The Relationship of Leadership to Profitability and Performance
DOI:
https://doi.org/10.63208/210113-649Keywords:
Affective Commitment, Organizational Citizenship Behavior, Profitability, Transformational LeadershipAbstract
This study examines the relationship between leadership, organizational performance, and profitability through a conceptual integrative literature review. The review synthesizes recent empirical studies published primarily between 2022 and 2025, focusing on transformational, transactional, digital, entrepreneurial, and ambidextrous leadership. The findings indicate that leadership does not consistently influence profitability through a direct pathway. Instead, its effects are primarily transmitted through individual, organizational, and capability-based mechanisms, including affective commitment, organizational citizenship behaviour, work engagement, organizational learning, innovation capability, knowledge sharing, and agile practices. The review further shows that leadership outcomes vary according to organizational and environmental conditions, including market competition, organizational support, institutional pressure, and organizational legitimacy. Based on these findings, the study proposes a value-chain perspective in which leadership behaviours and competencies influence people and organizational processes, activate capabilities, and subsequently contribute to operational, market, and financial performance. The study provides a conceptual framework for understanding how leadership creates measurable organizational value while identifying directions for future empirical research.
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