Journal of Optimization and Supply Chain Management

Journal of Optimization and Supply Chain Management

The Analysis of the Role of Leadership Styles and Managerial Decision-Making Strategies in Improving Financial Health and Overcoming Financial Distress Challenges

Document Type : Review Paper

Authors
1 Faculty of Education, University of Windsor, Windsor, Canada
2 Management and Accounting, Islamic Azad University, Iran
Abstract
Objective: The purpose of this research is to investigate the role of leadership styles and decision-making models in deriving positive impacts on the financial situation of organizations operating in an emerging economy. It will explore the influence of Transformational Leadership Styles, Transactional Leadership Styles, and Laissez-Faire Leadership Styles in relation to different models of decision-making.
Methods: Using an applied and descriptive-analytical research design, a survey methodology is used within this research study. Data were collected using standardized questionnaires from senior and middle-level managers within organizations listed on Tehran Stock Exchange. Using the survey methodology, a total of 63 responses were examined utilizing Partial Least Squares Structural Equation Modeling to assess the hypothesized relations among leadership style, decision-making approaches, and organization financial health.
Results: Results of the present research suggest that the transformational and transactional style of leadership has a positive and significant impact on corporate financial performance; in contrast to this, the impact of the laissez-faire leadership style is insignificant. On the other hand, in respect to the style of decision making, avoidant, intuitive, and rational styles of decision making have a positive and significant impact on financial performance; whereas instant and dependent style of decision making has no significance.
Conclusion: Organizational financial success can be promoted by combining good leadership styles and decision-making approaches that are suited to the situation. In particular, transformational leadership combined with rational and intuitive decision-making approaches contributes to improved financial outcomes. This research enriches the leadership and financial management literature by providing empirical insights into the impact it has on organizations operating in a developing economy.
Keywords

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