Transformational leadership and organisational performance: Three serially mediating mechanisms

The purpose of this paper is to investigate the serially mediating mechanisms of organisational justice, organisational trust, and employee reactions in the relationship between transformational leadership and organisational performance.

The study is based on a national sample of 133 organisations from the public and private sectors in Greece and on data obtained from 1,250 employees at three hierarchical positions. The statistical method employed is structural equation modelling.

The findings of the study suggest that responsive and supportive transformational leadership behaviour have a positive impact on organisational growth. Additionally, this impact is mediated by organisational procedural justice, organisational trust integrity and dependability, and organisational commitment.

The study does not allow for dynamic causal inferences because the data were collected using a questionnaire at a single point in time. Furthermore, the findings of the study may not generalise across borders, because the study was applied in the Greek context, which is experiencing a severe economic and financial crisis.

The major message of the study to decision makers and practitioners is that leaders should work at fostering organisational commitment by improving perceptions of fairness and trust, consistent with the context where the organisation is activated.

There is hardly any research that has been conducted to examine the serially mediating relationships of justice, trust, and employee reactions using multi-dimensional constructs in investigating the relationship between transformational leadership and organisational performance.