Leadership Styles and Organizational Performance


This study is about leadership styles and organizational performance. The main objective of this study is to explore the relationship between leadership styles and organizational performance by studying the moderating role of organizational culture. An organization culture has pivotal role in formulating the leadership styles of an organization. Today, organizations are focusing to cope with various cultural groups. Further, the purpose of research is to study the relationship between the leadership styles of general higher education and vocational and technical education. Various statistical tests and modified multifactor leadership questionnaire will be used to analyse data and to predict the different leadership styles. The possible results include Both Transactional and Transformational Leadership style will positively correlated with organizational performance while the Laissez Fair will negatively correlated with performance, organizational culture will play moderating role between leadership styles and organizational performance.


The role of leader is vital for the survival and progress of an organization. Leadership helps in developing the organization’s objectives, values and vision. Leaders which measure up to the standards of cultural elements are able to accomplish organisational effectiveness. Organization develops culture from its leadership and culture has also greatly affected on leadership. The leadership behaviour and competence have consistent relationship with organization effectiveness and performance. The organizational culture also plays very important role in developing and shaping the leadership style. Leaders involve influencing personnel to persuade them achieve the organizational objectives. Moreover, effective heads not only influence subordinates, but also ensure that they achieve their highest potential performance. As a pivotal component of the system their behaviour is one of the basic stimulants to make organization more effective.

Despite the implicit and explicit linking of leadership and culture in many parts of organization theory, very little critical research attention has been payed to understanding the links between the two concepts and the impact that such an association might have on organizational performance. The absence of critical literature exploring the performance implications of the links between organizational culture and leadership is surprising given many references to the importance of the two concepts in the functioning of organizations.


“Leadership styles has affected on performance of organization and culture plays a moderating role between leadership styles and organizational performance”

Research Hypothesis

The below depicted hypotheses has developed to predict the various relationships between variables.

H1; There is significant relationship between transformational leadership and organizational performance.

H2; There is a significant relationship between transactional leadership and organizational performance.

H3; There is significant relationship between Laissez fair leadership and organizational performance.

H4; Organization culture moderates between transformational leadership and organizational performance.

H5; Organization culture moderates between transactional leadership and organizational performance.

H6; Organization culture moderates between Laissez Fair leadership and organizational performance.



To explore the relationship between various leadership styles and organizational perceived performance taking into account the moderating role of organizational culture.

Specific Aims

A-This study is aimed at exploring the relationship between:

  1. Transformational leadership and organizational perceived performance
  2. Transactional leadership and organizational perceived performance
  3. Laissez Fair leadershipand organizational perceived performance

B-To study the moderating effect of culture of the organization between leadership styles and Performance of organization


Literature Review

Leadership has significant impact on performance and culture has mediating role between leadership styles and performance of the organization. Culture distorts leadership – performance relationship. In this section we examine link between leadership styles and performance, organizational culture-performance relationship and culture-leadership styles relationship.

Previous studies regarding the development of human resource explain the characteristics of behaviors of leadership where it focuses larger on the relationship type between leaders and followers in an organization (Bass, Avolio, 1993). Such relationships occur in two contrast forms called transformational and transactional leadership (Mackenzie et al.., 2001) Burns firstly developed the both leadership styles in 1978 and this was expanded by Bass and Avolio (1991).

Transformational leadership involves the ability to inspire and motivate followers. Research findings support the process-based approach to leadership. This approach posits that a person is influenced by activating internal motivators. A process-based view of leadership involves the ability to motivate followers to act, recognizing that the ability to successfully influence others is the essence of leadership (Yukl, 1999).

Colleges and Universities in the United States are undergoing a time of change. The Quality of their future depends on how well they respond to evolving realities in the larger world beyond their walls (Abelson, 1997).

There are four assumptions found related to culture:

Scott et al. (2003) first, related to the process of organizational culture change and according to this culture resist changing. They are to some extent manageable and flexible. Ogbonna and Harris (2002) after the analysis of present culture change concluded that the process of organizational culture change can be influenced and this perspective adopted by the many contemporary researchers. Scott et al. (2003) second, related with performance of business with different organizational cultures. Third, related with the possibility of identifying cultural attributes that cause to good performance and helping managers to design better strategies for culture change. Fourth, change cause to benefits and will be more important than any negative outcomes.

Robbins and Coultar (2005) there are contingency theories of leadership which describe what style of leadership is best for what type of Situation.

The basic theme of research was transformational and transactional leadership. Transformational leadership consisted of five major components which are much more important in terms of followers mentoring, coaching and development. The research found that in transactional leadership there is statistically significant difference in public and private sector (Bodla, 2010). The field of education is facing a lot more challenges (Jones, 2000) According to Gunter (2001) the responsibility of education leadership is to facilitate the learning activities and providing for an environment that is enabling and supportive for knowledge and related activities. Butcher et al (2000) recognized the importance of leadership for professional development in education.

Harling (1984) supported the view to study higher education leadership. His view clarified that ‘an examination of the leadership within the educational system would be incomplete without an examination of the leadership role in, and of, higher education’. Laissez-faire leadership represents the absence of a transaction of sorts with respect to leadership in which the leader avoids making decisions, abdicates responsibility, and does not use their authority. It is considered active to the extent that the leader ‘‘chooses” to avoid taking action. This component is generally considered the most passive and ineffective form of leadership. (Antonakis, Avolio, & Sivasubramaniam, 2003)

Waters and Kingston (2005:14) raise their concern about the current and future states of educational leadership, and in particular the principalship.


This study is significant because it would help in achieving effective leadership styles in higher education and technical fields.The result of this study would contribute to the knowledge base essential for the practice of educational administration by explaining the relationship between leadership styles and organizational performance. Moderating role of organizational culture is also important for development of effective leadership, while is studied under present research. This study has significant for not only for higher education administration practices but also for the smooth operations of technical and vocational practices.The results obtained for this study would provide information to administrators based on research and theory to assist them in their administration responsibilities. Administrators would learn about leadership with the performance of organization and different leadership styles suited to their personality, knowledge and situations affecting their roles.

Research design and methods

Schematic diagram of Theoretic framework

Theoretical Framework

According to model three leadership styles works as independent variables that impacts on organizational performance, a dependent variable. Culture distorts the relationship of leadership styles and performance. Transformational and transactional styles affects positively on organizational performance while the Laissez-Faire affects negatively. Culture is the moderating variable. The details regarding variables are given below.

Transactional Leadership

Leader influences on individual through a system of reward and punishment. This shows that if the follower does something good, then he/she will be rewarded and if he/she does something wrong then they will be penalized.

Transformational Leadership

Leaders start with articulating vision and mission. They create valuable and positive change in the followers.

Laissez Faire

Also known as non-directional leadership because they the leader provide little or no direction to the followers.

Organizational Performance

Organizational performance consists of the actual results or output of an organization as measured against its intended output (goals and objectives).

Organizational Culture

It is an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural) of an organization.

Population and Study Sample

We will include universities from public sector and Vocational & Technical field such as TEVTA and PVTC. Data will be collected from managerial staff, academics and other librarian & Admin staff.

Sample Size and Selection of Sample

Number of questionnaires will be distributed as depicted below:

* Public Universities: 700

  • Punjab University Lahore
  • Islamia University Bahawal Pur
  • GCU Faisal Abad
  • University of Education Lahore Campus
  • University of Education Multan Campus
  • Veterinary University Lahore
  • BZU Multan

* Technical Education and Vocational Training Authority (TEVTA) 170

  • Approximate fifty campuses will be included in this study.

* Punjab Vocational Training Council Lahore(PVTC) 200

  • Includes Vocational Training Institutes and Head Officeof Punjab Vocational Training Council.

Data Collection Sources

Data will be collected through the following sources:

  1. Personal Meetings
  2. E-Mail
  3. Mail (By Post)

The research instrument

Questionnaire will be used to collect the data. (Questionnaire attached in appendix I)

Data Management

We will use different software to manage the data. For example, SPSS, Microsoft Office 2007 etc.

Data analysis and interpretation

Data will be analysed through SPSS 16v.

Following statistical tests will be applied for the analysis of data:

  • Descriptive statistics
  • Mean & Standard Deviation
  • Correlation Analysis
  • Regression Analysis

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