THE EFFECT OF THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP, ORGANIZATIONAL CULTURE AND PERFORMANCE: Empirical Findings from Four Public Sector Organizations in the United States Virgin Islands

Abstract

Scholars and practitioners in social sciences have argued that there is some association between leadership and performance, but empirical evidence has yet to prove the effect of leadership, performance and culture on public organizational performance. This study has investigated the effect of transformational leadership styles, organizational culture types and performance in four public sector organizations. The argument that there is no association between the three fundamental pillars of public sector organization: leadership, performance and culture, has become an ongoing debate in social sciences. This study investigated the effect of transformational leadership traits, organizational culture types and performance in four public sector organizations. The objective of this research was to examine the effect of individual leadership traits, and culture types on performance in public organizations. The behavior elements examined in this study were idealized influence behavior, inspirational motivation, intellectual stimulation, individualized consideration, idealized influence and effectiveness. Performance outcomes variables were hiring decisions, performance measurements, job satisfaction, and structured reward system respectfully. The cultural variables used were clan culture, adhocracy culture, market culture, and hierarchal culture. This study utilized a survey designed and implemented a quantitative methodology. The analysis used primary data produced by the Multifactor Leadership Questionnaire (MLQ) to administer on 200 respondents from four of the largest public sector organizations in the United State Virgin Islands to examine the relationship of transformational leadership, organizational performance and organizational culture. The responses were scaled and coded to enable the segmentation of the data into dependent and independent variables based on the leadership, performance and culture variables. The study utilized the multiple regression models and correlation statistical analyses to determine the degree of commonality among the components. The results showed that while transformational leadership were strongly correlated with organizational performance with consistency and adaptability, organizational culture had a positive significant relationship with performance management practices. The study concluded that transformational leadership and organizational culture have positive effects on facilitating performance in mature public sector organizations, and recommended transformational leadership styles to actualize the culture types best suited in public sector organizations.