Ethical Leadership and Sustainable Entrepreneurial Performance among Amway Business Owners in Malaysia

HRMARS - 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.