The impacts of leadership style and best practices on company performances: Empirical evidence from business firms in Malaysia

Abstract

Many of the organisations competing in the fast-changing business environment are in a constant search for a robust strategy to help survive the new global economic order, making achieving improved performance continuously imperative. The ability to change and adapt to the new business rules demand that organisations acquire critical capabilities. This means the foci of organisational capabilities must hinge on the ability to direct resources on learning leadership style that could drive performance. Leadership capability in the form of transformational style combined with the best practice capability is the key determinants to organisational success. This paper conceptualises these variables and tests their structural linkages to company performance. The findings show that transformational leadership is significantly related to financial performance, and best practice management has mediated their relationship. The study implies that an effective management approach is the one that nurtures organisational change, and which emphasises key aspects of future-oriented elements transformational leadership and internalising best practice. The ability to weld these capabilities into the organisation's change effort proves a highly effective means to progress to world-class standard.

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