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A mixed-methods study of CEO transformational leadership and firm performance

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  • Jensen, Maika
  • Potočnik, Kristina
  • Chaudhry, Sara

Abstract

This mixed-methods study explores the relationship between CEO transformational leadership and firm performance relying exclusively on secondary data. We used a random sample comprising of 42 CEOs of publicly-listed US and European companies. We evaluated their transformational leadership drawing upon media sources which were content analyzed to create individual CEO profiles. These profiles were then given to a panel of three judges who rated the CEOs on their transformational leadership style. We obtained the firm performance data from Thomson Datastream. Our results showed significant associations between intellectual stimulation and inspirational motivation respectively, and different financial performance indicators. We also observed a tendency of positive relationships between individualized consideration and firm performance. These findings remained significant after controlling for company baseline performance, firm size, CEO tenure, and company location. Our findings largely support the positive role of CEO transformational leadership in shaping firm performance.

Suggested Citation

  • Jensen, Maika & Potočnik, Kristina & Chaudhry, Sara, 2020. "A mixed-methods study of CEO transformational leadership and firm performance," European Management Journal, Elsevier, vol. 38(6), pages 836-845.
    • Handle: RePEc:eee:eurman:v:38:y:2020:i:6:p:836-845
    DOI: 10.1016/j.emj.2020.05.004
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    References listed on IDEAS

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    1. Mengjuan Zhang & Hongwei Shi & Leon Williams & Paul Lighterness & Mingxing Li & Asad Ullah Khan, 2023. "An Empirical Test of the Influence of Rural Leadership on the Willingness to Participate in Public Affairs from the Perspective of Leadership Identification," Agriculture, MDPI, vol. 13(10), pages 1-21, October.
    2. Nor Sabrena Norizan & Ahmad Fadhly Arham & Ahmad Firdhaus Arham & Fatanah Jislan & Siti Norashikin Bashirun, 2024. "Perceived Organisational Support, Transformational Leadership and Organizational Performance: Perspectives of Hospitality Industry in Malaysia," Information Management and Business Review, AMH International, vol. 16(1), pages 157-172.
    3. Mai Ngoc Khuong & Do Thanh Tung & Thai Hoang Quoc, 2022. "Review of Empirical Research on Leadership and Firm Performance," SAGE Open, , vol. 12(3), pages 21582440221, July.
    4. Khawaja Khalid Mehmood & Mahnoor Rafiq, 2024. "The Impact of Transformational Leadership Climate on Business Sustainability and New Product Development Process: Moderating Influence of Strategic Flexibility," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 323-331.
    5. Fitri, Rohmadina Sabila, 2020. "Firm Performance Measurement," OSF Preprints qsu29, Center for Open Science.
    6. Abdulla Abdulaziz Al-Subaie & Mohd. Nishat Faisal & Belaid Aouni & Faisal Talib, 2021. "A Strategic Framework for Transformational Leadership Development in Megaprojects," Sustainability, MDPI, vol. 13(6), pages 1-21, March.

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