Practice and Role of Transformational Leadership on Organizational Performance

Thesis (M.A.), 2020

96 Pages







List of acronyms


1.1. Background of the Study
1.2. Statements of the Problems
1.3. Objectives of the Study
1.4. Research questions
1.5. Scope of the study
1.6. Limitations of the Study
1.7. Significance of the study
1.8. Operational definitions of some key terms
1.9. Organization of the study

Chapter Two
2.1. Introduction
2.2. Theories and concepts of terms
2.3. Empirical Literature
2.4. Research Gap

Chapter Three
Research Methodology
3.1. Introduction
3.2. Description of the Study Area
3.3. Research Approach
3.4. Research Design
3.5. Variables of the Study
3.6. Population and Sampling Procedure
3.7. Sample Frame
3.8. Sampling Techniques and Sample Size Determination
3.9. Data Sources and Data Gathering Instruments
3.10. Data Quality Control Mechanisms
3.11. Data Analysis
3.12. Ethical Consideration

4.1. Introduction
4.2. Response Rate of Respondents
4.3. Demographic Characteristics of respondents
4.4. Presentation and Discussion of Survey and Interview Result

5.1. Introduction
5.2. Summary of the Findings
5.3. Conclusion
5.4. Recommendations




This thesis would not have been finalized without the directly or indirectly support of many people. It is not possible to express gratitude to each one by name, but I will mention a few who gave me their time, attention and encouragement during my two years stay in ECSU. My first and foremost acknowledgement goes to God who has helped me not only in doing this research but also in every step of my life.

I am very glad to express my heartfelt gratitude and appreciation to Dr. Berihanu Belayneh, my advisor for his invaluable, constructive and enduring comments and professional advice throughout from the inception to the completion of this thesis.

I would also like to acknowledge the contribution of all employees and leaders of Addis Ababa City Administration for their cooperation by filling up the questionnaires and providing valuable information for completing my work.

My specials thank also goes to my wife Lidiya Gurmu and my special daughter Sara Amare for their incalculable role of continuous blessing and moral support in all my actions, for their encouragement and motivation throughout my life.

I would like to acknowledge the contribution of my Brothers Yirgalem Tilahun and Muluken Tilahun for their holistic support and priceless contribution, co-operation and assistance throughout my work.

Last, but not least my heartfelt appreciation goes to my friends and relatives who have been with me throughout my work by providing both material and moral support. Specifically, I would like to deeply thank; Dereje Tirebo, Tamene Abebe, Abiy Getachew for their cooperation and assistance throughout this work.

Gizachew Tilahun Desbalo


The researcher was born in 1981 in Butajira City Administration, kebele 03 from his lovely mother Etagu Hassen and his lovely father Tilahun Desbalo. The researcher started his education at Butajira elementary School, and continued his secondary education in Butajira high School.

For higher education, he joined Addis Ababa University, Sciences facility for his first Degree (1999-2004) and successfully completed his undergraduate study in Mathematics. After the completion of his first degree, he was joined Government high schools and started working in Dalocha high school, SNNPR, Siliti Zone and Butajira High school, SNNPR, Gurage Zone, as a mathematics teacher for about 6 years, and in Addis Ababa city administration as expert and leader for 6 years in woreda and sub city levels.

Started his Masters Degree in Ethiopian Civil Service University, Institute of Leadership and Good Governance (2017- 2019).


Table3. 1 Cronbach’s Alpha’s Reliability test for study variables

Table4. 1 Response rate of respondents

Table4. 2 Demographic Characteristics of leaders

Table4. 3 Demographic characteristics of employees

Table4. 4 Extent to which leaders display idealized influence

Table4. 5 Extent by which leaders demonstrate inspirational motivation

Table4. 6 Analysis on intellectual stimulation components of transformational leadership

Table4. 7 Analysis on individual consideration components of transformational leadership

Table4. 8 Pearson correlation results of components of transformational leadership (N= 50)

Table4. 9 Descriptive analysis of dimensions of transformational leadership

Table4.10 Employees perception towards their leaders’ transformational leadership

Table4. 11 Person correlation results of employee perceptions ratings of their leaders’ transformational leadership role (N =366)

Table4.12 Correlations between employees’ perception of their leaders’ transformational leadership role and organizational performance (N =366), N (OVP) =50

Table4.13 Model summary for predicting organizational performance using transformational leadership roles of leaders’

Table4. 14 Analysis of variance (ANOVA) between dependent and independent variables

Table4. 15 Regression coefficient between transformational leadership roles and organizational performance


Figure2. 1 Conceptual framework

Figure3. 1 Study area map

List of appendix

Appendix A : Questionnaire for Leaders

Appendix B: Interviews Guiding Questions for Leaders

Appendix C: Questionnaire for Employees

Appendix D: Interviews Guiding Questions for Employees

Appendix E:Questionnaires for leaders: Amharic Version

Appendix F: Questionnaires for employees: Amharic Version

Appendix G: descriptive statistics of each items of employees’ perception

List of acronyms

Abbildung in dieser Leseprobe nicht enthalten


Leaders have a vital role in motivating and inspiring employees to perform their job more than they originally expected from them. In this regard, transformational leadership gives emphasis on inherent motivation and followers’ development, which fits the needs of today’s complex work groups, who want to be inspired and empowered in order to achieve the pre determined goal of their organization. Thus, this study was conducted to assess the practice and role of transformational leadership on organizational performance in public organizations of AACA. To this end, concurrent research design was adopted. The study was conducted in fifty public organizations of two sub cities selected through stratified simple random sampling techniques. From these organizations, 431 participants were selected through proportionate, simple random and purposive sampling techniques. Questionnaires containing open and close-ended items and semi-structured interview were employed in the process of data gathering. The quantitative data were analyzed by utilizing frequency, percentages, mean, standard deviations, correlation, and regression. The data gathered through interviews and open-ended questions were categorized to groups to supplement the quantitative data. The study revealed that, transformational leadership and its four dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individual consideration were being practiced, but, except inspirational motivation, which had a good practice, the rest three dimensions practiced moderately. Inspirational motivation was identified as the frequently practiced dimension of TL in the study area. The study also shows that, though, the majority of employees (46.7%) had a positive perception, a significant numbers (53.3%) of employees showed their disagreement and undecided on their leaders transformational leadership role. Moreover, employees placed the perception on their leaders’ transformational leadership role in the order of rank as providing intellectual stimulation, Modeling the way, Inspirational motivation, providing individual consideration , and sharing of organizational vision respectively. It was found that; leaders’ role of transformational leadership has a negative and statistically insignificant relationship with organizational performance. In addition, the study revealed that, o nly 6.7% of the variation in organizational performance in public sector organizations of AACA explained by leaders’ transformational leadership role . Finally, the researcher recommended that, AACA develop policies and practices that focus on resolving problems related to the effective practice of transformational leadership, which is important in improving the performance of the organization.

Key words Transformational leadership, organizational performance, public organization.



This chapter deals with background of the study, statement of the problem, objectives of the study, research questions, significance and scope of the study. It also states operational definitions of some key terms and the organization the study.

1.1. Background of the Study

Different definitions have given to the term leadership because of the growing global influences and generational differences (Northouse, 2016:2-5). Fore instance, (Yukul, 2013:4-5) make analysis on the definitions used by different researchers and distinguish the common features that leadership is about an influencing process over other people to guide, structure, and facilitate activities in groups or organizations. In addition, (Northouse, 2016:3) conceptualized leadership as a process whereby an individual influences a group of individuals to achieve a common goal by identifying components central to the phenomenon leadership.

The modern scientific study of leadership dates only from the turn of the twentieth century (Yukul, 2013:2).However, scholars’ interest in leadership starts from its earliest writing. The nineteenth century was dominated by the concept of ‘great man’ theory (Wart, 2012:9). Particular great men move history forward due to their exceptional characteristics as leaders. The scientific mood of the early twentieth century fostered the development of a more focused search for the basis of leadership (Wart, 2012:10). What traits and characteristics do leaders seem to share (Rainey, 2014:337)? Researchers developed personality tests and compared the results of average individuals with those perceived to be leaders (Wart, 2012:4).

Until 1978, the focus of the majority literature on leadership was derived from the concern in organizational makeup to understand the impact of leadership styles in small group behavior and outcomes with similar variable models(Storey, 2005:13), while attention to leadership on entire organization were largely ignored. Burn’s Book on leadership dramatically changed that interest by introducing the notion TL and this has shifted attention to leadership of entire organizations rather than the leadership of small groups (Wart, 2012:4-5). Leadership is such broadly used concept that it can be ambiguous if not defined narrowly.

According to (Northouse, 2007:2), leadership defined as “a process whereby an individual influences a group of individuals to achieve a common goal.” Leadership is about how well leaders manage themselves and others but not all about intellectual ability or technical expertise (Mitchel, 2013:11). The expected outcome for all public, private, or non-profit organizations is the achievement of operational and strategic objectives with more committed employees (Rainey, 2014:151). Getting extraordinary achievements in organizations through ordinary people remains the objective and the challenge (Kouzes & Posner, 2007: 25). In line with this general definition, scholars conceptualized more specific leadership styles, but the researcher will only focus on the transformational leadership.

Transformational leadership has speedily occupies central place in leadership research and application of leadership theory (Northouse, 2016:161). This is because transformational leadership gives emphasis on intrinsic motivation and follower development, which fits the needs of today’s complex work groups, who want to be inspired and empowered in order to achieve their goal in times of uncertainty(Bass & Riggio, 2006:xi)

According to Burn (1978), transformational leaders are leaders who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity (Bass.& Riggio, 2006:3). Transformational leaders helps follower to grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the group, and the larger organization (ibid).

Organizations have an important functioning in our daily lives. Therefore, effective organizations are crucial for developing nations including Ethiopia, as it is the determinant factors in the economic, social and political progress of the countries. Though the concept of organizational performance is very common in the academic literature, its definition is difficult because of its many meanings. That is why there is not commonly accepted definition of this concept. For example to Lebans & Euske (2006: 71), performance is a set of financial and nonfinancial indicators, which offer information on the degree of achievement of goals. While for Jung (2011: 195) & Rainey (2014:149), performance is the actual achievements of a unit relative to its intended to attain, such as the attainment of goals and objectives, which reflects effectiveness of the organizations. Organization is successful if it accomplishes its goals (effectiveness) using a minimum of resources (efficiency) (Corina,. Livia & Roxana, 2011:287).

An increasing public demands made all public organizations to improve their performance. According to Arslan & Staub(2013:109), if organizations wants to fit and continue to exist, they must increase their performance. The role of leadership is critically important for achieving the performance of organizations (Peterson ,Smith, Martorana, and Ownes, 2003:795). Recently Transformational leadership style, among any other style, has rapidly become the style of leadership chosen for application in transforming the performance of organizations (Walker, 2007:154-155). This is because of transformational leadership, can create a difference and bring a change or a transformation in many ways (Bass & Riggio, 2006:53-55). However, the process of transforming leadership is the major challenges of all public sectors in the world, and the problems related to organizational performance is highly related to lack of effective public sector leadership (Tesfaye & zeerihun, 2014:10)

Effective public sector management is a critical component for sustainable development for all countries. That is why the Ethiopian government has shown commitment to improve public service leadership by launching different initiatives under the umbrella of Civil Service Reform Program. Public service leaders at all levels organizational structure advocate transformational agenda to achieve growth and transformational plan (GTP) goals. According to (Mesfin 2006; Paulos 2000 as cited in Tesfaye & Zerihun , 2014:1-3) However, public service organizations’ performance highlighted a number of implementation deficiencies in terms of effectiveness, efficiency and a leadership practice has not been up to expectations.

Therefore, the researcher intended to investigate the practice of transformational leadership and its role on organizational performance in public sectors of city government of Addis Ababa.

1.2. Statements of the Problems

Effective leadership has become central in modern public service reform. For its achievement, effective leaders have needed to enhance the readiness of employees to deal with change and crises (Yukl, 2007:10) and serves as the engine for organizational performance. It is clear that, effective leadership is importance in public organization, because without appropriate leadership it is difficult to achieve the predetermined goal of any organization (Yukul, 2013:44). So identifying what leadership styles and leaders do guarantee in improving organizational performance is crucial for public organizations.

However, challenges faced in improving the performance of the public organization in addressing the complex and dynamic work environment observed globally. Therefore, implementing different mechanisms and strategies in Ethiopian public sector is important to improve the performance of the organization. According topublic organizations in Addis Ababa have been faced tremendous challenges in providing quality, efficient, effective, ethical and equitable service for citizens.

Some researchers argue that, the major problems related to organizational performance were lack of transformational leadership . Transformational leadership is better to fit for leading today’s complex work group and organizations because it challenges the statuesque (Yukl, 2007:10). Transformational leaders are pioneers, they are willing to step out in to the unknown; their work to make a change and the statuesque is unacceptable for them (Northouse, 2016:174).

Over the past few decades, public service reform in Ethiopia had highly emphasized the importance of effective leaders in public organizations. In the top management system sub program under the umbrella of the Civil Service Reform, leaders considered to have a visible leadership role like; providing and strengthen strategic planning, monitoring and evaluation, improve organizational performance, and prepared the employees(Minstry of Capacity Building, 2004:232-237). Moreover, they expected to transform their organization in line with the theoretical perspectives of transformational leadership. However, the leadership support and commitment to implement the Civil Service Reform was not inspiring.

According to article (49) of the FDRE constitution and proclamation, No 361/2003 of City Government of Addis Ababa revised charter; the City builds self-governing status in line with the framework of decentralization. That is, public sector organizations in Addis Ababa are autonomous within the framework of the federal law with respect to strategic planning, financial management, and establishment of public organization. This shows the power of managing public organizations is decentralized, which requires effective leadership.

However, City Government of Addis Ababa report (2017/2018) reveals that leaders are not achieving expectations placed by the government and the public. The report shows, instead of managing change as a leader, they resist change and support the statuesque, leaders fail to create conducive environment to improve organizational performance. Moreover, unethical practice, bad governance, inefficiency and ineffectiveness of public organization continually are increasing. As a result, customer dissatisfaction and bad governance observed in Addis Ababa. As the information obtained from the report, organizational performance is in question.

According to MacGregor Burns, transformational leadership considered necessary to solve the world’s most critical problems, such as poverty and unemployment. He argue that, this needed leadership is not top-down, but must occur at the grassroots level, by thousands of leaders who are close to the community, who will listen to and be responsive to their needs, who will empower them and help to develop poor communities into self-sustaining ones (Bass & Riggio, 2006:224).

Though, Melese & Zerihun(2014) studied the application of transformational leadership in public service organization in Ethiopian, Keyrdin & Abera(2017) studied the practice of transformational leadership in Ethiopian Technical Vocational and Training Institutions, Beriahnu(2016) studied transformational leadership role of principals at Ethiopian Secondary School. However, as my knowledge is concerned there is no reported studies that focuses on the extent of practicing transformational leadership based on the four dimensions presented by Bass and Riggio(2006) particularly in AACA. Therefore, there is scarcity of data to recommend spolicy makers to set plan that helps to increase leadership effectiveness to improve organizational performance.

The need to close this gap initiated the researcher to investigate the practice and role of transformational leadership on organizational performance in Addis Ababa City Administration.

1.3. Objectives of the Study

1.3.1. General objective of the study

The general objective of the study is to investigate the practice and role of transformational leadership on organizational performance in City government of Addis Ababa.

1.3.2. Specific objectives

The specific objectives of the study are to:

- examine the extent to which leaders’ practice transformational leadership in public organizations.
- explore the components of transformational leadership that are frequently practiced by leaders‘ in selected public sector
- assess employees’ perceptions of their leaders’ transformational leadership role in selected public sector in city government of Addis Ababa
- examine the relationship between transformational leadership role of leaders and organizational performance.

1.4. Research questions

- To what extent do leaders’ practice transformational leadership in public organizations of Addis Ababa?
- What components of transformational leadership do leaders’ frequently practice in selected public sectors of Addis Ababa City Administration?
- How employees perceive their leaders’ transformational leadership in public sector of city Government of Addis Ababa?
- What is the relationship between transformational leadership role of leaders and organizational performance in the study area?

1.5. Scope of the study

This study is conducted in City Government of Addis Ababa and is concentrated only in public sector organizations due to time and finance constraints . The target population for this study was leaders and employees who are currently working in public sectors organizations of two sub cities of Addis Ababa City Administration. This study is limited to the four dimensions of transformational leadership: Idealized Influence, Inspirational Motivation, Intellectual Stimulation, and Individual Considerations presented by Bass & Riggio (2006) as independent variables to measure its role on dependent variables, which are the two indicators (effectiveness and efficiency) of organizational performance described by Rainey (2014).

1.6. Limitations of the Study

The study has encountered some limitations. Lack of employees who have worked with the current leaders of the organization for a considerable years to rate the perception of their leaders transformational leadership role because of the frequent change of leaders in public sector organizations and un involvement of city level leaders in the study were a preliminary limitation of the study. However, this limitation was filled by conducting interviews with more experienced employees and leaders to gather in depth data.

The major challenges the researcher encountered in carrying out the research were lack of adequate finance, and frequent meetings of leaders that hindered to get respondents particularly for interviews. The problem was solved by arranging programs after working hours and weekend. Lack of good writing experiences that helps to conduct relatively consistence and readable study on the part of the researcher was the other challenges that affect the quality of the research. To overcome this challenge the researcher consults his colleague and other scholars who have experience in the area of the study.

1.7. Significance of the study

The focus of the study is to assess the practice and role of transformational leadership on organizational performance in Addis Ababa City Administration public sector organizations. The results of the study would be highly important for public sector organizations higher officials (policy makers) of City Government of Addis Ababa in providing suggestion about areas of strengths and weaknesses regarding the practice of transformational leadership so that they can plan different mechanisms and strategies to improve their leadership effectiveness, which have a direct impact on organizational performance.

It can also increase the awareness of leaders regarding the need to improve their leadership capability to meet the challenging and increasingly changing work environment by adding some knowledge to the existing research gap regarding the practice and role of transformational leadership.

Moreover, this study helps the researcher in increasing his knowledge, reasoning skill and make meaningful contribution to the academic world; thereby stimulating further research on the practice and role of transformational leadership on organizational performance to provide valuable insight for both academics and practitioners.

1.8. Operational definitions of some key terms

Employee s: all workers who are currently working in public sector organizations of Addis Ababa City Administration considered as employees.

Effective leadership : means demonstrating a strong character. They care for the strengths and talents of their people and build teams committed to achieving common goals.

Leader : In this study leader means office head at city, Sub city and woreda levels of Addis Ababa City Administration.

Leadership role : refers to an expected behavior and action from the leadership to achieve the predetermined goal of organizations.

Organizational performance : organization performance is the actual achievements relative to its intended achievements, such as the attainment of goals and objectives (Jung 2011:195). In this study, organizational performance is measured in terms of effectiveness & efficiency of the public sector organizations.

Public sector organization: means an organization within government systems, especially with in the civil service.

Role : the duty or use that someone or something usually has or is expected to have (Cambridge dictionary)

Sub City Administration: means the second administrative stratum of city government of Addis Ababa.

Transformational leadership: is leadership behavior that centers on the development of followers by raising their individual needs to a higher level and seeking to meet those higher needs. In this study, transformational leadership characteristics include the four dimensions; Idealized Influence, Inspirational Motivation, Intellectual Stimulation, and Individualized Consideration presented by(Bass & Riggio, 2006: 5).

Transformational leadership practice : displaying/demonstrating the characteristics of the four dimensions of transformational leadership in their organizations

1.9. Organization of the study

This study is organized in five chapters. In the first chapter the introduction of the study, it includes background of the study, statement of the problem, objectives of the study, research questions, significance, scope, and operational definitions of some key terms are presented. The second chapter discusses the related literature on leadership specifically transformational leadership in public organizations including leadership theories, components of transformational leadership, organization performance, and the role of transformational leadership on organizational performance. Chapter three describes the research methodology of the study. The fourth chapter of the study includes the presentation of the findings and analysis of the qualitative and quantitative data. Finally, the fifth chapter incorporates conclusions and recommendation of the study drawn from the major findings.

Chapter Two


2.1. Introduction

This chapter is about the literature review of theoretical, conceptual and empirical literature of leadership related to the study. It discusses leadership and explains how effective leadership can be achieved. Furthermore, it also focuses on the practices of leaders engaging transformational leadership in public sector organizations, organization performance and its dimensions. Moreover, followers’ perception towards their leaders’ transformational leadership and the roles of transformational leadership on organization performance also discussed.

2.2. Theories and concepts of terms

2.2.1. The concepts of leadership

Leadership has been complex phenomenon about which many theories have been developed. Research has generated more than 350 definition of leadership (Ricketts, 2011:5). Different Scholars define leadership differently according to their individual perspectives and the aspects of the phenomenon of most interest to them (Yukul, 2013:2). For instance, North house, by identifying some components central to the phenomena, defined leadership as “a process whereby an individual influence a group of individuals to achieve a common goal” (2007:3).

After reviewing a comprehensive literature, Yukul(2013:7) defined Leadership as “the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and communal efforts to accomplish shared objectives”. In this definition, efforts used to influence and facilitate the current work of the group or organization as well as to ensure that it is prepared to meet future challenges is considered.

Although, goals and objectives achievement is the ultimate measure of effective leaders and organizations (Ricketts, 2011:5), as the definition of leadership, the conceptions of leadership effectiveness differ from one author to another. The researcher’s explicit or implicit conception of leadership reflects the selection of criteria evaluate the effectiveness of leadership. Most researchers evaluate leadership effectiveness in terms of the consequences of influence on a single individual, a team or group, or an organization (Yukul., 2004:1-6). According to Yukul (2013:8-9), the extent by which the performance of the team or organization is enhanced and attainment of goals are facilitated, followers’ attitudes and perceptions about their leaders’, and leaders’ contribution to the quality of group processes as perceived by followers or by outside observers are described as indicators for the criteria for leadership effectiveness.

2.2.2. Theories of leadership

Scholars who define, and explain the importance of leadership have developed several leadership theories and styles. A review of the scholarly studies on leadership shows that there is a wide variety of different theoretical approaches to explain the complexities of the leadership process (Northouse, 2016:1).

There are leadership theories that emphasize one category is more than the others as the primary basis for explaining effective leadership, and leader characteristics have been emphasized most often over the past half-century. Another common practice is to limit the focus to one type of leader characteristic, namely traits, behavior, or power (Yukul, 2013:11-12). To be consistent with most of the leadership literature and to understand the evolution of leadership theory, it is better to examine the historical approach of leadership theory, beginning with the trait perspective of leadership and moving to the transformational leadership theory. Trait theory

One of the earliest theories for studying leadership was the trait theory (Ricketts, 2011:13).This theory was Popular in the 1930s and 1940s. According to Yukul (2013:12), this theory argues that some people are natural leaders and endowed with certain traits not possessed by other people. Furthermore, Northouse (2016:19-27) presented that according to trait theory leaders are born with inherent unique traits or characteristics. Researchers tried to determine those characteristics or traits that make a person an effective leader (Rainey, 2014:337). Some of the traits that are used to distinguishing personal characteristics of a leader are intelligence, self-confidence, determination, integrity, and sociability (Northouse, 2016:23).

According to trait theory, the traits or characteristics of leaders have a positive impact on individual capacity for effective leadership. Leaders’ intellectual ability helps to develop complex and social problems skills. Leaders’ ability to be convinced on their own skills and competencies helps to influencing others. People with determination to be willing to assert themselves are proactive and have the capacity to preserve the face of obstacle. Leaders who exhibit the action of integrity will inspire confidence with others as they can be trusted to do what they say are going to do. Leaders’ who seek out enjoyable social relationship have good interpersonal skills and create cooperative relationship with their followers. To summarize trait theory argue that, leaders traits are associate with effective leadership and are contribute to substantially to ones capacity to be a leader (Northouse, 2016:19 - 27).

Recently many researchers made progress in discovering how leaders attributes are related to leadership behavior and effectiveness. A more recent trait approach examines leader values that are relevant for explaining ethical leadership (Northouse, 2016:27). The behavioral theory

Unlike the trait theory, which emphasizes the personality characteristics of the leader, this theory emphasizes one’s personality style (Ricketts, 2011:16). According to (Northouse, 2016:71), the behavioral theory focuses exclusively on what leaders do and how they act. The failure in the ability of traits to predict effective leadership caused scholars during the 1950s to view a person’s behavior, rather than individual’s personal traits, as a way of increasing leadership effectiveness (Palestine 2008:3). In shifting the study of leadership from leader trait to behaviors, the behavioral theory expanded the research of leadership to include the actions of leaders toward followers in various contexts and the behavioral revolution in psychology led to an attempt to define effective leadership in behavioral terms.

Researchers studying the behavioral approach determined that leadership is composed of two general kinds of behaviors: task behaviors and relationship behaviors (Northouse, 2016:71). Task behaviors: These kinds of leaders’ behavior facilitate goal accomplishment; leaders lead and make decision irrespective of the wishes of the group. Whereas, relationship behaviors help followers feel comfortable with themselves, with each other, and with the situation in which they find themselves and leaders lead and makes decision with the input of the groups (Ricketts, 2011:16 & Northouse, 2016:71). The central purpose of the behavioral approach is to explain how leaders combine these two kinds of behaviors to influence followers in their efforts to accomplish their objectives. Situational/contingency theories of leadership

The most important innovation in leadership research was the effectiveness of any style depends on the situation or immediate circumstances in which the leader is operating (Ricketts, 2011:16-17). Situational approach differs from the earlier trait and behavioral approach in asserting that leaders can change their style to meet the need of a particular group or task.

To determine needs in a particular situation, a leader must evaluate her or his followers and assess how competent and committed they are to perform a given goal. Effective leaders analyze the situation, identify the leadership style that will be most effective, and then determine whether they can implement the required style. From this perspective, to be an effective leader requires that a person adapt his or her style to the demands of different situations (Northouse, 2016:93).

2.2.3. Concepts of transformational leadership

In the 1970S, researchers’ in the field expressed increasing concern about the inadequacy of their theories and have long recognized leadership that went beyond the notion of a social exchange between leader and follower (Rainey, 2014:349). The political Scientist James McGregor Burns (1978) initially introduced transformational leadership, by distinguishing between transactional and transformational leaders. For him, transactional leaders are those who motivate followers by recognizing their needs and providing tangible rewards to fulfill those needs in exchange for their performance and support. Whereas, transformational leaders who raise followers goals to higher plan, focused on higher order inherent needs, they motivate followers to exceed their own narrow self – interest in pursuit the goal for the benefit of community or the nation (Bass & Riggio, 2006:3, Rainey, 2014:349 & Northouse, 2016:162).

Burns argue that, transformational leadership has seen when leaders and followers make each other to advance to a higher level of morale and motivation. Such leaders are able to inspire followers to change their expectations, perceptions and motivation to work leading to achievement of organizational goals through the strength of their vision and personality, (Northouse, 2016:162-163).

Numerous theories of transformational leadership were proposed, but the version of Bass (1985, 1996) has an influenced leadership study than any of the others (Yukul, 2013:322). Bass presented a more systematic analysis of transformation leadership by distinguishing with transactional leadership. For him, transformational leadership shifts followers’ focus from lower to higher order needs. It motivates them to sacrifice their own self-interests by showing followers that their self-interests linked to community. He argues that transformational leadership has an emotional and intellectual component (Rainey, 2014:350). Transformational leaders are rarer and increasingly critical to organizational performance (Wart, 2012:81).

Both Burns (1978) and Bass’ (1985) theories clarified the interaction between followers and leader especially how the relationship between employee and leader is managed in ways that ultimately leads to employees going to sacrifices their self-interest in support of organizational goals. Transformational and transactional leadership theories provide a way of understanding how leaders influence organizational performance (Northouse, 2016:162 & Wart, 2012:75).

Transformational leadership concerned with emotions, values, ethics, standards, and long-term goals. It includes assessing followers’ motives, satisfying their needs. Transformational leadership involves an exceptional form of influence that moves followers to accomplish more than what is usually expected of them (Northouse, 2016:161).

According to wart (2012:75-81), transformational leadership focuses on leaders’ leading change and activates the changing process. Wart argues that, transformational leaders change organizations and peoples in three successive steps. The first step is recognizing the need for change since the competitive environment and the speed of responsiveness required in the given environment needs change. The second step is creating a new vision in order to anticipated, refined, prepared, and widely articulated the new ways of doing business. The third step is institutionalizing the change, the new vision is understood, new structure, mechanism, and incentive must be put in place.

Transformational leaders are those who stimulate and inspire their followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leaders inspire their followers as well as challenge, encourage, and provide meaning and understanding. They intellectually stimulate, expanding followers uses of their ability, and challenge the “status quo.” (Bass & Riggio, 2006:3-4 )

Analysis done by Bass on transformational leadership points out that, this form of leadership has emotional and intellectual components. The emotional component involves an inspiring influence on followers. The intellectual component involves careful attention to individual followers, often of caring, developmental, mentoring nature as well as intellectual stimulation. The intellectual aspect can take various forms such as manipulating symbols, using national discourse, or evoking ideas and can involve cognitive stimulation as much as intellectual teaching. Bass also emphasize the importance of leaders’ technical competence to their influence and effectiveness (Rainey, 2014:350).

The components of transformational leadership have evolved as modifications in both the conceptualization and measurement of transformational leadership. According to Bass (1985, 1998), Bass, and Riggio (2006) transformational leadership has four main components: such as idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration.

Idealized influence; refers to stimulate followers’ emotional attachment to leader and identification with him or her (Rainey, 2014:350). Transformational leaders behave in the way that allows them to serve as role models for their followers; they are admired, respected and trusted. Model the way to the desired objectives, set the example, and makers of meanings, pathfinders, and molders of organizational culture. Followers identify with the leaders and want to emulate them; their followers’ endow leaders as having extraordinary capabilities, persistence, and determination (kouzes & posner, 2007:25, Bass & Riggio, 2006:6). Stressing group goals is important as it elevates follower values and goals from self-interest to social interest and thus cultivates group cohesion. These leaders usually have very high standards of moral and ethical conduct and they counted on to do the right thing (Bono & Judge, 2004:908). The idealized influence dimension is measured on two components: attribution component that refers to the attributions of leaders made by followers based on followers’ perceptions towards their leaders, and a behavioral component that refers to followers’ observations of leader behavior (Northouse, 2016:167)..

Inspirational motivation; the second component of transformational leadership refers to leaders behaves in ways that motivate and inspire followers by providing meaning and challenge to their work (Northouse, 2016:169), team spirit is provoked, interest and hopefulness displayed. Leaders demonstrate commitment to communicate with their followers about the future expectations that need to be achieve, to become committed to and a part of the shared vision in the organization (Bass & Riggio, 2006:6, Northouse, 2016:169). These types of leaders have a deep sense of the purpose for the system and a long-range strategic sense and these provide a sense of overall direction.

Intellectual stimulation; It includes engages followers in recognizing and confronting challenges on their own beliefs and values as well as those of the leader and the organization(Rainey, 2014:350 , Bass, & Riggio, 2006:7), and approaching old situations in new perspectives and develop innovative ways of dealing with organizational issues(Barbuto, 2005:26-40). It encourages followers to think things out on their own and engage in careful problem solving and risk taking. The leaders empower followers by encouraging them to propose new and debatable ideas without fear of punishment or ridicule. They do not impose their own ideas judiciously and certainly on subordinates. This encourages follower initiative and independence in handling organizational issues.

Individual consideration; the fourth component of transformational leadership is individualized consideration . This dimension is characteristic of leaders who provide a supportive climate in which they listen carefully to the individual needs of followers in order to achieve the goal of the organization through encouraging, recognizing employees’ contribution and celebrating the accomplishment of goal. People are treated individually and differently based on their talents and knowledge (Shin & Zhou, 2003:703-714) and with the intention of allowing them to reach, higher levels of achievement that might otherwise have not been achieved (Wart, 2012:85). Leaders are coaches and advisers while trying to assist followers’ become fully actualized. These leaders may use delegation to help followers grow through personal challenges (Northouse, 2016:169).

2.2.4. The concept of transformational leadership in public sector organizations

The main activities of public sector organizations is to provide the social, educational, scientific, cultural, sport, and other paid or free services that are not exchanged in market(Rainey, 2014:152). The functions of public sector organizations are interrelated and oriented to the fulfillment of public interests. The satisfaction of public needs and interests depends on the capacity of public sector organizations to plan, to prepare and make decisions effectively, and to control the implementation of such decisions.

However, they are facing enormous and sever challenges in aiming to provide services of the highest standards to their customers and service users while operating with strictly limited resources (Storey, 2005:174). Public sectors leadership in the twenty-first century is challenging and change oriented. Rapidly growing global conditions, shifting political and economic influences, advancements in operational technologies and practices and rising expectations of leadership are changing our ideas of “what” and ‘How’ government should do and accomplishes its mission(Walker, 2007:154).


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Practice and Role of Transformational Leadership on Organizational Performance
Ethiopian Civil Service University  (Institute of leadership and governance)
Leadership and good governance
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Practice and role of transformational leadership on organizational performance
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Gizachew Tilahun (Author), 2020, Practice and Role of Transformational Leadership on Organizational Performance, Munich, GRIN Verlag,


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