Impact of Leadership Styles on Organizational Performance

Amal Zada Khan · Nosheen Adnan

141 citations0/0 files storedRePEc: Research Papers in Economics

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Employee Performance and Leadership Employee Performance and Management Leadership and Management in Organizations

Abstract

Performance of organizations is related to the profitability of the organizations in terms of its growth and profit both in long and short term. In business organizations, investors and businessmen desire and endeavor to ensure that their organizations perform well to earn more profit, grow fast and achieve competitive edge in the industry. For organizations to perform well, apart from tangible and intangible resources, effective and dynamic leadership is a pre requisite. Leadership style of the leader of an organization has a strong impact on the performance of the organization. Though most of the researchers in the past agreed that leadership style has relationship with organizational performance but there are some who did not support this view, hence, an ambiguity exists. To address this confusion, the researchers studied the types/styles of leadership and the leadership styles of different leaders of various organizations in Pakistan and examined their impact on organizational performance. There are three main leadership styles; transformational, transactional and laissez faire leadership styles. While the first two have a positive but different level of impact, the third one has a negative impact on organizational performance. A quantitative study was conducted by using a questionnaire filled from various leaders of manufacturing and service organizations. Results of the study were studied through SPSS and the researchers found that though the most suited style of leadership is transformational one but in new and growing organizations transactional leadership style may be more productive, while in certain circumstances though limited and for a short period, laissez faire style may be required. Hence, the leader might have to adopt a hybrid style of leadership style. Leadership style has a significant impact on the organizational performance.

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References

1987Leadership and Performance beyond Expectations 1979The Social Psychology of Organizations.2004Transformational and Transactional Leadership: A Meta-Analytic Test of Their Relative Validity.1993Improving Organizational Effectiveness through Transformational Leadership 2002Personality and leadership: A qualitative and quantitative review.1969A Theory of Leadership Effectiveness 1985Leaders : the strategies for taking charge 1996Transformational leader behaviors and substitutes for leadership as determinants of employee satisfaction, commitment, trust, and organizational citize

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