Impact Of Leadership On Organisational Performance

Research Context: Background

Discuss about the Impact Of Leadership On Organisational Performance.

Leadership is extremely important for establishing clear organisational vision, communicating those visions proper among employees and encouraging them to achieving those visions effectively. It can have significant impact on the organisational performance level. Successful leaders direct the employees strategically for achieving the core organisational goals and objectives.

The study is mainly aimed at examining the impacts of transformational and transactional leadership styles on the performance level of Department of Telecommunications and Postal Services in Pretoria, Gauteng. The theoretical relationships among transactional, transformational leadership and organisational performance will be the main focus of this study. Later on, the empirical test of the study will evaluate the best and most significant leadership style on organisational performance.

Different employees can have different expectations from the actual meaning of leadership. The business leaders, community leaders and political leaders are associated with different connotations. The most significant matter is that the leaders must have the ability to influence their followers (Barnes, Christensen and Stillman 2013).

Rao (2014) pointed out three most significant elements of leadership process, which are described below:

• Leadership traits, characteristics and consequential behaviour: Such qualities enhance the abilities of the leaders to undertake leadership roles and fulfil those roles effectively.
• Follower characteristics and group of members: This refers to the attributes of the followers that have huge impact on the leadership characteristics. These characteristics are consisted of cultural backgrounds, group member attitudes, expectations and educational levels.
• External and internal environment influencing leadership effectiveness: This situation is different in different times of change than in time of stability, in war than peace and in small rather large organisations.

Effective interaction among these elements highly contributes in the effectiveness of leadership. The leaders, who are unwilling and unable to respond to such challenges, are more likely to become power wielders for maintaining their influence and power (Tourish 2014). Birasnav (2014) opined that power denotes the amount of influence of a leader and the probable rate of the influence. In business and political context, power is simply denoted as the possession of resources and capabilities for influencing the outcome. Power denotes the potential capacity of the leaders to influence the employees, whereas, influence represents the ability of the leaders towards communicating the ideas and soliciting support/buy-in from followers/subordinates of these ideas.

Department of Telecommunications and Postal Services is facing leadership challenges in terms of influencing others to do particular jobs for accomplishing the organisational goals and objectives. However, the application of power by the leaders has become the reality for the contemporary business organisations. Leaders use and acquire power daily for accomplishing the specific organisational goals. The use of power enhances both the power of leaders as well as the organisational power (Bottomley et al. 2016). According to Zhu et al. (2015), the employees are more likely to respond in one of three types of organisational powers, which are namely commitment, compliance or resistance. Likewise, it has been observed that the employees of Department of Telecommunications and Postal Services tend to resist with the instructions of the leaders. It may probably because of their expectation that they hold from the leaders.

The Research Problem

National Department of Telecommunications and Postal Services was established in May 2014 National Elections. The President Zuma had pronounced the establishment of this organisation. Accordingly, the subsequent presidential proclaims in Government Gazette No. 37839 and Gazette No. 38280 dated 15 July and 02 December or 2014 confirmed transfer of power, administration and functions entrusted by specific legislation to Ministry of Telecommunications and Postal Services. It had been newly formed as Ministry of Communications.

It brought about numerous changes in uncertainty and administration. The changes in administration impacted the organisational structure as well as business. In such circumstances, it is extremely difficult to focus on the development of appropriate leadership behaviour for managing the uncertain environment. The organisation need to respond to the rapid changes in business environment and conflicting expectations of the clients for remaining highly competitive in present economic environment (Wang et al. 2014). It is imperative for the organisations to consider appropriate leadership style for improving organisational performance. In such extent, transformational and transactional leaders have been considered as the key for motivating the employees and improving their performance level.

The research study is aimed at investigating the influence of of leadership on organisational performance of Department of Telecommunications and Postal Services (DTPS) in Pretoria, Gauteng. The theoretical framework and variables associated with leadership will be investigated in this research study. Primary data will be gathered from the selected employees of (DTPS) through distributing written questionnaires among them. Based on the findings of the research result, some suitable recommendations will also be provide in this study for improving the organisational performance of the organisation.

In order to collect relevant information regarding the research topic, the following research objectives will be taken into consideration:

• To determine the impact of leadership on organisational performance
• To identify employee perceptions of the existing leadership style
• To study the conceptualisation and different measures of organisational performance
• To make recommendations to Department of Telecommunications and Postal Services over their leadership development for improving organisational performance

The following research questions will help in gathering most authentic information about the research topic:

• How leadership impact on the organisational performance level?
• What are the perceptions of the employees regarding the existing leadership styles?
• What are the most effective measurements for determining the organisational performance?
• How Department of Telecommunications and Postal Services can develop their leadership styles to improve organisational performance level?

The research study can be an effective secondary source for other researchers and students to conduct further related research study. The findings of the study can help the organisations to improve their leadership style. It will ultimately enhance organisational performance level. The research findings will also facilitate in identifying the drivers of the organisational performance. It will assist the contemporary business organisations to adopt proactive approach rather than adopting reactive approach for leading high level of organisational performance.

Leadership is the ability of a person to set and achieve challenging goals, take decisive and swift and decisive actions inspire the employees to achieve goals and outperform organisational goals. The success of an organisation is highly dependent on organisational performance, effective employee commitment and employee job satisfaction (Eisenbeiss, Van Knippenberg and Fahrbach 2015). As per the previous authors, leaders facilitate and motivate the employees to be highly competitive through effective leadership style. Leadership style is the process of influencing others towards understanding the tasks needed to be done for accomplishing a particular job. Moreover, the business leaders always support the employees in their ways of achieving overall organisational goals and objectives. It is the process of facilitating the individual employees to put their collective efforts for accomplishing shared organisational goals and objectives (Jacobsen and Bøgh Andersen 2015).

Aim of the Study

Over the last few decades, leadership has become the most explored and significant concept in business and industry for leading business success. The style of leadership is not only identified through the actual behaviour of the leaders but also perception of behaviours (LePine et al. 2016). It has turned into the most effective elements for organisational performance. Different types of leadership styles can have different types of impact on organisational performance. Hence, it can be said that the leaders do not have impact only on employees’ performance, but also they have impact on overall organisational performance. The leaders of contemporary business organisations must understand the complexities of the rapid changing business environment in global markets. Cooperative relationship between the leaders and employees and organised task structure often lead to effective employee performance.

Transformational leadership was actually initiated in the year 1960 by James Macgregor Burns. Later on, it was developed by Bass and Avolio, who have innovatively altered the formal conception of this leadership. In contemporary researches based on leadership, transformational leadership is the most popular and frequently sought-after leadership style among the researchers. According to Boies, Fiset and Gill (2015), transformational leaders cultivate positive values among the followers for exceptionally leading them towards accomplishing organisational goals and objectives. Such leaders effectively meet the high order needs of the followers for initiating trusting culture in the workplace. Such trusting organisational climate even induces the employees to sacrifice their self-interest for the sake of high level organisational performance.

On the other hand, Breevaart et al. (2016) opined that transformational leaders can highly motivate the employees though setting and communicating clear organisational vision. In this way, such leaders can better lead the employees towards achieving common organisational goals through making proper employee connection. Such leaders are the best to understand the individual employee needs and their strength and weaknesses of the employees. Hence, they can best motivate and develop the employees towards achieving high level of organisational performance.

Transformational leadership can be divided into four following components:

• Idealized Influence: It is the most compelling feature of transformational leadership for which the leaders are looked upon in respect, admiration and imitated by followers.
• Inspirational Motivation: As per this component, transformational leaders provide positive reinforcement and motivation to their followers for excelling their work with pronounced loyalty and commitment.
• Intellectual Stimulation: As per this component, transformational leaders stimulate the efforts of the employees as most creative and innovative through reframing problems, questioning assumptions and approaching old circumstances in new ways.
• Individualized Consideration: Transformational leaders compassionately recognize the individual needs of their subordinates and motivate them towards achieving organisational goals through meeting their individual needs.

Newman et al. (2017) stated transactional leadership as the exchange leadership style, where the leaders motivate the employees to produce desired results through explaining the targets that must be met by the employees. Transactional leaders always suggest employees the ways of achieving targets and clarify their performance evaluation for keeping them engaged with their job roles. Furthermore, such leaders also provide feedbacks and rewards to the hardworking employees for keeping up their hard work for achieving organisational goals.

Research Objectives

Transactional leadership styles demonstrate leadership behaviours from three viewpoints. This leadership style has also been split into passive and active leadership by contingency reward and management by exception (Kesting et al. 2015).

• Contingent Reward: As per this style, the employees will be awarded with appropriate awards for their success of achieving task effectively. However, the employees will be penalized with penalty or criticism for lack of achievement of their tasks.
• Active Management by-Exception: As per this style, the leaders set individual employee objectives and performance standard for better leading them towards achieving their individual objectives. Furthermore, the leaders also keep close look on the work progress of the employees for helping them in their complexities. In case of any unconventionalities and errors, it is corrected immediately and several rules and procedures are reinforced to mitigate the issues in work.
• Passive Management by-Exception: As per this style, the leaders are inactive observers, who only intervene involuntarily in case of any error the employee performance.

Organisational performance is extremely important for leading high level of organisational success. However, there is strong debate regarding the issues of conceptual bases and terminology for performance measurement. There is no single measure of performance, which can fully explain all of its aspects. Effective organisational performance highly depends on proper transformation of inputs into desired outputs for achieving core organisational goals and objectives (Bouckenooghe, Zafar and Raja 2015). It is the ability of the organisations towards achieving their organisational goals and objectives through optimal utilisation of limited organisational resources. Moreover, the effectiveness of organisational performance is determined in relation between effective cost and realized output, minimal and cost effectiveness and standard output and achieved output (Colbert, Barrick and Bradley 2014).

Organisational performance often faces the issues of conceptual problems in terms of distinguishing between productivity and performance. Productivity is the ratio, which depicts the volume of work completed work within a specified period. On the other hand, performance is the broader aspect consisting of productivity, quality, consistency and other factors. The following four dominant approaches are used to define organisational performance:

• Goal Approach: An organisation is created with a specific purpose for serving the stakeholders. Organisational performance is the ability of an organisation towards achieving those specific purposes.
• The System Resource Approach: This approach determines the relationship between the environment and stakeholder. According to Engelen et al.(2015), an organisation becomes highly effective, while it can take the advantage of environment to acquire scare resources and values for operating its business.
• Constituency Approach: Maynard et al.(2017) opined that an organisation is said to be effective, while its multiple stakeholders perceive it as effective. The organisations having high level of control over the resources are more likely to have influence on its performance.
• Competing Values Approach: Organisational goals are settled in various directions with different expectations of various constituencies. Hence, the organisations have to apply various criteria for measuring the performance. The organisations must be adaptable and flexible enough with the changing demands of the stakeholders for leading effective organisational performance. An effective and performing organization must have high degree of commitment and collaboration among the stakeholders through team project, team management and work groups Herman and Chiu (2014). The flexibility of the organizations enhances their ability to utilize the scarce resources of environment for leading high level of organisational performance. The value of organisational performance is mostly measured through stock market.

The core relationship between the leadership style and organisational performance has become the most significant area in research studies. Most of the research findings have demonstrated that leadership style has significant impact on organisational performance (Herman and Chiu 2014).

D’Innocenzo, Mathieu and Kukenberger (2016) have carried out an investigation on the small scale organizations for finding out the impact of leadership style on organisational performance. As per this research, transformational leadership positively influence the organisational performance. However, transactional leadership and laissez-faire leadership negatively impact organisational performance. Bouckenooghe, Zafar and Raja (2015) conducted survey on selected small scale organizations of Nigeria for evaluating the impact of leadership style on organisational performance. As per the result of this research, transformational leadership is positive associated with organisational performance, but transactional leaders is insignificantly associated with organisational performance.

McLachlan and Garcia (2015) examined the impact of leadership style on organisational performance. As per this research result, both transformational and transactional leaders are positively associated with the employee performance. Similarly, D’Innocenzo, Mathieu and Kukenberger (2016) conducted research on the impact of leadership style on the organisational performance of selected private schools of Pakistan. The research results have revealed that both transformational and transactional leadership have positive influence on organisational performance. However, as per this research result, transactional leadership is most positively associated with organisational performance as compared with transformational leadership.

Research Questions

The research carried out by Engelen et al. (2015) on the organisations of United States of America has revealed that both transformational and transaction leadership is positively linked with the performance level of the organisations. However, transformational leadership has over and above contribution in organisational performance as compared with the transactional leadership.

The theoretical considerations of the literature have provided the bases to generate the hypotheses that are used to put forward the empirical determination. Such hypotheses will be analyzed in the data analysis section.

H₁: Transformational leadership style tends to impact positively on organisational performance

H₀: Transformational leadership style tends to impact negatively on organisational performance

H₂: Transactional leadership style is likely to impact positively on organisational performance

H₀: Transactional leadership style is likely to impact negatively on organisational performance

H₃: Transformational leadership style tends to have a positive relationship with organisational performance

H₀: Transformational leadership style tends to have a negative relationship with organisational performance

H₄: Transactional leadership style is likely to have a positive relationship with organisational performance

H₀: Transactional leadership style is likely to have a negative relationship with organisational performance

This section will highlight the several tools and methods that will be utilized for completing the research. Being the proposal, it will highlight the research philosophy, research approach, research purpose, research design, research strategy and data collection method, sampling and data analysis procedure. All possible tools will be analyzed and specific tools that will be required for the research will be justified for each of the methods.

According to Saunders et al. (2015), research philosophy helps in determining the source, nature and development of knowledge with respect to the research topic. This tool helps I constructing the assumptions and beliefs for the topic and based on this accurate strategy is selected for collecting data. There are three types of philosophies, which are Positivism, Interpretivism and Realism research philosophy. Considering positivism philosophy, it can be said thatfactual information is collected through observation method and it is completely dependent on quantifiable data. On the other hand, McLachlan and Garcia (2015) pointed out that Interpretivism philosophy deals with collecting data that is socially constructed and helps in constructing the real information for the research topic. Finally, realism research philosophy is the mixture of the earlier two philosophies, which is associated with collecting both socially constructed data and observed data.

Concerning the research topic, it can be said that such data must be collected that can be quantified and measured in terms of number so that it can be measured in the later sections. Moreover, the data that will be collected must be extremely trustworthy, detailed and fact oriented. Therefore, positivism research philosophy will be selected as it will fulfil all the criteria for authentic data collection.

Significance of the Study

According to Smith (2015), research approach helps in collecting the most accurate and relevant information, which may either contain fact oriented data or observed data. Two of the most widely used research approaches are inductive and deductive approach. While considering inductive approach, it can be said that the final outcome of the research will end up with developing new theory emerging for the data that has been analyzed. This approach is considered as the bottom-up approach where data is initially observed, then hypothesis is set up and finally theory is constructed. On the other hand, deductive approach is just the opposite and it is considered as the top-down approach. Here initially theory is described concerning the research topic and based on that hypothesis is created, later data is collected and observed and finally specific data is provided in support of the research recommendations.

Considering the research topic, it can be said that factual data has to be collected so that the generated hypothesis can be accepted. Initially, the literature review will be constructed where all the theories, concepts and critical analysis will be done and based on that research hypothesis will be developed. It can be said that the procedure completely justifies the deductive research approach and therefore it will be selected for constructing more specific data from more general data.

In order to accomplish a successful research, it is very important to quantify the research variables. There are three most well-known research purposes for conducting research study such as explanatory, exploratory and descriptive research purpose. According to Singh (2015), while considering the Explanatory purpose, it can be said that it helps in identifying the relationship between the research variables. This relationship helps in collecting factual data. On the other hand, exploratory purpose creates the research paper ground work. It helps in finding the research paper background and social causes concerning the issues surrounding the research variables. Finally, descriptive research purpose helps in analyzing the research variables in independent manner that helps in accumulating actual purpose of the research topic.

Concerning the research, it can be said that the interdependency between the research variables such as leadership and organizational performance is the main relationship that will help in developing the research hypothesis. Therefore, it can be said that the main purpose is the construct the relationship between independent and dependent variable so that final outcome can be measured. Therefore, for this research explanatory research purpose can be justified.

Leadership Style

The widely used research designs are descriptive, correlational, semi-experimental and experimental and reviews. According to Kratochwill (2015), descriptive research design is comprised of the methods such as case-study, naturalistic observation and survey. In case study method, secondary data is collected and analyzed. On the other hand, through survey, primary data is collected from respondents. Correlational design is comprised of case-control study and observational study. This design constructs the interrelationship between2 or more quantitative variables considering the identical set of participants. Abdulkadiroglu et al. (2017) pointed out that Semi-experimental research design lacks the random assignment element to control and treatment. Finally, experimental research design deals with controlling the factors that might affect the research outcome and therefore, in each stage instruments are validated to measure outcomes.

Considering the research topic, it can be said that survey and observation will be the most suitable for collecting factual data. Respondents will be selected and from them direct response will be collected. Therefore, it can be said that the most suitable research design will be descriptive as it will help in collecting primary data and describe the findings by comparing with literature review in order to identify a final specific outcome.

According to Wolgemuth et al. (2015), research strategies are the most important for collecting the most accurate, real and unbiased data from the sources. The widely used research strategies are focus group, case study, survey and interview. Case studies are mostly the sources of secondary information that are available from several empirical databases and historical data published in the past. Nardi (2018) pointed out that Focus group is such a strategy where group of individuals are interviewed where perceptions, opinions, beliefs, and attitudes are analyzed. Interview strategy helps in collecting qualitative data from specific and single respondent one at a time and survey is such a strategy through which close ended questions are asked to respondents and based on their response further data is analyzed.

Considering the research topic, it can be said that pool of response from respondents has to be collected and therefore the sample size will be quite huge. In such as a situation collecting and analyzing qualitative data will not be effective as factual data will not help in generating numeric values. Therefore, survey strategy will be used for collecting data from sample size.

According to the viewpoint ofSekaran and Bougie (2016), data collection is the most important research methodology tool that helps in quantifying data. The two most commonly used data collection instruments are primary and secondary. Through primary data collection method, direct responses from the respondents are collected. Such data can be quantitative, qualitative or both. On the other hand, secondary data collection deals with collecting data from published sources such as journals, books, empirical evidences, blogs, articles, reviews and authentic websites. However, such data is mostly qualitative and therefore quantifying the data in terms of numerical values is often very complex.

The research will be accomplished through survey strategy and therefore primary data collection method will be the most accurate. Moreover, in order to quantify the data, only quantitative data will be collected and therefore no interview will be done. The respondents will be given the questionnaire through Google Form tool and data will be collected electronically. This is because it is the most convenient and accurate real-time data collection tool. The questionnaire will comprise of both demographic and quantitative questionnaire. It will be close ended sheet, therefore 5-point Likert Scale method will be used as the options.

According toEriksson and Kovalainen (2015),population is the broader group of people who can be intended to generalize the result of study. Population size is considered the scope from which data can be collected. On the other hand, sample size is considered as the subset of population size who actually participates in the research and from whom qualitative or quantitative data is collected.Sekaran and Bougie (2016) pointed out that Response rate is the ratio of respondents that fill up the questionnaire to the total number of surveys that has been sent out to be filled. 20% response rate in an online survey is considered as good that helps in delivering accurate data.

While considering the viewpoint ofHoyle and Gottfredson (2015), it can be said that probability sample size is such as population where every member gets the fair chance of selection. On the other hand, non-probability sample size is such as population where there is no indication of which individual from the population will be selected as respondent.

Figure: Sampling Methods

(Source: Hoyle and Gottfredson 2015)

Considering the research topic, it can be said that probability sampling must be selected as positivism research philosophy has been selected and there cannot be any biased selection. Moreover, each of the respondents will be given fair chance to be selected.Considering the 20% response rate, total population that has to be selected is:

500 (population size) * 20% = 100

For a huge organization such as DTPS, targeted population for this study will include both the employees (subordinates) and leaders (supervisors) from Pretoria, Gauteng Province.

The two most widely used statistical data analysis methods for researches are descriptive and inferential. According toHeeringa, West and Berglund (2017), descriptive statistics deals with recording data from group members and summarizing the statistics in the form of group properties. The uncertainty factor is quite less in descriptive statistics as it only describes the items and people. This method includes mean, median, mode, standard deviation and some graphs and charts. On the other hand, inferential statistics involves the analysis of specific group of sample from the entire population size. It helps in drawing sample and generalize those to a population. In involves hypothesis tests, regression analysis and confidence intervals.

In this research inferential statistics will be used for data analysis as specific sample size will be selected for analyzing the data. SPSS will be used for data representation and correlation regression will be used for statistical data analysis. On the other hand, hypothesis testing will be done using t-test for hypothesis acceptance.

According toRoberts and Allen (2015), voluntary participation of the respondents must be entertained for the survey accomplishment. None of the respondent will be forced to participate and they will be given the opportunity to quit the survey at any moment. Moreover, the respondents will not be influenced for participation and any unethical behavior towards data manipulation will be prevented. Furthermore, the research study must also comply with all data protection acts and collected information must be protected against any fake access and leakage.

Figure: Research Structure

 (Source: Created by Author)

Activity Start Date	Completion Date
Complete draft proposal	30/04/2018
Revise proposal	07/05/2018
Submit revised proposal	07/05/2018
Collect data	18/05/2018
Analyze data	28/05/2018
Finish and submit draft of Chapter 1	21/05/2018
Finish and submit draft of Chapter 2	28/05/2018
Finish and submit draft of Chapter 3	04/06/2018
Finish and submit draft of Chapter 4	11/06/2018
Finish and submit draft of Chapter 5	18/06/2018
Submit revised draft	28/04/2018
Final submission of the research project	30/06/2018
Masters Research Project approved	20/07/2018

Chapter 1: Introduction: This chapter will be associated with discussing the backgrounds and problem statement of the research. This chapter will also frame effective research questions and objectives for gathering authentic research information.

Chapter 2: Literature Review: This chapter will explore the previous literature associated with the research topic. Apart from that, this section will also discuss the theoretical underpinning related to the research topic.

Chapter 3: Research Methodology: This section will select the most appropriate research methods for collecting authentic information about the research topic. Moreover, the chapter will crucially choose data collection method for gathering most relevant research information.

Chapter 4: Finding and Data Analysis: This chapter will collect the authentic data about research topic. Furthermore, this section will apply effective data analysis method for extracting the right information from the collected data.

Chapter 5: Conclusion and Recommendation: This section with provide the brief of the final research result. It will also suggest some suitable recommendations for overcoming the actual research problem.

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