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

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  • Panagiota Xanthopoulou
  • Ioannis Dimitrios Karampelas

Abstract

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.

Suggested Citation

  • Panagiota Xanthopoulou & Ioannis Dimitrios Karampelas, 2020. "The Impact of Leadership on Employees’ Loyalty and on Organizational Success: Do Transformational and Transactional Leadership Ensure Organizational and Work Commitment?," International Journal of Sciences, Office ijSciences, vol. 9(10), pages 45-63, October.
    • Handle: RePEc:adm:journl:v:9:y:2020:i:10:p:45-63
    DOI: 10.18483/ijSci.2389
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    References listed on IDEAS

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    1. Blomme, Robert J. & Kodden, Bas & Beasley-Suffolk, Annamaria, 2015. "Leadership theories and the concept of work engagement: Creating a conceptual framework for management implications and research," Journal of Management & Organization, Cambridge University Press, vol. 21(2), pages 125-144, March.
    2. U. D. Abasilim & D. E. Gberevbie & O. A. Osibanjo, 2019. "Leadership Styles and Employees’ Commitment: Empirical Evidence From Nigeria," SAGE Open, , vol. 9(3), pages 21582440198, July.
    3. Janet Chew & Christopher C.A. Chan, 2008. "Human resource practices, organizational commitment and intention to stay," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(6), pages 503-522, September.
    4. Ilzar Daud, 2019. "The Relationship between Leadership Style and Employee Outcomes: The Mediating Role of Organizational Commitment," GATR Journals jmmr215, Global Academy of Training and Research (GATR) Enterprise.
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