Dimensions of transformational leadership and organizational performance: the mediating effect of job satisfaction

Abstract

Purpose Poor corporate governance was reported to significantly contribute to the 2017/2018 financial crisis in Ghana. As leadership is a vital concept in the corporate governance system, this study aims to examine the effect of transformational leadership on organizational performance and hypothesizes that job satisfaction mediates such a relationship. Design/methodology/approach This study adopted a quantitative research approach where a cross-sectional survey design was used to collect the data from 300 purposively sampled employees of five selected commercial banks. The data was analysed using PROCESS version 3.4.1. Findings The results show that individualized consideration is the dominant transformational leadership dimension being practiced by supervisors and managers in the selected commercial banks. Again, the four dimensions of transformational leadership have a positive effect on organizational performance, and such effect is significantly mediated by job satisfaction. Practical implications The findings suggest that the dimensions of transformational leadership should be continuously improved alongside strategically motivating employees to increase their satisfaction level to enhance organizational performance. Originality/value This study provides evidence that bank managers need to be cognizant that job satisfaction is vital in the industry and must be a focal point of corporate governance practices. The mere initiating of transformational leadership behaviours without a clear link to employee satisfaction may result in employee disengagement, consequently affecting the banks’ performance and survival.

Linking transformational leadership with job satisfaction: the mediating roles of trust and team cohesiveness

“…The four dimensions of transformational leadership hold a close relationship with job satisfaction (Boamah et al. , 2018; Chandrasekara, 2019; Hilton et al. , 2021).…”

“…Transformational leadership has a significant positive effect on job satisfaction in Pakistan and America (Barnett, 2018;Shah et al, 2017). Hilton et al (2021) also denoted that the four dimensions of transformational leadership hold a positive relationship with job satisfaction. Some other scholars also prove a positive relationship between transformational leadership dimensions and job satisfaction (Cahyono et al, 2020;Mickson and Anlesinya, 2019;Puni et al, 2018).…”

“…The hypothesized direct model is developed from the relationship between the dimensions of transformational leadership and job satisfaction, so hypotheses H1, H2, H3 and H4 are formulated. The four dimensions of transformational leadership hold a close relationship with job satisfaction (Boamah et al, 2018;Chandrasekara, 2019;Hilton et al, 2021). Several other studies on the relationship between the four transformational leadership dimensions and job satisfaction are presented in building the hypotheses.…”

Antecedents of Employee Performance on the Media Nusantara Citra Group Television Station

“…Every organization strives to encourage Employee Performance and tries to create a space where employees can produce amazing work and perform to the best of their ability Based on previous research conducted by Pracoyo et al (2022) show that there is an influence between transformational leadership and Job Satisfaction. In addition, the results of Hilton's (2021) research were conducted to show that transformational leadership has an effect on Job Satisfaction. Furthermore, research conducted by Puni (2018) shows the effect of Transformational Leadership on Job Satisfaction.…”

Monitoring and Evaluation for Education and Accountability in Edmund Rice Foundation Australia Nairobi County

“…Transformational leadership theory attempts to explain the influence of transformational leadership on corporate governance (Leveric, 2014). Further, transformational leadership is relevant in promoting organizational performance because irrespective of the organization type, the style chosen is based on the leader's ability, preference and experience (Hilton et al, 2021). This theory instigates the relationship between transformational leadership and performance of state-owned enterprises.…”