Maryland Smith Research / April 18, 2018

Transformational Leadership Artistry

When Does Transformational Leadership Matter Most?

Transformational Leadership Artistry

To succeed, business leaders benefit from developing some persuasive powers.

They must lead teams toward the achievement of a shared purpose and vision. Scholars point to transformational leadership (TFL) as being one of the more useful leadership skills, in its ability to create four important behaviors: idealized influence; inspirational motivation; intellectual stimulation; and individualized consideration, which relates to attention to each follower's needs.

In recent research, Hui Liao and M. Susan Taylor, from the University of Maryland’s Robert H. Smith School of Business, and co-authors Joo Hun Han from Rutgers University and Seongsu Kim from Seoul National University, show the interconnectedness among High-Performance Work Systems (HPWS), organizational orientations, transformational leadership and team performance.

“Transformational leaders can inspire individual followers to go beyond their own self-interest and benefit collective performance of the group to which they belong,” the researchers say.

The researchers obtained data from 44 Korean companies, across multiple sectors. Researchers conducted site visits with each company and selected 179 participating teams using a stratified random sampling approach, and later administered a survey.

They found that high-performance work systems and the team manager’s level of TFL generally go hand-in-hand. However, the relationship is positively and negatively moderated by adaptation and efficiency orientations, respectively.

Organizations that have an adaptation orientation are generally seeking to adapt to a changing environment. The researchers find that those organizations generally create an environment that’s more receptive to TFL within team managers. When organizations have a high level of adaptation orientation, team managers will be more likely to respond to TFL-enhancing HPWS with a high level of transformational leadership skill.

In contrast, when organizations have an efficiency orientation, they are seeking generally to produce the greatest output with available methods and resources. In those instances, the work becomes more about maintaining the status quo and meeting established goals, rather than setting new visions and goals. “In organizations with a high efficiency orientation,” the researchers find, “team managers will not see a strong need for TFL.”

The results also supported a multilevel, moderated mediation effect with the indirect effect of HPWS on team performance via TFL varying significantly as a function of adaptation and efficiency orientations.

This study advances the understanding of how HPWS and organizational orientations jointly affect the emergence and effectiveness of TFL. The researchers suggest that future research might investigate the complex interplay of human research management and organizational context in affecting leadership and important performance outcomes.

Read more: Effects of High-Performance Work Systems on Transformational Leadership and Team Performance: Investigating the Moderating Roles of Organizational Orientations is featured in Human Resource Management.

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