An analytical study on the effective dimensions of leadership styles for enhancing organizational performance
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Published:
Dec 23, 2024
Keywords:
Leadership, Leadership style, Organizational performance, Passive-Avoidant leadership, Transformational leadership, Transactional leadership
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Articles
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Abstract
Leadership style plays an important role in improving organizational performance, especially in the face of increasingly complex global competitive challenges. Effective leadership is considered capable of increasing motivation, job satisfaction, and team cohesion, which ultimately contributes positively to organizational performance. The aim of this research is to examine the impact that different leadership styles, with a focus on transformational leadership, have on the results of an organization. The research method used was a literature review of relevant scholarly sources, including articles, conference proceedings, and books that discuss the contribution of leadership style to organizational performance. Data collection was conducted through online database searches, including Google Scholar and JSTOR. The findings indicate that by promoting employee involvement and fostering a culture of constant enhancement, transformational leadership can greatly enhance organizational effectiveness. At the same time, transactional leadership may be successful in reaching short-term goals but lacks the ability to inspire lasting motivation. On the other hand, passive-avoidant leadership often results in hindered team dynamics and reduced productivity. The advice given in this research suggests that companies should focus on implementing transformational leadership in order to boost employee motivation, involvement, and creativity. Moreover, utilizing a blend of transformational and transactional leadership techniques may be effective in reaching both immediate and long-lasting objectives. Organizations are also advised to develop leadership competencies through training, as well as avoid passive-avoidant leadership styles that can be detrimental to team performance
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How to Cite
Fariz, F., & Winarsih, T. (2024). An analytical study on the effective dimensions of leadership styles for enhancing organizational performance. Indonesia Auditing Research Journal, 13(4), 244–255. https://doi.org/10.35335/arj.v13i4.377
References
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Bhansali, L., Nair, K., Jain, D., & Nair, S. (2014). Leadership Styles and Organizational Learning-An Empirical Study on Select Private Banks in India. Conference Proceedings of HR Summit, 346.
Boyne, G. A., & Walker, R. M. (2005). Introducing the “determinants of performance in public organizations” symposium. Journal of Public Administration Research and Theory, 15(4), 483–488.
Buil, I., Martínez, E., & Matute, J. (2019). Transformational leadership and employee performance: The role of identification, engagement and proactive personality. International Journal of Hospitality Management, 77. https://doi.org/10.1016/j.ijhm.2018.06.014
Burch, T. C., & Guarana, C. L. (2014). The comparative influences of transformational leadership and leader–member exchange on follower engagement. Journal of Leadership Studies, 8(3), 6–25.
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Chatterjee, A., Pereira, A., & Bates, R. (2018). Impact of individual perception of organizational culture on the learning transfer environment. International Journal of Training and Development, 22(1), 15–33.
Duguay, A. M., Loughead, T. M., & Munroe-Chandler, K. J. (2018). Investigating the Importance of Athlete Leadership Behaviors and the Impact of Leader Tenure. Journal of Sport Behavior, 41(2).
Eisenbach, R., Watson, K., & Pillai, R. (1999). Transformational leadership in the context of organizational change. Journal of Organizational Change Management, 12(2), 80–89.
Ejaz, H., Shafique, I., & Qammar, A. (2024). The role of team cohesion and ambidexterity in enhancing employee adaptive performance: an examination of a multilevel model. Journal of Organizational Change Management.
Elbaz, A. M., & Haddoud, M. Y. (2017). The role of wisdom leadership in increasing job performance: Evidence from the Egyptian tourism sector. Tourism Management, 63, 66–76.
Fariz, F. (2019). Human Resources Competences in Economics Higher Education Provider in East Java, Indonesia: The determinant of organizational performances. Asia Pacific Management and Business Application, 8(02), 133–144.
Fariz, F. (2022a). Quality Improvement Strategy for Strengthening Higher Education Competitiveness (Studies at the College of Economics in East Java). Khazanah Sosial, 4(2), 272–283.
Fariz, F. (2022b). Strategies to Increase User Satisfaction in Online Shopping Applications. Journal of Applied Management (JAM), 20(2), 438–444.
Fariz, F. (2022c). The effect of supplier integration, manager transformational leadership on supply chain performance. Uncertain Supply Chain Management, 10(3), 993–998. https://doi.org/10.5267/j.uscm.2022.2.014
Fariz, F., & Winarsih, T. (2024). Enhancing Competitive Advantage of Higher Education Institutions Through the Implementation of Knowledge Management and Information Technology. Innovative: Journal Of Social Science Research, 4(2), 2010–2026.
Flamholtz, E. (1995). Managing organizational transitions: implications for corporate and human resource management. European Management Journal, 13(1), 39–51.
Ford, J. D., & Schellenberg, D. A. (1982). Conceptual issues of linkage in the assessment of organizational performance. Academy of Management Review, 7(1), 49–58.
Gandolfi, F., & Stone, S. (2018). Leadership, leadership styles, and servant leadership. Journal of Management Research, 18(4), 261–269.
Gardner, W. L., Karam, E. P., Alvesson, M., & Einola, K. (2021). Authentic leadership theory: The case for and against. The Leadership Quarterly, 32(6), 101495.
Ghafourian SharifHeravi, M., Shahidi, S. E., & Nik Mahmood, N. H. (2010). Investigating the relationships between leadership style and personnel turnover intention in it companies in Iran. Proceedings of the 2010 Special Interest Group on Management Information System’s 48th Annual Conference on Computer Personnel Research on Computer Personnel Research, 48–54.
Green, R. E., Malaspinas, A.-S., Krause, J., Briggs, A. W., Johnson, P. L. F., Uhler, C., Meyer, M., Good, J. M., Maricic, T., & Stenzel, U. (2008). A complete Neandertal mitochondrial genome sequence determined by high-throughput sequencing. Cell, 134(3), 416–426.
Hammer, M., & Champy, J. (1993). Business process reengineering. London: Nicholas Brealey, 444(10), 730–755.
Han, S., Harold, C. M., & Cheong, M. (2019). Examining why employee proactive personality influences empowering leadership: The roles of cognition‐and affect‐based trust. Journal of Occupational and Organizational Psychology, 92(2), 352–383.
Heifetz, R. (2009). The practice of adaptive leadership: Tools and tactics for changing your organization and the world. Harvard Business Press.
Herlina, E., Tukiran, M., & Anwar, S. (2021). The Effect Of Entrepreneurial Leadership On Organizational Performance: Literature Review. Marginal: Journal Of Management, Accounting, General Finance And International Economic Issues, 1(1), 25–33. https://doi.org/https://doi.org/10.55047/marginal.v1i1.9
Hersona, S., & Sidharta, I. (2017). Influence Of Leadership Function, Motivation And Work Discipline On Employees’performance. Jurnal Aplikasi Manajemen, 15(3), 528–537.
Keleş, N. (2022). Liderlik, Liderlik Tarzları ve Türk Gümrük İdareleri Özelinde Kamu Yönetiminde Liderlik. Uluslararası Liderlik Çalışmaları Dergisi: Kuram ve Uygulama, 5(2), 72–85.
Kirkbride, P. (2006). Developing transformational leaders: the full range leadership model in action. Industrial and Commercial Training, 38(1), 23–32.
Lama, P. B., Aryal, N. P., & Shrestha, R. (2024). The Influence of Leadership Styles on Employee Performance: Transformational, Transactional and Ethical Leadership. Business Ethics and Leadership, 8(2), 152–163.
Li, A. N., & Tan, H. H. (2013). What happens when you trust your supervisor? Mediators of individual performance in trust relationships. Journal of Organizational Behavior, 34(3), 407–425.
Logan, J. (2024). Impact of Strategic Leadership Styles on Organizational Performance in Canada. International Journal of Strategic Management, 3(4), 26–37.
Mahmood, S., Rehman, S. U., & Ashraf, M. U. (2023). Organizational culture, AI training, and technological tools: Influencing women’s leadership success in the unique context of the UAE. Journal of Excellence in Management Sciences, 2(2), 18–28.
Marr, B., Schiuma, G., & Neely, A. (2004). The dynamics of value creation: mapping your intellectual performance drivers. Journal of Intellectual Capital, 5(2), 312–325.
Martin-Rojas, R., Garcia-Morales, V. J., & Gonzalez-Alvarez, N. (2019). Technological antecedents of entrepreneurship and its consequences for organizational performance. Technological Forecasting and Social Change, 147, 22–35.
Mumtaz, S., Selvarajah, C., & Meyer, D. (2024). How does human relations climate and organizational support affect readiness to change? The mediating role of employee participation and leadership excellence. Global Business and Organizational Excellence, 43(2), 79–91.
Najihah, N., Winarsih, W., & Mutaharoh, M. (2024). The Role of Ownership Structure on Corporate Tax Avoidance: Evidence from Manufacturing Company in Indonesia. Jurnal Manajemen Bisnis, 11(2), 1097–1110.
Neely, Andrew. (2005). What has 25 years of P/OM research taught us about productivity.
Neely, Andy. (2002). Business performance measurement: Theory and practice. Cambridge university press.
Ngang Tang, K. (2019). Leadership and Change management. Springer.
Oktaviani, R. (2022). Systematic literature review of job satisfaction: An overview and bibliometric analysis. Jurnal Ekonomi Kreatif Dan Manajemen Bisnis Digital, 1(2), 185–203.
Patiar, A., & Wang, Y. (2016). The effects of transformational leadership and organizational commitment on hotel departmental performance. International Journal of Contemporary Hospitality Management, 28(3), 586–608.
Rahmat, R., Ramly, M., Mallongi, S., & Kalla, R. (2019). The leadership style effect on the job satisfaction and the performance. Asia Pacific Journal of Management and Education (APJME), 2(1).
Roundy, P. T., Harrison, D. A., Khavul, S., Pérez-Nordtvedt, L., & McGee, J. E. (2018). Entrepreneurial alertness as a pathway to strategic decisions and organizational performance. Strategic Organization, 16(2), 192–226.
Saleem, M. A., Bhutta, Z. M., Nauman, M., & Zahra, S. (2019). Enhancing performance and commitment through leadership and empowerment: An emerging economy perspective. International Journal of Bank Marketing, 37(1), 303–322.
Saleh, R. M. M., Nusari, M., Habtoor, N., & Isaac, O. (2018). The effect of leadership style on organizational performance: Organizational commitment as a mediator variable in the manufacturing sector of Yemen. International Journal of Management and Human Science (IJMHS), 2(4), 13–24.
Salter, T. R. (2007). Reducing instability in a transforming organization. Massachusetts Institute of Technology.
Sawalha, I. H. S. (2013). Organisational performance and business continuity management: a theoretical perspective and a case study. Journal of Business Continuity & Emergency Planning, 6(4), 360–373.
Sokolic, D., Croitoru, G., Florea, N. V., Robescu, V. O., & Cosac, A. (2024). The Effect of Leadership Styles on Employee Motivation and Organizational Performance in Public Sector Organizations. Valahian Journal of Economic Studies, 15(1), 53–72.
Taylor, A., Santiago, F., Hauer, J., Hynes, R., & Mickahail, B. K. (2019). Leadership, Growth, and the Future. Effective and Creative Leadership in Diverse Workforces: Improving Organizational Performance and Culture in the Workplace, 101–153.
Tunali, C. B., & Sener, S. (2019). The determinants of entrepreneurship in Turkey. Procedia Computer Science, 158, 648–652.
Udin, U. (2024). Transformational leadership and organizational learning culture in the health sector: The mediating and moderating role of intrinsic work motivation. Work, 77(4), 1125–1134.
VanGronigen, B. A. (2022). Leadership Styles. New York, USA: Routledge.
Weller, I., Süß, J., Evanschitzky, H., & von Wangenheim, F. (2020). Transformational leadership, high-performance work system consensus, and customer satisfaction. Journal of Management, 46(8), 1469–1497.
Winarsih, T., & Fariz, F. (2021). The Effect of Job Satisfaction on Organizational Commitment and Work Discipline. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(1), 1328–1339.
Yabrifa, O., Ajalie, S. N., & Oigbochie, A. E. (2024). Empirical Examination of Leadership Styles as A Predictor of Organizational Performance in Bayelsa Specialist Hospital. American Journal of Economics and Business Innovation, 3(2), 158–163.
Yukl, G. (1989). Managerial leadership: A review of theory and research. Journal of Management, 15(2), 251–289.
Zhang, X., & Li, B. (2016). Organizational culture and organizational performance: a brief review. Journal of Advances in Social Science and Humanities, 2(5), 16–21.
Alonderiene, R., & Majauskaite, M. (2016). Leadership style and job satisfaction in higher education institutions. International Journal of Educational Management, 30(1), 140–164.
Arif, S., & Akram, A. (2018). Transformational leadership and organizational performance: the mediating role of organizational innovation. SEISENSE Journal of Management, 1(3), 59–75.
Arnett, D. B., Sandvik, I. L., & Sandvik, K. (2018). Two paths to organizational effectiveness–Product advantage and life-cycle flexibility. Journal of Business Research, 84, 285–292.
Azzahra, A., Savandha, S. D., & Syarif, A. N. (2024). Assessing Leadership Styles’ Influence on Organizational Performance: A Case Study of Service-Oriented Companies. OPSearch: American Journal of Open Research, 3(3), 928–936.
Balakrishnan, K., Angusamy, A., Patil, R. G., & Razak, M. N. F. (2024). Enhancing Work Performance: The Role of Communication and Leadership Styles. Jurnal Komunikasi: Malaysian Journal of Communication, 40(1), 376–394.
Bass, B. M., & Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. sage.
Bass, B. M., & Bass Bernard, M. (1985). Leadership and performance beyond expectations.
Bass, B. M., & Riggio, R. E. (2006). Transformational leadership 2nd ed. Lawrence Erlbaum Associates, Inc.
Bhansali, L., Nair, K., Jain, D., & Nair, S. (2014). Leadership Styles and Organizational Learning-An Empirical Study on Select Private Banks in India. Conference Proceedings of HR Summit, 346.
Boyne, G. A., & Walker, R. M. (2005). Introducing the “determinants of performance in public organizations” symposium. Journal of Public Administration Research and Theory, 15(4), 483–488.
Buil, I., Martínez, E., & Matute, J. (2019). Transformational leadership and employee performance: The role of identification, engagement and proactive personality. International Journal of Hospitality Management, 77. https://doi.org/10.1016/j.ijhm.2018.06.014
Burch, T. C., & Guarana, C. L. (2014). The comparative influences of transformational leadership and leader–member exchange on follower engagement. Journal of Leadership Studies, 8(3), 6–25.
Burns, J. M. (1978). Leadership and followership. Leadership, 18–23.
Chatterjee, A., Pereira, A., & Bates, R. (2018). Impact of individual perception of organizational culture on the learning transfer environment. International Journal of Training and Development, 22(1), 15–33.
Duguay, A. M., Loughead, T. M., & Munroe-Chandler, K. J. (2018). Investigating the Importance of Athlete Leadership Behaviors and the Impact of Leader Tenure. Journal of Sport Behavior, 41(2).
Eisenbach, R., Watson, K., & Pillai, R. (1999). Transformational leadership in the context of organizational change. Journal of Organizational Change Management, 12(2), 80–89.
Ejaz, H., Shafique, I., & Qammar, A. (2024). The role of team cohesion and ambidexterity in enhancing employee adaptive performance: an examination of a multilevel model. Journal of Organizational Change Management.
Elbaz, A. M., & Haddoud, M. Y. (2017). The role of wisdom leadership in increasing job performance: Evidence from the Egyptian tourism sector. Tourism Management, 63, 66–76.
Fariz, F. (2019). Human Resources Competences in Economics Higher Education Provider in East Java, Indonesia: The determinant of organizational performances. Asia Pacific Management and Business Application, 8(02), 133–144.
Fariz, F. (2022a). Quality Improvement Strategy for Strengthening Higher Education Competitiveness (Studies at the College of Economics in East Java). Khazanah Sosial, 4(2), 272–283.
Fariz, F. (2022b). Strategies to Increase User Satisfaction in Online Shopping Applications. Journal of Applied Management (JAM), 20(2), 438–444.
Fariz, F. (2022c). The effect of supplier integration, manager transformational leadership on supply chain performance. Uncertain Supply Chain Management, 10(3), 993–998. https://doi.org/10.5267/j.uscm.2022.2.014
Fariz, F., & Winarsih, T. (2024). Enhancing Competitive Advantage of Higher Education Institutions Through the Implementation of Knowledge Management and Information Technology. Innovative: Journal Of Social Science Research, 4(2), 2010–2026.
Flamholtz, E. (1995). Managing organizational transitions: implications for corporate and human resource management. European Management Journal, 13(1), 39–51.
Ford, J. D., & Schellenberg, D. A. (1982). Conceptual issues of linkage in the assessment of organizational performance. Academy of Management Review, 7(1), 49–58.
Gandolfi, F., & Stone, S. (2018). Leadership, leadership styles, and servant leadership. Journal of Management Research, 18(4), 261–269.
Gardner, W. L., Karam, E. P., Alvesson, M., & Einola, K. (2021). Authentic leadership theory: The case for and against. The Leadership Quarterly, 32(6), 101495.
Ghafourian SharifHeravi, M., Shahidi, S. E., & Nik Mahmood, N. H. (2010). Investigating the relationships between leadership style and personnel turnover intention in it companies in Iran. Proceedings of the 2010 Special Interest Group on Management Information System’s 48th Annual Conference on Computer Personnel Research on Computer Personnel Research, 48–54.
Green, R. E., Malaspinas, A.-S., Krause, J., Briggs, A. W., Johnson, P. L. F., Uhler, C., Meyer, M., Good, J. M., Maricic, T., & Stenzel, U. (2008). A complete Neandertal mitochondrial genome sequence determined by high-throughput sequencing. Cell, 134(3), 416–426.
Hammer, M., & Champy, J. (1993). Business process reengineering. London: Nicholas Brealey, 444(10), 730–755.
Han, S., Harold, C. M., & Cheong, M. (2019). Examining why employee proactive personality influences empowering leadership: The roles of cognition‐and affect‐based trust. Journal of Occupational and Organizational Psychology, 92(2), 352–383.
Heifetz, R. (2009). The practice of adaptive leadership: Tools and tactics for changing your organization and the world. Harvard Business Press.
Herlina, E., Tukiran, M., & Anwar, S. (2021). The Effect Of Entrepreneurial Leadership On Organizational Performance: Literature Review. Marginal: Journal Of Management, Accounting, General Finance And International Economic Issues, 1(1), 25–33. https://doi.org/https://doi.org/10.55047/marginal.v1i1.9
Hersona, S., & Sidharta, I. (2017). Influence Of Leadership Function, Motivation And Work Discipline On Employees’performance. Jurnal Aplikasi Manajemen, 15(3), 528–537.
Keleş, N. (2022). Liderlik, Liderlik Tarzları ve Türk Gümrük İdareleri Özelinde Kamu Yönetiminde Liderlik. Uluslararası Liderlik Çalışmaları Dergisi: Kuram ve Uygulama, 5(2), 72–85.
Kirkbride, P. (2006). Developing transformational leaders: the full range leadership model in action. Industrial and Commercial Training, 38(1), 23–32.
Lama, P. B., Aryal, N. P., & Shrestha, R. (2024). The Influence of Leadership Styles on Employee Performance: Transformational, Transactional and Ethical Leadership. Business Ethics and Leadership, 8(2), 152–163.
Li, A. N., & Tan, H. H. (2013). What happens when you trust your supervisor? Mediators of individual performance in trust relationships. Journal of Organizational Behavior, 34(3), 407–425.
Logan, J. (2024). Impact of Strategic Leadership Styles on Organizational Performance in Canada. International Journal of Strategic Management, 3(4), 26–37.
Mahmood, S., Rehman, S. U., & Ashraf, M. U. (2023). Organizational culture, AI training, and technological tools: Influencing women’s leadership success in the unique context of the UAE. Journal of Excellence in Management Sciences, 2(2), 18–28.
Marr, B., Schiuma, G., & Neely, A. (2004). The dynamics of value creation: mapping your intellectual performance drivers. Journal of Intellectual Capital, 5(2), 312–325.
Martin-Rojas, R., Garcia-Morales, V. J., & Gonzalez-Alvarez, N. (2019). Technological antecedents of entrepreneurship and its consequences for organizational performance. Technological Forecasting and Social Change, 147, 22–35.
Mumtaz, S., Selvarajah, C., & Meyer, D. (2024). How does human relations climate and organizational support affect readiness to change? The mediating role of employee participation and leadership excellence. Global Business and Organizational Excellence, 43(2), 79–91.
Najihah, N., Winarsih, W., & Mutaharoh, M. (2024). The Role of Ownership Structure on Corporate Tax Avoidance: Evidence from Manufacturing Company in Indonesia. Jurnal Manajemen Bisnis, 11(2), 1097–1110.
Neely, Andrew. (2005). What has 25 years of P/OM research taught us about productivity.
Neely, Andy. (2002). Business performance measurement: Theory and practice. Cambridge university press.
Ngang Tang, K. (2019). Leadership and Change management. Springer.
Oktaviani, R. (2022). Systematic literature review of job satisfaction: An overview and bibliometric analysis. Jurnal Ekonomi Kreatif Dan Manajemen Bisnis Digital, 1(2), 185–203.
Patiar, A., & Wang, Y. (2016). The effects of transformational leadership and organizational commitment on hotel departmental performance. International Journal of Contemporary Hospitality Management, 28(3), 586–608.
Rahmat, R., Ramly, M., Mallongi, S., & Kalla, R. (2019). The leadership style effect on the job satisfaction and the performance. Asia Pacific Journal of Management and Education (APJME), 2(1).
Roundy, P. T., Harrison, D. A., Khavul, S., Pérez-Nordtvedt, L., & McGee, J. E. (2018). Entrepreneurial alertness as a pathway to strategic decisions and organizational performance. Strategic Organization, 16(2), 192–226.
Saleem, M. A., Bhutta, Z. M., Nauman, M., & Zahra, S. (2019). Enhancing performance and commitment through leadership and empowerment: An emerging economy perspective. International Journal of Bank Marketing, 37(1), 303–322.
Saleh, R. M. M., Nusari, M., Habtoor, N., & Isaac, O. (2018). The effect of leadership style on organizational performance: Organizational commitment as a mediator variable in the manufacturing sector of Yemen. International Journal of Management and Human Science (IJMHS), 2(4), 13–24.
Salter, T. R. (2007). Reducing instability in a transforming organization. Massachusetts Institute of Technology.
Sawalha, I. H. S. (2013). Organisational performance and business continuity management: a theoretical perspective and a case study. Journal of Business Continuity & Emergency Planning, 6(4), 360–373.
Sokolic, D., Croitoru, G., Florea, N. V., Robescu, V. O., & Cosac, A. (2024). The Effect of Leadership Styles on Employee Motivation and Organizational Performance in Public Sector Organizations. Valahian Journal of Economic Studies, 15(1), 53–72.
Taylor, A., Santiago, F., Hauer, J., Hynes, R., & Mickahail, B. K. (2019). Leadership, Growth, and the Future. Effective and Creative Leadership in Diverse Workforces: Improving Organizational Performance and Culture in the Workplace, 101–153.
Tunali, C. B., & Sener, S. (2019). The determinants of entrepreneurship in Turkey. Procedia Computer Science, 158, 648–652.
Udin, U. (2024). Transformational leadership and organizational learning culture in the health sector: The mediating and moderating role of intrinsic work motivation. Work, 77(4), 1125–1134.
VanGronigen, B. A. (2022). Leadership Styles. New York, USA: Routledge.
Weller, I., Süß, J., Evanschitzky, H., & von Wangenheim, F. (2020). Transformational leadership, high-performance work system consensus, and customer satisfaction. Journal of Management, 46(8), 1469–1497.
Winarsih, T., & Fariz, F. (2021). The Effect of Job Satisfaction on Organizational Commitment and Work Discipline. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(1), 1328–1339.
Yabrifa, O., Ajalie, S. N., & Oigbochie, A. E. (2024). Empirical Examination of Leadership Styles as A Predictor of Organizational Performance in Bayelsa Specialist Hospital. American Journal of Economics and Business Innovation, 3(2), 158–163.
Yukl, G. (1989). Managerial leadership: A review of theory and research. Journal of Management, 15(2), 251–289.
Zhang, X., & Li, B. (2016). Organizational culture and organizational performance: a brief review. Journal of Advances in Social Science and Humanities, 2(5), 16–21.
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