The role of leadership on organisational outcomes from social identity and a psychological contract perspective

Abstract

Leadership in general and transformational leadership in particular has been on the research agenda for a number of decades. This is especially true because of the relevance attached to leadership in terms of organisational effectiveness. This particular study examines the association between two major explanatory frameworks, namely psychological theory and social identity theory, and both attitudinal and performance measures as outcomes. Furthermore, it evaluates the relevance of transformational leadership on the relationship between these variables. This project provides a through and critical review of the main theories and transformational leadership in relation to the selected outcomes. This review generated three specific research questions, namely: Research question 1: What is the relationship between PC, SI, TL and outcomes? Research question 2: How does the perception of leadership over time affect outcomes? Research question 3: Does TL at time 2, impact the relationship between the changes in both PC and SI and changes in outcomes? In order to answer these research questions, data was collected by means of a questionnaire over two time points over a period of three months. Data were collected from 68 full time employees working in a local insurance organisation and analysis was conducted using SPSS to answer the research questions. More specifically collation analysis and multiple regressions were employed to answer the research questions. Results revealed that most of the study variables were correlated in the hypothesised direction and transformational leadership predicted many of the outcomes at different time points. In addition, changes in psychological contracting and social identity failed to interact with transformational leadership at Time 2 in explaining changes in outcomes expect for task performance. Overall, the results reveal the sign importance of transformational leadership, psychological contract, social identity and outcomes. The discussion presents an interpretation of these findings in the light of the literature review and also provides a number of practical recommendations stemming directly from the results.