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.