Correlations to Financial Performance in the Pharmaceutical Industry

There exist conflicting priorities for leaders when considering ethical leadership behaviors and organizational financial performance. The purpose of this quantitative study was to examine correlations between top manager ethical leadership levels and organizational financial performance, within the pharmaceutical industry. The Ethical leadership theory was used to frame the study. Relationships between top managers’ perceived ethics levels and organizational financial performance were studied, as well as, whether top managers’ practices, purposes, and virtues acted as mediators. A goal of 184 participants were recruited from 338 pharmaceutical companies. Five top managers and 17 of their direct report team members took part in the study. Top managers were asked to complete the Sustainable Leadership Questionnaire while their teams provided responses to the Ethical Leadership Questionnaire, and data was collected over a 12-week period. Following the Baron and Kenny model testing for mediation, regression analysis was performed using the IBM SPSS Statistics software to measure correlations between the dependent, independent, and mediating variables. No statistically significant relationship was found between the top managers’ ethics level and the organizational financial performance. Correlations were found between the mediating variables and organizational financial performance. This study contributes to positive social change by adding empirical evidence to the understanding of ethical leadership and its impact on organizational financial performance. Advancing ethical leadership within the context of the pharmaceutical industry affords the potential for better allocation of societal healthcare resources, and more equitable access to innovative medicine for consumers