LEADERSHIP STYLES, ESGs, AND EXTERNAL SOCIAL CAPITAL: IMPACT ON ORGANIZATIONAL COMMITMENT AND INNOVATION IN SERBIA

Abstract

Leadership, Environmental, Social, and Governance (ESG) practices and External Social Capital (ESC) are critical elements in contemporary organizations, frequently discussed in scientific literature. However, their influence on organizational commitment and innovation, particularly in the Serbian context, is underexplored. This study aims to investigate the relationships between leadership styles, ESG dimensions (Environmental Protection, Corporate Social Responsibility, Corporate Governance), and ESC on organizational commitment and innovation in Serbian enterprises in order to provide valuable insights for managers. All three hypotheses were confirmed. According to the results, environmental protection is the strongest predictor of innovation, explaining 28% of its variance. While leadership significantly affects both organizational commitment and organizational innovation, ESC has a less direct or even negative impact on commitment and a positive one on innovation. These results from Serbian organizations contribute to the understanding of how contemporary leadership and sustainability practices drive success in the context of the national business environment.