Relying on the social cognitive theory, which postulates that human behaviour is due to social experiences and cognitive interpretation, the current study seeks to investigate the mediating role of collective teacher efficacy (CTE) in the relationship between principals' systems thinking (PST) and school effectiveness in terms of academic emphasis and student academic achievement after accounting for students' socioeconomic backgrounds. A three-source survey design with self-report and non-self-report data was used, from a sample of 423 participants from 71 elementary schools in Israel. The sample included school management team (SMT) members and teachers who were not SMT members. Data were aggregated at the school level of analysis. The results from structural equation modelling and bootstrapping analysis indicated that CTE partially mediates the relationship between PST and academic emphasis, irrespective of the students' socioeconomic backgrounds. Theoretical and practical implications are discussed.