Towards Business Leadership in Farming Through Evaluating Cost Management and Economic Performance: An Integrated PLS-SEM Model and the Mediating Role of Operational Efficiency

The growing importance of management in ensuring effective cost control and sustainable economic performance in agricultural enterprises underscores the need for a deeper understanding of the relationships between costs and efficiency in poultry farming systems. Despite numerous studies on cost management, there remains a significant gap in explaining how cost structures interact with operational efficiency to shape economic performance within the framework of enterprise management. The objective of this study is to examine the impact of cost factors and operational efficiency on the economic performance of poultry farms. The empirical analysis is based on primary survey data collected in 2025 in Iraq from a targeted sample of 105 officially registered poultry farmers in the province of Salah al-Din, characterized by scale of production, variability in cost structure, and operational practices. The study employs a structured questionnaire administered during face-to-face interviews and utilizes structural equation modeling (SEM) with bootstrapping methods using SmartPLS software. The results show that feed costs have a strong positive impact on meat production (β = 4.844, p = 0.002) and mortality-related activities (β = 4.417, p = 0.013), confirming its decisive role in production intensity. Energy costs demonstrate a significant negative impact on meat production (β = −4.736, p = 0.002) and mortality (β = −4.438, p = 0.013), but a positive effect on profit (β = 3.252, p = 0.016), highlighting their dual role in efficiency and financial performance. Furthermore, mortality negatively affects profitability (β = −0.187, p < 0.001), whereas the production cycle positively affects profit (β = 0.113, p = 0.043), indicating a mediating role for operational efficiency. The results contribute to the literature on business leadership by demonstrating how cost management mechanisms can enhance decision-making effectiveness and promote stable performance outcomes in agricultural business organizations.