Effect of leadership on organizational commitment.

AuthorLyndon, Shiji

This paper focuses on the relationship between leadership and organizational commitment in the Indian context. It traces the research on leadership and commitment and arrives at a conceptual framework establishing the linkages between the relevant variables. Data was collected through questionnaires to measure leadership styles and organizational commitment. A total of 239 responses was gathered from employees working in banking, higher education, Information Technology and manufacturing sectors. The research finds a positive linkage between leadership style and organizational commitment. One important finding of the study has been that, in the Indian context, contingent reward is perceived more transformational than transactional factor. Implications of this study on managerial practice are also discussed.


In today's competitive environment organizations are trying to outperform their competitors by producing better products and services. To achieve this objective, an organization requires highly committed employees. Organizational commitment refers to an employee's psychological bond with the organization (Mowday, Steers & Porter, 1982). The concept of organizational commitment has received considerable attention because of its impact on individual performance, organizational effectiveness and its relationship with desirable work outcomes (SjmOsi & Xenikou, 2010). Thus, the factors which influence organizational commitment have become an important area of research in the field of human resource development (Joo & Shim, 2010).

An increasing number of studies focus on identifying the antecedents of organizational commitment (Chen & Francesco, 2000; Lok & Crawford, 2001; Mathieu & Zajac, 1990; William & Hazer, 1986). The influence of leaders on creating and maintaining organizational culture is an accepted fact (Panda & Gupta, 2001). The literature on leadership suggests that the ability to understand and work within a culture is a prerequisite to leadership effectiveness (Henessey, 1998). In this paper we study the influence of leadership styles on organizational commitment. Transformational and transactional leadership styles are studied to understand its influence on affective, continuance and normative commitment.


Leadership is one of the most widely and frequently studied topics in the area of organizational behavior (Yammarino, 2013). There are numerous definitions and approaches to leadership. Leadership can be viewed from multiple perspectives. It can be represented as an act (Bennis & Goldsmith, 1994), behavior (Hemphill & Coons, 1957; Gerber, Nel & Van Dyk, 1996; Rowden, 2000) or process (Jacques & Clement, 1991; Stogdill, 1974; Yukl, 1999; Northhouse, 2007).

Similar to the wide range of leadership definitions used by different researchers and practitioners, there are also differences in conceptualizing and'measuring leadership. Some of them have focused solely on the leader to explain leadership, while there are others who have used follower centered approach. Graen and Uhl Bien (1995) classified leadership theories into three categories: the leader, the follower and the leader follower relationship. Hernandez, Eberly, Avolio and Johnson (2011) integrated the numerous theories of leadership on the basis of two fundamental principles i.e. the locus and mechanism of leadership. The locus of leadership refers to the source from which leadership emerges. While the mechanism of leadership implies the means by which leadership is enacted. Hernandez et. al. (2011) categorized leadership theory into five loci: i.e. leader, follower, leader-follower dyad, collective, and context. Hernandez et. al. (2011) also identified four mechanisms of leadership i.e. traits, behaviors, cognition and affect.

Transformational & Transactional Leadership Theories

Transformational and transactional theories of leadership are based on the concepts given by McGregor Burns (1978) in his bestselling book "Leadership". The concept of transformational leadership emerged'from the interest in the concept of charismatic leadership. Transformational leadership consists of four components: charisma or idealized influence, inspirational motivation, intellectual stimulation and individualized consideration (Bass, 1985). Charisma or idealized influence is the degree to which the leaders can influence followers to identify with the leader by arousing strong emotions. Inspirational motivation is the degree to which the leader communicates an appealing vision and inspires followers to pursue that. Intellectual stimulation is the degree to which the leader articulates new ideas, encourages followers to question conventional practices and fosters creativity among the followers. Individualized consideration is the degree to which the leader provides support, encouragement and coaching to followers.

Transactional leadership refers to the exchange relationship between the leader and the follower to fulfill their interests (Bass, 1999). Transactional leaders try to fulfill follower's needs in exchange of their completing the job requirements. Transactional leadership consists of three components: contingent reward, management by exception-active and management by exception-passive. Contingent reward refers to the degree to which leaders can establish transaction with followers by rewarding the efforts of followers by communicating with them as to what they must do to get rewards and punishing undesirable actions. Management by exception is the degree to which the leader takes action by intervening so that the decided standards are achieved. The difference between active and passive management-by-exception is made on the basis of the timing of the leader's intervention (Bass & Avolio, 1993). Active leaders intervene by anticipating mistakes and problems and taking preventive action before the problem becomes grave while passive leader intervenes only after the follower fails to meet the pre-determined standards.

Organizational Commitment

Organizational Commitment is the degree of identification and participation in an organization. It is the mental contract which connects the individual to the organization...

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