Mostafa Sayyadi, Author, Transformational Leadership: How To Prosper as a Leader In Today's Hypercompetitive Environment

There are many academic studies that focus on the organizational and managerial factors that drive organizational performance. Leaders within large companies can play a crucial role in achieving a high level of effectiveness and world class efficiency. A good leader can in fact turn a weak business plan into a success, but a poor leader can ruin even the best plan. The question is: can leadership style improve organizational performance in large companies? The answer is a resounding “Yes.” In 2001, Chien identified the relationship between the effectiveness of leadership and the type of leadership adopted by top management executives in large companies. He found there was a strong positive correlation between perceived effectiveness by leaders themselves and their employees on the one hand and observed transformational leadership on the other. In large companies, business leaders need to improve relationships with subordinates to understand mutually expected behaviors. In this example, transformational leadership can provide a significant contribution to leaders in large companies to enhance their interactions and develop the relationships with employees.

Transformational leadership plays a crucial role in developing a learning climate within companies, and empowers employees in the pursuit of organizational goals. Transformational leaders can also enable large companies to actively respond to the changes occurring in the external environment, and create effective changes to build a sustained learning workplace within large companies. Moreover, it is evident that intellectual stimulation as another aspect of transformational leadership could also positively impact on the effectiveness of leadership in large companies to build a learning workplace through facilitating knowledge sharing around the organization.

Leaders in large organizations require people who have been inspired to face the changes in the business environment. Based on this, transformational leadership can contribute to these leaders inspiring their followers through determining a highly desired expectation for employees. Therefore, transformational leadership is a leadership style which could be employed in order to improve the effectiveness of leadership in large organizations.

Transformational leaders enhance interactions and dialogue to link subordinates’ individual-interests to collective-interests. In this way, transformational leaders can positively contribute to enhancing collaboration to develop relationships with subordinates. In addition, transformational leaders engender trust, thereby showing concern for both organizations’ needs and followers’ interests at the same time. In particular, a transformational leader shows their concern through focusing on identifying employees’ individual needs within companies. It is also argued that transformational leaders are leaders that improve trust in order to enhance the commitment of their subordinates and mobilize their support toward transformational leadership’s vision for changing the current situation. Furthermore, transformational leadership provides freedom for followers to investigate new ideas and knowledge. Accordingly, it is apparent that transformational leadership can be applicable to develop learning climates. Importantly, transformational leaders propel learning culture that facilitates knowledge sharing and new idea generation within organizations. Following this approach, Dix (2013) says that if an organization wants to have a culture oriented towards learning, then transformational leadership is a very viable choice. Therefore, it can be seen that transformational leadership positively contributes to organizational culture.

To analyze the relationship between corporate culture and firm performance, both cultural aspects of collaboration and trust positively contribute to companies to effectively and actively respond to environmental changes and customer needs and employee growth needs through developing effective learning workplaces within these companies. This also helps companies to improve performance in terms of the quality of products and services. Learning culture as another cultural aspect sheds light on organizational capabilities to develop learning. It is quite understandable that this cultural aspect can particularly facilitate performance in companies, by developing suitable workplaces for experts and internal consultants to effectively share their knowledge with others. People in fact recognize how old resources can address new and problematic situations by sharing their knowledge within these companies, and this can help to create more innovative ideas for organizational problems. Maister (1993) in his book, Managing the Professional Service Firm, says that innovative ideas generation can improve profitability for companies.

Therefore, I suggest that business leaders in large companies should consider transformational leadership as a facilitator of organizational culture, which in turn enhances financial and non-financial performances.

References

Chien, HJ 2001, A comparison of leadership characteristics in public and large and small private organizations in Taiwan, Nova Southeastern University.

Dix CR 2013, Leadership and learning: the impact of transformational leadership on learning culture within global ministry non-profits, Indiana Wesleyan University.

Maister, DH 1993, Managing the professional service firm, Free Press ; Maxwell Macmillan Canada ; Maxwell Macmillan International, New York : Toronto : New York.