This study examines the impact of ethical leadership on sustainable entrepreneurial performance within Malaysia’s direct selling ecosystem, with a focus on Amway Business Owners (ABOs). Malaysia’s direct selling industry contributed RM34.4 billion to the national economy in 2024, recording 7.4% growth and ranking sixth globally and fourth in the Asia?Pacific region. The country also holds the highest global market penetration rate at 2.28%, underscoring the sector’s socio?economic importance and its relevance to entrepreneurial research. Ethical leadership is defined in this study as the display of normatively appropriate behaviour by upline leaders and the reinforcement of ethical standards through transparent communication and responsible decision?making. In network?based direct selling environments where formal authority is limited, relational credibility becomes crucial for maintaining trust, engagement, and performance continuity. Grounded in ethical leadership theory, stakeholder theory, and sustainable entrepreneurship, this study proposes a structural equation model (SEM) in which ethical leadership predicts sustainable entrepreneurial performance conceptualised across economic, relational, and personal dimensions through the mediating roles of ABO engagement, ethical climate, and trust. The paper advances a clearer research gap by situating ethical leadership within Malaysia’s collectivist, relationship?driven direct selling context, where informal governance requires strong moral leadership for sustainability. Practically, the study offers actionable guidance for strengthening ethical governance and responsible growth in network?based entrepreneurship.
Abdel-Zahra Hassan, K., Al Khazraje, M. E. B., & Khalil Ibrahim Al-Jubouri, N. (2023). Ethical Leadership and Its Impact on Sustainable Performance: An Exploratory study of the Opinions of Employees at Al-Mustaqbal University. Futurity Economics & Law, 3(4), 134–151. https://doi.org/10.57125/FEL.2023.12.25.09
Abdi, A.?N. M., Hashi, M. B., & Latif, K. F. (2024). Ethical leadership and public sector performance: mediating role of corporate social responsibility and organizational politics and moderator of social capital, Cogent Business & Management, 11:1, 2386722, DOI: 10.1080/23311975.2024.238672
Abdelkarim, A. (2023). Ethical leadership and organisational accountability: Implications for sustainable performance. Journal of Business Ethics, 182(4), 1125–1142.
Al Armoti, I. H., Abdullah, R., & Omar, K. (2022). Ethical leadership and organisational performance: Evidence from Malaysian organisations. Journal of Business Ethics, 178(2), 265–283.
Al Halbusi, H., Alhaidan, H., Ramayah, T., & AlAbri, S. (2023). Ethical leadership and employees’ ethical behavior: Modeling the contingent role of moral identity. Business & Professional Ethics Journal, 42(1), 1–31. https://doi.org/10.5840/bpej202344135
AlHawi, Ahmad Khalil and Cek, Kemal. (2024). The impact of ethical leadership on environmental performance in the construction industry: mediating role of environmental innovation and innovation climate. Management & Accounting Review (MAR), 23 (1): 4. pp. 85-132. ISSN 2550-1895.
Alsoqae, A. M., Almutairi, G. M., Ahmad, Z., Almutairi, E. H., Aljanabi, H. M., bin Libdah, G. H., Alqahtani, L. A., Almutairi, J. A., Aldewihy, R. S., & Alshahrani, S. S. (2023). The influence of ethical leadership on employee behavior: A systematic review. Journal of Positive Psychology & Wellbeing, 7(3), 55–71. https://journalppw.com/index.php/jppw/article/view/17480
Bandura, A. (1977). Social learning theory. Englewood Cliffs, NJ: Prentice?Hall.
Bedi, A., Alpaslan, C. M., & Green, S. (2016). A meta-analytic review of ethical leadership outcomes and moderators. Journal of Business Ethics, 139(3), 517–536.
Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595–616. https://doi.org/10.1016/j.leaqua.2006.10.004
Brown, M. E., Treviño, L. K., & Harrison, D. (2005). Ethical leadership: A social learning perspective. Organisational Behavior and Human Decision Processes, 97(2), 117–134.
Charoensap, K., Wongpakaran, T., & Wongpakaran, N. (2018). Ethical leadership and organisational culture: Evidence from emerging economies. Journal of Business Ethics, 148(1), 1–17.
Dodamgoda, S., Wijeratne, W., & Perera, K. (2024). Ethical leadership in emerging Asian markets: Evidence from SMEs. Asian Journal of Management Research, 15(1), 56–72.
Durst, S., Foli, S., & Temel, S. (2024). The impact of ethical leadership on KM practices and performance. Knowledge and Process Management. 31(4), 275-283. https://doi.org/10.1002/kpm.1779
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Cambridge University Press. https://doi.org/10.1017/CBO9781139192675
Hameed, I., Malik, Q. A., & Farooq, M. (2023). Linking ethical leadership to sustainable business performance: Empirical insights from SMEs. Sustainability Accounting, Management and Policy Journal, 14(3), 289–308.
Hsieh, C., et?al. (2023). A bibliometric review of ethical leadership research: Shifting focuses and theoretical insights. AERA Open, 9(1), 1–13. https://doi.org/10.1177/23328584231209266
Hurduzeu, G. (2015). The impact of ethical leadership on organisational performance. Procedia Economics and Finance, 32, 1212–1219.
Joseph, N. (2023). Ethical leadership and organisational resilience: Insights from Malaysian SMEs. International Journal of Management Studies, 30(1), 67–85.
Kaptein, M. (2024). Ethical leadership and corporate compliance: Lessons from emerging economies. Journal of Business Research, 185, 145–157.
KLSE Screener. (2024). Direct Seller Malaysia 2024 – Industry Highlights. (Industry statistics of Malaysia’s direct selling sector.)
Liu, Y., Chen, Z., & Zhang, H. (2023). Human and nature in digital transformation: Examining sustainable values in AI ecosystems. Journal of Sustainable Development, 16 (4), 45–60.
Madanchian, M., Mahmod, R., Hussein, R., & Sulaiman, A. (2018). Impact of ethical leadership on organisational performance: Evidence from Malaysia. Cogent Business & Management, 5(1), 1–18.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organisational trust. Academy of Management Review, 20(3), 709–734.
Mseti, E., Lameck, W., & Kinemo, S. (2023). Ethical leadership and employees’ performance: A systematic review. East African Journal of Education and Social Sciences, 4(6), 1–6.
Nandasinghe, D. (2020). Ethical leadership and employee behaviour: A social learning perspective. Journal of Leadership & Organisational Studies, 27(1), 89–104.
Nguyen, H., Dao, T., & Pham, L. (2021). Ethical leadership and sustainable organisational outcomes in Southeast Asia. Sustainability, 13(15), 8492.
Onsori, M. R., Nagy, N. G., & Szabó-Szentgróti, G. (2025). Ethical leadership and organizational resilience: Exploring the interconnected dynamics. International Journal of Ethics and Systems, 41(3), 727–760. https://doi.org/10.1108/IJOES-08-2024-0260
Pezzolo, M., & Monaci, M. (2024). The role of the corporate ethical virtues model in sustainability reporting. Corporate Social Responsibility and Environmental Management, 2024, N/A-N/A. https://doi.org/10.1002/csr.2996
Rihal, J., Alzubi, A., Aljuhmani, H. Y., Berbero?lu, A. (2025). From ethics to ecology: How ethical leadership drives environmental performance through green organizational identity and culture. PLoS One. 2025 Nov 13; 20(11):0336608. doi: 10.1371/journal.pone.0336608
Shepherd, D. A. & Patzelt, H. (2011). The new field of sustainable entrepreneurship: Studying entrepreneurial action linking “what is to be sustained” with “what is to be developed”. Entrepreneurship Theory and Practice, 35, 137-163. doi:10.1111/j.1540-6520.2010.00426.x
Shi, L., Wu, Q., & Zhao, Y. (2019). Human factors in sustainable development: Ethical leadership and corporate governance. Sustainability Science, 14(3), 45–58.
Shuya, X., & Mohamed Zainal, S. R. (2022). How to achieve better sustainable performance: The role of ethical leadership and green employee empowerment. AgBioForum, 24(2), 206–214.
Stavropoulou, A., Ooms, A., Rovithis, M., & Stroumpouki, T. (2024). Key concepts of ethical leadership: A review of the literature. World Journal of Advanced Research and Reviews, 21(3), 2227–2232. https://doi.org/10.30574/wjarr.2024.21.3.0913
Tushar, B. (2017). Human behaviour and sustainable systems: Integrative perspectives. Sustainability Review, 22(1), 75–92.
Ughulu, J. (2024). Ethical leadership in modern organizations: Navigating complexity and promoting integrity. International Journal of Economics, Business and Management Research. https://doi.org/10.51505/IJEBMR.2024.8505
Uy, M. A., Foo, M. D., & Song, Z. (2013). Joint effects of prior start?up experience and coping strategies. Journal of Business Venturing, 28(5), 583–597.
Vig, S., & Dumicic, K. (2016). Ethical leadership and organisational performance: A review of empirical literature. International Journal of Business Research, 16(2), 32–48.
Wang, J., Li, P., & Wang, X. (2022). Sustainability and non?technological factors in enterprise performance. Journal of Business Strategy, 43(6), 123–135.
Xuecheng, Z., & Iqbal, J. (2022). Ethical leadership and corporate sustainability in SMEs. Journal of Business Ethics, 175(2), 353–368.
Zainal, S. F., Hashim, H. A., Salleh, Z., Mohamad Arif, A., & Mohamad, N. R. (2024). A qualitative study on the elements of ethical culture among managers of SMEs in Malaysia. Asian Journal of Business Ethics, 14, 1–33. https://doi.org/10.1007/s13520-024-00226-4
Isa, A. M., Kudus, N., & Al?shami, S. A. (2026). Ethical Leadership and Sustainable Entrepreneurial Performance among Amway Business Owners in Malaysia. International Journal of Academic Research in Business and Social Sciences, 16(4), 313–323.
Copyright: © 2026 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
