A leadership-organisational performance model for state-owned enterprises in emerging economies

Abstract

Purpose: Poor leadership skills are often one reason for poor performance in emerging economies’ state-owned enterprises (SOEs). Research on transformational leadership’s (TL) effectiveness in the public sector is limited and sometimes contradictory and incomplete. The present study sought to develop and test a TL and organisational performance (OP) model that includes the role of soft influence tactics and leader–follower relationship quality. Design/methodology/approach: Quantitative predictive research was used. The Multifactor Leadership Questionnaire-5X, Influence Behaviour Questionnaire, Leader-Member Exchange Questionnaire, and an adapted measure of OP were used to collect data from 302 staff members from 12 SOEs and government officials from line Ministries in an emerging economy. Variance-based structural equation modelling was used in data analysis. Findings/results: The findings show that the relationship between TL and OP is complex. Although TL directly influences OP, it also does so through soft proactive influence tactics (sPIT) and leader–follower relationship quality. Transformational leadership, proactive influence tactics and leader–follower relationship quality combined explained 47% of the variance in OP. Practical implications: State-owned enterprise leaders and management should take note that TL, proactive influence tactics and the quality of leader–follower relationships can be integrated to influence OP positively and significantly. Originality/value: This research provides additional knowledge to the limited research available on SOEs in emerging economies. Furthermore, it reveals that sPITs and leader–follower relationship quality influence the relationship between TL and OP in these SOEs. This addresses a knowledge gap concerning the leadership-OP relationship.