Transformational Leadership and Firm Performance

This assignment explores the relationship between transformational leadership and firm performance. It analyzes scholarly articles examining how CEO leadership styles and organizational cultures influence business outcomes. The assignment delves into concepts like intellectual capital, social media utilization in business, corporate social responsibility, cross-cultural management, and competitive advantage within a global context. It encourages critical thinking about the role of leadership in driving organizational success.

Running head: LEADERSHIP
Leadership
Name of the Student
Name of the University
Author Note

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Introduction
Kamukama (2013) stated that the organizational leadership begins with the process of
forming the culture by imposing various assumptions on the followers who take the individuals
as leaders. The stability of the organization depends on the rate of success through which the
organization can perform the tasks by assuming the goals and objectives that has been set by
the leaders. The leaders are able to achieve the goals by being more reliable in the organization
and provide better signals to the followers regarding the beliefs and the values on which the
organization is based. After the culture that has been set in the organization is accepted, it
becomes easy in maintaining the growth of the organization, as the beliefs and values of the
leaders can be communicated to all the members of the organization. according to Cui, Li and
Meyer (2015), the promotion of ethical culture by the leaders within the organization helps in
providing better services towards the society and as demanded by them along with the ability
with which the problems of the society can be addresses by the organization with respect to an
event of a disaster, which will help the organization in competing with the rivals.
Rothermael (2015) was of the opinion that the leaders of the organization also have to
deal with many complex situations regarding the decisions that need to be made so that the
organization can achieve the goals and objectives within the environments that are complex in
nature. The success of the leadership skills possessed by the leaders will depend mostly on the
understanding and the knowledge that is present within them regarding the culture that is
present within the organization. Friedman, Carmeli and Tishler (2016) stated that the leadership
that is present within the organization can be defined as the behaviors, beliefs and the values
that need to be differentiated from the other organization, which helps the organization in
gaining a competitive advantage. The leadership present within the organization can be
classified in to three levels. The first level is based on the artifacts and behavior, as it is the

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behavior that is portrayed by the followers within the organization. According to Sultana et al.
(2013), this level shows the environment in which the work is being done along with the
technological levels that are being used in the organization. Most of the employees within the
organization showcase different characteristics and behaviors, which needs to be valued within
the organization so that the work can be done in a better manner.
Porter, Rivkin and Kanter (2013) stated that the operation of the leaders is to be based
on the principles of moral and discipline in an ethical manner within the organization. They need
to act with respect to the values and beliefs that will be productive in nature so that promotion
and establishment of culture can be done within the organization.
Discussion
Aziz et al. (2013) stated that leadership is important with the organization so that it can
help in identifying and developing the skills and knowledge of the followers that will help in
increasing the performance of the organization. An example of this would be Steve Jobs of
Apple Inc. and Michael O’Leary of Ryanair who was successful in implementing the changes
that were required within the organization so that the level of performance can be increased
within the company. However, the role of the managers is somewhat different than the leaders
of the organization, as the managers mostly take advantage of their authoritative power so that
it can help in bringing compliance among the members of the organization.

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Figure 1: Leadership Theories
(Source: Kasemsap 2016)
Gharibvand et al. (2013) stated that the trait theory in leadership helps in identifying the
various traits that are present within the person so that they can become potential leaders of the
organization. There is a major issue with this theory that is there is no specific set of traits that
are mentioned, which needs to be present within the leaders so that they can be effective in
nature. The recent theoretical perspective of the model is that there are different levels of skills
that are present within the leaders and has to be judged based on the motivation, integrity,
confidence and the maturity of emotions that are present within the leaders.
Bhaswar and Chattopadhyay (2015) were of the opinion that the behavioral theory is
based on the behaviors that are shown by the leaders, which can be classified in to task
centered and people centered. The task centered behavior of the leaders puts more emphasis
on the tasks and roles that are taken up by the leaders along with the planning and standards of
performance present within the leaders. The behavior that is centered around the people is
based on the leaders providing support to the followers along with the trust and confidence that

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is shown by them, which helps the leaders in being concerned with the welfare of the
employees.
Romm (2014) opined that the contingency theory is based on analyzing the significance
of the situation so that the effectiveness of the leaders can be understood within the present
situation. The approach of leadership is that the leader may be successful in one organization
but may fail in another organization depending on the situation where they need to carry out the
operations.
The leaders have to act as an inspiration so that it can help in increasing the level of
innovation within the organization. The leaders have to provide better establishments to the
employees so that it can help in the development of innovative products within the organization.
The leaders can provide this by constructing better circumstances within the working
environment so that the employees can feel safe within the organization (Boulouta and Pitelis
2014). The increase in the level of innovation will help the organization in gaining a competitive
advantage over the rival firms that are present in the market. It will also allow the organization in
providing the products that are differentiated in nature. Additionally, the leaders of the business
have to provide assistance to the level of creativity that will help in bringing positive
improvements in the organization. This will help the business to provide better chances of being
innovative within the market. The objective of the leaders has to be that the employees have to
be encouraged in being innovated within the organization (Donate and de Pablo 2015). For
example, Steve Jobs of Apple Inc. provided many opportunities to the employees in bringing out
their creative side within the organization. This has helped the company in being one of the
most popular companies when it comes to mobile phones. The company provides a better
infrastructure to its employees so that the process of innovation can be carried out in a
sustainable manner. The encouragement that is provided by the company helps the employees
in providing the visualization on a collective manner so that the products can be of varied

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nature. These principles have helped in instilling and boosting confidence of the employees
within the organization so that innovation can be followed in a continuous manner.
According to Feng, Huand and Zhang (2016), the innovative attitude of the leaders will
help in inspiring the followers and modify the products so that the organization can gain a
competitive advantage in the market over the rival firms. The leaders need to find faults in the
innovative products so that it can be developed in a new manner and do not penalize the
employees due to the fresh thoughts that they implement in the work place. This helps in giving
rise to new and innovative products within the organization. It also helps the employees in
taking up responsibilities and work in an efficient manner so that the productivity of the
organization can be increased to a great extent.
According to Bateh et al. (2013), the organizational development is the practices and
knowledge that the leaders do so that it can help in changing the attitude of the employees
within the work place and increase its level of productivity in an effective manner. The leaders
help in improving the organization by relating it with the external environment so that the internal
function can be high, which will help in better performance and increase the quality of life among
the employees. According to HJP and Efendy (2017), the leaders have to instruct the managers
and the consultants in the organization so that they can keep a track of the activities that are
being done by the employees. Since it is not possible for the leaders to assess the
responsibilities of the employees individually, they delegate the work to their subordinates,
which helps in gaining better control of the organization. The difference between generation and
application of knowledge has to be understood by the leaders so that it can help them in
working in an effective manner within the organization.
Imran, Ilyas and Aslam (2016) were of the view that the scope of the organizational
behavior has to be understood by the leaders, which includes the people, technology that is

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being used within the organization, social system and the structure of the organization. The
people form an important part of the organization, as without them the productivity level cannot
be increased. The existence of the organization is based on serving the people in a better
manner, which will help the organization in competitive advantage in the market over the rivals.
The leaders need to have a better understanding of the personality of the people and their
values and attitudes need to be respected within the organization, which will help the employees
in increasing their level of satisfaction within the work place. According to Chen (2015), the
structure of the organization also plays an important role, as it helps in building relationship
among the employees. The employees are assigned their respective duties so that they can
work in accomplishing the goals of the organization. The structure of the organization helps in
placing the employees in a hierarchical manner so that the senior employees can help the junior
ones in performing the duties in a responsible manner so that it can help the organization in
achieving its goals and objectives.
Goleman (2017) stated that the leaders have to ensure that adequate technologies are
being used within the organization so that it can help the employees in working in an effective
manner and increase the level of output. The use of proper buildings and machineries will help
the employees in increasing their level of productivity, as the output of the organization will be
increased along with the introduction of innovative products. The organization also needs to
work towards the society as well. Wang, Tsai and Tsai (2014) were of the opinion that the
influence by the organization within the society plays a pivotal role in earning the goodwill within
the society, which will help in increasing the sales of the products in the market. An example of
this would be Apple Inc., where under the leadership of Steve Jobs, the company was able to
achieve a higher rate of returns, as Jobs always tried to encourage their workers in
manufacturing innovative products so that it can help the company in gaining a competitive
advantage in the market. This had led to the maximization of the level of profits for the

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company, as most of the products offered by the company were considered to be innovative
and revolutionary in the market.
Jobs were mostly a charismatic leader and helped the company in having many worthy
achievements by making the employees take new initiatives and be a visionary in the
organization. The employees are made to achieve the goals of the organization through regular
interaction with the leader so that it can help in building up the confidence of the employees.
Sanchez and Benito-Hernandez (2015) stated that the charismatic personality of Jobs helped
the organization and the employees by providing them with motivation and boosts the self-
confidence within them so that it can help the employees in achieving the goals of the
organization. This has led the company in gaining a competitive advantage in the market and
increase the volume of sales as well. The use of the charismatic leadership within the
organization will help the organization in being optimistic regarding the increase in the level of
production, as the increase in the level will help in gaining a competitive advantage in the
market. The encouragement that is provided by these leaders will help in contributing towards
the additional production of the firm. The leaders have to use their power of intelligence so that
it can help in reaching an agreement with the employees so that they can feel as a part of the
organization.
Ton (2014) stated that the competitive advantage within the organization is the means
through which the products of one organization can be differentiated with that of the other. This
helps the company in gaining an upper hand in the market due to the unique characteristics that
are present within the products and the customers can gain maximum level of satisfaction after
it has been purchased by them. The rival companies try to improve their products on a
continuous level so that they can match with the original products that are being manufactured
by the parent company so that it can be distributed in the market in a competitive price.
According to Dustin, Bharat and Jitendra (2014), the leaders of the organization have to make

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sure that the products that are being manufactured by their firm are different from the ones that
are being produced by the rival companies. The leaders also have to price the product in a
competitive manner so that it can help them in attracting most of the customers towards their
company. The leaders have to help the employees in appreciating the objectives that has been
set within the organization so that they can deliver the best output, which will help in meeting the
goals in an efficient manner. McCallumj, Schimd and Price (2013) stated that this will help the
leaders in gaining a competitive advantage in the market as well due to the level of efficiency
that is shown by the employees towards the work. The leaders need to have a sympathetic
character so that their strong willpower will help in guiding the human resources in the correct
path. This will help the organization in utilizing its resources in the correct manner so that the
work can be done in an effective way.
Akdogan, Arslan and Demirtas (2016) were of the opinion that the reaction of the leaders
in a crisis situation helps in understanding the culture and values that are present within the
organization. The situation of crisis helps the leaders in changing the norms and values so that
it can help the organization in coping up with the difficulties that the organization may face. The
action taken by the leaders help the employees and the organization in being visible and most
of the attention is centered towards them. This helps the leaders in highlighting the situation of
crisis in a better manner so that they can get the attention and help in improving the situation of
the organization. According to VanderPal and Ko (2014), the situation of crisis helps the leaders
in influencing the culture that is present within the organization with respect to the ethical and
moral behaviors so that it can help in creating new values within the organization. This will help
the organization in changing its nature of work and gain a competitive advantage in the market
by increasing the level of output as well.
Muenjohn and Armstrong (2015) were of the view that the budget of the organization is
an important part in deciding the resources that needs to be allocated within the work place. The

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leaders play a crucial role in channelizing the resources according to the budget that has been
set within the organization so that it can help the organization in achieving its goals and
objectives. The balance between the resources and the budget will help in increasing the level
of output of the firm so that maximum satisfaction can be provided to the customers by providing
them with the best products. Fleisher and Bensoussan (2015) stated that the distribution of the
resources has to be equal within the organization so that all the departments can perform in a
better manner, which will help in increasing the opportunity of the organization to increase its
level of profits in the market. This will help the firms in gaining a competitive advantage in the
market. It will also help the leaders in rewarding the employees in a handsome manner
regarding the efficiency with which they will work within the organization and increase the level
of output as well. Hartnell et al. (2016) stated that the use of the performance appraisal tool by
the leaders is efficient in nature, as it helps in measuring the performance of the employees in a
continuous manner. This helps the leaders in assessing the effectiveness of the employees and
the use of knowledge within the work place so that the work can be done in an efficient manner.
The employees will be able to achieve more than their desired output due to the fair system of
rewards that is present within the organization. This will help the company in gaining a
competitive advantage in the market over the other firms.
According to Martinuzzi and Krumay (2013), Apple Inc. has a good system of rewards
for the employees who uses their skills and knowledge in producing innovative products. The
employees are encouraged so that the level of efficiency in the firm can be increased, which will
help in increasing the output level as well. The organization also punishes the employees who
behave in an unethical manner, which has helped the employees in believing that the firm
honors the trust that the customers believe in them. This has helped the employees in
understanding the importance of the culture within the organization and they work in an effective
manner so that the products can be delivered in the market in a unique manner. The use of the

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fair system of rewarding structure will help the employees in getting a better understanding
regarding the compensation that they would be receiving if their productivity level is more than
their target. This will help in providing motivation to the employees, which will directly affect their
nature of work within the work place.
The leaders have to set example within the work place by being a role model for the
employees so that the employees can look up to them when they face any difficulty within the
organization. The leaders need to provide proper and efficient methods of coaching so that it
can help the employees in working in an efficient manner and increase the level of productivity
within the firm (Dustin, Bharat and Jitendra 2014). The standards of ethics in an organization
need to begin from the leaders and flow to the employees, which can be instilled among the
followers by providing them with better levels of coaching. The proper method of coaching will
help the firm in achieving the goals and objectives of the organization, as the leaders will
educate the employees regarding the improvement of the skills and knowledge of the
employees (Ton 2014).
The leaders also play an important role in the process of selection and retaining the
employees within the organization. The leaders establish the base of the culture based on which
the process of recruitment of the employees are done. This helps the organization in delivering
the objectives and goals that are present in the organization by setting the values in a proper
manner. The efforts of the process of recruitment has to be linked with the organization failing
which can cause a disaster within the organization with respect to the moral and ethics that are
followed within the workplace (Chen 2015). The leaders have to provide support to the
development and hiring of the people with a specific set of skills, which will help in getting the
work done before the assigned deadline. Through the process of hiring and selecting the
employees, the leaders help in increasing the level of commitment among the employees as

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well, this helps the organization in a gaining competitive advantage over the other companies
that are present in the market (Wang, Tsai and Tsai 2014).
The core competencies of the organization need to be enhanced so that it can help the
company in gaining a competitive advantage over the other firms. The things that help in
increasing the level of production needs to be utilized by the leaders so that it can help the
company in being better than the other organizations that are present in the market of the same
industry. The development of the competitive strategy in the organization has to be done based
on the strategies that are being taken up the firm (Romm 2014). An example of this would be
that Apple has a well developed team of research who are improving the ways of technology
than the rival companies that are present in the market. This has helped the company in gaining
an advantage over the competitors, as most of the customers invest their money in the products
of the company. As a result of this, the company has been able to nurture the work climate that
is oriented only towards the results. It has also helped in promoting the culture of the
organization in a proper manner along with the establishment of expectations from the
objectives that has been set within the organization.
Kasemsap (2016) was of the view that the culture that is present within the organization
can also be used as a competitive advantage, as it helps the company in developing its
strategies so that the attitudes and actions of the employees can be regulated. Apple has
always been able to increase the entrepreneurial activities within the organization, as it has
helped in the growth of the employees through proper innovative products. This has helped the
organization in building up a healthy and strong culture by implementing the best strategies in
the system, which has resulted in increasing the competitive advantage of the firm as well.
Apple had a visionary leader in the name of Steve Jobs who helped in connecting with
the employees in an empathic manner so that he can help in influencing the thinking capacity of

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the people. This had led to the rise in the culture within the organization so that the viability in
long-term can help in the success of the organization (Bateh et al. 2013). He believed in making
a difference within the organization so that the future of the company can be safe and adequate
investment in the human resources can be made. The function of the visionary leader is that
they are concerned with the future of the company, which will be sustainable and will be able to
make better returns on the investments (Chen 2015).
The managerial leader on the other hand follows the visionary leader who is given the
charge of looking after the daily operations of the business. This will help in ensuring that the
effectiveness of the employees can be measured and they can meet the demands of the
company in the consumer market. These leaders will be reacting to the decisions made by the
visionary so that it can ensure the running of the organization n an effective manner (Muenjohn
and Armstrong 2015).
Conclusion
Therefore it can be concluded leadership helps in the overall success of the organization
as well as gaining a competitive advantage for the firm in the market. The relationship between
the leaders and the employees is an integral part, as it helps in influencing every step that are
present in the process of strategic management. The leaders help in setting the goals and
objectives of the firm so that the employees can be able to follow the policies and procedures,
which will help in increasing the level of output and gain a competitive advantage in the market.
The use of the resources in a proper manner will help the organization in maximizing its level of
output so that the firm can attract the customers towards them. This will help in increasing the
level of profit for the firm as well. The employees of the organization play an important role in
achieving the targets, which needs to be monitored by the leaders. The leaders need to be
proactive within the organization so that they can make efficient decisions, which will help in

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increasing the innovation within the organization. The skills and competencies of the employees
have to be assessed so that they can be provided with proper and effective training that will help
in honing their skills. This will help in improving the level of production within the system that will
provide a competitive advantage to the firm over the rivals.

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