Do strategic planning dimensions and transformational leadership contribute to performance? Evidence from the banking sector

Abstract

Article history: Received: July 10, 2020 Received in revised format: October 18 2020 Accepted: October 25, 2020 Available online: October 25, 2020 While some organizations realize the important role of strategic planning (SP) and leadership in influencing their business performance, it is unknown what SP dimensions and leadership style are required to improve the performance of banking institutions. The purpose of this study is to investigate the effects of transformational leadership (TL) style and SP dimensions (strategic planning level, implementation and barriers) on organizational performance. To this end, a self-administered questionnaire is distributed to a sample of 246 managerial employees from private banks in Yemen. The analysis with structural equation modelling using partial least squares indicates that TL style and SP dimensions significantly influence the performance of Yemeni banks. The results reveal that TL and SP dimensions are profoundly needed to enable Yemeni banks to propel to improved bank performance. The results draw several pertinent implications for decision makers that will help enhance the performance of the banking sector. Limitations from the findings and recommendations for further research are put forward. © 2021 by the authors; licensee Growing Science, Canada