Transformational Leadership In Small Business Case Study

794 Words 4 Pages
Transformational Leadership and Employee Turnover Intentions in Small Businesses
Increasingly, it is becoming evident that the new approach to organizational leadership involving employee commitment to a shared vision—termed transformational leadership (TFL)—is directly linked to enhanced organizational performance (Judge & Piccolo, 2004; Yukl, 2006; Wang, Oh, Courtright & Colbert, 2011). Furthermore, the literature suggests that transformational leaders are able to boost organizational performance by engaging their employees (or followers) in a more meaningful and satisfying relationship. By doing so, transformational leaders lower their employees’ willingness to leave the organization—referred to as turnover intentions (Wells & Peachey, 2011).
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Baum, Locke, and Kirkpatrick. (1998) explain that small businesses represent a simpler, more integrated social system, with fewer people, less hierarchy, and less subdivisions of work. Also, small business managers often execute a multiplicity of roles, imposed on them by the organization’s small size, limited time and resources (Avery, 2004). As such, the physical and psychological distance between managers and employees in small organizations is less than that of their larger counterparts in the marketplace. This defines the classical, directive leadership style that small businesses typically adopt (Antonakis & Atwater, 2002). Moreover, given the fewer hierarchical levels in small businesses, the interaction between managers and employees is likely to be relatively frequent and direct. Hence, managers can more readily influence employee attitudes and behaviour, including their intentions to remain with the organization, as opposed to the more detached relationships that are typical in larger enterprises (Antonakis & Atwater, 2002; Avolio, Zhu, Koh, & Bhatia, 2004). Consequently, if competent employees remain in an organization, there are several potential benefits including increased productivity, financial savings, and the retention of organizational knowledge (Gray, Phillips, & Normand,

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