How does transformational leadership influence on the performance of public service organizations in a developing country? The interventional roles of NPM cultural orientations

Abstract

By drawing on New Public Management (NPM) framework and transformational leadership theory, this study examined how transformational leadership impacts the performance of public organizations via NPM cultural orientations. Research data is collected from 205 public service organizations in Vietnam. The results of analysis with the support of Partial Least Square-Structural Equation Modeling (PLSSEM) technique. The research results indicate (1) Transformational leadership has a significant positive impact on the performance of public organizations; (2) Results-oriented culture mediates the relationship between transformational leadership and organizational performance; (3) Innovation-oriented culture doesn’t mediate the relationship between transformational leadership and organizational performance. This is one of the few studies examine the interrelationship between transformational leadership, NPM culture orientations on public organization performance. The message of the findings to practitioner is that public managers should apply transformational skills at fostering results-oriented culture to lead higher organizational performance. Thus, the findings contribute to a more nuanced understanding of how transformational leadership and organizational culture play a vital role in performance management practices.