Islamic Values and Value–Behaviour Gaps in Saudi SMEs: A Qualitative Study of Leadership Practice

Abstract The relationship between religiously grounded values and everyday leadership practice in organisations remains underexplored, particularly in small and medium-sized enterprises (SMEs). In Saudi Arabia, Islamic values such as justice, trust, consultation, and accountability are expected to underpin ethical leadership and organisational conduct. Yet interview accounts from employees and leaders suggest systematic value–behaviour gaps in how these values are interpreted and enacted in practice. Drawing on 30 semi-structured interviews with one leader and five employees in each of five Saudi SMEs, this exploratory qualitative study examines how Islamic values are mobilised in leadership practice and how different patterns of value enactment shape employees’ experiences. Using an inductively derived three-level framework – balanced, excessive and insufficient enactment – the study illustrates how the same values can support ethical leadership when applied in a balanced way, but become associated with harmful or destructive leadership practices when applied in excess or deficiency. The findings show how Islamic values may be selectively internalised or performatively invoked, creating misalignments between professed values and everyday leadership behaviours. Drawing on moral identity theory and virtue ethics as complementary theoretical perspectives, the study explains two dimensions of value enactment. Moral identity theory illuminates how Islamic values are internalised, selectively enacted, or invoked performatively, while virtue ethics explains how values can become dysfunctional when enacted excessively, insufficiently or without proportion and contextual judgement. Together, these perspectives clarify how value–behaviour gaps emerge and shape employees’ experiences in Saudi SMEs.