The Role of Leadership Styles in Fostering Strategic Agility: Evidence from a Leading Iraqi Bank

This study investigates the influence of transformational and transactional leadership styles on the strategic agility of Bank of Baghdad, a leading Iraqi bank operating in a dynamic and competitive environment. Strategic agility, defined as the capacity to sense and respond effectively to environmental changes, is crucial for organizational success in today's rapidly evolving market. Utilizing a quantitative research design, a structured questionnaire was administered to a sample of 269 employees at various hierarchical levels within the bank. The questionnaire assessed leadership styles (transformational and transactional) and the bank's strategic agility based on established scales adapted from prior research. Data analysis involved descriptive statistics, correlation analysis, and regression analysis to examine the relationships between the variables. The findings reveal a strong positive relationship between both transformational and transactional leadership styles and strategic agility. Transactional leadership demonstrated a slightly stronger influence, potentially highlighting the importance of clear performance expectations and efficient operations in a dynamic environment. While the bank exhibits a generally positive perception of both leadership styles, there is potential for enhancing innovation and experimentation to further improve strategic agility. Based on these findings, the study recommends a balanced leadership approach that blends the visionary and empowering aspects of transformational leadership with the performance-oriented and operational focus of transactional leadership. It also suggests fostering a more proactive approach towards innovation, investing in leadership development programs, promoting a culture of agility, and regularly monitoring the impact of leadership on strategic agility. This study contributes valuable insights for both academics and practitioners seeking to understand the critical role of leadership in fostering organizational agility within the banking sector and beyond, particularly in dynamic and competitive environments like the Iraqi banking industry.