The influence of leadership on strategic flexibility and business performance: the mediating role of talent management

Abstract

PurposeThe aim of this paper is to determine whether leadership affects strategic flexibility and business performance taking into consideration the mediating role of talent management in these relationships.Design/methodology/approachThe proposed framework is tested by confirmatory factor analysis (CFA) and finally structural equation modeling (SEM), using the survey data from 462 Greek firms. The mediation effect of talent management was tested by the Sobel test.FindingsThe results show that leadership drives firms to strategic flexibility and business performance, but the introduction of talent management fully mediates these relationships. Strategic flexibility also affects business performance positively.Research limitations/implicationsThis study explores a formal style of leadership; many leadership styles remain unexplored. The field of talent management is in urgent need of more empirical research to explain its importance and how talent management is handled in the 21st-century.Practical implicationsThis study proves that managers should invest more in talent management; outstanding talent can be leveraged to implement the best operational practices while managers' motivation for talent management contributes to a deeper anchoring of strategic flexibility and performance efforts in firms.Originality/valueThe current state of knowledge of both theory and practice for critical organizational factors such as strategic flexibility and talent management will be extended.