Effect of Leadership Style on Organizational Performance (A Case of Islamic Banking Industry in Pakistan)

Abstract

The current study is an attempt to explore the relationship of leadership styles and organizational performance. Transformational and transactional leadership styles were chosen as independent variables, while the performance of organization is chosen as dependent variable. Inspirational motivation, Individual Consideration and Charisma are constructs of Transformational leadership style, while constructive reward system and Corrective management system are constructs of transactional leadership style. Employees’ satisfaction is taken as measure of organizational performance. The study has its focus on Islamic banks of Peshawar, Pakistan. The data is collected with the help of questionnaire. The findings of the study show that, constructive reward system, inspirational motivation and Charisma have significant positive relationship with employees’ satisfaction. While, corrective Management system and Individual consideration have positive insignificant in relationship with employees’ satisfaction.