A correlational study of transformational and transactional leadership and organizational commitment in small entrepreneurial firms

Leadership style of managers is an important determinant of organizational success. Effective managers can influence employee job attitudes and behaviors toward attaining organizational goals. A committed and productive workforce is an essential asset of small business organizations and a strong source of competitive advantage. The purpose of this quantitative, non-experimental correlational research was to examine the relationship between transformational and transactional leadership style of managers and organizational commitment of their subordinates in small entrepreneurial firms. Data were collected from 71 organizational members of two small entrepreneurial firms in New Jersey. The survey included items of the Multifactor Leadership Questionnaire and the Three-Component Model Employee Commitment Survey. Research findings indicated positive relationships between each leadership style and different components of organizational commitment. Results provided evidence of significant relationships between transformational leadership style and affective commitment, r = .516, p < .01, and transformational leadership style and normative commitment, r = .319, p < .01. The outcomes of multiple regression analyses indicated that 26.8% of the variance in level of affective commitment and 11. 9% of the variance in level of normative commitment were accounted for by the transformational leadership style. A significant relationship found between transactional leadership style and continuous commitment, r = .235, p < .05, and 8. 2 % of the variance in level of continuous commitment was accounted for by the transactional leadership style. The results indicated that transformational leadership style of managers explained more variance in the level of employee affective (beta=.528, p < .01) and normative (beta= .350, p < .01) commitment above transactional leadership style.