Perceived leadership behaviours and their effects on IT departments in Swiss financial companies

Abstract

PurposeThe purpose of this paper is to examine the effects of perceived transformational, transactional and laissez-faire (LF) leadership behaviours on both the effectiveness of the leader and satisfaction with the leader, as perceived by information technology (IT) subordinates in the Swiss financial sector.Design/methodology/approachIn total, 182 IT professionals from 45 Swiss financial companies rated their perceptions using the Multifactor Leadership Questionnaire (MLQ 5X short). Results were evaluated using partial least squares based structural equation modelling.FindingsIdealised influence (attributed) and individualised consideration as well as contingent reward (CR) leadership are positively related to effectiveness and satisfaction. LF leadership had a strong, significant negative effect on both outcomes. No augmentation effect of idealised influence and/or inspirational motivation over the effects of CR was found. These results are partly contradictory to findings of earlier studies. Additionally, stability problems/discriminant validity issues were found for some of the examined constructs.Practical implicationsManagers and leaders in IT departments in Swiss financial institutions should be advised of the possibly strong effects of CR on outcomes, together with the risks of potentially highly negative impacts of LF leadership, as well as the possible limitations of the stability and validity problems found. Leadership training could be used to this end. The paper gives specific advice on how the different findings could be included in such training.Originality/valueIT can significantly contribute to a firm’s success, and leading people who deliver technology is becoming more important in an increasingly digitised world. No previous research has illustrated the effects of leadership behaviours on IT departments in Swiss companies.