Transformational Leadership in the Public Sector Empirical Evidence of Its Effects

The environment in which public organizations are managed is becoming evermore demanding, including more calls for innovation and performance despite static or declining resource base. To be effective in this changed environment, leaders are asked to overcome many of the structural and environmental constraints characteristic of the public sector (Moynihan and Pandey 2005; Pandey 2010; Rainey and Steinbauer 1999). Given the many competing factors that shape organizational change and performance, the effects of leadership are difficult to fully assess. There is a seemingly endless series of schools of leadership theory to consider. In this chapter, we focus primarily on one general theory of leadership— transformational leadership—in the public sector setting. We examine transformational leadership because of its prominent influence in mainstream organization theory. In recent years, this influence has begun to emerge in empirical studies of public organizations. This research provides evidence that transformational leadership can have important direct and indirect effects on innovation and performance. In addition to increasing employee empowerment (Park and Rainey 2008), cooperation (Oberfield 2012), satisfaction (Oberfield 2012; Trottier, van Wart and Wang 2008), and commitment to the organization’s mission (Park and Rainey 2008; Wright, Moynihan, and Pandey 2012), transformational leaders also increase both the availability and use of performance data to make decisions (Moynihan, Pandey, and Wright 2012). Some of these studies also suggest that transformational leadership increases productivity and assessments of individual and organizational performance (Belle 2012; Grant 2012; Oberfield 2012). In other words, transformational leaders speak to basic issues of motivation, innovation, and increasing achievement. In this chapter, we explain the concept of transformational leadership and summarize basic claims advanced about its effects in public settings. We review evidence that transformational leadership matters to performance and then present arguments about how key components of transformational leadership can encourage a more innovative organizational culture, increase