Does Strategic Leadership Affect Financial Performance? (A Study of Selected Firms of Textile Industry in Pakistan)

Abstract

Performance is largely related to management decisions. Within   the hierarchy of a company, maximum power is vested in the strategic leadership. Thus, it is the strategic leadership that is primarily responsible for the efficient working of the company. By adopting different types of leadership behaviours, such as charismatic, considerate or transactional, the strategic leader motivates his subordinates for efficient working. This affects the overall  performance of a company. The financial performance has been measured through Sales, Net Profit Margin, Earnings per Share, Return on Equity and Return on Asset. The results support the theory that charismatic trait of leadership has the most significant impact on the financial performance of a company. The other two types of leadership behaviours, considered in this study, have no significant impact on the financial performance.