Leadership Styles
Leadership Styles
Leadership Styles
Sobia Iqbal
Assistant Professor: Department of Management Science DHA Suffa University
sobia.iqbal@dsu.edu.pk
Muhammad Waqas
Senior Lecturer: Department of Management Science DHA Suffa University
Burhan Sami
PhD Scholar: Department of Management Science DHA Suffa University
ABSTRACT
Creativity at the workplace is a key factor that enables organizational growth and development, there better
leadership skill is crucial for creating an environment for raising a creative workplace. This study
empirically analyzes the leadership styles adopted in the Higher Education Sector of Pakistan and their
impact on the retention of employees, incorporating transactional leadership, transformational leadership,
and innovative environment as independent variables, and employee retention as the dependent variables.
Further, this study assimilated the role of diversity on employee retention as moderators considering it
elements. From the diversity context, this study mainly relies on demographic information only and
discusses the moderating impact of gender of respondent, gender of supervisor, education level, and
employment status as a model to interpret the impact. For the empirical analysis of the study the digital
questionnaire has been distributed and received 411 respondents from the Higher Education Sector. SPSS
has been used for the analysis. The studies concluded that transformational leadership is significant in the
Higher Education Sector of Pakistan and all the four factors of diversity are not moderating in this set of
data.
Keywords: Leadership, Transactional Leadership, Transformational Leadership, Innovative environment,
Diversity.
Gel Classifications: M14, L14, I23
1. INTRODUCTION
The role of leadership is a complex phenomenon as it involves many factors along with different stages of
control and operational analysis (E.Dinh, Lord, Gardner, Meuser, & Liden, 2018). Leadership is the core
part of management, and its importance cannot be ignored. The skills of a leader are considered as the
necessary element in the success and setback of a firm. Therefore, the success or setback of an organization
generally identifies as a success or failure of leadership. A leader has enormous leverage on the success of
an organization.
The issue of leadership has become the focus of interest for researchers. Creativity climate
development is stated as to provide the circumstances for people to generate new ideas regarding new
challenges and opportunities which are being faced. The scope of this particular study is focused for the
teaching faculty of the Higher Education Sector of Pakistan. It targets to identify the influence of leadership
style on Employee Retention in the Higher Education Sector. In the modern era, creativity has a dominant
impact on any organization’s success. Creativity at the workplace is a key factor that enables organizational
growth and development. Better leadership skill is therefore necessary for creating such a climate for raising
a creative workplace. There is no unanimously agreed ‘the most suitable style’ of leadership style (Bolman
& Deal, 2008). There are many leadership styles adopted by Higher Educational Institutes around the globe,
but researches supports to the transformational leadership style as most effective one in this sector (Aguirre
& Martinez, 2006). Similar the results concluded by the study of (Kezar & Eckel, 2008) reported that
transformational, transactional, and laissez fair are effective in different scenarios in Higher Educational
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Institutes which are focusing on diversity agenda. The literature for diversity supports that diversity
leadership is the master of all leadership styles (Bolman & Deal, 2008). It has been reported that structural,
political and symbolic frames are best leadership flairs (Birnbaum, 1988). Collegial leadership frame is
reported by (Williams & Wade-Golden, 2013). The role of leadership in Mexican universities have been
analyzed by five factors of leadership that is strategist, legitimator, politician, motivator, and communicator
and all these are components of transformational leadership (Badillo-Vega & Espinosa, 2020). The study
concluded that transformational leadership is playing a dynamic role in the development of the Higher
Educational Institutes of Mexico. The literature from leadership style perspective in Higher Education,
finds many related studies in support of transformational leadership to develop the Higher Education Sector.
In this study the focus is on the two major leadership adopted styles in Higher Educational Institutes in
Pakistan. It engrossed on transformational and transactional leadership styles to draw a conclusion about
the research question that is intended to identify the relationship of leadership flair and diversity on
employee retention in the Higher Education Sector. An ongoing study analyzed the impression of leadership
flair diversity on employee retention in the Higher Education Sector. Previous studies are focusing on the
leadership style and employee retention and the effect of diversity on employee retention separately and to
the preeminent of the researcher’s awareness the current study is one of the very unique studies that discuss
diversity and leadership style on employee retention at the same time especially featuring Pakistan’s Higher
Education Sector.
2. REVIEW OF LITERATURE
Academic institutions like universities and colleges are distinctive in nature when it comes to decision
making process and are entirely different from the corporate sector or government department. In
universities, the academic work is managed around the intellectual activities of the professors which need
an entirely different mechanism of leadership. That will depend upon the implanted nature of university
and their Presidents/Vice Chancellors. In the process of analyzing university leadership the authorities need
to take care of national educational development along with international market requirements of the Higher
Education (Badillo-Vega, Georg, & Pedro, 2021).
Consisting on the following three factors:
A. Develops the visualization for the aims of the organization
B. Openly share the prophecy with the employs
C. Develop a clear long term strategy to achieve the organization goals
The study of (Jacobsen, Andersen, Bollingtoft, & Eriksen, 2021) concluded that the
transformational leadership is the behavior of the leader to progress, share and stand with visualization and
prophecy in order to stimulate the employees and make them understand the long term vision of the
organization. The notion of transformational leadership has progressively shifted towards the notion of
instructional leadership, as per the prospects of the academic arena for leaders to bring visionary leadership
tactics into the Higher Education Institutions (Leithwood & Jantzi, , 2019). The study concluded that
instructional leadership was appropriate in education sector of Malaysia during 1980s and 1990s. However,
the education sector had different experience in late 1990s. Referring to transformational leadership.
(Masduki Asbari & Novitasari, 2020) Has concluded that the success of a leader lies in their work and
incorporated varies mechanism to motivate and trigger their respective staff and they bring a positive
change in the Higher Educational culture of their institute. (Asbari, 2020) Reported that the leaders as well
as the follower inspires individuals to accomplish advanced level of morality and justice to the
responsibilities. Similar hypothesis was established by (Zaman, et al., 2020) in their research in which they
have concluded by structural equation model that the transformational leadership has significant positive
influence on employs performance specially during the covid-19 when everything face rapid change.
(Zaman, et al., 2020) Further they suggest that the transformational leadership is best style of leadership
when the system is facing the change. Whereas the transactional leadership refer to the compliance by
reward and punishments. Though this system is successful in short term but it is not effective in longer run
(Asbari, 2020). Indicate that transformational leadership develops a strong association among the leader
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and follower although the transactional leadership does not develop the association among leader and
supporter as it is based on the reward and punishment (Purwanto, Asbari, & Santoso, 2019).
In case of Pakistan’s Higher Education Institute (Khan, Idris, & Amin, 2021) concluded in their
study that transactional and transformational leadership, both has optimistic and substantial impression on
employ performance in Higher Education Sector of the country they further enlighten the researcher that it
is the justice in the system which may create a difference in some organizations.
Every organization wants the long term engagement of their employees. Retaining old employ is
the success of any company as it will reduce the operational cost also it will enhance the productivity as old
employ know the rules and organizational culture better than if company hire new employs. (Winoto,
Tecoalu, & Wijaya, 2021) Have also conclude the compensation and supervisor support has positive and
significant impact on employee retention. In the similar study (Yasin, 2021) analyzed the association among
responsible leadership and employ turnover rate and he reported the results that there is a negative and
substantial relationship between the responsible leadership and employ turnover. From the above discussion
we may conclude that the leadership style plays a dynamic role in retention of employs.
Innovation is the unique process of value addition of any economic activity. It might be in the
operational activity or product development activity or at any stage if someone develop a unique procedure
to address the process it is consider as innovation. (Yamin, (2020) Analyzed the relationship between the
employ retention and innovation (the study use entrepreneurial orientation as proxy of innovation) and
concluded that the firms who gave more chances to their employs to experiment in a controlled way the
employs chances of retention increase.
3. CONCEPTUAL FRAMEWORK
Transformational
Leadership
Innovative Environment
4. METHODOLOGY
The selected study independent variables are transformational leadership; transactional leadership and
Innovative environment whereas the gender of respondent, gender of supervisor, employment status,
education of Higher Education Employees are the moderating variables and Employee Retention as the
dependent variable. As the study population is focused on the Higher Education Sector so the lecturer or
above at the university level has been considered as the sample. The sample size calculated by rasoft was
385 as the population size is large. The digital questionnaire was shared through different electronic and
digital media and the study received the response of 411 employees of the Higher Education Sector. The
purposive sampling technique has been adopted. Digital questionnaire (through google forms) has been
sent to all major universities of Pakistan to get the maximum response. SPSS package has been used for the
data analysis.
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5. ANALYSIS
5.1. EMPIRICAL ANALYSIS
This section of the study explains the empirical analysis of all the demographics of the survey.
DESCRIPTIVE ANALYSIS
Table No: 1
Valid Cumulative
Frequency Percentage
Percentage Percentage
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Since the demographics of this study is very much diversified, its diversification varies from the
Gender of Respondents/participants to the Gender of their respective Supervisors, Education level and
employment status, therefore it may be conclude that it is a well-defined survey that covers all relevant
demographics diversities of the Higher Education Sector.
5.2. Reliability Analysis
RELIABILITY STATISTICS
Table No. 2
Variables Cronbach's No of Items
Alpha
Transformational Leadership .727 7
Transactional Leadership .637 4
Employ Retention .668 8
Innovative environment .642 4
Table 2 shows that the data is valid for all variables as Cronbach’s Alpha meets the minimum limit
of reliability. As the innovative environment is our controlling (moderating) variable, in this case, the
controlling variable might not be effective.
CORRELATIONS
Table No. 3
Retention Pearson Employee Transformational Innovation Transactional
Correlation Retention Leadership Environment Leadership
1 -.011 .116* .500**
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
The construct validity analysis of the study displays that correlation is significant between the
Employee Retention and Transactional leadership, Further, the Transformational Leadership and an
Innovative Environment are not significantly correlated with Employee Retention. With this evidence we
may conclude that in the Higher Educational Sector, the Transactional Leadership is significantly correlated
with the Employee Retention.
On the basis of Reliability and Validity Analysis, the study has been considered for backward
regression test to identify the significance of the model. Backward regression run three different models on
the bases of significance.
Variables Entered/Removeda
Table No. 4
Model Variables Entered Variables Method
Removed
Transactional Leadership, . Enter
1 Transformational Leadership,
Innovative Environmentb
. Innovative Backward (criterion: Probability of F-to-
2
Environment remove >= .100).
. Transformational Backward (criterion: Probability of F-to-
3
Leadership remove >= .100).
a. Dependent Variable: Employee Retention
b. All requested variables entered.
Table no. 4 show the summary of the table and R2 illustrates that 25% of the variation in the
dependent variable is due to these independent variables. All three model shows that the variation in
dependent variable due to all independent variables is 25%.
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Model Summary
Table No. 5
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .502a .252 .247 .55264
2 .502b .252 .248 .55197
3 .500c .250 .248 .55216
a. Predictors: (Constant), Transactional Leadership, Transformational Leadership, Innovative
Environment
b. Predictors: (Constant), Transactional Leadership, Transformational Leadership
c. Predictors: (Constant), Transactional Leadership
Analysis of variance shows the overall fitness of the model. Table no. 5 demonstrates the significant
values of the F-ratio which implies that the model is fit to do the analysis and recommendation.
ANOVAa
Table No. 6
Model Sum of Squares df Mean Square F Sig.
Regression 41.896 3 13.965 45.727 .000b
1 Residual 124.300 407 .305
Total 166.196 410
Regression 41.889 2 20.944 68.744 .000c
2 Residual 124.307 408 .305
Total 166.196 410
Regression 41.501 1 41.501 136.121 .000d
3 Residual 124.696 409 .305
Total 166.196 410
a. Dependent Variable: Employee Retention
b. Predictors: (Constant), Transactional Leadership, Transformational Leadership, Innovative
Environment
c. Predictors: (Constant), Transactional Leadership, Transformational Leadership
d. Predictors: (Constant), Transactional Leadership
Backward regression results show that the model is fit for all three models as sig. value of the F-
Test is less than 0.05. The magnitude of the F-ratio of model three is higher among all so the study may
conclude that model three is more significant than others. For the final decision, the study needs to analyze
the independent effect of all variables. It also represents the independent impact of variables on the
dependent variables as only Transactional Leadership shows a substantial impact on Employee Retention.
Coefficientsa
Table No. 7
Model Unstandardized Standardized t Sig. Collinearity
Coefficients Coefficients Statistics
B Std. Beta Tolerance VIF
Error
(Constant) 2.268 .200 11.348 .000
Transformational -.050 .047 -.052 -1.062 .289 .763 1.311
Leadership
1 Innovative .009 .056 .008 .155 .877 .713 1.403
Environment
Transactional .403 .036 .502 11.254 .000 .925 1.081
Leadership
2 (Constant) 2.281 .182 12.498 .000
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