About this article
- Submitted: May 31, 2025
- Final Revised: Sep 18, 2025
- Accepted: Jan 06, 2026
- Published: Jan 23, 2026
- Abstract view: 6
- PDF Download: 1
- Volumes: Vol. 4 No. 1 (2026) Pages 1-10
- DOI: 10.63208/210113-225
License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Copyright (c) 2026 Kustariningrum, Edi Setiawan, Mirwan Surya Perdhana (Author)
Cite this article
Abstract
This study examines how leadership influences profitability and organizational performance through identifiable transmission channels, exploring whether its impact is direct or mediated by firm-level capabilities and behaviors. The paper synthesizes cross-study evidence integrating leadership perspectives—including transformational, transactional, digital, entrepreneurial, and ambidextrous—with performance-management frameworks to trace effects from leader behaviors to process, market, and financial outcomes. Drawing on empirical studies from 2022–2025, the review finds that leadership quality rarely affects profitability directly; instead, its effects operate through mediators such as affective commitment, organizational citizenship behavior, innovation capacity, organizational learning, agile practices, and management accounting systems. Contextual moderators, including competition intensity, incentive design, institutional legitimacy, and cross-level dynamics, can amplify or dampen these effects. Methodologically, the study identifies consistent pathways, for example: leadership influences engagement, innovation, and agility, which enhance performance and ultimately improve profitability. The main contribution is a coherent value chain linking leadership to operational excellence and customer value, providing a practical blueprint for aligning leadership design with organizational systems, culture, and performance metrics to drive sustainable financial outcomes.
References
Ansari, M. S. A., Abouraia, M., El Morsy, R., & Thumiki, V. R. R. (2024). Influence of transformational and transactional leadership on agile project success. Project Leadership and Society, 5, 100136.
Backhaus, L., & Vogel, R. (2022). Leadership in the public sector: A meta-analysis of styles, outcomes, contexts, and methods. Public Administration Review, 82(6), 986–1003.
Conde, R., Dinulescu, C., & Pointer, L. (2025). Multi-level leadership interactions in sales: Exploring gender, performance and tenure effects. Journal of Business & Industrial Marketing, 40(4), 1008–1026.
Cooper, D. J., d’Adda, G., & Weber, R. A. (2024). Effective leadership across economic contexts. The Leadership Quarterly, 35, 101788.
Cristofaro, M., Neck, C. P., Giardino, P. L., & Neck, C. B. (2023). Self- and shared leadership in decision quality: A tale of two sides. Management Decision, 61(9), 2541–2563.
Do, V. P. A., & Bui, Q. T. (2022). The influence of leadership personality on profitability and firm investment in human capital: Evidence from Vietnamese SMEs. Finance Research Letters, 47, 102960.
Dubey, P., Pathak, A. K., & Sahu, K. K. (2023). Assessing the influence of effective leadership on job satisfaction and organizational citizenship behaviour. Rajagiri Management Journal, 17(3), 221–237.
Gošnik, D., Meško, M., & Stubelj, I. (2023). The relationship between leadership in BPM and company profitability. Administrative Sciences, 13(3), 77.
Huang, C.-H., Ting, C.-W., Chang, T.-W., Lee, Y.-S., & Yen, S.-J. (2023). The impact of ethical leadership on financial performance: The mediating role of environmentally proactive strategy and the moderating role of institutional pressure. Sustainability, 15(13), 10449.
Jauhari, H., Kumar, M., & Pandey, J. (2024). Impact of transformational leadership on service-delivery behaviors of frontline service employees. Journal of Retailing and Consumer Services, 79, 103816.
Klein, G. (2023). Transformational and transactional leadership, organizational support and environmental competition intensity as antecedents of intrapreneurial behaviors. European Research on Management and Business Economics, 29, 100215.
Mai, N. K., Do, T. T., & Nguyen, D. T. H. (2022). The impact of leadership competences, organizational learning and organizational innovation on business performance. Business Process Management Journal, 28(5/6), 1391–1411.
Marfo, M., Armah, A. A., Ofei, E. F., Adadevoh, L., & Reindoph, R. (2024). Effective leadership techniques and public sector performance: Evidence from Ghana. International Journal of Organizational Leadership, 13(1), 59–78.
Mohamud, A. H., Mohamud, I. H., & Mukhtar, A. A. (2024). Impact of leadership styles on employee performance in Hormuud Telecom, Mogadishu, Somalia. International Journal of Organizational Leadership, 13(3), 632–647.
Mollah, M. A., Ibrahim, Al Masud, A., & Chowdhury, M. S. (2024). Strategic leadership, affective commitment and strategic agility. Heliyon, 10, e40839.
Nasution, M. I., Soemaryani, I., Yunizar, & Hilmiana. (2024). Ambidextrous leadership and individual ambidexterity: Emerging challenges for medical representative performance. Cogent Business & Management, 11(1), 2356904.
Otache, I., Mejabi, E. I., Alogwuja, C. U., & Umar, K. (2025). Entrepreneurial leadership and hospitality firm performance: The roles of employee creativity and competitive advantage. Journal of Hospitality and Tourism Insights. Advance online publication.
Tran, Y. T., Chau, T. H. P., & Pham, Q. T. (2025). Transformational leadership and firm performance: The mediating roles of innovation capacity and management accounting systems usage. Sustainable Futures, 10, 100988.
Tirdasari, N. L., & Dhewanto, W. (2012). Family business succession in Indonesia: A study of hospitality industry. Procedia – Social and Behavioral Sciences, 57, 69–74.
Yas, H., Alkaabi, A., AlBaloushi, N. A., Al Adeedi, A., & Streimikiene, D. (2023). The impact of strategic leadership practices and knowledge sharing on employees’ performance. Polish Journal of Management Studies, 27(1), 343–362.
Zhao, S., Renxi, W., Giglio, C., & Appolloni, A. (2025). Impact of leadership styles and organisational citizenship behaviours on organisational green innovation performance: The moderating role of organisational legitimacy. Business Strategy and the Environment, 34, 3209–3225.