Exploring Purpose-Driven Leadership: Theoretical Foundations, Mechanisms, and Impacts in Organizational Context

Abstract

Leadership has been extensively studied in organizational contexts, with numerous theories examining how leaders influence success and employee engagement. Most recently, integrating organizational purpose—the core reason for an organization’s existence—into leadership has garnered substantial interest, resulting in the underdeveloped concept of Purpose-Driven Leadership. This paper presents a systematic review of Purpose-Driven Leadership in organizations. We employed the PRISMA guidelines and searched WoS and SCOPUS, identifying 58 relevant research papers for inclusion in our review. The success of Purpose-Driven Leadership, as a nexus of individual and organizational purposes, hinges on defining and implementing an organizational purpose that resonates at all levels, based on the inverted pyramid of purpose, from overarching organization to individual roles. Our review suggests several positive outcomes associated with Purpose-Driven Leadership. These include increased work engagement, where employees are more invested in their roles; enhanced organizational commitment, reflecting stronger loyalty to the organization; improved employee performance, demonstrating higher productivity and effectiveness; and overall organizational performance. Additionally, this leadership approach promotes a cohesive and motivated workforce by aligning individual goals with the broader organizational purpose, fostering a culture of collaboration and innovation. Several moderators were also identified, including effective purpose communication, impact perception, autonomy, and balance of work–life.