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Follower Behavior and Organization Performance: The Impact of Transformational Leaders

October 24, 2007

"Empirical studies on the mediating process in the relationship between transformational leadership and organizational performance focus primarily on constructs like followers' trust, agreement on values, group cohesion, satisfaction, self efficacy beliefs and followers' intrinsic motivation. By surveying 91 leaders from German companies, the following hypotheses are tested: First, we expect followers' organizational citizenship behavior (OCB in terms of Podsakoff, et al., 1997) to mediate relationship between transformational leadership and follower performance (hypothesis 1a). Second, we suggest controversial discussion among followers (debate as meant by Simons, et al., 1999) to be a mediator between transformational leadership and follower innovation (hypothesis 2a). Whereas organizational citizenship behavior (OCB) has yet to be examined in connection with transformational leadership (Bettencourt, 2004; Kent & Chelladurai, 2001; Podsakoff, MacKenzie & Boomer, 1996; Podsakoff et al., 1990), debate has not. In contrast to transformational leadership, transactional leadership may trigger rather followers' in-role than extra-role behavior (Avolio & Bass, 1988). Thus, we do not expect OCB and debate, respectively, mediating the transactional outcome-relationship (hypothesis 1b and 2b).

Transformational leaders inspire followers to achieve extarordinary outcomes by providing both meaning and understanding. Leaders are admired, respected and trusted. Followers identify with and want to emulate their leaders. By providing meaning and challenging to their followers' work, leaders motivate their followers. Leaders stimulate followers by questioning assumptions, refraining problems, and approaching old situations in new ways. Leaders pay attention to each individual's need for achievement and growth by acting as a coach or mentor. While transformational leadership emphasizes social exchange between leader and follower in the form of the psychological contract and thus stimulates, OCB, transactional leadership, on the contrary is primarily based on the economic exchange (Pillai, Schriesheim, & Williams, 1999). Transactional leaders, identify the needs of their subordinates, clarify and negotiate the aspired goals, and regulate follower behavior using contingent positive or negative reinforcement (Bass, 1985). Transactional leadership means that followers agree, accept or comply with the leader in exchange for praise, rewards, and resources or the avoidance of disciplinary action (Bass et al., 2003).

Organizational Citizen Behavior (OCB) comprises extra-role behaviors that are not within role but nevertheless of great importance for efficient processes in organizations (Organ, 1988; Podsakoff et al., 1997). Helping behavior stimulates performance because new colleagues are easily integrated into the group. Transformational leaders are assumed to "stimulate followers to perform beyond the level of expectations' (Bass, 1985, p. 32). In contrast, transactional leadership is not likely to trigger extra-role behavior (Erhart & Naumann, 2004).

Hypotheses 1a: OCB will mediate the relationship between transformational leadership and followers performance.

Hypotheses 1b: OCB will not mediate the relationship between transactional leadership and follower performance.

Hypotheses 2a: Debate will mediate the relationship between transformational leadership and follower innovation.

Hypotheses 2b: Debate will not mediate the relationship between transactional leadership and follower innovation.

We interviewed N = 91 leaders (department heads and group leaders) from N=91 German companies (operating in e.g., engineering, insurance, telecommunication companies, banks) working in different functional departments (production 23%, marketing and sales 20%, commercial administration 19%, human resources and organization 15%, R&D 13%, and technical support 10%). The respondents were predominantly male (86%), in average 44 years old (SD = 8.99), and disposed over 7.8 years (SD = 7.05) of leadership experience in average. The departments had an average size of 34 members (SD = 52). The return rate was 90%, probably since we addressed each participant personally.

Transformational and transactional leadership were measured by using the German translation of the Multifactor Leadership Questionnaire (MLQ-Form 5X Short, Bass & Avolio, 1995) by Felfe (2006). The participants were asked to rate their leadership behavior on a seven-point Likert scale (ranging from 'never' to 'almost always'). OCB was measured by five items based on Deckop et al.'s (1999) version of the instrument originally developed by Podsakoff and MacKenzie 1989). Debate was measured by the four-item scale developed by Simons et al (1999). We measured performance by five items based on Becker, Billings, Eveleth and Gilbert's (1996) seven-point scale, which covers qualitative and quantitative aspects of performance (e.g., 'my subordinates complete work in a timely and effective manner'), ranging from 'disagree' to 'agree' and from 'very low' to 'very high'. We operationalized follower innovation using the 'Role Based Performance Scale' (RBPS) developed by Welbourne, Johnson, and Erez (1998).

Transformational leadership significantly explained variance in follower performance. Transactional leadership significantly explained experience in OCB. These results confirmed hypothesis 1a. Hypothesis 1b, which negates an analogous mediator effect for transactional leadership, was also confirmed. Hypothesis 2a was confirmed in the data too. Since the first two steps testing the analogous mediator effect for transactional leadership did not show significant effects, hypothesis 2b, stating no such mediating effect to occur for transactional leadership was also supported.

The described heuristic 'leadership behavior - follower behavior -leadership success' exactly corresponds to the logics of the mediator approach followed in our study (Boerner, Eisenbeiss & Griesser, 2007, p 15-26)."

Reference: Boerner, S., Eisenbeiss, A., & Griesser, D. (2006). Follower behavior and organizational performance: the impact of transformational leaders. Journal of Leadership and Organizational Studies, 2006, Vol. 13, No. 3

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Created: 2007-07-05, Updated: 2008-12-28