Strategic leadership to organization performance: strategic flexibility and innovative HR practices

Purpose Drawing on Upper Echelons Theory, this study investigates a moderated serial mediation model linking strategic leadership to organization performance through organization strategic flexibility and innovative HR practices. In addition, this study examines organization absorptive capacity as a moderator. Design/methodology/approach We used time-lagged survey data collected from 487 employees working in Saudi Arabian service-sector organizations. We tested the proposed model using Mplus. Findings The results indicate that strategic leadership is positively associated with organization performance, both directly and indirectly through the sequential mediating roles of organization strategic flexibility and innovative HR practices. Moreover, an organization's absorptive capacity moderates the relationship between strategic leadership and organization strategic flexibility, thereby strengthening the serial indirect effect of strategic leadership on organization performance. Originality/value This study extends strategic leadership research by developing an integrated explanation of how strategic leadership is translated into organizational performance. Drawing on Upper Echelons Theory, it identifies organizational strategic flexibility as an adaptive capability and innovative HR practices as an implementation mechanism through which strategic leadership influences performance. The study also advances the literature by positioning organizational absorptive capacity as a contextual boundary condition that strengthens this process.