO of our company spoke about strategic and organizational goals of sustainability” (α = .96). Furthermore, the intra-class correlation coefficient (ICC(1)) of vision communication of sustainability is 0.19 (F(129, 432) = 2.02, p < .001), providing support for our aggregation of TMT evaluations of this construct (LeBreton & Senter, 2008).

Organizational Change

CEOs were asked to report to what extent their organizations have changed in the past 3 years (1 = not at all, 7 = very intensively). A five-item scale developed by Jeong and Shin (2019) was used to measure organizational change. A sample item is “How much did organization structure change in the past three years?” The reliability of this scale is .84.

Sustainability Performance

CEOs were required to report the sustainability performance of their company using a five-item scale developed by Gelhard and von Delft (2016) (1 = strongly disagree, 7 = strongly agree). A sample item of this scale is “We develop new products/services or improve existing products/services that are regarded as sustainable for society and environment” (α = .85).

CEO Dialectical Leadership Behavior

CEO dialectical leadership behavior was rated by TMTs with a 22-item scale developed by H. Wang et al. (2023) (1 = strongly disagree, 7 = strongly agree). A sample item is “The CEO of this firm constantly evaluates the organization’s opportunities and threats brought about by changes in the external environment” (α = .99). The intra-class correlation coefficient (ICC(1)) of the CEO’s dialectical leadership behavior is 0.09 (F(129, 432) = 1.44, p < .01), providing support for the aggregation of the CEO’s dialectical leadership behavior data (LeBreton & Senter, 2008).

Control Variables

To minimize spurious interpretation of our findings regarding the characteristics of CEOs and firms (H. Wang et al., 2023), we controlled the CEO (i.e., gender, education, and tenure) and composition of TMT characteristics in the analysis process.

Results

Discriminant Validity Test

We first conducted a confirmatory factor analysis (CFA) using Mplus 8.0 to test the discriminate validity of the focal constructs (Muthén & Muthén, 2017). As variables in our study were collected from different sources (vision communication of sustainability and dialectical leadership behavior were reported by TMT members, and organizational change and sustainability performance were reported by CEOs), we conducted CFA separately. At the TMT level, we found that the two-factor model (vision communication of sustainability and dialectical leadership) had a better fit (χ² = 1,271.53, df = 274; RMSEA = 0.08; CFI = 0.94; TLI = 0.93; SRMR = 0.03) than the one-factor model (χ² = 2,235.99, df = 275; RMSEA = 0.12; CFI = 0.88; TLI = 0.87; SRMR = 0.05; Δχ²(1) = 964.46, p < .01). At the CEO level, the two-factor model had a good fit (χ² = 55.46, df = 34; RMSEA = 0.07; CFI = 0.96; TLI = 0.95; SRMR = 0.04) and was better than the one-factor model χ² = 208.97, df = 35; RMSEA = 0.20; CFI = 0.69; TLI = 0.60; SRMR = 0.12; Δχ²(1) = 153.51, p < .01).

As common method bias may lead to inflated estimates of the relationships (Podsakoff & Organ, 1986), we strictly followed procedural and statistical remedies suggested by researchers to address this problem (Podsakoff et al., 2012). Besides CFA tests, we also calculated the variance inflation factors (VIFs) of the mediator (i.e., organizational change) and dependent variable (i.e., sustainability performance) to assess the possibility of multicollinearity. The results showed that all VIFs were below 2.0, indicating that multicollinearity is not a serious problem in this analysis (Hair et al., 2010). Thus, the distinction between the measures was ensured.

Hypothesis Testing

As vision communication of sustainability and dialectical leadership were both reported by TMT members, we split the data based on previous research methods to resolve common method bias (Ostroff et al., 2002; Podsakoff et al., 2003). For the same CEO, data from half of his/her TMT members was used to measure vision communication of sustainability, and the other half was used to indicate dialectical leadership behavior. Table 1 shows the means, standard deviations, and correlations of the variables in our study.

Table 1.

Means, Standardized Deviations, and Correlations of the Variables.

Variables	Mean	SD	1	2	3	4	5	6	7	8	9	10
1. CEO gender	1.21	0.41	—
2. CEO education	5.18	0.67	–.22*	—
3. CEO tenure	8.08	4.72	–.00	–.10	—
4. TMT gender	1.42	0.31	.19*	–.03	.05	—
5. TMT education	4.95	0.56	–.14	.24**	–.31**	–.01	—
6. TMT tenure	4.94	2.43	.01	–.12	.28**	–.25**	.01	—
7. Vision communication of sustainability	6.33	0.73	–.12	.08	.10	–.07	–.17	.05	—
8. Organizational change	4.88	1.13	–.04	–.07	.01	–.12	.02	.10	.28**	—
9. Sustainability performance	5.26	1.10	.16	–.13	.07	–.05	–.06	.11	.17	.45**	—
10. Dialectical leadership behavior	6.15	0.91	.15	–.17	.12	–.06	–.19*	.01	.33**	.08	.17*	—

Note. N = 130.

*

p < .05. **p < .01.

Hypothesis 1 proposed a positive relationship between CEO vision communication of sustainability and firm sustainability performance. Linear regression results show that this relationship was significantly positive (b = 0.27, SE = 0.13, p < .05), supporting Hypothesis 1.

Hypothesis 2 suggested an indirect effect between vision communication of sustainability and firm sustainability performance via organizational change. To test this hypothesis, we used the PROCESS tool from SPSS (Model 4), with a bootstrapping of 5,000 and a 95% confidence interval (CI) (Hayes, 2018). This analysis showed that organizational change mediated the positive relationship between CEO vision communication of sustainability and sustainability performance (b = 0.18, SE = 0.07, 95% CI [0.06, 0.33]). CEOs’ vision communication of sustainability increased firm sustainability performance by positively engendering organizational change. Thus, hypothesis 2 was supported.

To test Hypothesis 3, which proposed the moderating effect of dialectical leadership behavior on the indirect effect between vision communication of sustainability and sustainability performance through organizational change, we applied the PROCESS tool from SPSS (Model 7) with the bootstrapping procedure (bootstrap = 5,000) (Hayes, 2018). As shown in Table 2, we found support for the moderated mediation model (Index = 0.15, SE = 0.06, 95% CI [0.03, 0.28]). Specifically, as plotted in Figure 2, the indirect relationship between CEO vision communication of sustainability and sustainability performance via organizational change would be significantly stronger when dialectical leadership is higher (Conditional indirect effect = 0.32, SE = 0.11, 95% CI [0.14, 0.56]) but insignificant when dialectical leadership is lower (Conditional indirect effect = 0.06, SE = 0.07, 95% CI [–0.06, 0.23]). Overall, all of our hypotheses were supported. Please see Appendix B for the SPSS outputs.

Table 2.

Summary of Indirect Effects Via Organizational Change.

Indirect effect	Sustainability performance
	Estimate	SE	95% CI
Via organizational change
High dialectical leadership (+SD)	0.32	0.11	[0.14, 0.56]
Low dialectical leadership (–SD)	0.06	0.07	[–0.06, 0.23]
Index of moderated mediation	0.15	0.06	[0.03, 0.28]

Note. Indirect effects were tested for significance using confidence intervals from 5,000 bootstrapping resamples. SE = standard error; CI = confidence interval.

Figure 2.

The interaction of vision communication of sustainability and dialectical leadership behavior on organizational change.

Discussion

Given that CEOs’ behaviors could significantly influence the organization, their initiative communication of vision is indispensable to exploring how effective vision communication of sustainability is on firm sustainability performance (Baum & Locke, 2004; Stam et al., 2014). Our study has yielded important findings regarding the relationship between CEO vision communication of sustainability and firm sustainability performance. Specifically, our results indicate a significant positive association between these two variables, which is mediated by enacted organizational change. This suggests that when CEOs effectively communicate their vision for sustainability, it can inspire and drive positive changes within the organization that ultimately contribute to its sustainability performance.

Furthermore, our study has also shed light on the role of dialectical leadership behavior in this relationship. We found that CEO dialectical leadership behavior can enhance the positive effects of vision communication on enacted organizational change and sustainability performance. In other words, when CEOs exhibit dialectical leadership behavior, they are better equipped to support the implementation of their vision, accelerate the rate of positive organizational change, and ultimately contribute to improved sustainability performance. While our sample is drawn from China, we believe that our research findings were not limited to the Chinese context.

Overall, these findings have important implications for organizations looking to improve their sustainability performance. By emphasizing the importance of effective vision communication and dialectical leadership behavior, our study highlights key strategies that can be leveraged to achieve sustainable practices and outcomes.

Theoretical Contribution

Our study makes several contributions to different literature domains. First, except for traditional measurements of firm performance, integrating sustainability performance into careful consideration is gradually more important in both theoretical and practical domains (Gelhard & von Delft, 2016; Kantabutra, 2020; Shahab et al., 2020). One of the recent debates within management literature is how firms balance volatile and even conflicting social, environmental, and economic demands to achieve superior sustainability performance and how will the CEOs be appraised as extraordinary or not in such externally dynamic surroundings (Feroz et al., 2021; Lăzăroiu et al., 2020; Rajesh & Rajendran, 2020). We address the research questions from the CEOs’ vision perspective, especially CEOs’ vision communication of sustainability, offering an underlining process of how upper-level managers function. We reveal that leaders can transfer their thinking about sustainability to effectively motivate employees through vision communication. Thus, vision communication of sustainability could offer followers a better understanding of strategic vision and reduce their potential resistance to implementing actions (Venus, Stam, & van Knippenberg, 2019), correspondingly to the trend encompassing more firm performance measurement indicators (i.e., sustainability performance) and unfolding a significant perspective of upper-level leader behaviors (i.e., vision communication of sustainability).

Second, our findings contribute to the vision communication literature on the influence of specific vision communication content on sustainability performance. One should realize that general vision communication is less determined to firm sustainability performance. Specific vision communication content is critical to realize specific goals of firm performance (Baum et al., 1998; Venus, Stam, & van Knippenberg, 2019). Because of the significance of attaining sustainability performance (Gelhard & von Delft, 2016), we focus on how vision communication of sustainability affects such consequences. There is no doubt that organizational vision is essential to firm maintenance and development but its effects on various organizational functions are ambiguous. From our findings, vision communication that includes specific content can effectively guide followers on how to achieve explicit goals and clarify what they need to do to prompt specific firm performance, and thus makes sense. Although vision has the attribute of abstractness, CEO still needs to communicate with their followers specific content to make sure they catch on to the core of the vision, avoiding the situation when followers’ behaviors harm strategic consensus and commitment when the followers are not strategically aligned with the CEOs (Ateş et al., 2020).

Third, even if the studies on UET are abundant, the internal mechanism of how CEOs’ personal characteristics, behaviors, or other interactive activities affect firm strategic actions and firm performance is still full of ambiguities (Neely et al., 2020; Sosik & Cameron, 2010; G. Wang et al., 2016). As UET illustrated before, the CEO’s vision communication would possibly direct to firm performance (Neely et al., 2020; Venus et al., 2013). However, the black box in the process is less clear. As a way of how CEOs’ vision communication works for the entire firm, organizational change seems to be inextricably linked with the content of vision communication (Venus, Johnson et al., 2019). Our findings suggest that the CEO’s specific vision communication of sustainability motivates followers to take action to achieve what the vision expects about sustainability, which, from an aggregate perspective from the firm level, is organizational change. Moreover, through such a change occurring in the whole firm, the CEO’s vision communication of sustainability can finally increase the firm’s sustainability performance.

Finally, we incorporated the boundary condition from the leadership perspective and found the positive moderating effect of dialectical leadership between vision communication of sustainability and organizational change. As mentioned before, effective leadership behaviors are essential to facilitate the transfer and success of organizational vision (Martins, 2020; Men et al., 2020; van der Voet & Steijn, 2021), which broadens and flourishes the literature on strategic leadership from the aspects of dialectical leadership behaviors. Moreover, adding how CEOs conduct context-appropriate leading behaviors to attain prosperous organizational performance would enrich the understanding of the application of upper-echelon theory. Specifically, we point out why dialectical leadership behaviors could realize the outcomes lying in the CEO’s sense of change, contradictions, and connection (H. Wang et al., 2023). On the one hand, the idiosyncrasy of dialectical leadership could better foster a sustainability sense, making vision communication of sustainability better transferred in the firm, boosting sustainability performance through transferring organizational change. As dialectical leadership promotes coordination among different departments and tasks and holistically manages the overall firm (H. Wang et al., 2023), CEOs can coordinate the development of change of sustainability in the whole firm by balancing the short and long term. Therefore, we broaden the vision research area on sustainability and organizational change from the stream of strategic leadership.

Practical Implication

Effective communication of a CEO’s vision is crucial for organizations to adapt and thrive in today’s dynamic business environment (Collins & Porras, 1996). Our research suggests that in order to improve sustainability performance, CEOs should focus on communicating their vision for sustainability to their followers, which can trigger the necessary staff behaviors and changes within the organization. This involves paying attention to environmental demands and considering the environmental impacts and benefits of their products. Executives can spread their vision for sustainability by communicating it to members of the organization, but the effectiveness of this communication is limited by the leader’s capabilities (Hansen & Schaltegger, 2016). Therefore, selecting and nurturing leaders who possess strong communication skills for sustainability vision could be a key factor in achieving and maintaining an organization’s long-term sustainability performance.

Moreover, decision-makers tend to prioritize financial performance over other sustainability dimensions due to a business-oriented mindset that favors a binary “either/or” approach (Chen et al., 2021). Our findings indicate that dialectical leadership can effectively integrate sustainability into a company’s operations and achieve both organizational change and sustainability performance objectives. This approach allows them to balance the competing demands of short-term financial performance and long-term sustainability outcomes, leading to a more comprehensive and sustainable vision for their organization. To cultivate dialectical leadership behavior among leaders, firms can incorporate training programs focused on developing this skill set. These programs can include workshops, coaching sessions, and mentoring programs that provide leaders with the tools and techniques needed to embrace dialectical leadership behaviors.

Limitations and Future Direction

The study is subjective to several limitations that show the ways for future research. One of the factors limiting the effectiveness lies in the research methodology, manifesting in the design and measurement. In this study, both leaders and TMT members received the request to complete the surveys with 1 week of time lag, to some extent which adversely influenced the validity of our conclusion. Also, we were unable to get the objective measure of suitability performance. Future research is better to adopt other methods, such as longitudinal research design, to determine if there is a causal relationship between organizational change and sustainability performance. Moreover, studies on organizations and firm performance point out that CEO rather than followers are more sensitive to higher-level changes (Clapham & Schwenk, 1991). Thus, we invited CEOs to indicate organizational change and sustainability performance. However, even if the variance of ratings is valid, the data is still not as convincing as objective consequences, such as ratings from a third party. We encourage future studies on related topics to use objective sustainability performance to improve the findings’ validity.

Second, the primary strength of the current study lies in the process of organizational change mediating CEO vision communication and sustainability performance. We choose organizational change as the mediator because it comprehensively encompasses significant facets, such as organizational structural changes, core processes upgrading, etc., which significantly determine sustainability performance. However, our data are correlational, making it difficult to rule out alternative explanations for the observed relationships. Other underlining mechanisms, such as followers’ and organizational behaviors as well as feedbacks, are pivotal for explaining such changes but have not received enough attention in our study (Petrou et al., 2018; Wiedner et al., 2017). How the vision communication is reflected in the behavioral settings (i.e., workplace task arrangements, leader-follower communication) needs to be further explored. Future studies could investigate other possible mechanisms that help explain the relationship between vision communication and sustainability performance.

Third, although leadership is relatively influential in organizational studies, and we identified that dialectical leadership does play an effective moderating effect, boundary condition factors from other perspectives deserve attention. For example, whether specific industries where businesses belong affect the relationship between vision on sustainability and sustainability performance can also be enlightening (e.g., Zhang et al., 2019). Besides, in rapidly changing environments, a firm’s dynamic capabilities, a company’s ability to integrate, build and reconfigure internal and external capabilities to cope with changes (Teece et al., 1997), may also reflect a firm’s capacity to facilitate changes guided by the vision communication of sustainability. Finally, firm size may also represent a potential boundary condition affecting the effectiveness of vision communication on sustainability performance. Notably, the positive effect of vision communication on sustainability performance may be more pronounced in small to medium-sized firms. This is because smaller firms typically require less coordination to enact organizational change than larger firms. Conversely, larger firms may necessitate greater effort and more coordinated policies to effectively implement sustainable practices and achieve positive sustainability outcomes. Future studies on other boundary conditions would help understand when and where vision communication affecting firm performance might be out of expectation.

Finally, in this study, we focus on the content of vision communication. We believe that vision communication of sustainability can better promote the achievement of sustainability performance. However, a review of the literature on vision communication shows that the expression style of vision communication also affects the effectiveness of communication (Stam et al., 2014; Carton & Lucas, 2018), which is not covered in this paper. How a vision is communicated, directly or indirectly, in words or images, may affect how well employees perceive and react to the vision and subsequently regulate their willingness toward it. Scholars in future studies of vision communication will be better at exploring more vision communication for the organization’s sustainable development.

Conclusion

To conclude, the current research studied the process of how CEO vision communication of sustainability promotes firm sustainability performance. The study has demonstrated that effective CEO vision communication can significantly enhance firm sustainability performance, with the relationship being mediated by organizational change. Furthermore, we further suggest that the positive impact of CEO vision communication on firm sustainability performance can be amplified by higher levels of dialectical leadership behaviors. These findings have important implications for firms striving to achieve sustainability goals, as they highlight the critical role of CEO behavior and communication in shaping organizational culture and driving sustainability performance.