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Archives of Business Research – Vol. 9, No. 8
Publication Date: August 25, 2021
DOI:10.14738/abr.98.10662. Al-Khulaifi, E., & Younus, M. K. (2021). Transformational Leadership and Performance: Testing Mediation and Moderation in Qatari
Hospitality Industry? Archives of Business Research, 9(8). 12-27.
Services for Science and Education – United Kingdom
Transformational Leadership and Performance: Testing
Mediation and Moderation in Qatari Hospitality Industry
Dr. Ebrahim Al-Khulaifi
Qatar Museum Authority Qatar
Muhammad Kashif Younus
University of Manchester, UK
ABSTRACT
This study aimed to determine organisational performance with the perspective of
employees' service performance by leadership in the hospitality industry. For doing
so, we hypothesised the relationship of transformational leadership and
employees' service performance via two roots, service climate and organisational
identification. Furthermore, to examine the leadership role in service climate
development and organisational identification, we used proactive personality as
the boundary condition to these relationships. Data for the study was collected from
a diverse range of organisations operating in the Qatari hospitality industry.
Findings showed that the service climate fully mediates the relationship, while
organisational identification failed to mediate the relationship. Considering the
moderating effects, results suggested that strong proactive personalities will
strengthen transformational leadership on service climate and organisational
identification. This study als0 discussed various theoretical and managerial
implications.
Keywords: Transformational leadership, service climate, organisational identification,
employees' service performance, organisational performance, proactive personality,
hospitality industry.
INTRODUCTION
Hospitality industry around the globe has attracted researchers and practitioners, but in the
present situation of COVID-19, not only for medium organisations but also for various stable
organisations to manage their organisational performance. Considering organisational
performance in the perspective of employees' performance, leadership has been an inordinate
concern (Tu, Bono, Shum, & LaMontagne, 2018; Dong, Bartol, Zhang, & Li, 2017; Chen, & Hou,
2016; Thibodeaux, Labat, Lee, & Labat, 2015; Sarwar et al. 2020), especially in service
organisations (Bligh, Kohles, & Yan, 2018; Ponnuswamy, & Manohar, 2016; Jyoti, & Dev, 2015).
Likewise, a leader is a personality that can motivate, support, direct, and change followers'
behaviour. Furthermore, leaders' attributes, characteristics and relational behaviours have a
substantial effect on various organisational outcomes like organisational performance
(Gündemir, Carton, & Homan, 2019; Barrick, Thurgood, Smith, & Courtright, 2015) and brand
image (Bravo, Montaner, & Pina, 2012). Similarly, various individual outcomes (e.g. employees'
citizenship behaviour, job performance, job satisfaction, job commitment, employee's
turnover) are claimed in the literature as trickle-down effects of good leadership (Koning &
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Al-Khulaifi, E., & Younus, M. K. (2021). Transformational Leadership and Performance: Testing Mediation and Moderation in Qatari Hospitality
Industry? Archives of Business Research, 9(8). 12-27.
URL: http://dx.doi.org/10.14738/abr.98.10662
Kleef, 2015, Chen et al., 2014; Xu & Cooper, 2011; Sarwar et al. 2020). Additionally, leaders are
considered as a significant source to enhance employee's learning (Berson, Da'as & Waldman,
2015), employee's organisational behaviour (Koning & Kleef, 2015), employee's commitment
(Wallace, de Chernatony, & Buil, 2013), organisational performance (García-Morales, Jiménez- Barrionuevo, & Gutiérrez-Gutiérrez, 2012).
More specifically, when we talk about the organisational performance in the hospitality
industry, it relies on the services provided to their clients, which majorly depend on their
employees. Correspondingly, the employee will only perform according to the vision, which is
transferred to them and this is the point where transformational leadership comes into play
because "transformational leaders have the ability to transform organisations through their
vision for the future, and by clarifying their vision, they can empower the employees to take
responsibility for achieving that vision" (Kim, 2014) Although various studies provide evidence
that leadership has numerous positive outcomes in an organisational perspective (Koning &
Kleef, 2015, Chen et al., 2014; Xu & Cooper, 2011). However, a specific leadership type
(transformational leadership) is not under the limelight, especially in the hospitality industry.
Therefore, more empirical evidence is required to validate the role of transformational
leadership in the performance of organisations involved in the hospitality business and unearth
this relationship's underlying mechanisms.
Thus, this study draws the relationship between transformational leadership and
organisational performance via two roots. First, we build on social identity theory (SIT:
Ashforth & Mael, 1989) that organisational identification mediates between transformational
leadership and organisational performance. Second, we draw on social information process
theory (SIP: Salancik & Pfeffer, 1978) that service climate mediates between transformational
leadership and organisational performance. Moreover, we also put a proactive personality as a
boundary condition to transformational leadership with organisational identification and
service climate. This boundary condition further explores the mediated relationships, and we
believe that proactive personality strengthens these relationships.
Further, this study is conducted in Qatar's hospitality industry because of its significant
contribution to the Qatari gross domestic product (GDP). According to a report, the Qatari
hospitality industry contributed 61.4 billion Qatari Riyal in the country's GDP and is expected
to rise this contribution up to 199.3 billion Qatari Riyal by 2028 (Amna, 2020).
This study contributes in two perspectives. First, from an organisational perspective, it
validates the relationship between transformational leadership and organisational
performance in a worlds' stable economy (Qatar). Second, from an individual perspective, it
explores leaders' relationship with their employees and how this relationship is affected by
leaders' abilities. Further, this study also explains how employees' personality moderates the
relationship of leaders and employees. Furthermore, this study contributes to the literature of
transformational leadership by investigating the constructs of leaders, organisations, and
employees in a unified model. Finally, the study also provides insights to the practitioners
specifically in the hospitality industry that how leaders can modify the organisational outcomes
by their transformation abilities, which will help the development and management of human
resource policies.
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Archives of Business Research (ABR) Vol. 9, Issue 8, August-2021
Services for Science and Education – United Kingdom
LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT
Transformational leadership and organisational service performance
Transformational leaders use an approach to transforming organisational objectives and vision
into employees by motivating them to make their performance aligned with the organisational
objectives (Buil, Martínez & Matute, 2019). Furthermore, effective management of
organisational policies needs strong transformational leadership. As "transformational leaders
have the ability to transform organisations through their vision for the future, and by clarifying
their vision, they can empower the employees to take responsibility for achieving that vision"(Kim,
2014). Transformational leaders majorly work on two behaviours, which are inspirational
motivation and idealised influence (Bass, 1990). Concisely, the idealised influence is known as
"Charisma" is defined as leaders' ability to portray morality and ethicality by their behaviours.
Therefore, such abilities make them confident and role models for their followers. Another
ability of transformational leaders is to inspire their followers. They inspire followers by
motivating them towards a specific thing or objective. In result, these behaviours of
transformational leaders in various positive change in their employees' behaviour.
It has been proven that transformational leadership plays a critical role in organisational
perspective. This study is only focused on the organisational service performance in the
hospitality industry. Like other services sectors, the hospitality sector also relies on their
employees' performance and the services delivered to its clients. Therefore, service
performance is considered the imperative construct was driven by the leadership of an
organisation as service performance is defined as proficiency of task performed to deliver the
specific service (Aryee et al., 2016) and it also includes the delivery of promised and creative
services (Liao & Chuang, 2007).
Moreover, among all leadership styles, transformational leadership has been found the most
influential style to determine employees' positive behaviours, especially in the services sector
(Mackenzie et al., 2001). According to Yukl (1999), transformational leaders can take their
followers to that level of motivation. They start thinking beyond their self-interest and perform
with high standards and creativity to achieve organisational goals. Furthermore, Rafferty and
Griffin (2004) also proven this level of motivation that followers' values, attitudes, and beliefs
are aligned with organisations by this motivation. In result, organisational performance boosts
up by service performance of their employees. Several studies have evidenced the favourable
outcomes of transformational leadership; for example, Judge and Piccolo (2004) argued that
transformational leadership and organisational performance are positively interrelated.
Similarly, transformational leadership also positively affects various dimensions of
organisations (Piccolo & Colquitt, 2006). Therefore, based on the above arguments, we stated
our first hypothesis as:
H1: Transformational leadership positively affects organisational service performance.
Transformational leadership and organisational identification
The literature has argued that transformational leadership plays a critical role in shaping
employees' specific behaviours (Bligh, Kohles, & Yan, 2018; Sarwar et al. 2020). As earlier
noted, transformational leaders motivate and inspire their followers so that employees behave
beyond their self-interest and act with accordance with leaders transferred vision (Buil,
Martínez & Matute, 2019). Transformational leaders display their behaviours according to
morality and ethicality, which make them followers' role model. As a result, they blindly start
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Al-Khulaifi, E., & Younus, M. K. (2021). Transformational Leadership and Performance: Testing Mediation and Moderation in Qatari Hospitality
Industry? Archives of Business Research, 9(8). 12-27.
URL: http://dx.doi.org/10.14738/abr.98.10662
following their leaders who provide the aid to leaders in transforming organisational vision
into employees' self-vision, because followers link the organisation and leaders with their
identities and feel proud to work for them (Ghadi, Fernando, & Caputi, 2013). According to SIT,
when people get impressed and inspired by someone, they try to be like him (Mael & Ashforth,
1992). This inspiration develops psychological bonds between the leader and the follower,
which drives followers to work according to their expectations. Therefore, grounding on SIT,
we proposed that organisational identification that becomes the social identification on later
stages of affection with organisations and leaders can be developed through transformational
leadership. This argument drove us to state our second hypothesis as:
H2: Transformational leadership positively affects organisational identification.
Organisational identification and organisational service performance
Employees use organisational identification to get recognised in their social groups, and they
want people to know them by their organisations in which they work. Therefore, Mael and
Ashforth (1992) argued that organisational identification is social identification where people
feel proud to define themselves as part of any organisation or group. Several studies have been
validated organisational identification as the predictor of numerous positive outcomes like job
satisfaction (Park & Park, 2018), organisational commitment (Nguyen, Pham, & Bui, 2020),
employees' turnover (Akgunduz & Bardakoglu, 2017), employees' performance (Lu et al.,
2017), and work engagement (Demirtas et al., 2017). Concisely, based on SIT, we argued that
when employees idealise their organisation and use their organisation as a social symbol to
define themselves, the organisation becomes their identity. To, maintain this identity with the
organisation, employees work with dedication, creativity, and according to the organisation's
standards, which ultimately boost the organisational service performance. Thus, based on the
above discussed theoretical and empirical evidence, we proposed that employees'
organisational identification will positively affect organisational service performance.
Therefore, we started our third hypothesis:
H3: Organisational identification positively affects organisational service performance.
Organisational identification as a mediator
Identification is conceptualised as the inclination of someone to be recognised as a member of
a social or professional group (Ashforth & Mael, 1989). Mainly, organisational identification
incorporates the level at which employees align their organisational values and attributes to
define themselves (Dutton et al., 1994). Likewise, organisational identification drives
employees to psychologically think that attributes of the organisation are identical to their
attributes (Ciampa et al., 2019). Similarly, strong identification develops employees' mindset
that they and their organisations are not apart from each other, and this mindset drives them
to have a permanent favourable organisational concept (Buk, 2017). Therefore, strong
identification will stimulate employees to behave according to organisational expectations
(Ciampa et al., 2019).
This study demonstrates that transformational leadership strongly predicts organisational
service performance and organisational identification provides the mediational mechanism in
this relationship. As earlier noted, transformational leadership positively affects organisational
identification (Bai, Lin, & Li, 2016). Moreover, leadership shapes followers' identity, ultimately
influencing their behaviours (Ding, Zhang, Sheng, & Wang, 2017). Moreover, transformational
leaders display such behaviours to their followers, which alter their self-concept and
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Archives of Business Research (ABR) Vol. 9, Issue 8, August-2021
Services for Science and Education – United Kingdom
identification. According to Bass (1990), employees' needs and development are the main focus
of transformational leaders. In concern of this focus, they work as mentors, which help their
followers get motivated and align their work with the organisational vision.
As literature has shown the positive link between transformational leadership and employees'
affection and identity with the firm (Kark et al., 2003). Therefore, we believe that
transformational leadership will predict employees' organisational identification. In result,
organisational service performance will be boosted through employees' organisational
identification. As Dutton et al. (1994) argued, employees with strong identification are inclined
towards an organisation with positive attitudes. According to SIT, belongingness of people to a
specific and idealised group increases their self-esteem, and they feel pride to be connected
with that specific group (Hogg & Turner, 1985; Tajfel, 1978).
In this perspective, this pride of employees drives them to put more efforts into the
organisation (Walumbwa, Avolio, & Zhu, 2008). Moreover, strong identification with an
organisation also keeps employees' actions favouring the organisation (van Dick et al., 2008).
Concisely, employees' favourable actions keep them more focused on their performance and
perform their duties extraordinarily with creativity (Walumbwa et al., 2008, 2011). Therefore,
based on SIT, we argued that by idealising the organisation's image transformed by their
leaders, employees make their identity with the organisation, which gives them the social pride
and self-esteem. To maintain this pride and self-esteem, employees put more effort into their
services and stay more focused on their performance, which ultimately boosts the
organisational service performance. Thus, we developed the fourth hypothesis as:
H4:Organisational identification positively mediates the relationship between
transformational leadership and organisational service performance.
Transformational leadership and service climate
Leadership literature has witnessed that leaders play an imperative role in developing and
managing the work environment (Hong et al., 2013). Moreover, in the service sector, the service
climate primarily depends on leaders because they are the authentic and primary sources of
work-related information (Walumbwa et al., 2010). Likewise, in the services sector, employees
frequently interact with their leaders; therefore, they majorly rely on their leaders (Liao &
Chuang, 2007). Based on SIP, we build an argument that as leaders in the services sector, they
are the primary sources of information. They also behave as the organisation's face with
employees; therefore, employees perceive the organisational practices and policies. After
developing perception about the organisational policies and practices transformed by leaders,
a specific service environment develops as the transformed vision and practices are perceived
(Griffin, 1983; Mayer et al., 2007). Thus, we believe that transformational leadership will
substantially affect the service climate in the hospitality industry. Therefore, fifth hypothesis is:
H5: Transformational leadership positively affects service climate.
Service climate and organisational service performance
As earlier noted, service climate can be referred to an environment at the workplace where
employees perceive the organisational practices, policies, and procedures of customer services
in a similar manner (Liao & Chuang, 2007). Moreover, it includes employees' consensus on how
their organisation value the service quality, service delivery procedures, and other operational
procedures at the workplace (Hong et al., 2013). Therefore, it is argued that service climate