Transformational Leadership and Objective Performance in Banks

Abstract

Dans cette recherche, on analyse les relations existant entre les leaderships de transaction et de transformation et des indices de performance de vingt banques, cela a partir d'un Cchantillon de quelques 1500 observations. Le comportement de leadership est mesurC griice au Questionnaire Multifactoriel de Leadership (MLQ) qui est applique ici pour la premibre fois a des germanophones. La valeur psychomCtrique du MLQ allemand a CtC analyste et jugCe pas satisfaisante. Nous avons mis au point et contre-valid6 un MLQ modifiC a quatre facteurs. I1 s'agit de la premikre Ctude empirique qui rapporte le leadership a des indices objectifs de performance, Cchappant a toute influence qualitative ou subjective. Les mesures objectives de performance prennent en considkration les charactkristiques des clients et du march6 local et indiquent si des objectifs raisonnables ne sont pas atteints ou au contraire dCpassCs. A partir des Cvaluations du modkle de Lisrel, nous confirmons l'hypothbse selon laquelle le leadership de transformation favorise davantage la performance que le leadership de transaction. La distinction entre performance a long terme et performance a court-terme est une autre nouveautC de cette ttude. I1 apparait que les dimensions centrales du leadership de transformation sont plus fortement corrClCes avec la performance A long terme. La considkration portCe a l'individue prCsente une corrClation positive avec la performance a court-terme, mais est nCgativement corrClCe avec la performance a long terme.This investigation examines the relations between transformationall transactional leadership and performance indicators of 20 different banks, using a sample of some 1500 observations. Leadership behaviour is measured by the Multifactor Leadership Questionnaire (MLQ), which is used for the first time in the German-speaking area. The psychometric quality of the German MLQ is analysed and found to be inadequate. We therefore derive and cross-validate a modified four-factor MLQ. This is the first empirical study We would like to thank two anonymous referees and the editor for many helpful comments and suggestions. 0 1998 International Association of Applied Psychology 398 GEYER AND STEYRER that relates leadership behaviour to objective performance indicators without any qualitative or subjective influence. Objective performance measures take into account customer features and local market conditions, and show whether reasonable targets are over-or underperformed. Based on LISREL model estimates we find support for the hypothesis that transformational leadership affects performance over and above transactional leadership. Another new aspect of this study is the distinction between long-term and short-term performance. We find that core dimensions of transformational leadership are more strongly related to long-term than to short-term performance. Individualised Consideration is positively related to short-term but negatively related to long-term performance.

Leadership styles in organizations during harsh economic environments

“…This is in contrast to Howell and Avolio (1993), whose observation was that transformational but not transactional leadership of financial managers positively predicted unit performance over a one year period. Similar observations by Geyer and Steyrer (1998) in an evaluation of managers heading Australian branch banks, reported a stronger positive relationship between transformational leadership and long-versus short term performance.…”

“…For example, Trottier et al (2008) suggested that both transactional and transformational leadership are perceived as important in government settings, although transformational leadership is considered more important. Geyer and Steyrer (1998) reported that transactional leadership predicted the short-term financial performance of bank branches while transformational leadership exhibited stronger predictions over a long period of time.…”

Assessing the Effects of Leadership Styles on Employees’ Outcomes in International Luxury Hotels

“…To be specific, this survey includes a set of 36 questions regarding three leadership styles: transformational, transactional, and non-transactional leaderships. This measurement has had wide application in contexts of general leadership, such as delivery firms (Hater and Bass 1988), banks (Geyer and Steyrer 1998), military (Yammarino et al 1993), and general business firms (e.g., health care and service agency) (Tejeda et al 2001), and hotels (Hinkin and Schriesheim 2008). The previous studies indicated acceptable levels of validity and reliability of the measurement.…”

Moderating Effects of Subordinates’Competency Level on Leadership and Organization Citizenship Behavior

“…Results of past researches show that transformational leadership has been consistently linked to followers' higher level of OCB (Bass, 1985;Organ, 1988;Podsakoff et al, 1990;Howell & Avolio, 1993;Lowe, Kroeck & Sivasubramaniam, 1996;Geyer & Steyrer, 1998;Wang, Law, Hackett, Wang, Chen, 2005;Schlechter & Engelbrecht, 2006;Boerner, Eisenbeiss, Griesser, 2007). On the other hand, the relationship between transactional leadership and OCB has been less empirically examined.…”