The effect of talent management and leadership styles on firms’ sustainable performance

Abstract

Purpose

This study aims to develop a framework that examines how different leadership styles influence talent management (TM) and how these leadership styles and TM influence firms’ sustainable performance considering the moderating role of environmental dynamism.

Design/methodology/approach

To achieve these objectives, an empirical survey was conducted among 480 participant firms in Greece. Hierarchical regression was performed to test the hypotheses.

Findings

This study reveals the significance of authoritative and transformational leadership on TM. The results also show the positive effect of talent development on sustainability. Moreover, entrepreneurial leadership is found to be the most influential style for economic sustainability, whereas transformational and transactional leaderships are the most influential leadership styles for social and environmental sustainability performance.

Research limitations/implications

The data was collected at only one point in time, while sustainability is a continuous process. Moreover, only four leadership styles were addressed.

Practical implications

Proper leadership style should be selected to facilitate different sustainability dimensions. Talent development is a valuable investment toward sustainable performance of firms.

Originality/value

This study contributes to the upper echelon theory, identifying whether and how different leadership styles affect TM and sustainability. The study also advances the human recourse development literature by critically reviewing and identifying the influence of TM on firms’ sustainable performance. Moreover, the role of environmental dynamism is revealed on all the above relationships.

Citation

Kafetzopoulos, D. and Gotzamani, K. (2022), "The effect of talent management and leadership styles on firms’ sustainable performance", European Business Review, Vol. 34 No. 6, pp. 837-857. https://doi.org/10.1108/EBR-07-2021-0148