Soft Skills and Hard Results: Why Relationship Leadership Outperforms Task Management in Bangladesh's $42B Garment Sector

This study examines the relationship between leadership behaviour and firm performance in Bangladesh's $42 billion ready-made garment (RMG) sector, employing a mixed-methods approach combining PLS-SEM analysis of 400 factories with thematic interviews. Results reveal that relation-oriented leadership (ROB)—emphasising trust, empathy, and conflict resolution—has twice the impact (β = 0.42) of task-oriented approaches on performance, reducing turnover by 22% and enhancing productivity. Competitive advantage mediates 42.3% of this relationship, resolving the leadership-performance paradox by demonstrating how leadership translates into cost efficiency, human capital, and market adaptability. Emotional intelligence (EI) strengthens ROB's effectiveness by 27%. However, excessive empathy can hinder decisive action, presenting a critical trade-off—firm strategy further moderates outcomes, with change-oriented leadership driving 61% greater performance in differentiation-focused firms. The study advances the resource-based view by positioning leadership as a culturally contextualised VRIN resource in labour-intensive industries while challenging Western-centric leadership models. Practical implications include a strategic leadership alignment framework for RMG managers and policymakers, with direct applications for training programs and national industry benchmarks. By bridging theory and practice, this research offers a scalable solution to enhance competitiveness and worker welfare in global supply chains, particularly relevant for emerging economies facing similar labour dynamics.