Leading MSMEs through times of uncertainty: the impact of Responsible Leadership on employee resilience and well-being

Responsible leadership (RL) involves making ethical and transparent decisions that prioritise the best interests of all stakeholders, including employees, consumers, and the community (Maak and Pless, 2006; Pless, 2007). It is distinguished by the qualities of empathy, integrity, and a commitment to long-term sustainability rather than short-term gain (Maak and Pless, 2006; Pless, 2007; Voegtlin, 2016). This study aims to investigate the impact of RL on employees’ resilience and well-being during times of uncertainty. The three parts of this study have significant theoretical and practical implications. The review of literature indicates wide research gaps with a lack in research on the effects of RL on employee performance through times of uncertainty. Existing research focuses primarily on larger firms and overlooks smaller enterprises in unique cultural context such as the MSMEs in Thailand. Therefore, the first study focuses on the systematic literature review (SLR) of RL and is based on the framework of the ABC model, which has been used as the foundation in this five-step analytical approach. 74 empirical studies published between 2015 to February 2023 have been studied. The study indicates that RL is in an emerging stage of development. The findings also reveal that RL is a desirable leadership requirement of all kinds of businesses to embrace in changing situations. Drawing on The Social Identity Theory of Leadership (SITL), the second study explores the relationship between RL and employee resilience by examining the mediating role of leader group prototypicality and employee psychological empowerment. An online survey is conducted among 328 MSMEs employees in Thailand after the pilot study. The structural equation modeling analysis indicated that the RL effects on employee resilience is partially mediated by group prototypicality and psychological empowerment. Drawing on The Leader-Member Exchange theory (LMX), the third study investigates into the mediating role of trust in leaders and organisational justice between RL and employee well-being and the moderating role of transparent communication in the relationship between RL and trust in leaders. The findings provide better guidance to alleviate existing RL practices in the context of Thai MSMEs in uncertainty business environment.