¶ … leadership is understood today is in the dichotomy between transactional leadership and transformational leadership. Where the former focuses on execution of tasks, the latter has become more popular in the knowledge economy. The basic theory of transformational leadership is said to "transform followers' personal values and self-concepts and move them to higher level of needs and aspirations" (Gumusluogu & Ilsev, 2009, 1). In essence, transformational leadership encourages both individual transformational, and by way of that, transformation of the organization as a whole. Since the concept was first developed, transformational leadership has been studied extensively, and there is evidence to support the idea that transformational leadership is associated with superior performance at both individual and organizational levels (Wang et al., 2011). However, there remains a need to understand the way by which this process works. In other words, we know that transformational leadership often has a positive influence on an organization, but we do not know why it does, and how it works. This study will focus on investigating the influence of transformational leadership on employee's work behaviors and outcomes" with an eye to understanding why transformational leadership is so effective.
Background of the Problem
The study of transformational leadership goes back at least 25 years (Wang et al., 2011), so there is a rich body of literature that has allowed us to understand what transformational leadership is, and what the outcomes associated with transformational leadership are. Generally, across industries, transformational leadership has a positive influence on performance outcomes (Resick et al., 2009). The gap in the literature lies with understanding the processes by which transformational leadership works. One input factor found is that transformational leaders are found to have higher levels of emotional intelligence than transactional or laissez-faire leaders (Harms & Crede, 2010).
One key element is the relationship between the transformational leader and followers, specifically how the leader influences follower behavior. Gumusluogu & Ilsev (2009, 1) investigated how transformational leadership can influence creativity, particularly juxtaposed against transactional leadership, a style less oriented towards encouraging creative thinking. They also studied the contextual factors that influence the degree to which transformational leadership influences innovation (Gumusluogu & Ilsev, 2009, 2). Pieterse et al. (2009) argue that transformational leadership creates an environment of psychological empowerment that allows innovation to flourish. Puranova & Bono (2009) investigated the differences between how transformational leadership works in face-to-face situations, versus how it works in virtual teams. The arrival of the virtual team has allowed for such comparisons, which can shed light about how transformational leadership works, given that the nature of interaction between leaders and followers is different in the virtual context. The role of follower characteristics has also been studied, but findings indicated that follower engagement can be increased with transformational leadership (Zhu, Avolio & Walumbwa, 2009). Another moderator is the trust that the followers have in the leader -- the higher the trust level the more effective the leader will be (Liu, Siu & Shi, 2010). Team diversity is another influencing factor (Kearney & Gebert, 2009).
The many moderating factors have contributed to the challenges of pinning down exactly how and why transformational leadership is effective. Factors such as virtual teams and increased diversity have added to our knowledge about the effectiveness of transformational leadership, but have also added increased complexity to the study. The current state of the research continues to confirm that transformational leadership is effective, but the added complexity of the study indicates that it is time to move towards understanding why it is effective. Thus, the purpose of this study is to investigate the influence of transformational leadership on employees' work behaviors, and from there the outcomes.
Theoretical Foundation
Transformational leadership has been a theme in leadership study for at least the past 25 years. The concept of transformational leadership is typically juxtaposed against transactional leadership, though other style such as laissez-faire can also fit within this paradigm. Leadership study has often focused on whether or not transformational leadership is effective, concluding that it is (Resick et al., 2009). Companies that succeed also have higher levels of transformational leadership than companies that have failed (Jandaghi, Matin & Farjami, 2009). The transformational-transaction dichotomy has also been used as a framework for understanding other concepts of leadership such as complexity leadership, e-leadership and leader-member exchange (Avolio, Walumbwa & Weber, 2009). The field of applied psychology in particular has focused on understanding why transformational leadership styles work, and what the antecedents of transformational leadership are, so this will form a lot of the theoretical framework for understanding the research problem.
Review of the Literature
Transformational leadership affects performance in a number of ways. Some of the influences of leadership on the organization...
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