Transformational leadership style and holistic accountability mechanisms in not-for-profit organisations

Abstract

This study examines: (i) the ability of the transformational leadership style of top management to effect holistic accountability in not-for-profit organisations (NFPs) through the use of downward (to clients), upward (to funders) and lateral (to employees) accountability mechanisms; and (ii) a mediating effects model of not-for-profit accountability practices wherein the use of lateral accountability mechanisms mediates the association between transformational leadership style and the use of downward and upward accountability mechanisms. Data from 236 NFPs in the residential aged care sector in Australia were gathered through survey questionnaire and analysed using Structural Equation Modelling. We find that transformational leadership style is significantly associated with the use of downward, upward and lateral accountability mechanisms. We also find that the use of lateral accountability mechanisms mediates the association between transformational leadership style and the use of both downward (full mediation) and upward (partial mediation) accountability mechanisms. The results have implications for the research literature seeking to understand the role of leadership in effecting holistic accountability in NFPs as well as for management and practice in those organisations.