Link Between Transformational Leadership and Organizational Performance

Topics: Leadership, Management, Organizational studies and human resource management Pages: 11 (3811 words) Published: March 9, 2011
This paper presents a relationship between transformational leadership and organizational performance. Through some findings, it has been concluded that transformational leadership has positive relationship with the overall performance of organization which could be measured in terms of effectiveness, efficiency, relevance and profitability of the organization. There are, basically, four components of a transformational leadership: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Transformational leadership is a far reach goal for a Nepalese organization. Introduction to the theme

The theme of my study is 'Link between transformational leadership and organizational performance'. There are mainly two different but very important factors in the theme. Those factors are transformational leadership and organizational performance which can be described as below: 1. Transformational leadership:

The term transformational leadership was first coined by Dowton (1973). Its importance came into light after a classic work provided by James MacGregor Burns in his researches about political leaders. According to Burns, transformational leadership is a process in which leaders and followers promote each other to higher levels of morality and motivation. Transformational leaders help their followers to look at old problems via a new perspective. In simple words, Burns attempted to link the roles of leadership and followers in which a leader tries to get connected with the followers which in turn raises the level of motivation and morality in both. Further, he distinguished between transactional and transformational leadership on the grounds of relationship of leaders and followers. Transformational leaders are also known as visionary leaders. Also sometimes it is termed as charismatic leaders. The point to remember is that all transformational leaders are charismatic but not all charismatic leaders are transformational. One of the most suitable examples of a transformational leader is Mahatma Gandhi who transformed the whole country with the support of his followers. Similarly, in 1996, Boss and Alive expanded the model of Burns, and defined the aspects of transactional and transformational leadership and even prepared it in questionnaire called "Multifactor Leadership Questionnaire (MLQ)." In this model, the aspects of transformational leadership include idealized influence, intellectual stimulation, inspirational motivation and individualized considerations. These aspects can be explained as below: a) Idealized influence: A leader is taken as a role model by the followers. A leader behaves in a conviction and takes stand which make followers to idealize the leader and respect his/her decisions. b) Inspirational motivation: A leader communicates his/her vision in such a manner that inspires the followers to become a part of that vision. c) Intellectual stimulation: In his factor, a leader stimulates and encourages the followers to use their creativeness in solving any problems that comes in the way of achieving mission. d) Individualized consideration: The followers get a supportive climate and personal attention from their leaders. A leader also acts as a mentor and provides appreciation to the individual contribution to the team. 2. Organizational Performance:

The organizational performance is defined in terms of effectiveness (mission fulfillment), efficiency (use of resources), ongoing relevance (the extent to which the organization adapts to changing conditions in its environment), and financial viability (long term profitability). Organizational performance is affected by organizational motivation, external environment and organizational capacity. Conceptual Review and Empirical Results

The research, conducted by Hancott D.E. (2005) in "Relationship between transformational leadership and organization performance in the largest public companies of...

References: • Bass M. B, Riggio E. R ,“Transformational Leadership”- A book
• Fenwick F. Jing & Gayle C. Avery "Missing Links in Understanding the Relationship between Leadership and Organizational Performance". International Business & Economics Research Journal – May 2008 Volume 7, Number 5.
• Hancott D.E. (2005) "Relationship between transformational leadership and organization performance in the largest public companies of Canada". A Dissertation Proposal Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy, Capella University.
• Jandaghi G., Matin H.Z., Farjami A.(2009) " Comparing Transformational Leadership in Successful and Unsuccessful Companies". The Journal of International Social Research, Volume 2/6 Winter 2009
• Kantabutra S. and Gayle C. "Enhancing SME Performance through Vision-based Leadership: An Empirical Study". 16th Annual Conference, 2003, Small Enterprise Association of Australia & New Zealand Victoria, Australia
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