Evaluation of the effect of modern approaches to management and leadership styles for sustainable business performance: the mediating role of innovation in the banking sector of Ghana

Purpose This study investigates the impact of contemporary management and leadership styles on sustainable business performance. With sustainable business performance as the dependent variable, modern management approaches and leadership styles were designated as independent variables, and innovation was the mediating variable. This study employs economic, environmental and social sustainability as proxies for sustainable business performance. Systems thinking, total quality management, lean management, agile management and matrix management were used as proxies for contemporary management. Transformational, servant, authentic and situational leadership styles. Design/methodology/approach Among the 23 registered banks in Ghana, this study focuses on nine banks listed on the Ghana Stock Exchange. A survey questionnaire was designed, and a stratified purposive sampling technique was employed, resulting in a sample of 405 completed questionnaires. Data analysis was performed using partial least squares structural equation modelling (PLS-SEM) to assess the seven hypotheses. Findings The findings suggest that leadership styles and modern management approaches positively and statistically significantly impact sustainable business performance. The findings also demonstrate that innovation has a positive and statistically significant influence on sustainable business performance. Additionally, the results indicate that innovation partially mediates the relationship between leadership style, modern management approaches and sustainable business performance. Practical implications These findings emphasise the importance of modern management practices and adaptive leadership for sustainability. Policymakers should endorse training that fosters flexible leadership and innovation, and managers should adopt practices aligned with these insights to enhance sustainable performance and gain a competitive advantage. Originality/value This study explores the relationship between contemporary management practices and leadership styles in fostering sustainable business performance, particularly the mediating role of innovation.