Leadership Styles and Business Transformation: The Mediating Role of Knowledge Management and Organizational Culture

Abstract

This study examines how leadership styles influence business transformation through the mediating roles of knowledge management and organizational culture. Recent research suggests that leadership affects transformation not only directly but also through internal processes that shape learning, behavior, and collective norms. Building on this perspective, the present study aims to clarify the mechanisms through which leadership contributes to strategic renewal in manufacturing firms. A quantitative, cross-sectional design was employed using data collected from senior managers, and the analysis was conducted through Partial Least Squares Structural Equation Modeling. The results revealed that leadership significantly enhances both knowledge management and organizational culture. These two factors exert meaningful effects on business transformation. The mediation analyses confirmed that both knowledge management and organizational culture partially transmit the influence of leadership to transformation outcomes. The findings highlight the importance of cognitive and cultural mechanisms in explaining how leadership drives organizational change. They also highlight the need for firms to strengthen internal knowledge systems and cultivate supportive cultures to maximize leadership effectiveness in transformation initiatives.

Keywords:  Leadership Styles, Business Transformation, Knowledge Management and Organizational Culture