Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. * Korespondenčni avtor / Correspondence author 206 Prejeto: 15. april 2024; revidirano: 28. junij 2024; sprejeto: 20. september2024. / Received: 15 th April 2024; revised: 28 th June 2024; accepted: 20 th September 2024. DOI: 10.37886/ip.2024.011 Do Managers Dare to Lead Sustainably? Building Blocks for Managing Stakeholders in an Organization to Promote Sustainable Practices Tadeja Sumrak Vegelj * Nuklearna elektrarna Krško, d.o.o., Vrbina 12, 8270 Krško tadeja.sumrak.vegelj@fos-unm.si Abstract: Research Question (RQ): The performance and development of any organization towards sustainability depends on its leaders and their skills. The research focuses on leaders, and how they act, lead, and make decisions when confronted with the fact that their vision drives them to promote sustainable practices. The research question is: What are the most frequently highlighted leadership building blocks in influencing stakeholders’ sustainability thinking? Purpose: The main purpose of the research in to review the existing literature on leadership styles that can be attributed to sustainability elements and to highlight the correlation between leadership style and the promotion of sustainable practices in an organization. Method: The methodological approach was based on the initial systematic review of domestic on foreign literature and articles published in accessible databases (Scopus, ProQuest, Science Direct, Web of Science) and repositories of Slovenian Universities. We used the keywords “sustainability”, “leadership style” and “social outcomes” in both languages. Results: The analyzed articles highlight the transformational leadership style sustainable and provide key sustainable practices in the organization. Society: Identifying the key qualities of leaders and leadership styles positively impacts employees and other stakeholders by highlighting the key building blocks that leaders can use to influence society. Originality: Due to the focus on the sustainable practices in the organization in correlation with leadership style, the originality of the research will increase the transparency of the theses in the field of management by highlighting the building blocks of sustainable leadership and linking them to sustainable leadership theory. This will lay the foundations for further research towards defining a new sustainable leadership style. Limitations/Future Research: Limitations of this research are evident in the relatively small sample number of cases that encompass the actual implementation of sustainable development to stakeholders. Future research should empirically verify the awareness and application of the highlighted building blocks of leadership style in establishing sustainable business practices. Keywords: sustainability, leadership style, transformational style. 1 Introduction In recent years, more and more attention has been paid to protecting the environment, nature, water and reducing gas emissions and pollution. Thinking green was defined in early 1987 in a report by the World Commission on Environment and Development (Eur-Lex, 2024, para. 1) as a way of acting that leaves future generations with the possibility of meeting their needs Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 207 as well as or even better than we do now. Since then, many global organizations have been working on sustainability with an increasing focus on individuals and, more recently, organizations. Sustainability is a concept that integrates care for the environment, air, and water on the one hand, and society and all its stakeholders on the other. These changes are becoming permanent in some organizations due to two significant areas. The first is the evolution of Industry 4.0, which introduces new technologies to improve efficiency and competitiveness, and the second in the transition from one linear to a circular economy (Manco, Caterino, Rinaldi, & Macchiaroli, 2023, p. 89). The concept of sustainability is based on the mindset that an organization is not just a commercial activity but is about integrating wider social and environmental benefits (Murphy, 2022, p. 9). Furthermore, leaders increasingly recognize that organizations cannot operate in a world of poverty, inequality, social and environmental crises, as markets will contract, supply chains will break, consumers and employees will resist (Murphy, 2022, p. 21). Of course, profit is not to be ignored as an important factor in setting and achieving goals. But if we want to provide more responsible business practices for future generations, we need to find ways to embed sustainability into the complex operations of the organizations. It is necessary to find a way to impact sustainability in the complex operations of an organization as it is not only about financial-economic goals, but about environmental and social implications and the extension of benefits to current and future populations (Manco, Caterino, Rinaldi, & Macchiaroli, 2023, p. 91) as well as the alignment of the values of sustainability in the broader ecosystem by aligning stakeholders in this thinking (Murphy, 2022, p. 93). This task is delegated to leaders and their actions due to their influential role and operational impact, interdependent with personality traits and decision-making of leadership style which we have identified as a gap in research. Given the importance of highlighting, accepting, and implementing sustainable practices, and the risk of them remaining merely on paper without actual implementation, we aim to identify the dependent variable of sustainable practices and highlight key leadership building blocks crucial to fostering sustainability initiatives. 2 Theoretical Framework 2.1 Sustainability Paradigm and the Importance of Leadership The concept of sustainability in the study of organizational paradigms is not new. This interplay between society, profit, and the environment began in the 1950s with the emergence of corporate social responsibility (CSR), but the definition then was different from the one today. CSR is a concept that can be considered foundational to sustainability, yet the essential difference between responsibility and sustainability was that CSR focused on social issues, while the beginnings of sustainability were oriented towards the environment. It was only Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 208 after the year 2000 that those concepts began to be equated in terms of society and environment scope (Bansal & Song, 2017, p. 107). The development further strengthened towards the aligning the goals of both concepts, that organizational success is achieved only when considering interdependence with broader organizational systems (Bansal & Song, 2017, p. 111). The concept of sustainability has become the focus of many global discussions, simultaneously highlighting gaps caused by modern lifestyles due to rapid development, improved living conditions, enhanced educational opportunities, limited natural resources, climate warming, water, air and soil pollution, and unequal wealth distribution (Afridi, Javed, Ali, Zafar, & Haider, 2023; Fisher et al., 2023, p. 3). This has made sustainability an intensely researched topic in recent years. The development of sustainability as we know it today dates to 1987 when the World Commission on Environment and Development (WCED) produced a report that laid the foundation for sustainability, addressing the environment, society, and economy (Fisher et al., 2023, p. 17-24; Elsawy & Al-Ghurabli, 2024, p. 237). Three basic approaches were identified for achieving or measuring sustainability: efficiency in integrating economic interests, consistency in the use of renewable resources, and sufficiency in terms of consumption. Subsequently, sustainability development was influenced by policy, its measures, and overarching documents, as presented in Table 1. Table 1. Documents and policy measures Documents and policy measures Climate Change Convention, Rio 1992, concept of emission reductions presented to the world population Kyoto Protocol - an amendment to the Convention - reduce emissions by 5% (Europe 8%) over the period 2008-2012 compared to 1990 Doha Conference, 2012, 18% emissions reduction by 2020 (Europe 20%) Paris Agreement, December 2015, commitment by all countries to take action to reduce emissions and adapt to climate change CO2 Law - Swiss Climate Policy Act, 2008, introduction of a tax on fossil fuels 2030 Agenda, UN General Assembly - 17 Sustainable Development Goals The documents consequently bind organizations to take steps towards sustainability, with leaders holding the reins in their ability to transfer ideological beliefs to other stakeholders in the value chain. Sustainability entails highlighting factors that foster a long-term business relationship while maximizing financial impact (Fisher et al., 2023, p. 65) and specific organizational policy measures aimed at improving the well-being of all stakeholders while considering economic, social, and environmental performance (Servaes, Thi Thu, Kluijtmans, & Crucke, 2023, p. 7). Its dimensions extend to environmental awareness, the impact vision of social responsibility, and encouraging employees to follow a socially responsible vision, all aimed at integrating the organization with society and the environment. Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 209 Sustainability is a marathon, and a short-term focus does not bring the results that organizations want. It involves complex challenges, including the intricate interdependence of social, environmental, and economic goals, which can lead to resistance to change due to knowledge and skills deficiencies (Elsawy & Al-Ghurabli, 2024, p. 242). Unfortunately, sustainability is often viewed not as an opportunity for organizational growth but as a tool for risk management and brand formation for consumers and investors. It is not about promises, plans, or programs, but about leadership (Murphy, 2022, p. 5). It encompasses not only financial-economic goals but also environmental and social consequences, extending benefits to current and future populations (Manco, Caterino, Rinaldi, & Macchiaroli, 2023, p. 76). Sustainability needs to be personalized before it can be integrated into an organization and later into the external environment and other stakeholders. Gaps exist in the perception of sustainability between a leader and their employees, or between what leaders claim to be doing in terms of sustainability and what employees see or what is part of the business (Murphy, 2022, p. 95). Clementino and Perkins (2020, p. 392) note that the implementation of sustainability faces obstacles when organizational vision and strategy are defined but ideas fail to be implemented or transferred across all levels of the organization. Even if implemented, subsequent gaps can lead to a decline in the innovation of the organizational culture towards sustainability. Therefore, leaders and their leadership styles play a crucial role in this process. If we focus only on the social aspect of sustainability, social awareness among all stakeholders largely depends on leaders, their personal beliefs, actions, collaboration with others, and their ability to transfer practices to other stakeholders. This dependency is more pronounced in the current situation, where there is a growing demand for monitoring sustainability indicators and responding to market-driven changes (Piwowar-Sulej & Iqbal, 2023, p. 11). Leaders are increasingly aware of the importance of integrating the interests of the organization and society for long-term impact (Fisher et al., 2023, p. 38). They see sustainable leadership as a way of guiding employees towards education, ethical reflection, and creating returns that are not only about profit maximization but also about driving societal development (Fisher et al., 2023, p. 40). Among these social impacts, employees demand the greatest attention when introducing the social sustainability factors (Servaes, Thi Thu, Kluijtmans, & Crucke, 2023, p. 2). Fisher et al. (2023, p. 57) highlight values as a guide for a stable, comprehensive, long-term, and explicit sustainability operation, achieving positive outcomes through the establishment of a collective effort among all stakeholders, even in the face of limited resource availability. Theoretically, there are some scientific studies on the impact of sustainability and the connection to leaders' commitment (Gill, Moss, Beverly, & Thepthongsay, 2023, p. 24; Mahran & Elamer, 2023, p. 1990), primarily focusing on environmental standards. This research focuses on the social part of these factors, aiming to analyze the influence of leaders Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 210 on sustainability implementation in business and identify key leadership building blocks that define a leader as sustainable. Therefore, the research question is: What are the most frequently highlighted leadership building blocks that ensure success in influencing stakeholders' sustainability thinking and building an ethical culture in an organization? 2.2 The Role of Leaders in Sustainable Leadership Leadership plays a crucial role in achieving excellence in sustainable practices. Mahran and Elamer (2023, p. 1990) noted a significant increase in research post-2022 in correlations between leadership characteristics and organizational sustainability practices, with China and the USA leading in research volume. Their study also highlighted that only one percent of research focuses on leadership styles in relation to sustainability, and even fewer explore the relationship between sustainability and leadership foundations (Boeske, 2023, p. 2). However, there has been a substantial recent increase in research focusing on leadership styles. Leaders are increasingly aware of the importance of aligning organization and societal interests for long-term effects (Fisher et al., 2023, pp. 38-40). The growing effort to integrate the economic, social, and environmental aspects of organizations has led to the concept of sustainable leadership (Elsawy & Al-Ghurabli, 2024, pp. 237). Many researchers view sustainable leadership as guiding employees towards education, ethical reflection, and creating returns that drive societal development, with employees demanding significant attention in the implementation of social sustainability factors (Servaes, Thi Thu, Kluijtmans, & Crucke, 2023, p. 2). This approach involves balanced decision-making that follows economic, environmental, and social factors with leaders ensuring they mitigate potential negative impacts, leverage sustainability-related opportunities, and contribute to global sustainability goals (Elsawy & Al-Ghurabli, 2024, p. 238). Fisher et al. (2023, p. 57) highlight values as a guide for a stable, holistic, comprehensive, long-term, and explicit sustainability operation, achieving positive results through the establishment of collective effort among all stakeholders, even amidst resource constraints. As the basis for sustainable leadership, strategies are the ones that must be built upon the foundations. This includes developing long-term orientation, embracing organizational diversity, demonstrating emotional and personal maturity, and prioritizing ethical decision- making (Welch, 2024, p. 2). Sustainable leadership is a dynamic process that must be transformative, based on long-term and systemic thinking, and understanding the interconnected systems of society, environment, and economy withing the organization. It involves engaging stakeholders, promoting openness and transparent communication based on trust and accountability, and upholding ethics and integrity that maintain high moral standards in leadership concerning respect for people, communities, and the natural environment (Elsawy & Al-Ghurabli, 2024, p. 238). Similarly, Lee (2024, p. 9) underscores the importance of leadership, defining it as a critical Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 211 building block of sustainability that defines collective efforts for sustainability through legal operations, connects stakeholders, and ensures appropriate correlations. Ryan and Cross (2024, p. 147) conclude that leaders have the power to transform organizations positively or negatively, emphasizing the importance of leaders being aware of the characteristics and behaviors they employ in their work. Identifying key traits of sustainable leaders, Elsawy and Al-Ghurabli (2024, p. 239) synthesized six building blocks from scientific research, which I summarize as the most frequently emphasized and presented in Figure 1 based on the literature review. Figure 1. Building blocks of a sustainable leadership style Based on this research, it can be summarized that in a sustainable leadership style, leaders are expected to envision the future for their organization and society, internalize it, and inspire others to achieve the vision. Another key characteristic is innovation and the search for new solutions, followed by empathy with different stakeholders, and understanding their needs, problems, and ideas, which leads to resilience in facing uncertainty and a strong commitment to sustainability even when the set goals seem unattainable. A key building block is certainly the collaboration of leaders inside and outside organizations and the awareness of collective action. High ethical standards, and respect for people, communities, and the natural environment are expected in their actions. These building blocks also identify one of the most frequently discussed styles related to sustainability, namely the transformational style, and serve as a basis for us to examine through a literature review whether these building blocks also constitute the style of a sustainable leader in the European economic arena. 2.3 Transformational Leadership Style The impact organizations on society and the environment are implemented through the top management of the organization, as their influence on their own workforce, users, investors, suppliers, and other stakeholders involved in the organization’s operations can reflect an approach to sustainability (El-Mallah, Aref, & Sherif, 2023, p. 492). This is particularly Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 212 relevant for organizations within the greatest environmental impact and those that are aware that their consciousness of sustainable business practices is crucial, recognizing that employees are key to fulfilling the vision (Ding, Su, & Hahn, 2023, p. 2). Leaders are fundamental change agents who ensure effectiveness in achieving goals, making it essential to choose the right leadership style, which depends on the maturity of the followers (Melean et al., 2023, p. 548). Leadership style represents the strategy a leader adopts, aligned with both their beliefs and the organization’s goals, which are reflected in the organizational culture. Key values that promote change, goal achievement, creativity, and innovation, as well as efforts to ensure greater competitiveness are crucial (Melean et al., 2023, p. 546-550). Therefore, inherent traits sus as charisma on the one hand, and learned traits (encouraging trust, motivating) on the other come into pay. This raises the question of whether we can identify a leadership style that has all these qualities expected of leaders who aim to lead their stakeholders towards sustainable practices and inspire and motivate them on this journey. The literature highlights that leaders who want to launch sustainability in the organizational culture should adopt strategies for mobilizing employees to implement sustainability, demanding accountability from employees for using sustainable practices, and providing workers with tools and training to further improvements in this area. Additionally, a focus on human resources and their values as a foundation for achieving organizational effectiveness is essential, ensuring that employees put in maximum effort and are willing to perform their tasks efficiently while encouraging interactions that lead to structuring the organizational expectations and behavioral change (Melean et al., 2023, p. 552). All this can be achieved by assigning tasks related to environmental protection, adapting job descriptions to be more sustainable, considering sustainable competencies in hiring, conducting sustainability training, and promoting ecological behavior in professional tasks (Servaes, Thi Thu, Kluijtmans, & Crucke, 2023, p. 5). Traditional classical leadership has been discussed in the literature under different terms (line, autocratic, bureaucratic, transactional leadership), but there is an increasing emphasis on democratic forms of leadership. Ivanko (2019, p. 388) highlights transformational leadership as a form that emphasizes reason, morality, charisma, employee empowerment, and collaboration. That leadership style is also important in shaping and achieving sustainable organizational performance. Ahsan (2023, pp. 789-795) has, through a literature review demonstrated the connection between transformational leadership and organizational culture, and through surveys analyzed via regression analysis, proved a positive relationship. Transformational leaders are those who inspire, are moral and care about personally teaching stakeholders. The research by Melean et al. (2023, p. 550) also indicate that transformational leadership style is most associated with sustainability efforts in the private sector, particularly in large Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 213 companies and those operating in the technology sector. This assertion is supported by numerous other studies, which highlight transformational leadership as crucial in the implementation of sustainability (Ahsan, 2023, p. 795; Ding, Su & Hahn, 2023, p. 795; Ding, Su & Hahn, 2023, p. 795; Ahsan, 2023, p. 795). 15; García Martín, Duran-Heras, & Reina Sánchez, 2023, p. 22; Hiebl & Pielsticker, 2023, p. 2354; Khan & Hinterhuber, 2024, p. 23; Morf & Bakker, 2022, p. 7; Zacher, Kühner, Katz, & Rudolph, 2024, p. 386). The transformational style is characterized by leaders who collaborate with other stakeholders, elevate motivation through the empowerment of individuals toward their goals, and are committed to ethics and morality (Alrabadi, Talib, & Abdulah, 2023, p. 53), based on goal orientation, stakeholder orientation, continuous adaptability, motivation, and leading by example. Transformational leaders are charismatic, inspiring, and encourage continuous improvement and personal development, extending their influence through the idealization of vision and goals (Metcalf & Benn, 2013, p. 375). A highlighted area of transformational leadership is the innovation potential. By empowering stakeholders to develop innovations, organizations can adapt to the changing economic environment, reflected in new, green ideas, products or services, and improved production processes or practices. The most challenging task for leaders is to recognize the enthusiasm of employees, motivate all stakeholders, and cultivate their creativity (Ding, Su, & Hahn, 2023, p. 2). To achieve this, leaders require a high level of self-awareness, which they must impart to employees, ensuring they understand essential sustainability issues and the need to change in this direction (Ahsan, 2023, p. 795). 2.4 Sustainable Leaders Beyond EU Borders The transformational leadership style is widely regarded as sustainable by researchers outside the European Union as well. Melean et al. (2023, p. 546) highlight the key characteristics of a transformational leadership style which include elevating employee value, encouraging proactive and positive behavior, creating significant changes in people's lives and organizations, emphasizing development, knowledge, and personal growth, demonstrating exemplary behavior, promoting creative problem-solving, reducing employee turnover, responding quickly to environmental demands, and inspiring motivation. From this, we can summarize that the transformational leadership style aims to influence and change organizational culture. Culture, for example, is an important element used to define the influence on individual behavior and their cognitive, affective, and behavioral responses to the environment (Karakasnaki, Pantouvakis, & Vlachos, 2023, p. 8). Moreover, the interaction between stakeholders serves as an intermediary variable between organizational values, culture, and work climate, positively impacting sustainable practices (Mitra, 2023, p. 1). Organizations are embedded in their local environments through many interactions, suggesting they influence the lives of local communities and the formation of individual values. The impact of inherent, Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 214 internal values such as conscientiousness, morality, and ethics is certainly present in discussions on social sustainability, as is common ethics and a rights-based approach, but this does not guarantee that actions will reflect such a mindset and represents a gap between subjectively desired and objectively needed sustainability actions (Lee, 2024, p. 7). The impact of values, culture, and ethical orientation of leaders on sustainability practices has been highlighted in Mitra’s research (2023, p. 12). Focusing solely on social sustainability practices confirms the correlation with the culture and ethics of leaders. This correlation has been demonstrated in different geographical regions where organizations operate, including China, Spain, Japan, Portugal, and India. The diversity of culture and behavioral patterns at the leadership level is crucial for identifying gaps that can occur in the implementation of sustainable practices. Charisma provides leaders with a clear purpose and energy, shapes their ethical behavior, and creates identification with the organization’s vision and strategy (Melean et al., 2023, p. 546). Individual sustainability awareness and stakeholder engagement are key elements of transformational leadership (Ding, Su, & Hahn, 2023, p. 2) and represent employee perception, collaboration, compliance, innovation, improvement, engagement, and satisfaction, although the exact definition of this concept is not yet established in the literature (Melean et al., 546). Transformational leaders promote sustainable thinking and green awareness through motivation and intellectual stimulation. They encourage the development of new ideas, new strategies for problem-solving, and consideration of responses from multiple perspectives. They highlight areas where the organization needs improvement and present employees with a vision of the future that they embody, thereby shaping the organizational culture (Ding, Su, & Hahn, 2023, p. 3). We can talk about a creative process involving employees that elevates the innovation process to a higher level because it is not just about making suggestions and ideas, it’s about the whole creative process of identifying problems, finding relevant information, and consequently, solutions. To achieve all this, a transformational leader needs to articulate his or her vision, acquire and enhance knowledge, provide individualized mentorship, and intellectually stimulate employees (Ding, Su, & Hahn, 2023, p. 4). A leader who follows sustainable practices is expected to engage in environmentally friendly behavior themselves, demonstrate commitment to their way of thinking, and above all, be role models to their employees (Ding, Su, & Hahn, 2023, p. 5). They should strive to achieve the organization's sustainability goals and foster innovation (García Martín, Duran-Heras, & Reina Sánchez, 2023, p. 15). Employees who perceive this in their leader are willing to take greater risks, undertake more tasks, and in the long run, adopt sustainable practices into their personal lives and beliefs. It is expected that a leader, through their enthusiasm for sustainable practices, will turn potential crises into opportunities for organizational development and consequently inspire their employees to do the same (Ding, Su, & Hahn, 2023, p. 18). Once a Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 215 transformational leader gains trust and collaboration from their employees, they must ensure this level of cooperation is maintained. These are just some of the building blocks that authors outside the European Union have studied. It is anticipated that these elements of transformational leadership style vary based on the geographical area and culture of the study. Therefore, our research is focused on the European area because it is considered that there are not so many differences between cultural patterns and ways of thinking. 3 Method Using the keywords »trajnost«, »stil vodenja« in »transformacijski stil« in Slovenian language and »sustainability«, »corporate leadership« and »transformation leadership« in English, we searched for scientific articles in Scopus, ScienceDirect, and Web of Science databases. The research was conducted using “in” in Slovenian and “and” in English. Regarding Slovenian academic works, we focused primarily on doctoral dissertations, which were searched in repositories of Slovenian universities: University of Ljubljana, University of Primorska, University of Nova Gorica, University of Maribor, and the Faculty of Organizational Studies in Novo mesto, using the same keywords. Searching for foreign doctoral dissertations was conducted in the ProQuest database. We also examined two monographic publications, one obtained through library loans and the other electronically on SpringerLink (see Table 2). Table 2. Research literature included in the study DATABASE Number of studies Share of publications Scopus Science Direct 10 4 35 % 14 % Web of Science 4 14 % Proquest 5 17 % SpringerLink 1 3 % Univerza na Primorskem 0 0 % Univerza v Ljubljani 0 0 % Univerza v Mariboru 3 11 % Fakulteta za organizacijske študije Novo mesto 1 3 % Univerza v Novi Gorici 0 0 % Ostali viri 1 3 % 29 100 % Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 216 After the initial abstract review, we selected scientific articles based on thematic relevance and focused only on those fully matched the search terms. The first selection was made in the databases themselves, focusing only on research articles and studies that had been carried out on the European continent because of similar thought, cultural cross-cutting similarities and similar ways of organizing and operating organizations. We archived the remaining articles using the Mendeley database, eliminated duplicates, reviewed them for relevance based on their abstracts, and then further selected them using exclusion criteria. The collected literature is presented in a Prisma diagram in Figure 2. Figure 2. Research model Following the initial abstract review, we further examined the articles’ abstracts for relevance to the research topic and included those that met all selection criteria in our study. The final Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 217 analysis of the articles was carried out in Atlas software, where we used coding to identify the key research building blocks within each document. Once the selection of research articles was completed, the articles were prepared for further processing. The scientific articles, monographs, and doctoral dissertations included in the study were predominantly from 2020, with the largest percentage of publications from 2023 and forward. We added a tag to each article below which was then used for processing in Atlas.ti. Tags were assigned according to the type of literature (academic article, monograph, doctoral dissertations, sequential number, and year of publication). This was followed by a content analysis focusing on the highlighted building blocks of the transformation leader. Each article underwent analysis, and its content was coded. Coding involved identifying the key characteristics typical of transformational leadership styles as emphasized by the authors. At the end of the analysis, we had 16 codes: goal orientation, accountability, adaptation to change, personal growth, knowledge, communication, motivation, stakeholder focus, teamwork, innovation, charisma, ethics, leading by example, personal integrity, personal values, role modeling, and continuous learning. Before final data processing, certain codes were logically combined. For example, continuing education, knowledge, and personal growth were merged into personal growth, while leading by example, mentorship, and personal values were merged into leading by example. The connectivity of articles with the most frequently discussed building blocks was depicted through a schema, identifying those most commonly appearing in the reviewed articles. The articles and publications were analyzed using descriptive and compilation methods, primarily looking for the results of qualitative and quantitative empirical research. The content analysis provided us with a systematic overview of the building blocks of transformational leadership style which were highlighted and are discussed below. After descriptive and content analysis of the articles, we realized that we could not use all the literature covered because some of it only contained literature reviews and we wanted to focus on empirical research articles. Therefore, we excluded the articles by Cambrea, Paolone, and Cucari (2023) and Costa et al. (2023) as they did not research the building blocks of transformational leadership. The former highlights leadership style according to gender, while the research by Costa, Padua, and Moreira (2023, p. 17) shows that transformational style is the most conducive to innovation and explores only this direction of correlation. We also excluded the article by Ding, Su, and Hahn (2023) and the dissertation by Horan (2024) as they studied the behavioral traits of Chinese leaders, Ferrero-Ferrero et al. (2023) article did not identify traits of leaders and Finja, Zeppenfeld, and Lueg (2023, p. 4461) merely observed the correlation between sustainability and transformational leaders, focusing on narcissists. Hence, 18 units remained for further processing. Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 218 4 Results In our literature review study, summarized in Table 3 are the most important building blocks that the authors from the reviewed studies highlighted in their research. Each of the reviewed articles highlights the area of action and through a research approach, identifies what defines a transformational leader in their work. Table 3. Content synthesis Author Article tag Empirical research Dimensions of the building blocks Ashan et al., 2023, p. 791 – 794 AJ 01/23 Italy Embodying the vision, inspiring followers, developing individuals, pursuing goals, ethics and values, encouraging Bashynska et al., 2024, p. 13-16 AJ 02/24 Ukraine Knowledge, ethics, morality, respect for others, communication, trust, goal orientation, quick response, positive attitude, organization, competence, innovative thinking, risk-taking, perseverance, self- criticism, skill, knowledge, values, ability, reflection, emotional intelligence, innovative action, motivation Becker, 2021, p. 145 DD 01/21 Germany Social identity, sharing values, personality of the leader, trust, inclusion, empowerment of individuals Bencsik & Pangsy- Kania, 2023, p. 13- 24 AJ 03/23 Hungary, Poland Accountability, adapting to change, innovation, collaboration, teamwork, growth orientation, stakeholder focus, values, role model, highlighted: motivation, culture, knowledge retention, innovation, teamwork, goal orientation, development Cambrea,Paolone and Cucari, 2023, p. 16 AJ 04/23 Italy A woman leader is much more successful than a man in leading sustainable practices, but only if she is in a leadership role and not so much if she is a follower. Chandranathan, 2019, p. 258 DD 02/19 United Kingdom Idealising influence, motivation, intellectual stimulation and individualised reflection, charisma Costa Padua & Moreira, 2023, p. 18 AJ 05/23 Portugal Transformational leadership is identified as the most conducive to fostering innovation towards other stakeholders (does not highlight employees in this correlation) - does not highlight key qualities of leaders Ding Su & Hahn., 2023 AJ 06/23 China Exclusion of sample due to geographical limitation Eberz et al, 2023, p. 10-14 AJ 07/23 Not define Critical self-reflection, informed decision-making, personal influences, seeing challenges as opportunities, values, strategic competence, ability to work with other stakeholders, systems thinking »se nadaljuje« Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 219 Author Article tag Empirical research Dimensions of the building blocks Ferrero-Ferrero et al. 2023, p. 467 AJ 08/23 Spain Correlation between sustainability and real engagement, rather than defining leadership Finja Zeppenfeld & Lueg., 2023, 9. 4459 AJ 09/23 Germany Proven negative correlation between the adoption of sustainable practices and narcissists (grandiloquent leadership, need for admiration and lack of empathy) Fisher et al., 2023, p. 40 M 01/23 Switzerland Commitment to values, continuing education, ethical reflection Garcia Martin, Duran-Heras, & Reina Sanchez, 2023, p. 9-21 AJ 10/23 Europe, India Values, inspiration, charisma, individual beliefs, engaging followers Hiebl & Pielsticker, 2023, p. 2351-2357 AJ 11/23 Germany Innovation, team spirit, focus on objectives, leading by example, inspiration, but no link with personalities Horan, 2024 DD 03/24 California Geographical exclusion criterion Khan & Hiterhuber, 2024, p. 19-21 AJ 12/24 Multinational, Europe Individual values, ethical responsibility, personal integrity Lazar, 2023, p. 174- 180 DD 04/23 Europe Exposing leaders and developing an organizational culture for the successful implementation of sustainable Maletič, 2018, p. 170 DD 05/13 Slovenia, Spain, Serbia, Poland and Germany Learning environments and innovation - not yet focusing explicitly on leadership Mazur & Walczyna, 2020, p. 17 AJ 13/21 Poland Active role, highlighting the employee as a key Mitchell, 2023, p. 81-98 DD 06/23 Multinational Focus on sustainability, motivating, adapting quickly, inspiring, focusing on goals, rewarding Morf & Bekker, 2022 AJ 14/22 Switzerland Visionary, motivation, personal conviction, cooperation Mrusek, Ottenbacher, & Harrington, 2022, p. 10-14 AJ 15/21 Germany Cooperation, respect, shared vision, innovation Murpyh, 2022, p. 97-112 M 02/22 Multinational, Europe Learning, ability to involve other stakeholders, role modeling, goal orientation, cooperation »se nadaljuje« »nadaljevanje« Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 220 Author Article tag Empirical research Dimensions of the building blocks Servaes, Thi Thu, Kluijtmans, & Crucke., 2023, p. 23-27 AJ 16/23 Belgium Concern for employee satisfaction, moral principles, a sense of belonging as a leader Vidmar, 2021, p. 41-53 DD 07/21 Slovenia Knowledge, personal touch, communication Transformational leadership can be considered a central theoretical framework for researchers (Chandranathan, 2019, p. 235), and the majority of studies have shown a connection between transformational leadership, organizational culture (Lazar, 2023, p. 139), and actual sustainable practices in organizations (Bashynska et.al., 2024, p. 25; Chandranathan, 2019, p.252; Hiebl & Pielsticker, 2023, p. 2352; Lazar, 2023, p. 130). Based on empirical research the literature review comparison highlighted the key building blocks of transformational leaders, including their personal traits and acquired building blocks, which contribute to sustainable development and transmit this mindset into the organizational culture. To highlight, one such finding is certainly that of Garcia Martin, Duran-Heras, and Reina Sanchez (2023, p. 12), where they considered transformational leadership style as one of the styles related to economic, social, and environmental outcomes, emphasizing values, leaders' own beliefs, and pursuit of goals, but less so their behaviors as the key building block of leadership. Value as a key element, alongside skills, knowledge, personal orientation, innovation, and mindset was also endorsed by Bashynska et al. (2024, pp. 9-25), who confirmed the importance of building on these elements with external influences and the similarity of the set of these building blocks across in their studies. The key findings of the considered units were processed with the use of Atlas.ti to identify which building blocks are most frequently expressed through empirical research. The data obtained are presented in Figure 3. »nadaljevanje« Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 221 Figure 3. Exposure of Transformational Leader Building Blocks As can be seen in Figure 3, six building blocks of transformational leadership have been highlighted based on the literature reviewed: goal orientation, charisma and ethics, personal integrity, teamwork, stakeholder focus, and leading by example. Bashynska et al. (2024, p. 25) explored a combination of indicators reflecting leaders' personality traits and the impact of leadership on the management of innovative activities in organizations that pay attention to sustainability. They found that none of the surveyed companies fell into the low-level range when concerning sustainable leadership, indicating that leaders have a set of knowledge and values, act as role models, and motivate (Chandranathan, 2019, p.251; Eberz, Lang, Breitenmoser, & Niebert, 2023, p.13; Morf & Bakker, 2022, p. 7; Mrusek, Ottenbacher, & Harrington, 2022, p. 14), have charisma and are ethically focused (Fisher et al., 2023, p. 40) and have interactions with all stakeholders (Eberz, Lang, Breitenmoser, & Niebert, 2023, p. 13) positioned high on the scale of important building blocks. Conversely, Khan & Hinterhuber (2024, p. 20) question whether the logic of sustainable business compared to leadership techniques is sufficiently supported by data, focusing on the influence of values, ethics, and personal integrity of leaders on sustainable practices within organizations. They demonstrated the impact of values but not so much of Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 222 building blocks, the impact of personal integrity and ethics but not the impact of ethical culture. The social dimension of sustainability is not only represented by employees and customers but also by suppliers. Here again, based on the regression analysis conducted (Hiebl & Pielsticker, 2023, p. 2352) transformational leadership is positively related (Lazar, 2023, p. 130) to the relational stability of suppliers and leads to more sustainable relationships. The articles reviewed and the highlighted building blocks were mainly evidenced through semi-structured interviews with leaders and surveys among employees across the European continent. The key building blocks have been empirically supported and can serve as a basis for further research. 5 Discussion Despite geographical and cultural differences, the examination by European authors has shown a certain percentage of commonality between the key building blocks of the transformational leadership style highlighted and its application in sustainable practices. Outside the EU transformational leadership style is characterized by change-enhancing behaviors, creativity and innovation, and investing effort in ensuring greater competition (Ding, Su, & Hahn, 2023, p. 3; García Martín, Duran-Heras, & Reina Sánchez, 2023, p. 15; Melean et al, 2023, p. 550), while motivation, goal orientation, and teamwork are common building blocks that are apparently independent of culture and geographic origin (Ding, Su, & Hahn, 2023, p. 3; Hiebl & Pielsticker, 2023, p. 2352; Morf & Bakker, 2022, p. 7; Mrusek, Ottenbacher, & Harrington, 2022, p. 14). Based on all analyzed data Figure 4. highlights the review results of the building blocks of transformational leadership. Figure 4. Building blocks of a Transformational Leader Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 223 Therefore, innate qualities such as charisma, and personal integrity on the one hand, and acquired traits such as fostering trust and motivation on the other, are the building blocks that define a leadership style guiding an organization towards sustainability. Given that the analyzed articles were empirical in nature, the application of this leadership style in practice and the importance of the highlighted building blocks in leadership effectiveness have been demonstrated and as such, have answered the research question regarding the most exposed leadership building blocks that ensure success in influencing stakeholders' sustainability thinking and building an ethical culture in the organization. Furthermore, if we compare these building blocks with those that we have presented in the introduction that are considered sustainable leaders (see Figure 1), then we can conclude that a transformational leadership style can be equated with sustainability, as certain building blocks overlap with those that we define as a sustainable leadership style. For example, vision, empathy, collaboration, and ethics also define a sustainable leader, as do goal orientation, stakeholder focus, teamwork, and the charisma of a transformational leader. The intertwining of these building blocks of conducted research and the parallel drawn between a sustainable leader and a transformational leader represent a significant contribution to the science in this field. Validating this association and highlighting the key building blocks is an extension of existing knowledge and research. Leaders' behavior needs to be inclusive and open to new ideas, and more specifically, in setting clear performance goals (García Martín, Duran-Heras, & Reina Sanchez., 2023, p. 13). The highlighted behavioral patterns from our research summarize, based on conducted regression analyses of the reviewed literature, the correlation between the core building blocks of transformational leaders and the success of implementing sustainable practices in the organization. The transformational leadership style presented in the introduction can also be linked to sustainable practices in an organization because of the qualities that such a leader possesses, which are crucial in today's context. For organizations, it is essential to build their goals on social sustainability factors that foster good relationships with employees, customers, suppliers, owners, and the local community in which the organization operates. If a leader is aware of their role in promoting sustainability and aims for long-term efficiency, their actions and leadership will be directed towards teamwork, motivation, connecting, rewarding, and importantly, respecting and involving all stakeholders. In this way, we can expect that the organization's existence will not only aim to bring profit but also to educate future generations about the importance of social (and environmental) factors and ensure the organization's long- term sustainability. 6 Conclusion The main purpose of the research was to review the existing literature and to identify the leadership style that best embodies sustainable development by identifying fundamental building blocks that characterize such a leader. Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 224 Based on the results obtained after the systematic literature review, we can conclude that leadership styles and the building blocks we have outlined have more similarities than differences. We have also confirmed that the transformational leadership style, in connection with the implementation of sustainable practices in organizations, is considered the most suitable and prevalent. Additionally, we highlighted some key building blocks of this style on which leaders could build their skills to effectively lead and achieve primarily social factors of sustainable development, thereby offering organizations the opportunity for further development of social factors into their business models. Thirdly, we laid the foundation for further research both in terms of empirical research and the enhancement of the theoretical framework, as we equate the highlighted building blocks of sustainable leadership with the theory of sustainable leadership. This forms the basis for further exploration toward defining a new, sustainable leadership style and shaping a model of sustainable leadership. For the scientific field the compiled building blocks represent a merging of findings of several empirical studies in the European field and build on them for more in-depth and extended further research. They also signify progress for organizations and society at large in terms of awareness, acceptance, and implementation of these building blocks into operations, decisions, and organizational culture, providing leaders with opportunities for personal and business growth. Above all, our research could be instrumental for European leaders by highlighting these building blocks and the transformational leadership style in launching sustainability into practice for all stakeholders. We see the limitations of our research mainly in the relatively small number of units of reviewed literature and access to databases obtained as well as in the relatively small number of empirical studies carried out that would only address the correlation between social factors and transformational leadership style. A recommendation for further research could involve searching academic articles in other databases and increasing the number of analyzed units. This approach would enhance the chances of confirming the findings and expanding the research model to include other cultures and determine differences in building blocks related to transformational leadership style based on geographic variables and other demographic influences (educational attainment, gender). 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Zacher, H., Kühner, C., Katz, I. M., & Rudolph, C. W. (2024). Leadership and Environmental Sustainability: An Integrative Conceptual Model of Multilevel Antecedents and Consequences of Leader Green Behavior. Group & Organization Management, 49(2), 365-394. doi:https://doi.org/10.1177/10596011241229891 *** Tadeja Sumrak Vegelj is a PhD student at the Faculty of Organisation Studies in Novo mesto, programm Quality Management. She holds a Master's degree from the University of Ljubljana, Faculty of Economics. Since 2014 she has been employed at Nuklearna elektrarna Krško d.o.o. in the Procurement Department and has 20 years of experience in the field of organizational management, business operations, marketing, new project Izzivi prihodnosti / Challenges of the Future, Članek / Article November 2024, leto / year 9, številka / number 4, str. / pp. 206–228. 228 implementation and public procurement. Acquired competences: in 2018, additional qualification of Public Procurement Expert in the Republic of Slovenia. Challenges and desire for development are transferred from the field of public procurement to the sustainable business of organizations and the importance of organizations’ awareness of sustainability orientation, and therefore continues her work by joining sustainability groups and upgrading her education in this field as well. *** Povzetek: Si menedžerji upajo voditi trajnostno? Gradniki vodenja deležnikov v organizaciji z namenom spodbujanja trajnostnih praks Raziskovalno vprašanje (RV): Delovanje in razvoj vsake organizacije v smeri trajnosti je v veliki meri odvisno od vodij, njihovih veščin, načina komunikacije in motiviranja ostalih deležnikov. Ta raziskava se tako osredotoča na vodje, njihov način delovanja, vodenja in sprejemanja odločitev, ko so postavljeni pred dejstvo, da jim vizija narekuje spodbujanje trajnostnih praks. Raziskovalno vprašanje se tako glasi: Kateri so najbolj pogosto izpostavljeni gradniki vodenja, ki zagotavljajo uspešnost pri vplivanju na trajnostno razmišljanje deležnikov? Namen: Glavni namen raziskave je preveriti obstoječo literaturo glede stilov vodenja, ki jim lahko pripišemo elemente trajnosti in izpostaviti raziskave o korelaciji med stilom vodenja in spodbujanjem trajnostnih praks v organizaciji. Metoda: Metodološki pristop smo na podlagi uvodnih spoznanj začeli s sistematičnim pregledom domače in tuje literature in člankov, ki so objavljeni v dostopnih bazah podatkov (Scopus, ProQuest, Science Direct, Web of Science) ter po repozitorjih slovenskih univerz. Pri iskanju ustreznih člankov smo uporabili ključne besede, in sicer “trajnost”, “slog vodenja”, “družbena odgovornost”, v slovenskem jeziku ter “sustainability”, “corporate leadership” in “social outcomes” v angleškem jeziku. Rezultati: Analizirani članki dokazujejo izpostavljenost transformacijskega stila vodenja kot trajnostnega in podajajo ključne gradnike, ki so za takšne vodje značilni. Organizacija: Raziskava bo vodstvenemu kadru dala vpogled v ključne gradnike njihovega vodenja za zagotavljanje trajnostnih praks v organizaciji. Družba: Implementacija in prepoznavanje ključnih lastnosti vodij in načinov vodenja ima pozitiven vpliv tudi na zaposlene in ostale deležnike, torej na družbo nasploh, saj izpostavlja ključne gradnike, s katerimi lahko vodje vplivajo na družbo. Originalnost: Zaradi izpostavljanja pozornosti uveljavitvi trajnostnih praks v organizacijo v korelaciji z vodstvenim stilom, bo originalnost raziskave povečala preglednost do sedaj raziskanih tez na področju menedžmenta, saj bomo izpostavili gradnike trajnostnega vodenja in jih povezali s teorijo trajnostnega vodenja. To bo zasnovalo temelje za nadaljnje raziskovanje v smeri definiranja novega, trajnostnega stila vodenja. Omejitve/nadaljnje raziskovanje: Omejitve izvedene raziskave vidimo v sorazmerno majhni količini raziskovanih enot, ki smo jih obravnavali in omejenim številom tistih, ki zajemajo dejansko implementacijo trajnostnega razvoja do deležnikov, zato smo se osredotočili na ugotovitve vpliva celostnih trajnostnih dejavnikov. Predlog nadaljnjih raziskav gre v smeri empiričnega preverjanja dejanskega zavedanja in uporabe izpostavljenih gradnikih vodstvenega stila za vzpostavitev trajnostnega poslovanja. Ključne besede: trajnost, stil vodenja, transformacijski stil. Copyright (c) Tadeja SUMRAK VEGELJ Creative Commons License This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License