Transformational Leadership as Mediator in the Relationship Between Cooperative Financial and Performance

Transformational leadership plays a crucial role in bridging financial management practices and cooperative performance. It ensures that financial strategies are effectively implemented and translated into improved performance. This study examined the role of the general manager’s transformational leadership in strengthening the link between financial management and cooperative performance. Specifically, it determined how transformational leadership, such as idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration, mediated financial performance when integrated with financial management practices. A quantitative research design with a mediation analysis was used to process data from 299 respondents across selected cooperatives. The results revealed that most respondents were from large cooperatives, many with low dividend rates. Findings showed that the general manager demonstrated a “Very high” level of transformational leadership, financial management practices were rated as “Very good,” and cooperative financial performance was assessed as “Very good.” There was no significant difference in cooperative performance when compared by size. The study concluded that financial management positively influenced general manager transformational leadership, financial management practices had a strong influence on cooperative performance, and transformational leadership mediated between financial management and financial performance with cooperative dynamic effect. Anchored on Transformational Leadership Theory, the study emphasized that leaders who inspire employees can elevate cooperative success and sustainability. With SDG 10, this research demonstrates how cooperatives, through effective leadership and sound financial management, can reduce socio-economic disparities, empower marginalized communities, and promote financial inclusion, thereby contributing to the reduction of inequalities, fostering economic opportunities, and stimulating sustainable economic growth.