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Leadership and Organizational Performance.

Isaac Otheo

Organizational Change

South Texas College

Amadita Zamora

08/12/2022

Leadership and Organizational Performance

Introduction
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The subject of the impact of leadership on organizational performance has received

wide scholarly attention for decades. The general sentiment among stakeholders has been that

the quality and style of leadership employed affect organizational performance accordingly.

There are various management theories in support of this, such as the behavioural management

theory, which posits that managers, by comprehending the unique capacities of employees, can

influence their, and the organization's performance. Likewise, the human relations tory holds

that effective relationships between leaders and subordinates stimulate enhanced performance.

A lot of other management theories have similar connotations and undertones. As such, various

scholars have engaged in scientific inquiry to test the validity of these claims and have come up

with loads of literature on the subject matter. However, this literature is lacking in congruence,

and substantial gaps are still evident. This paper will analyze past literature on the relationship

between leadership performance and organizational performance. The paper will establish gaps

and flaws in past literature and recommend a trajectory for future research.

RQ – How does leadership proficiency/competency affect performance and productivity within

organizations?

H 1 – There is a positive relationship between leadership competency and organizational

performance.

Literature Review

Popa, (2012) investigates the relationship between leadership effectiveness and

organizational performance. While most research has approached the subject matter from the

lens of leadership style, her research generally seeks to understand how competent leadership

results in improved performance. The article notes that generally, there is an observable

correlation between leadership effectiveness and organizational success in the business world.

The article then notes that leadership effectiveness does not exist in a vacuum-rather; it is

facilitated by organizational culture. In essence, effective leaders modify the culture of the
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organization accordingly to obtain effective results. The article thus recommends that leaders

shape cultural traits and environments of the organization to achieve improved productivity

from employees.

In her article, Hurduzeu (2015) explores the impact of leadership style on

organizational performance with a focus on transformational leadership. Transformational

leadership is defined as leadership that inspires positive change among employees. As such, the

study demonstrates that transformational leaders, by inspiring their subordinates to work

harder, stimulate higher levels of performance within the organization (Hurduzeu, 2015).

Transformational leaders rouse intrinsic motivation among subordinates boosting their

productivity. They capitalize on maximizing innovative capacity and technical capability to

complete assigned tasks. The article thus advocates for organizational leaders to adopt these

aspects of transformational leadership to manage their organizations for improved productivity.

Elenkov, (2002) explores the impact of transformational and transactional leadership

styles on organizational performance within the Russian context. The study performs a survey

on Russian companies and managers to this end. In particular, the author investigates how

support for innovation and group cohesiveness enabled by transformational leadership impacts

performance within the organization. The results of the study indicate that transformational

leadership directly resulted in improved organizational performance (Elenkov, 2002).

Companies and managers who employed transformational leadership and associated techniques

such as process consultation and sensitivity training posted enhanced organizational

performance. Therefore, the article recommends that organizations implement transformational

leadership within their management for improved productivity.

Jing & Avery, (2008) investigate the missing links in understanding the relationship

between leadership and organizational performance. The paper establishes that leadership is

instrumental in steering organizational performance. The authors acknowledge that whereas

scholarly research has established theoretical and empirical relationships between the two with

extensive literature to this end, there are still considerable gaps in understanding the nature of

these gaps, which calls for further inquiry. Therefore, the paper explores the antecedents,

typologies, paradigms and processes in organizational leadership that result in improved

organizational performance. The authors note that there exists a problem in the quality of

performance measurement, which has impeded explaining this relationship (Jing & Avery,

2008). More so, the article notes a flaw in the approach of the subject matter by past scholars

who have narrowed their focus to transformational and visionary leadership styles. Lastly, past

analysis has focused on individual outcomes as opposed to organization-level outcomes. The

authors thus recommend that future research on the subject correct these flaws to substantiate

existing gaps.

Conclusion

There is an observable correlation between leadership competency and organizational

success in the field of business. Various management theories support the claim that leadership

effectiveness results in improved organizational productivity. This subject has sparked

scientific inquiry among scholars for decades. The majority of research has, however, focused

on two leadership styles -transformational and transactional leadership. More so, this research

has often adopted an individual-based approach rather than an organization-wide, holistic

approach. Consequently, existing literature has failed to substantiate critical gaps in

understanding the nature of this relationship calling for further inquiry. As such, future research

on the topic should broaden its scope to include other styles of leadership as well as adopt an

organization-wide approach.
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References

Elenkov, D. (2002). Effects of leadership on organizational performance in Russian companies.

Journal of Business Research, 55(6), 467-480.

Hurduzeu, R. (2015). The Impact of Leadership on Organizational Performance. SEA -

Practical Application of Science, 3(7), 289-293.

Jing, F., & Avery, G. (2008). Missing Links In UnderstandingThe Relationship Between

leadership and Organizational Performance. International Business & Economics

Research Journal, 7(5), 67-78.

Popa, B. (2012). The relationship between leadership effectiveness and Organizational

Performance. Journal of Defense Resources Management, 3(1), 123-127.