Transformational leadership and its impact on organisational performance

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Transformational leadership is a leadership style in which leaders encourage, inspire and motivate employees to innovate and create change that will help grow and shape the future success of the company. This is accomplished by setting an example at the executive level through a strong sense of corporate culture, employee ownership and independence in the workplace (Lam, 2002).

Each organization has its own goal, and workers have to utilize different control activities and effective operation to achieve their organizational goal. Performance indices are an instrument to evaluate goal achievement. In the for-profit organizations, performance is to measure revenue, production, and profit making (Lee, 1996).

Morrow (2003) proposed that transformational leader will help to promote employees’ work abilities, organizational involvement, self-determination, delegation, and self-achievement. If leaders and followers can trust and help each other, it will engender a higher recognition to the organizational goals and values. The followers will make their best efforts to the organization and hope to keep a good relationship with each other. Hence, job satisfaction can be promoted by transformational leadership

Transformational leaders will motivate followers and lead them to achieve group performance under their own interests. Thus, followers will perform better than expectation and the degree of satisfaction will also increase. Lee (1996) found transformational leadership in the government agencies is positively related to the followers’ job satisfaction. Deluga&Souza (1991) found that performance, job satisfaction and transformational leadership are correlated. Transformational leaders will pay attention to take care and to respect their followers. So, performance and job satisfaction of followers in the work will be elevated. When transformational leaders promote the involvement and achievement of the employees, job satisfaction and organizational identification will also be raised. Therefore, the organization and employees will work closely and the job efficiency will be also lifted.

Conclusion

Various literature and scholars have found that transformational leadership has a positive effect on the organizational performance. It means that transformational leaders are helpful to promote work performance (Bass, 2003).Huang and Chi (2004) found thatJob satisfaction is significantly and positively related to organizational performance. In return job satisfaction can motivate employees to work hard and promote organizational performance (Lam, 2002). Thus, transformational leaders can promote employees’ job satisfaction and engender them to fulfill organizational missions and accomplish the organizational goals.

 

References

Morrow, P. C. (2003). Concept redundancy in organizational research: The case of work commitment. Academy of Management Review, 8(3), 486-500

Lee, J. H. (1996). The job satisfaction of accountants in the department of Budget, Accounting and Statistics of government. Unpublished master’s thesis, National Chung Hsing University, Taiwan.

Deluga, R. J.&Souza, J. (1991). The effects of transformational and transaction leadership style on the influencing behavior or subordinate police officers. Journal of Occupational Psychology, 64, 49-55

Bass, B. M.(2003). Predicting unit performance by assessing transformational and transactional leadership. Journal of Applied Psychology, 88(2), 207-218

Huang, Y. S.(2004). Internal marketing, organizational culture, job satisfaction, and operational performance: A study on international-class tourist hotels in Taiwan. Journal of Management & System, 11(4), 485-507

Lam, S.(2002). Relationship between organization justice and employee work outcome: A cross-national study. Journal of Organizational Behavior, 23, 1-18