Purpose In this study, leadership, social and technical system and organizational behavior theories were used to test the research model, consisting of six variables. The purpose of this study was to observe the impact of leadership styles (i.e. transformational leadership and empowering leadership) on organizational performance and innovation. In addition, the mediating role of shared leadership and mediating role of organizational culture in the model were measured. Design/methodology/approach This study relied on a quantitative design, specifically, a questionnaire, to obtain data from 301 employees in the health sector (three public-sector hospitals in the Basra Governorate). Findings Data analysis results showed that most of the relationships in the research model were positive. In addition, the results demonstrated the importance of the mediating variable in strengthening the relationship between the independent and dependent variables. The results of this study also clearly depicted the role of the mediating variable. Theoretical and practical implications were discussed, and proposals for future studies were presented. Originality/value This research focused on the use of modern leadership styles, collected data on such styles and included them in one model to enhance organizational output. This study was conducted in the context of the Iraqi health sector and can be distinguished from other studies by its adoption of a large sample to obtain clear and important results, thereby making it an important reference for researchers to improve organizational performance.