Strategic Leadership and Competitive Advantage in Islamic Banking: The Mediating Role of Knowledge Sharing in Iraq
DOI:
https://doi.org/10.54536/ajebi.v5i3.7644Keywords:
Competitive Advantage, Iraq, Islamic Banking, Knowledge Sharing, Strategic Leadership, Team EmpowermentAbstract
This study examines how strategic leadership enhances competitive advantage in Iraqi Islamic banks through the mediating role of knowledge sharing. Iraqi Islamic banks provide a distinctive research setting because they operate under both conventional competitive pressures and Sharia-compliance requirements, which constrain certain financial practices and require managers to balance regulatory, ethical, and market considerations. This context is particularly relevant for examining how leadership capabilities and knowledge-sharing mechanisms contribute to competitive advantage. Strategic leadership is conceptualized through three dimensions: decision-making, flexibility and adaptability, and team empowerment. Using a quantitative cross-sectional design, data were collected from senior managers, supervisors, and employees working in 20 major Islamic banks in Baghdad. Of 530 distributed questionnaires, 485 valid responses were analyzed using partial least squares structural equation modeling (PLS-SEM). The results show that strategic leadership has a significant positive effect on competitive advantage (β = 0.374, p < 0.001) and knowledge sharing (β = 0.745, p < 0.001), while knowledge sharing significantly enhances competitive advantage (β = 0.392, p < 0.001). The indirect effect of strategic leadership on competitive advantage through knowledge sharing is also significant (β = 0.292, p < 0.001), indicating partial mediation. These findings demonstrate that strategic leadership contributes to competitive advantage not only directly but also by creating an organizational environment that facilitates knowledge exchange. Practically, the findings suggest that managers of Islamic banks should strengthen participative decision-making, employee empowerment, organizational adaptability, and knowledge-sharing practices to improve competitive performance. The study contributes to the strategic leadership and knowledge management literature by providing empirical evidence from an underexplored Iraqi Islamic banking context and by clarifying the mechanism through which knowledge sharing translates leadership capabilities into competitive advantage.
Downloads
References
Abdeen, H., De-Pablos-Heredero, C., Cosculluela-Martínez, C., & Montes-Botella, J. (2025). Strategic leadership and its impact on dynamic capabilities and sustainable competitive advantages. Management Decision. Advance online publication. https://doi.org/10.1108/MD-07-2024-1682
Adekoya, A. A. (2022). Islamic banking and finance in developing countries: the goals, challenges and prospects. International Journal of Economics, Commerce and Management, 10(5), 348–369.
Agustini, D., & Sulistyo, H. (2017). A model of innovative capability improvement through affective commitment, knowledge sharing and Islamic leadership in civil servant staff (PNS) of Semarang Regency. International Journal of Islamic Business Ethics, 2(4), 187–200.
Al-Rihaymee, M. K. J., Safari, M., Yahyazadehfar, M., & Sani, M. A. (2024). A model towards achieving sustainable competitive advantage through human resource empowerment in the banking industry in Iraq: explaining antecedents and consequences. Pakistan Journal of Life and Social Sciences, 22, 4225–4245.
Alandejani, M. (2022). An overview of efficiency and profitability in Islamic banking: a comparative study between Islamic banking and conventional banking. Social and Management Research Journal (SMRJ), 19(1), 209–234.
Alhawamdeh, H., Alkhawaldeh, B. Y., Zraqat, O., & Alhawamdeh, A. M. (2024). Leveraging business intelligence in organizational innovation: a leadership perspective in commercial banks. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(1), 295–309.
Ali, W., Ibrahim Alasan, I., Hussain Khan, M., Ali, S., Cheah, J. H., & Ramayah, T. (2022). Competitive strategies–performance nexus and the mediating role of enterprise risk management practices: a multi-group analysis for fully fledged Islamic banks and conventional banks with Islamic window in Pakistan. International Journal of Islamic and Middle Eastern Finance and Management, 15(1), 125–145.
Ashkevari, S. B., & Ghasemi, B. (2023). The impact of strategic leadership on organizational performance with regard to the role of organizational innovation. Journal of Organizational Behavior Research, 8(2), 40–53.
Chatterjee, S., Chaudhuri, R., & Vrontis, D. (2022). Knowledge sharing in international markets for product and process innovation: moderating role of firm’s absorptive capacity. International Marketing Review, 39(3), 706–733.
Chaudhary, A., Islam, T., Ali, H. F., & Jamil, S. (2023). Can paternalistic leaders enhance knowledge sharing? the roles of organizational commitment and Islamic work ethics. Global Knowledge, Memory and Communication, 72(1–2), 98–118.
Hussein, M. K., Krmln, N. Q., Flayyih, H. H., & Noori, R. B. (2024). Harnessing technological innovation and artificial intelligence in Iraqi commercial banks to achieve sustainability. In International Conference on Explainable Artificial Intelligence in the Digital Sustainability (pp. 280–296). Springer.
Hussein, M. K., Mahdi, O. T., Zuhairi, M. M. K., & Al-tekreeti, R. B. N. (2023). The role of reengineering operations in achieving banking sustainability: a case study on a sample of employees in Iraqi private commercial banks. American Journal of Environmental Economics, 2(1), 79–91. https://doi.org/10.54536/ajee.v2i1.2259
Ibrahim, M. B., Abdul-Talib, A. N., & Jedin, M. H. (2018). Determinants of knowledge sharing among banks employees and its effect on service innovation: a conceptual framework. Journal of Business and Management, 20(5), 39–45.
Iqbal, S., Ullah, S., Rizwan, A., Nazeer, N., Rasheed, M., & Siddiqi, A. F. I. (2026). Building competitive advantage: how organizational culture shapes absorptive capacity through knowledge sharing. Journal of Organizational Effectiveness: People and Performance, 13(1), 170–188.
Islam, M. T. (2024). The shari’ah foundation of Islamic banking. Dirasah International Journal of Islamic Studies, 2(1), 36–67.
Jerab, D., & Mabrouk, T. (2023). Strategic excellence: achieving competitive advantage through differentiation strategies. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4575042
Juma, M., Muhoho, J., & Mwangi, J. K. (2024). Knowledge sharing and competitive advantage of commercial banks in Kenya. African Journal of Emerging Issues, 6(15), 133–145.
Kamariah Bt Abdul Wahid, N., Bt Mohd Mustamil, N., & Fariza Bt Mustaffa, N. (2019). A study on the influence of spiritual leadership on knowledge sharing behavior within telecommunication industry in Malaysia. Humanities & Social Sciences Reviews, 7(1), 87–98.
Kanji, S. I., Katrodia, A., & Ogola, F. O. (2023). The effect of strategic leadership on organizational performance in the financial institutions in Kenya. An International Serial Publication for Theory and Practice of Management Science, 403.
Khalifah, M. H., Aslan, H., & Abdullah, A. (2024). Challenges in the implementation of mudharabah financing in the Islamic banking industry. Ekinoks Ekonomi İşletme ve Siyasal Çalışmalar Dergisi, 11(1), 1–23.
Khraishi, A., Paulraj, A., Huq, F., & Seepana, C. (2023). Knowledge management in offshoring innovation by SMEs: role of internal knowledge creation capability, absorptive capacity and formal knowledge-sharing routines. Supply Chain Management: An International Journal, 28(2), 405–422.
Kazak, H., & Alim, H. B. (2022). Qard Al-Hassan model as an institutionalised method of Islamic finance. Islamiyyat, 44(1).
Kuyateh, M. A. (2025). Shariah compliance prohibitions in Islamic banking and finance: the case of riba, gharar and maysir. Journal of Islamic Banking & Finance, 42(2).
Mehrizi, F. Z. (2016). Investigating the relationship between job security and knowledge sharing behavior with the mediator of organizational culture in Ayandeh Bank. Mediterranean Journal of Social Sciences, 7(3), S2.
Mohamed, A. (2022). Strategic determinants of sustainable competitive advantage of Islamic commercial banks in Kenya [Doctoral dissertation, Jomo Kenyatta University of Agriculture and Technology].
Nor, M. S. B. M., & Fidhayanti, D. (2022). Riba and gharar on digital payment applications: comparison between Malaysia and Indonesia. Jurisdictie: Jurnal Hukum dan Syariah, 13(1), 40–62.
Ojonugwa, B. M., Adanigbo, O. S., & Ogunwale, B. (2023). Framework for strategic leadership in banking to achieve resilient economic growth. International Journal of Multidisciplinary Research and Growth Evaluation, 2, 802. https://doi.org/10.54660/.IJMRGE
Olan, F., Arakpogun, E. O., Suklan, J., Nakpodia, F., Damij, N., & Jayawickrama, U. (2022). Artificial intelligence and knowledge sharing: contributing factors to organizational performance. Journal of Business Research, 145, 605–615.
Rahmat, T., & Ahman, E. (2025). Green knowledge sharing for sustainable competitive advantage in the halal industry through an HRM perspective. Jurnal Nusantara Aplikasi Manajemen Bisnis, 10(1), 99–116.
Supriyanto, A. S. (2019). Obtaining factors affecting innovative work behavior (IWB) of local bank employees under Islamic leadership: application of partial least squares method. Industrial Engineering & Management Systems, 18(3), 417–425.
Suharto, S. (2023). Strategic leadership: effective leadership in strategic management. Jurnal Ilmiah Multidisiplin Indonesia (JIM-ID), 2(1), 38–44.
Tahsildari, H. (2015). The mediating effect of innovative behaviour and entrepreneurial passion on the relationship between transformational leadership and organizational effectiveness in Islamic banks [Doctoral dissertation, Universiti Teknologi Malaysia].
Wardaya, E. W. (2016). Pengaruh strategic leadership terhadap competitive advantage melalui intellectual capital sebagai variabel intervening pada perusahaan non-manufaktur terbuka di Kota Surabaya [Doctoral dissertation, Petra Christian University].
Yuen, S. S., & Lam, H. Y. (2024). Enhancing competitiveness through strategic knowledge sharing as a driver of innovation capability and performance. Sustainability, 16(6), 2460.
Yulitasari, L., Salma, A. M., & Suhendar, S. (2025). Enhancing the role of strategic management in advancing the sustainability of Islamic financial institutions. Jurnal Manajemen Dakwah, 11(1), 45–64.
Zhu, Y., Zhang, H., Siddik, A. B., Zheng, Y., & Sobhani, F. A. (2023). Understanding corporate green competitive advantage through green technology adoption and green dynamic capabilities: does green product innovation matter? Systems, 11(9), 461.
Zuhairi, M. M. K., & Hussein, M. K. (2023). The role of knowledge management processes in enhancing the quality of banking information systems: an applied study in the Iraqi Islamic banking sector. American Journal of Financial Technology and Innovation, 1(1), 46–53. https://doi.org/10.54536/ajfti.v1i1.2337
Downloads
Published
Issue
Section
License
Copyright (c) 2026 ibrahimabdmo@imamaladham.edu.iq
This work is licensed under a Creative Commons Attribution 4.0 International License.
