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This study proposes that a sector cultural characteristics influence the implications of principal leadership on school effectiveness. The study suggests a mediation-moderation model: teacher organizational commitment mediates the relationship between the interaction of participative decision-making (PDM) and paternalistic leadership and school sector and school effectiveness (teachers’ organizational citizenship behavior, teachers’ strain, student achievement). Data were collected randomly from a sample of 245 participants including ethnocultural minority Arabic-speaking teachers and Jewish teachers. Student academic achievement was provided by the National Authority for Measurement and Evaluation in Education. The Structural Equation Modelling results showed that the implications of paternalistic leadership are context-dependent and showed positive implications of PDM on school effectiveness regardless of school sector. Implications for theory and practice are discussed.