The Impact of Leadership on Employees’ Loyalty and on Organizational Success: Do Transformational and Transactional Leadership Ensure Organizational and Work Commitment?

Author(s): Panagiota Xanthopoulou, Ioannis Dimitrios Karampelas

Leadership issues are vital to organizational success (Kumar and Kaptan, 2007). Without a strategic and effective leadership, it is difficult for the members of the organization to maintain profitability, productivity and competitive advantage (Lussier and Achua, 2007). Work commitment is important for understanding employee work behavior (Mowday et al., 1979; Meyer and Herscovitch 2001; Meyer et al. 2002). This commitment has an impact on many work-related characteristics, such as the intention to stay in the business (Porter et al. 1974; Mathieu and Zajac 1990; Meyer et al. 2002; Chew and Chan 2008), the absence (Porter et al. . 1974; Angle and Perry 1981; Meyer et al. 2002), and satisfaction (Yousef, 2000; Meyer et al., 2002; Chughtai and Zafar, 2006). The purpose of the research is to describe how leadership affects work commitment and employee effectiveness in a business. The target of the research is to examine which of the two transformational and transactional leadership styles has the most significant impact on employee engagement and employee effectiveness. In this research, an in-depth examination of the concepts of leadership, leadership style and work commitment was first conducted. The actions taken to investigate the research problem and the reasoning behind the application of specific procedures or techniques used to locate, select, process, and analyze the information used to understand the problem were then described, thus allowing the reader to critically evaluate the overall validity and reliability of the study. The interview questions were then taken and a comparison was made between the answers to give the results of the research. The results were also discussed to find homogenizations or contradictions in the existing literature review. Finally, the findings of the research were reported and suggestions for future research were made. The results showed that transformational leadership can lead to job commitment and better long-term effort, creativity and productivity of employees. On the contrary, the leadership of the transaction cannot cause a work commitment, but it is observed that on the part of the employees it can cause better results in a short period of time. Combined, transformational and transactional leadership can lead to job commitment, better results on the part of employees in the short term, and better long-term effort, creativity and productivity of employees.

Leadership, Leadership Style, Transformational Leadership, Transactional Leadership, Organizational Commitment, Work Commitment

1. Aarons, G. A. (2006). Transformational and transactional leadership: Association with attitudes toward evidence-based practice. Psychiatric services, 57(8), 1162-1169.
2. Abasilim, U. D., Gberevbie, D. E., & Osibanjo, O. A. (2019). Leadership styles and employees’ commitment: Empirical evidence from Nigeria. SAGE Open, 9(3), 2158244019866287.
3. Aina, O. A., & Verma, K. K. (2017, February). Effect of leadership style on organizational commitment. In 2017 Pan Pacific Microelectronics Symposium (Pan Pacific) (pp. 1-15). IEEE.
4. Angle, H. L., & Perry, J. L. (1981). An empirical assessment of organizational commitment and organizational effectiveness. Administrative science quarterly, 1-14.
5. Avery, G. C. (2004). Understanding leadership: Paradigms and cases. Sage.
6. Avolio, B. J., & Bass, B. M. (1991). Full-range training of leadership. Manual. Binghamton, NY: Bass/Avolio & Associates.
7. Bakker, A. B., Albrecht, S. L., & Leiter, M. P. (2011). Key questions regarding work engagement. European journal of work and organizational psychology, 20(1), 4-28.
8. Bass, B. M. (1985). Leadership and performance beyond expectations. Collier Macmillan.
9. Bass, B. M., & Stogdill, R. M. (1990). Bass & Stogdill's handbook of leadership: Theory, research, and managerial applications. Simon and Schuster.
10. Bass, B. M., & Riggio, R. E. (2006). Transformational leadership. Psychology press.
11. Bass, B. M., & Avolio, B. J. (1993). Transformational leadership: A response to critiques.
12. Bass, B. M., & Avolio, B. J. (Eds.). (1994). Improving organizational effectiveness through transformational leadership. Sage.
13. Bass, B. M., & Riggio, R. E. (2006). Transformational leadership. Psychology press.
14. Bell, E., Bryman, A., & Harley, B. (2018). Business research methods. Oxford university press.
15. Blomme, R. J., Kodden, B., & Beasley-Suffolk, A. (2015). Leadership theories and the concept of work engagement: Creating a conceptual framework for management implications and research. Journal of Management & Organization, 21(2), 125-144.
16. Buchanan, B. (1974). Building organizational commitment: The socialization of managers in work organizations. Administrative science quarterly, 533-546.
17. Burns, J. M., & Leadership, H. (1978). Row. New York, 280.
18. Çelik, Vehbi, (2003), Eğitimsel Liderlik, Ankara: Pegem A Yayınları.
19. Chen, H. F., & Hong, C. W. (2005). The impacts of compensation equity and empowerment on organizational commitment. Soochow Journal of Economics and Business, 52, 235-262.
20. Chen, J. C., Silverthorne, C., & Hung, J. Y. (2006). Organization communication, job stress, organizational commitment, and job performance of accounting professionals in Taiwan and America. Leadership & organization Development journal.
21. Chew, J., & Chan, C. C. (2008). Human resource practices, organizational commitment and intention to stay. International journal of manpower.
22. Chughtai, A. A., & Zafar, S. (2006). Antecedents and consequences of organizational commitment among Pakistani university teachers. Applied HRM research, 11(1), 39.
23. Clinebell, S., Skudiene, V., Trijonyte, R., & Reardon, J. (2013). Impact of leadership styles on employee organizational commitment. Journal of Service Science (JSS), 6(1), 139-152.
24. Dale, Kathleen, and Marilyn L. Fox. "Leadership style and organizational commitment: Mediating effect of role stress." Journal of Managerial issues (2008): 109-130.
25. Dariush, L., Choobdar, G., Valadkhani, P., & Mehrali, E. (2016). Leader facilitating organizational commitment of employees (Tehran). International journal of economics, commerce and management, 4(5), 640-655
26. Darolia, C. R., Kumari, P., & Darolia, S. (2010). Perceived organizational support, work motivation, and organizational commitment as determinants of job performance. Journal of the Indian Academy of Applied Psychology, 36(1), 69-78.
27. Daud, I., & Afifah, N. (2019). The Relationship between Leadership Style and Employee Outcomes: The Mediating Role of Organizational Commitment. Afifah, Ilzar DN, 100-106.
28. Dee, J. R., Henkin, A. B., & Singleton, C. A. (2006). Organizational commitment of teachers in urban schools: Examining the effects of team structures. Urban education, 41(6), 603-627.
29. Deluga, R. J., & Souza, J. (1991). The effects of transformational and transactional leadership styles on the influencing behaviour of subordinate police officers. Journal of Occupational Psychology, 64(1), 49-55.
30. DuBrin, A. J. (2004). Instructor's Resource Manual with Test Bank: leadership research findings, practice, and skills. Houghton Mifflin..
31. Ehrhart, M. G., & Naumann, S. E. (2004). Organizational citizenship behavior in work groups: a group norms approach. Journal of applied psychology, 89(6), 960.
32. Erkutlu, H. (2008). The impact of transformational leadership on organizational and leadership effectiveness: The Turkish case. Journal of management development, 27(7), 708-726.
33. Fairholm, G. W. (1991). Values leadership: Toward a new philosophy of leadership. New York: Praeger.
34. Fornes, S. L., Rocco, T. S., & Wollard, K. K. (2008). Workplace commitment: A conceptual model developed from integrative review of the research. Human resource development review, 7(3), 339-357.
35. Donkor, F., & Zhou, D. (2020). Organisational commitment influences on the relationship between transactional and laissez-faire leadership styles and employee performance in the Ghanaian public service environment. Journal of Psychology in Africa, 30(1), 30-36.
36. Ghadi, M. Y., Fernando, M., & Caputi, P. (2013). Transformational leadership and work engagement. Leadership & Organization Development Journal.
37. Jernigan, E., & Beggs, J. (2010). Substitutes for leadership and job satisfaction: is there a relationship?. Journal of Organizational Culture, Communications and Conflict, 14(2), 97.
38. Haggarty, L. (1996). What is content analysis?. Medical Teacher, 18(2), 99-101.
39. Hassan, A., & Ahmed, F. (2011). Authentic leadership, trust and work engagement. International Journal of Human and Social Sciences, 6(3), 164-170.
40. Hayward, Q., Goss, M., & Tolmay, R. (2004). The relationship between transformational and transactional leadership and employee commitment. Grahamstown: Rhodes University, Business Report.
41. Hoy, W. K., & Miskel, C. G. (2010). Eğitim yönetimi: Teori, araştırma ve uygulama (çev. Ed. S. Turan). Ankara: Nobel.
42. Hsien, W. C. (1985). Comparative educational administration. Taipei, Taiwan: Wunan.
43. Ivey, G. W., & Kline, T. J. (2010). Transformational and active transactional leadership in the Canadian military. Leadership & Organization Development Journal.
44. Jiang, J. C. Huang. LC (2002). Organizational climate, organizational commitment and organizational citizen behavior. In 2002 Proceedings of Technology and Management Conference, Taipei, Taiwan.
45. Judge, T. A., & Piccolo, R. F. (2004). Transformational and transactional leadership: a meta-analytic test of their relative validity. Journal of applied psychology, 89(5), 755.
46. Kanter, R. M. (1968). Commitment and social organization: A study of commitment mechanisms in utopian communities. American sociological review, 499-517.
47. Kate W, Masako T.Reframing organizational commitment within a contemporary careers framework, Cornell University, New York, 2002
48. Keegan, A. E., & Den Hartog, D. N. (2004). Transformational leadership in a project-based environment: a comparative study of the leadership styles of project managers and line managers. International journal of project management, 22(8), 609-617.
49. Kent, A., & Chelladurai, P. (2001). Perceived transformational leadership, organizational commitment, and citizenship behavior: A case study in intercollegiate athletics. Journal of sport management, 15(2), 135-159.
50. Keskes, I. (2014). Relationship between leadership styles and dimensions of employee organizational commitment: A critical review and discussion of future directions. Intangible Capital, 10(1), 26-51.
51. Kumar, C. R. (2007). The leadership in management: Understanding leadership wisdom. APH Publishing.
52. Lee, J. (2005). Effects of leadership and leader‐member exchange on commitment. Leadership & organization development journal.
53. Leithwood, K., & Jantzi, D. (2000). The effects of transformational leadership on organizational conditions and student engagement with school. Journal of educational administration.
54. Lunenburg, F. C. (2003). Emerging Perspectives: The Usefulness of the Construct of Transformational Leadership in Educational Organizations.
55. Lussier , R. N., and Achua, C. F. (2010). Leadership, Fourth Edition, South-Western Cengage Learning: Mason,USA
56. Mathieu, J. E., & Zajac, D. M. (1990). A review and meta-analysis of the antecedents, correlates, and consequences of organizational commitment. Psychological bulletin, 108(2), 171.
57. Meyer, J. P., & Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human resource management review, 1(1), 61-89.
58. Meyer, J. P., & Allen, N. J. (1997). Commitment in the workplace: Theory, research, and application. Sage.
59. Meyer, J. P., & Herscovitch, L. (2001). Commitment in the workplace: Toward a general model. Human resource management review, 11(3), 299-326.
60. Meyer, J. P., & Parfyonova, N. M. (2010). Normative commitment in the workplace: A theoretical analysis and re-conceptualization. Human resource management review, 20(4), 283-294.
61. Meyer, J. P., Stanley, D. J., Herscovitch, L., & Topolnytsky, L. (2002). Affective, continuance, and normative commitment to the organization: A meta-analysis of antecedents, correlates, and consequences. Journal of vocational behavior, 61(1), 20-52.
62. Mowday, R. T., Steers, R. M., & Porter, L. W. (1979). The measurement of organizational commitment. Journal of vocational behavior, 14(2), 224-247.
63. Mosadeghrad, A. M., & Ferdosi, M. (2013). Leadership, job satisfaction and organizational commitment in healthcare sector: Proposing and testing a model. Materia socio-medica, 25(2), 121.
64. Northouse, P. G. (2018). Leadership: Theory and practice. Sage publications.
65. Omidifar, R. (2013). Leadership style, organizational commitment and job satisfaction: A case study on high school principals in Tehran, Iran. American Journal of Humanities and Social Sciences, 1(4), 263-267.
66. Price, J. L. (1997). Handbook of organizational measurement. International journal of manpower, 18(4-1), 305-558.
67. Politis, J. D. (2002). Transformational and transactional leadership enabling (disabling) knowledge acquisition of self‐managed teams: the consequences for performance. Leadership & Organization Development Journal.
68. Porter, L. W., Steers, R. M., Mowday, R. T., & Boulian, P. V. (1974). Organizational commitment, job satisfaction, and turnover among psychiatric technicians. Journal of applied psychology, 59(5), 603.
69. Powell, D. M., & Meyer, J. P. (2004). Side-bet theory and the three-component model of organizational commitment. Journal of vocational behavior, 65(1), 157-177.
70. Rashid, Z. A., Sambasivan, M., & Johari, J. (2003). The influence of corporate culture and organisational commitment on performance. Journal of management development.
71. Riketta, M. (2002). Attitudinal organizational commitment and job performance: a meta‐analysis. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 23(3), 257-266.
72. Robbins, S. P. (2016). Organizational behavior.
73. Rose, R. C., Kumar, N., & Pak, O. G. (2009). The effect of organizational learning on organizational commitment, job satisfaction and work performance. Journal of Applied Business Research (JABR), 25(6).
74. Rowold, J., & Schlotz, W. (2009). Transformational and transactional leadership and followers’ chronic stress. Leadership Review, 9(1), 35-48.
75. Sakiru, O. K., Othman, J., Silong, A. D., Abdullahi, M., Agbana, A., Kia, N., & Ndidi, N. L. (2013). Leadership styles and its effectiveness on employees' job commitment. Research on Humanities and Social Sciences, 3(9), 169-75.
76. Samad, S., & Yusuf, S. Y. M. (2012). The role of organizational commitment in mediating the relationship between job satisfaction and turnover intention. European Journal of Social Sciences, 30(1), 125-135.
77. Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. Pearson education.
78. Seltzer, J., & Bass, B. M. (1990). Transformational leadership: Beyond initiation and consideration. Journal of management, 16(4), 693-703.
79. Snodgrass, J., & Shachar, M. (2008). Faculty perceptions of occupational therapy program directors' leadership styles and outcomes of leadership. Journal of allied health, 37(4), 225-235.
80. Somers, M. J. (1995). Organizational commitment, turnover and absenteeism: An examination of direct and interaction effects. Journal of organizational Behavior, 16(1), 49-58.
81. Steers, R. M. (1977). Antecedents and outcomes of organizational commitment. Administrative science quarterly, 46-56.
82. Stevens, C. U., D’Intino, R. S., & Victor, B. (1995). The moral quandary of transformational leadership: Change for whom. Research in organizational change and development, 8(123-143).
83. Stewart, J. (2006). Transformational leadership: An evolving concept examined through the works of Burns, Bass, Avolio, and Leithwood. Canadian Journal of Educational Administration and Policy, (54).
84. Strom, D. L., Sears, K. L., & Kelly, K. M. (2014). Work engagement: The roles of organizational justice and leadership style in predicting engagement among employees. Journal of leadership & organizational studies, 21(1), 71-82.
85. Tziner, A., & Shkoler, O. (2018). Leadership Styles and Work Attitudes: Does Age Moderate their Relationship?(Estilos de liderazgo y actitudes en el trabajo:¿ modera la edad su relación?). Journal of Work and Organizational Psychology (2018), 34(3), 195-201.
86. Walumbwa, F. O., Lawler, J. J., Avolio, B. J., Wang, P., & Shi, K. (2005). Transformational leadership and work-related attitudes: The moderating effects of collective and self-efficacy across cultures. Journal of Leadership & Organizational Studies, 11(3), 2-16.
87. Walumbwa, F. O., & Lawler, J. J. (2003). Building effective organizations: Transformational leadership, collectivist orientation, work-related attitudes and withdrawal behaviours in three emerging economies. International journal of human resource management, 14(7), 1083-1101.
88. Wu, F., & Shiu, C. (2009). The Relationship between leadership styles and foreign English teachers job satisfaction in adult English cram schools: Evidences in Taiwan. The Journal of American Academy of Business, 14(2), 75-82.
89. Xiong Chen, Z., & Aryee, S. (2007). Delegation and employee work outcomes: An examination of the cultural context of mediating processes in China. Academy of Management Journal, 50(1), 226-238.
90. Yousef, D. A. (2000). Organizational commitment: a mediator of the relationships of leadership behavior with job satisfaction and performance in a non‐western country. Journal of managerial Psychology.
91. Yukl, G. (2008). How leaders influence organizational effectiveness. The leadership quarterly, 19(6), 708-722.
92. Yukl, G. A. (2010). Leadership in organizations. Upper Saddle Creek River, NJ: Person Prentice Hall.
93. Zin, R. M. (1998). Participation and commitment among Malaysian professionals. Penerbit Universiti Kebangsaan Malaysia.