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<p>The study examines the environmental dynamism (Env. Dyn.) and transformational leadership (Transf. Lead) indirect effects and Env. Dyn. moderating role on firms’ performance (FirmPR). Using structural equation modeling (SEM) and data collected from operating firms in Ethiopian industrial parks, the results show that Transf. Lead has a strong and positive direct effect on FirmPR (β = 0.884, <i>p</i> = 0.001), highlighting the critical role of inspiring and motivating leadership in driving organizational success. Env. Dyn. also positively influences FP (β = 0.813, <i>p</i> = 0.009), suggesting that firms can capitalize on dynamic and changing environments to enhance performance. However, the interaction between Transf. Lead and Env. Dyn. Exhibits a small but significant negative effect (β = -0.171, <i>p</i> = 0.031), indicating that the benefits of transformational leadership may slightly diminish under highly dynamic conditions. These results underscore the importance of combining effective leadership with adaptive strategies to maintain high performance in turbulent environments. The study recommends that organizations develop leadership programs that integrate transformational and adaptive approaches, proactively respond to environmental changes, and continuously assess the interplay between leadership and context to sustain competitive advantage.</p>

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Transformational leadership influence on industrial park firms’ performance in ethiopia: the moderating role of environmental dynamism

  • 期刊论文

  • 发表日期：

    2026年1月5日

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  • Biniam Getnet Agazu,
  • Chalchissa Amentie Kero,
  • Kenenisa Lemi Debela

摘要

The study examines the environmental dynamism (Env. Dyn.) and transformational leadership (Transf. Lead) indirect effects and Env. Dyn. moderating role on firms’ performance (FirmPR). Using structural equation modeling (SEM) and data collected from operating firms in Ethiopian industrial parks, the results show that Transf. Lead has a strong and positive direct effect on FirmPR (β = 0.884, p = 0.001), highlighting the critical role of inspiring and motivating leadership in driving organizational success. Env. Dyn. also positively influences FP (β = 0.813, p = 0.009), suggesting that firms can capitalize on dynamic and changing environments to enhance performance. However, the interaction between Transf. Lead and Env. Dyn. Exhibits a small but significant negative effect (β = -0.171, p = 0.031), indicating that the benefits of transformational leadership may slightly diminish under highly dynamic conditions. These results underscore the importance of combining effective leadership with adaptive strategies to maintain high performance in turbulent environments. The study recommends that organizations develop leadership programs that integrate transformational and adaptive approaches, proactively respond to environmental changes, and continuously assess the interplay between leadership and context to sustain competitive advantage.