This research investigated the effect of leadership style of the chief director in Korean Federation of Community Credit Cooperatives (KFCC) on empowerment and organizational performance. More details regarding research contents are as follow.
Fir...
This research investigated the effect of leadership style of the chief director in Korean Federation of Community Credit Cooperatives (KFCC) on empowerment and organizational performance. More details regarding research contents are as follow.
First, organizational performance was divided into service and financial performance. In the studies related to the effects of leadership style on organizational performance, there are not many studies which use financial performance as a variable. KFCC is one of financial institutions which reinforce high level of service so that measurement of service performance is worthwhile. Second, the difference between the effect of transformational leadership and transactional leadership on organizational performance was examined. It was analyzed that which performance between service and financial leadership had more influence on. Third, in the effect of transformational and transactional leadership on organizational performance, it was analyzed that how the empowerment, as a intervening variable, worked
The subject of this research is the leadership of the chief director in KFCC. The subject of survey was the staff members on the payroll among all members in KFCC. The Community Credit Cooperatives located seven Gu and one County of Daegu Metropolitan City, ten Cities and 13 County of Gyeongsangbukdo were the subjects of the study. For empirical study, a survey was implemented, and interviews of the chief directors, leaders of KFCC, and their staff were carried out to supplement insufficient parts of the survey. The questionnaire was appropriately reorganized for this study based on the contents developed by precedent studies.
The research model and hypothesis were set up through literature research, and the model of this study is as follow, <Figure 1>.
<Figure 1> Analysis Frame of This Research
Transformational Leadership
- Idealized influence
- Inspirational Motivation
- Individual Consideration
- Intellectual Stimulation
Transactional
Leadership
- Contingent Reward
- Management by Exception
Empowerment
- Identity
- Competency
- Self-determination
Organizational
Performance
Service Performance
- Attitude
- Faithfulness
- Agility
- Professionalism
Financial Performance
- Management Evaluation
-Total Assets Growth
- Net Profit
-Loan Growth
-Payroll Increase
The results of analysis are summarized as follows,
First, transformational leadership had a significant influence on both service and financial performance in the relationship between leadership style and organizational performance. Among subordinate variables, idealized influence had the greatest influence on service and financial performance. Transactional leadership had a positive (+) influence on both service and financial performance. Management by exception among subordinate variables presented a significant influence on both service and financial performance. Transformational leadership had more effect on organizational performance than transactional leadership, and both leadership styles had more influence on financial performance than service performance.
Second, idealized influence, intellectual stimulation and individual consideration, subordinate variables of transformational leadership of chief directors in KFCC, exercised a positive (+) influence on empowermentin the relationship between leadership style and empowerment. Contingent reward and management by exception, subordinate variables of transactional leadership, have a significant influence on empowerment.
Third, in the relationship between empowerment and organizational performance, empowerment showed a significant influence on service and financial performance, subordinate variables of organizational performance. All subordinate variables of empowerment, identity, competency and self-determination, had a positive (+) influence on organizational performance.
Forth, idealized influence and individual consideration, subordinate variables of transformational leadership, had an influence on organizational performance indirectly through empowerment, regarding mediation effect of empowerment in the relationship between leadership and organizational performance. However, idealized influence and intellectual stimulation exercised a direct influence on organizational performance. Therefore, transformational leadership shows that it will have an influence on organizational performance directly or indirectly through empowerment. Management by exception, subordinate variables of transactional leadership presented an indirect influence on organizational performance.