Influence of Leadership Traits on Corporate Culture and Corporate Ethical Standards: A Cross-Sectional Statistical Analysis of SMEs

Abstract

The small and medium-sized enterprises (SMEs) are considered as pillar of most economies but remain understudied in business ethics research and require thorough investigation. This cross-sectional endeavor examines impact of leadership traits on corporate ethical standards in Ukrainian SMEs. Data were taken from 327 SME owners and managers across four Ukrainian regions (Kyiv, Lviv, Dnipro, Odesa) using validated scales (Big Five Inventory-10, Ethical Leadership Scale, and Corporate Ethical Standards Scale). Hierarchical regression and mediation analysis (PROCESS Macro, 5,000 bootstrap samples) were employed, controlling for firm size, age, industry, and war impact. Results indicate that conscientiousness, β = 0.34, and agreeableness, β = 0.23, are positively linked with corporate ethical standards and the development of a strong corporate culture, while neuroticism, β = -0.28, shows a negative association. All the results are statistically significant. OPN and extraversion were not significant. Model explained 38% of variance. Results further showed that ethical leadership (ELD) behavior partially mediated the conscientiousness-ethics relationship (53%) and agreeableness-ethics relationship (48%). The study provides the first quantitative evidence from a post-Soviet, conflict-affected context in considered theme. Practical implications recommend SME selfassessment of conscientiousness and neuroticism, ELD training and differentiated donor support for war-affected SMEs. Corporate culture emerged as a key mechanism linking leadership traits to organizational ethics. War impact significantly moderated the conscientiousness-ethics relationship and weakening the positive association under high disruption. Findings contribute to business ethics literature by extending trait and social learning theories to a conflict-affected transition economy. Future research directions include multi-source data and cross-national replication.