Strategy Evaluation and Organizational Performance: Investigating Transformational Leadership as A Mediator Using PLS-SEM

Abstract

Effective strategic management and leadership are critical for improving organizational performance, particularly in public sector organizations. In the UAE, public institutions continue to face challenges in achieving desired performance outcomes. While prior research has examined leadership and strategy independently, there is a limited understanding of the mediating role of transformational leadership in the relationship between strategy evaluation and organizational performance. This study investigates the direct effect of strategy evaluation on organizational performance and determines whether transformational leadership mediates this relationship within the UAE Ministry of Energy and Infrastructure. A quantitative research design was adopted, with survey questionnaires administered to managers and administrative supervisors. A total of 351 valid responses were collected, achieving a response rate of 99.4%. Data was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that strategy evaluation alone does not have a significant direct effect on organizational performance. However, transformational leadership fully mediates the relationship, demonstrating that effective leadership is essential for translating strategic evaluation practices into improved organizational outcomes. This study contributes to the literature by providing empirical evidence of the mediating role of transformational leadership in the UAE public sector. Practically, the findings offer guidance for policymakers and public sector managers on aligning leadership development with strategic evaluation processes to enhance performance. The results underscore the importance of fostering transformational leadership to achieve higher efficiency, accountability, and service delivery in public organizations.