Transformational, Transactional, Democratic Leadership Effects on Employee Performance Mediated Knowledge Sharing at KB Bank Sumatera

Abstract

Leadership research often assumes that different leadership styles influence employee performance through similar mechanisms. This study examines whether knowledge sharing selectively mediates the relationship between leadership styles and employee performance. Data were collected from 181 employees across nine branches of Korea Banking (KB) Bank Regional Sumatera and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The measurement model showed satisfactory reliability, convergent validity, and discriminant validity. The results indicate that transformational leadership directly affects employee performance (β=.387, p<.001) but neither influences knowledge sharing nor yields indirect performance effects. Transactional leadership has no direct effect on performance (β=-.034, p=.702) but significantly influences knowledge sharing (β=.524, p<.001) and indirectly affects performance (β=.145, p<.001). Democratic leadership significantly affects knowledge sharing (β=.231, p=.026) and performance (β=.341, p<.001), with a significant indirect effect (β=.064, p=.036). The findings confirm that knowledge sharing serves as a selective pathway between leadership styles and performance. This study is limited by its cross-sectional design, single organizational context, and self-reported data. This study contributes to the leadership and knowledge management literature by highlighting the distinct mechanisms through which leadership styles influence performance and the importance of knowledge-sharing systems.

Keywords

Democratic Leadership Employee Performance Knowledge Sharing Transactional Leadership Transformational Leadership