Current trends and previous research in understanding the effects of organizational culture and leadership style continue to contribute to the field of business management. The concepts of leadership style and organizational culture lead to various theories that add to the foundation of understanding business management and to the premise of daily operations. The following literature review focuses on the theories and principles pertaining to leadership styles and organizational climate and culture. Results demonstrate the importance of both variables to the field of management as well as their influence on competitive advantage.
Transformational Leadership Styles Leadership styles involving transformational leadership
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Transactional leaders lead through rewards for accomplishment of task while praising success and cause and effect management therefore creating a system positive reinforcement (Daft, 2012; Odentude, 2013). On the other hand transformational leaders instill inherent motivation, inspiration and stimulation in organizations (Allen, Smith & DaSilva, 2013; Odentude, 2013; Shurbagi & Zahari, 2013). This particular style of leadership encourages participatory engagement between leadership and employees while continuing to nurture individuals in accomplishing organizational effectiveness. Furthermore the discovery led researchers to understanding how organizational effectiveness furthers organizational performance and learning leading to knowledge which heightens engagement within organizations (Choudhary et al., 2012). The use of the Multifactor Leadership Questionnaire (MLQ) helped various researchers understand to what extent transformational leaders operate in managing organizations. The pertinent criteria of managing and the questions asked helped researcher to attain characteristics supportive of organization goal attainment (Shurbagi & Zahari, 2013; Allen et al., 2013). One study researched the effects of psychological climate and transformational leadership among a church congregation.
The definition of psychological climate pertained to the consideration and willingness for change within an