Case Study: Impact of Great Leadership on Business Performance

This case study investigates the profound impact of great leadership on business performance, focusing on the relationship between leadership styles and organizational growth. The study, based on a case study by Yildiz, Basturk and Boz (2014), examines how transformational and transactional lea...Read More

Impact of great leadership on the growth of business performance
Research question:
How great leadership can make business performance grow better?
Research topic:
Impact of great leadership on the growth of business performance
Introduction
Every organisation wants to sustain the competitive advantage and its presence and
this could only be done when effective leadership is in place. Great leadership always helps
in improving the business performance and thereby, aiding to the business sustainability in
the market. The chosen case study text is written by Yildiz, Basturk and Boz (2014), from the
Kafkas University, Kocaeli University and Trakya University, Turkey, respectively. The
article is all regarding the impact of leadership on the overall performance of an organization.
It has demonstrated that appropriate style of leadership have the potential of influencing the
success and economic growth of the organisation as well as its employees. The main
objective of the main article is to analyse the influence of different leadership styles and that
of innovativeness of the leaders on the performance of business. The main article starts by
means of underlying the relations in between the organisational performance and the effect of
transformational and transactional leadership. The focus of this study is to assess upon the
impact of great leadership on the growth of business performance. It is very important to
investigate upon this issue as of the fact that many studies till date have focused on the
leadership style that can influence the organisational performance but very few have
addressed the point- what great leadership actually means and what is the relationship
between great leadership and business growth. As per the study of Yildiz, Basturk and Boz
(2014), relationship in between the two elements are not same in every sectors as different
sectors differ in terms of size, location and variables.

Impact of great leadership on the growth of business performance
Literature Review
The definitions of leadership and organisational performance have been illustrated in
brief. It is to mention that the notion of leadership is widely defined as the potential of
impressing and inspiring the follower by means of giving them with the purpose of fighting
for them. As opined by Madanchian et al. (2016), leadership can be defined as a “process-
oriented, non-specific practice of challenging the process and inspiring a shared vision while
enabling other to act and model the way to achieve a particular goal”. It is something that is
related to a particular position and it entails several obligatory functions and tasks, which
businesses are required to achieve for surviving, developing and being efficient. As opined by
Blanchard and Miller (2014), a great leader is one who listens with enthusiasm, have an
aspiring mind that is able of making a decisive action and is willing to empower and
encourage others in a supportive, humble and responsible manner in order to inspire them for
achieving certain set objectives and goals as planned. Great leaders are the ones who have the
ability of communicating their mission and expressing the same in ways that can inspire and
encourage others for attaining it. Notwithstanding this fact, there are also certain traits, skills
and behaviours that are necessary for becoming a great leader. Madanchian (2016) have
divided the functions of leadership in two different categories- a) functions of leadership in
transformation and, b) functions of leadership in normal operation. In such studies, the
functions of leadership in the normal operation have been evaluated as structure and support.
Such functions establish an environment for the employees and at the same time, organising
the labour in the method or normal operation. In the contemporary studies, the
transformational and the transactional leadership styles are been assessed and given much
interest (Blanchard and Miller 2014). Transformational leadership styles can be defined as
the process of loyalty that realises the missions and at the same time, targets of an
organisation by means of making significant changes in the attitudes of the organisational
members McCleskey (2014). On the contrary, the transactional leadership style can be
defined as the leadership style that promotes the compliance by the followers by means of
both punishments and rewards. In this way, they keep their followers motivated, but for
shorter period of time. However, as per Antonakis and House (2014), through transactional
leadership, employees could easily realise their roles in the business by means of gaining a
good understanding of the expectations of the organisation and the leader and as a result, they
do their best.

Impact of great leadership on the growth of business performance
As opined by Cania (2014), organisational performance can be referred to as the
“transformation of inputs into outputs for achieving certain outcomes”. In terms of its
content, performance informs regarding the relationship among the minimal and effective
cost (economy), the effective cost and realized output (efficiency) as well as among the
output and achieved the outcome (effectiveness)”. At present there is no agreement on the
standards that are to be used for the measurement of the organisational performance. Great
leadership always helps in improving the business performance by improving organisational
outcome and performance and thereby, aiding to the business sustainability in the market.
However, according to Blanchard and Miller (2014), there are four dominant approaches to
the same and they are- “Goal approach, System Resource Approach, Constituency Approach
and Competing Values Approach”.
Besides, future study is required as the result of the case study is dependent on only the
transactional and transformational leadership style and we cannot consider only these two
styles to be of great leaders. Therefore, the accuracy of the main case study is suspected.
Method
Primary data has been used in this case study. 576 people working in the service and industry
sector as employees and managers in Istanbul comprises the scope of the research study. The
research type used is explanatory, which is based on the cause and effect relation. Also, the
authors of the study have gathered the data and information in between the months of
November and December of the year 2013 in order to test their hypothesis. A questionnaire
was formed with 11 questions on leadership, 5 on innovativeness and 5 on the business
performance and the participants were asked to answer them. The research hypotheses were
tested using regression analysis (Yildiz, Basturk and Boz 2014).
Discussion
The findings of the case study are revealing that both the transformational and transactional
leadership have productive impact on the performance of organisation and business (Yildiz,
Basturk and Boz 2014). With the same, innovativeness, transactional leadership style and the
transformational leadership style have a great effect on the business performance and they
actually help in growing the business performance of an organisation. However, the
transformational leadership is more effective than the transactional one. The findings of the
study have significant similarities with the other recent studies conducted by Noruzy et al.

Impact of great leadership on the growth of business performance
(2013) and Koech and Namusonge (2012). However, it differs from the study of Santos et al.
(2014). Notwithstanding these facts, it is also to mention that there are certain limitations of
this case study. The study is focused only on the employees of service and industry sector of
Istanbul (Yildiz, Basturk and Boz 2014). This is also a major limitation of the study as of the
fact that different sectors differ in terms of size, location and variables. So, the leadership
style that has been proven to be fruitful cannot be the same for the other industries. Also, the
nature of the relationship among the different styles of leadership and organisational
performance have not been evaluated in the case study.
The study have provided a strong understanding of the development of effective organisation
and the relation among the transformational leadership and organisational performance and
that of transactional leadership and organisational performance (Yildiz, Basturk and Boz
2014). Great leadership always helps in improving the business performance and thereby,
aiding to the business sustainability in the market. Finding the right approach and method for
developing the employee performance is very important for great leaders. However, there are
certain limitations in this study and for that purpose, future studies are required to be
conducted for addressing the issue.
Conclusion
The selected case study has proven that there is a strong link among great leadership and
growth in organisational performance, which ultimately results in the growth of business.
Great leadership helps a business to sustain and survive in the long run. However, it is very
necessary for a leader to choose his or her approach of leadership wisely. The chosen case
study has focused on two styles of leadership and they are transactional leadership and
transformational leadership. Both the leadership style has a strong connection with the
development of an organisation. The study have provided a strong understanding of the
development of effective organisation and the relation in between the transformational
leadership and organisational performance and that of transactional leadership and
organisational performance. Great leaders are the ones who have the ability of
communicating their mission and expressing the same in ways that can inspire and encourage
others for attaining it. Notwithstanding this fact, there are also certain traits, skills and
behaviours that are necessary for becoming a great leader. It can be stated that great
leadership always helps in improving the business performance and thereby, aiding to the
business sustainability in the market.

Impact of great leadership on the growth of business performance
References:
Antonakis, J. and House, R.J., 2014. Instrumental leadership: Measurement and extension of
transformational–transactional leadership theory. The Leadership Quarterly, 25(4), pp.746-
771.
Blanchard, K. and Miller, M., 2014. The secret: What great leaders know and do. Berrett-
Koehler Publishers.
Cania, L., 2014. The impact of strategic human resource management on organizational
performance. Economia. Seria Management, 17(2), pp.373-383.
Madanchian, M., Hussein, N., Noordin, F. and Taherdoost, H., 2016. Effects of leadership on
organizational performance.
McCleskey, J.A., 2014. Situational, transformational, and transactional leadership and
leadership development. Journal of Business Studies Quarterly, 5(4), p.117.
Yıldız, S., Baştürk, F. and Boz, İ.T., 2014. The effect of leadership and innovativeness on
business performance. Procedia-Social and Behavioral Sciences, 150, pp.785-793.