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Transformational
Relationship between leadership
transformational leadership behaviors
behaviors and manufacturing
205
strategy
Received 13 October 2011
M. Birasnav Revised 26 June 2012
School of Management, New York Institute of Technology, Adliya, Bahrain Accepted 14 July 2012

Abstract
Purpose – It is widely agreed that top management’s leadership behavior is a source for achieving
and sustaining competitive advantage. Very few research studies analyzed the prevalence of
transformational leadership style in the manufacturing environment, and importantly, the
associations between transformational behaviors and manufacturing strategies in connection with
flexibility, quality, delivery, and cost are not yet deeply explored in the literature. In this direction,
efforts are initiated to explain the relationships between transformational leadership behaviors and
manufacturing strategies in this study. The paper aims to discuss these issues.
Design/methodology/approach – A systematic literature review was conducted by analyzing all
traditional and contemporary research studies in the fields of leadership and operations management
in order to examine the link between transformational leadership and manufacturing strategies
comprising of flexibility, quality, delivery, and cost strategy.
Findings – It was found from the review that top-level leaders exhibit transformational leadership
behaviors while implementing manufacturing strategies in their firms. In particular, transformational
leaders are capable to transform the production system into flexible system, and in addition, they
develop new production processes for manufacturing both new and old products. Such leaders ensure
quality in all the levels of production process and support to speed up order delivery process with the
help of technology. Finally, they also concentrate on reducing cost growth.
Research limitations/implications – This study is bounded by its focus on Bass and Avolio’s
transformational leadership behaviors and Ward and Duray’s manufacturing strategies comprising of
flexibility, quality, delivery, and cost strategy.
Originality/value – This study shows that transformational leaders, in the manufacturing environment,
use manufacturing strategy as a tool to improve operational performance. Thus, they have potential to
achieve and sustain competitive advantage through formulation of manufacturing strategy.
Keywords Transformational leadership, Strategy, Leadership, Manufacturing strategy
Paper type Literature review

Introduction
In order to manage production processes, concentrating on human resource
development is imperative for firms, which strive to achieve as well as sustain
competitive advantage. To achieve this advantage, firms must also focus on an effective
implementation of change management process, in addition to human resource
development. Exploring the kind of top management leadership style, adopted by firms International Journal of
is essential for implementing such processes. It is transformational leaders, who Organizational Analysis
Vol. 22 No. 2, 2014
establish supportive-culture that facilitates all employees to understand the impact of pp. 205-223
organizational change on improving operational performance. This culture also assures q Emerald Group Publishing Limited
1934-8835
that their involvement in the change management process attracts certain individual DOI 10.1108/IJOA-10-2011-0520
IJOA or group benefits. Apart from organizational culture, many research studies
22,2 empirically analyzed the impact of human resource management (HRM) practices,
manufacturing strategy, knowledge management (KM) and new technology
implementation on enhancing business performance (Youndt et al., 1996; Reed et al.,
2000; Darroch, 2005; Chan et al., 2004). On exploring the presence of facilitators in
the above associations, it is found that transformational leaders establish and
206 implement information technology (IT) enabled system, KM process, total quality
management (TQM) practices, HRM practices, and supportive organizational climate
within their organizations (Sosik, 1997; Puffer and McCarthy, 1996; Birasnav et al., 2011;
Goodwin et al., 2001; Bass and Avolio, 1995). Subsequently, they achieve and sustain
competitive advantage (Barney, 1991; Reed et al., 2000).
Since the investment in the production processes are significantly and comparably
higher than the other functions of the organizations, it is essential to investigate the
suitable leadership style to be executed by the top-level and middle-level leaders
involving in manufacturing process to enhance efficiency and lower production cost.
Any changes in the production process or in the design of the products have significant
effects in the financial performance, customer satisfaction and sales growth. At this
moment, it should be noted that leadership style of the operation managers also has a
significant impact on the operational performance. For example, leaders who have
willingness to engage in risk-taking activities are most likely to support their firms to
reduce cost growth and customer lead time. On the other hand, the probability of
occurrence of such outcomes is comparatively low when a leader initiates corrective
actions after a problem emerges. In this direction, developing transformational
leadership among operation managers is an essential activity due to the reasons that
such style sets vision for future, encourages employees to take risk, motivates employees
to achieve goals and supports employees to solve job problems in different ways.
Though transformational leadership is correlated with organizational performance,
the extent at which such leaders implement manufacturing strategies in order to
improve operational performance is not investigated yet. To bridge this gap, this study
reviews literature that explains the associations between transformational behaviors
and strategic aspects of manufacturing. Since many researchers have explained various
dimensions of transformational leadership (Podsakoff et al., 1996; Bass and Avolio, 1995;
Alimo-Metcalfe and Alban-Metcalfe, 2001) and manufacturing strategy (Ward and
Duray, 2000; Youndt et al., 1996), it is imperative that a particular dimension of
leadership and manufacturing strategy be focused upon. Therefore, this study focuses
on Bass and Avolio’s (1995) transformational leadership dimensions (idealized
influence, inspirational motivation, intellectual stimulation and individualized
consideration) and Ward and Duray’s (2000) dimensions of manufacturing strategy
(flexibility, quality, delivery and cost strategy). A systematic literature review was
conducted and relevant research studies are organized based on each relationship
between leadership behaviors and manufacturing strategy aspects.

Transformational leadership
Literature mentioned that leaders are not born rather are developed by mentors
(Kim, 2007). Thus, it is expected that newly developed leaders who is shaped by senior
leaders, will also develop future leaders. Supporting this notion, Lin and Huang (2005)
found out that highly tenured employees or leaders act as advisors or mentors.
The fundamental differences between management and leadership have high impact Transformational
on the way in which business processes are carried out in the organizations. In general, leadership
managers exercise control, emphasize rationality, expect employees to operate
efficiently, have impersonal attitudes towards achieving goals and importantly, do not behaviors
involve in risk-taking activities. In contrast, leaders make practical efforts to perform
tasks, have personal attitudes towards achieving goals, and importantly, perform
risk-taking activities (Zaleznik, 1992). Since leadership is a source of achieving and 207
sustaining competitive advantage, the process of transforming managers into
competent leaders will increase the performance of a current firm over its competitors.
Tannenbaum et al. (1961, p. 24) defined leadership as “interpersonal influence exercised
in situations and directed, through the communication process, toward the attainment
of a specified goal or goals”. In general, top-level leaders widely involve in designing
hierarchical structure, various polices development, and devising business strategies.
Middle-level leaders usually explain and interpret developed structure, policies, and
business strategies to their followers. And low-level leaders administer the structure
with the help of knowledge and rewards (Katz and Kahn, 1978). In general, Burns
(1978) classified leadership as transactional leadership and transformational
leadership. Transactional leadership is an exchange or trade-off process in which
leaders reward either employees’ efforts to fulfill obligations or their performance to
achieve predetermined goals (Bass and Riggio, 2006). It is in the forms of contingent
reward – informing employees that there is a correlation between reward offered and
efforts taken to achieve the set goals; management by exception (active) – monitoring
employees’ job performance and deviations from standard, if necessary, corrective
actions have been taken; and management by exception (passive) – carrying out
corrective measures once problems have been occurred (Bass, 1999).
On the other hand, transformational leadership behaviors inspire and motivate
employees to commit to achieve a shared vision and transform employees into creators
or innovators (Bass and Riggio, 2006). Transformational leadership is generally defined
as a relationship between a leader and employees. Within this relationship, employees
increase their performance and understand their potential due to the behaviors of leaders
(Northouse, 2007). These behaviors are idealized influence, intellectual stimulation,
inspirational motivation and individualized consideration. Idealized influence behavior
transforms leaders as role models for their employees, promotes leaders to risk takers
and polishes leaders to inspire ethical principles (Bass and Riggio, 2006). Inspiration
motivation behavior supports leaders to inspire and motivate employees by providing
a very challenging job. It facilitates leaders to communicate expectations and create
commitment among employees to achieve shared vision (Bass and Riggio, 2006;
Bass and Avolio, 1995). Researchers focus idealized influence behavior as a part of
charismatic leadership theory (Dubinsky et al., 1995). In parallel, others describe
combined idealized influence and inspirational motivation behaviors as charismatic
leadership behavior (Avolio et al., 1999). Intellectual stimulation behavior questions
assumptions held by the organizations and re-formulates problem-solving procedure.
In addition, it supports multiple paths to provide solutions for solving job problems
and restricts leaders from publicly criticizing employees (Bass and Riggio, 2006).
Individualized consideration behavior develops leaders as mentors. It also helps to
establish supportive-culture, assists in carrying out personalized interactions and
supports employee empowerment (Bass and Riggio, 2006).
IJOA Manufacturing strategy
22,2 According to Oliver (1997), sustained competitive advantage refers to as
implementation of a strategy that cannot be duplicated by other firms as well as not
implemented in any other firms. In specific, performance of a firm depends on how well
strategies are integrated with business functions. In this direction, Chandler (1962,
p. 13) defined strategy as “the determination of the long-term goals and objectives of an
208 enterprise, and the adoption of course’s of action and the allocation of resources
necessary for carrying out these goals”. Manufacturing industries strive to implement
various strategies to achieve significant market share growth. According to Barney
(1991), strategies improve operational performance only when such strategies are
rarely available, valuable, and inimitable. In this direction, Arafa and ElMaraghy
(2011) define manufacturing strategy as a sequence of decisions assessing
manufacturing system capabilities to achieve goals, which are a part of overall
business goals. Research studies have operationalized the manufacturing strategy with
the help of dimensions such as flexibility, quality, delivery and cost (Nobel, 1995;
Youndt et al., 1996; Ward and Duray, 2000).
Flexibility is the ability of a firm to increase or decrease productions to improve
performance. In particular, agility, adaptability and responsiveness are the dimensions
of flexibility (Youndt et al., 1996). In any organization, quality strategy focuses on
reducing the distance between customers’ expectations and customers’ satisfaction.
Furthermore, it concentrates on implementing continuous improvement process
on manufacturing function to deliver reliable products (Youndt et al., 1996). Delivery
strategy focuses on product or service delivery to a particular customer. It is
characterized as quick delivery and reliable delivery. According to Nobel (1995), the
former reduces lead time and the latter helps to retain customers. Low cost strategy
concentrates on reducing inventory and labor cost, improving materials shortage
reductions, and increasing capacity and equipment utilization (Nobel, 1995; Ward
and Duray, 2000).

Transformational leadership and flexibility

Flexibility refers to as the capability of a firm to satisfy customer demands and
quickly respond to sudden changes in the products created by its competitors (Vokurka
and O’Leary-Kelly, 2000). Strategy focusing on flexibility transforms production
system into highly adaptable and responsive system, and as a result, it reduces
manufacturing lead time and set up time. It also enables the system to accommodate
changes in scheduling of jobs and machines at any time (Ward and Duray, 2000).
Transformational leadership is found to have indirect association with flexibility
improvement through certain clusters of factors in relation to individual employees,
organization and environment. Researchers have proved that empowerment (Karuppan
and Kepes, 2006), organizational factors such as risk-taking, innovativeness,
technology, strategy and lean practices (Chang et al., 2007; Ndubishi et al., 2005;
Ward and Zhou, 2006; Ward and Duray, 2000) and uncertainty in the environment
(Swamidass and Newell, 1987) are the organizational investments that assist to
transform production system into flexible system (see Table I for more explanation).
Understanding the importance of such factors, transformational leaders empower their
followers by means of providing responsibilities, stimulating their cognitive abilities
and providing necessary resources that help them to create new ideas (Kark et al., 2003).
 Transformational
Reference Relationship Findings of study
leadership
Kark et al. (2003) Transformational This study, conducted among 888 employees and behaviors
leadership and 76 branch managers working in a large Israeli bank,
empowerment found that transformational leadership behavior was
positively related to employees’ empowerment
Ozaralli (2003) Transformational From 152 Turkish employees’ responses, this study 209
leadership and found that leaders’ transformational behaviors have
empowerment supported employees’ empowerment
Karuppan and Empowerment and This study had collected data from 170 operators,
Kepes (2006) flexibility 15 supervisors and four managers working in an
American manufacturing company and found that
increased involvement in decision making is correlated
with mix flexibility, i.e. number of products produced
Lee (2008) Transformational Responses are collected from 220 research and
leadership and development employees for this study and it is proved
innovativeness that transformational leadership behavior is positively
related to employees’ innovativeness
Dubinsky et al. Transformational Responses, collected from 140 sales employees and
(1995) leadership and risk- 34 sales managers, provided significant direct support
taking for the relationship between managers’ transformational
behaviors and employees’ risk-taking behaviors
Chang et al. Autonomy, Using 115 responses collected from Taiwanese
(2007) innovativeness, risk- motherboard manufacturing companies, this study
taking and flexibility proved that autonomy provided to employees helped to
improve new product and product-mix flexibility.
Organization innovativeness predicted new product,
product-mix, and volume flexibility. And risk-taking
ability improved new product flexibility
Waldman et al. Transformational A sample of 210 executives working for Fortune
(2001) leadership and 500 firms for this study found that leaders’ having
environmental charismatic behaviors improved organizational
uncertainty performance when they function under uncertain
environment
Swamidass and Environmental Data collected from 35 American manufacturing
Newell (1987) uncertainty and companies found that uncertain environment improved
flexibility manufacturing flexibility and managers’ strategic
decision making
Wang et al. Transformational This study found that leaders’ possessing charismatic
(2005) leadership and behaviors have successfully implemented ERP in the
technology organizations. Sample collected from 106 Taiwanese
companies also revealed that charismatic leaders
improve cohesiveness among ERP team members
through which they influence their performance
Ndubishi et al. Technology and This study proved from a sample of 92 Malaysian
(2005) flexibility semiconductor manufacturing firms that advanced
manufacturing technology used for selecting suppliers
had improved the level of manufacturing flexibility Table I.
Steed (2011) Transformational This study found that leaders having transformational Summary of the findings
leadership and lean behaviors enormously endorse implementation of lean on the association
practices practices. It is conducted among 25 healthcare between transformational
organizations located in the USA leadership and flexibility
(continued) strategy
IJOA
22,2 Reference Relationship Findings of study

Ward and Zhou Lean practices and Their study proved that lean practices (such as kanban
(2006) flexibility systems, lot size reduction, etc.) aimed to minimize waste
and produce high quality products reduced customer
lead time. Further, the sample of 1,757 American
210 manufacturing firms used for this study also confirmed
that using IT (for example, ERP) within a firm or
between the firms enables implementation of lean
practices and consequently, it supported to lower
customer lead time
Menguc et al. Transformational With the help 260 firms’ responses, this study found that
(2007) leadership and strategy transformational leadership is positively associated with
marketing differentiation strategy. It was reasoned that
they are very effective to read market situations and
update the capabilities of employees to meet customer’s
dynamic demands by providing job flexibility,
empowerment and motivation to employees
Ward and Duray Strategy and flexibility This study, carried out among 105 American firms, did
(2000) lend partial support for the hypothesis predicting the
positive association between competitive strategy and
manufacturing strategy. In specific, firms wanting to be
more distinctive in the market adopt manufacturing
strategy, which transforms production system into
Table I. flexible system

This empowerment technique supports employees to feel confident and improves their
capabilities of finding new and efficient ways to solve job problems. As a result,
they improve their organization’s ability to meet customer demands (Karuppan and
Kepes, 2006).
In order to reduce manufacturing lead time, firms mainly concentrate on
implementing IT system to integrate manufacturing functions with all the business
functions and implementing lean practices aiming at optimizing the resources (Ward
and Zhou, 2006). Interestingly, literature has explained how IT binds leadership and
reduction in lead time. For example, a research study revealed that leader’s knowledge
of business and IT provides support for application of IT system in the organization to
support, formulate, and enable strategies in relation to manufacturing (Armstrong
and Sambamurthy, 1999). In addition, many studies have observed that top
management support greatly influences information system performance (Neufeld et al.,
2007). Transformational leaders perceive that information systems’ actions are more
valuable as it provides leaders an unrestricted access to all available resources
(Beath, 1991). In addition, they concentrate on advanced manufacturing technologies
(for example, computer aided manufacturing and flexible manufacturing systems) as
such technologies support them to shorten time for new product development and
changeover time while producing different products (Wang et al., 2005) through which
leaders achieve flexibility (Chang et al., 2007). Thus, transformational leaders focus
on differentiation strategy to implement manufacturing strategy (Menguc et al., 2007;
Ward and Duray, 2000). In addition, idealized influence behavior encourages
employees to involve in risk-taking activities. As a result, they improve employees’
creative performance and organizational innovation or produce varieties of new Transformational
products and processes (Aragon-Correa et al., 2007). leadership
In specific, inspirational motivation and intellectual stimulation behaviors enable
leaders to design and optimize technology to generate quality ideas among employees behaviors
(Sosik, 1997; Bass, 2000). Neufeld et al. (2007) found from a study conducted on seven
organizations that implemented IT that employees accept IT implementation when
they work under charismatic leaders. Implementation of IT systems (for example, 211
enterprise resource planning (ERP) and decision support systems) is essential for
reducing lead time and set-up time (Huson and Nanda, 1995; Barua and Lee, 1997). And
a semiconductor manufacturing company also witnessed that investment in the shop
floor information systems dramatically reduced the scheduling complexity (Ovacik
and Uzsoy, 1994). Lareau (1991, p. 250) defined just-in-time (JIT) manufacturing
as “a manufacturing system should produce goods in response to customer demand –
the ‘pull’ – rather than producing goods and then trying to sell them – the ‘push’”.
According to Shah and Ward (2003), lean manufacturing is an integrated system
composed of elements such as JIT manufacturing, TQM, HRM practices and total
preventive maintenance (TPM). This high quality product generating system enables
firms to minimize waste, meet customer demands, improve employees’ performance,
reduce customer lead time and cycle time, and lower manufacturing cost (Shah and
Ward, 2003). Fortune 500 companies witnessed that transformational leadership
behaviors are necessary to implement lean practices within the organization (Herkness,
2005; Steed, 2011). While firms adopt lean practices, problem solving capability and
higher response rate have commonly been reported as production issues. To mitigate
those issues, employees are provided sufficient autonomy over their tasks (Turner et al.,
2002). In this moment, it should be noted that transformational leaders are social
architects, who provide employees autonomy to perform highly challenging tasks
effectively. Consequently, employees achieve job satisfaction (Bass, 1999).
Idealized influence behavior facilitates transformational leaders to set a vision for
future and it is believed that when organizations implement TQM practices, leaders
exhibit transformational behaviors (Puffer and McCarthy, 1996). Supporting this
notion, Shea and Howell (1998) also proposed that behaviors of idealized influence
and inspirational motivation develop employees’ behaviors necessary to produce
TQM related outcomes. Birasnav et al. (2011) investigated the relationship between
transformational leadership and KM process via HRM practices. Their study
highlighted that in order to promote knowledge creation among employees,
transformational leaders voluntarily offer employees monetary and nonmonetary
rewards. Thus, they motivate and inspire employees to meet unambiguous
expectations, accomplish a shared vision and develop team sprit (Bass and Riggio,
2006). Transformational leaders also encourage employees to participate in training
programs to learn waste reduction techniques. Consequently, they improve employee’s
self-efficacy to achieve TQM outcomes (Zhu et al., 2005; Shea and Howell, 1998). These
leaders make their employees aware of the fact that work is more important and
valuable and so employees feel a sense of work centrality (Bass, 1999). For instance,
when employees operate machines, they extensively take care of equipment
maintenance and monitoring instead of having the feelings that this task is not
related to the job to be performed. In this direction, transformational leaders encourage
employees to implement TPM technique – an approach of considering maintenance
IJOA of equipment and tools as an integral part of job tasks to identify malfunctions
22,2 warnings ( Jayaram et al., 2010). Further, Waldman et al. (2001) proved that charismatic
leaders achieve highest level of their performance when they function under uncertain
environment. It should be noted that firms would provide more importance to
flexibility when environmental uncertainty exists (Swamidass and Newell, 1987).
Based on the above arguments, it is proposed that:
212 P1. Transformational leadership behaviors have significant and positive
association with manufacturing flexibility strategy.

Transformational leadership and quality

According to Lemak and Reed (2000), TQM means that top-level leaders having
transformational behaviors inspire and motivate all employees to focus on immediate
customer demand and quality service. In addition to provide training to employees on
using control charts, programs for developing interpersonal skills and team
participation would also support employees to focus on quality through customer
point of view. In line with Zhu et al. (2005), transformational leaders encourage
employees not only to attend training programs to enhance their level of human capital
but also to gain knowledge on statistical process control. Since charismatic leaders
suggest employees to accept technology implemented in their firms (Neufeld et al.,
2007), it is also expected that transformational leaders will invest on technologies
to monitor quality for example, real-time process control systems – a technology
to ensure maximum production in manufacturing industries (Idris et al., 2008). Further,
Aragon-Correa et al. (2007) found that transformational leaders encourage
organizational learning – a kind of learning from internal and external
environment, in particular, learning from new processes and products through
which organizations improve its innovative capability. In this way, transformational
leaders install new machineries and motivate employees to learn from it. Firms
focusing on quality improvement will also concentrate on developing new processes
for their old and new products. Such process redesign supports to lower process cost
and improves the quality of service delivered (Reijers and Mansar, 2005). Interestingly,
new process development is closely associated with innovation, which is an outcome of
a learning process. However, the level of innovation depends on the extent at which
newness added into the product under development. Innovation, in general, is of two
types: product innovation – introduction of new products or services to meet customer
demand and process innovation – newness in the business operations such as job
specifications, work flow process, or machineries to deliver a new product (Damanpour
and Gopalakrishnan, 2001).
Many research studies have found that transformational leadership behaviors
are positively associated with innovation ( Jung et al., 2003; Aragon-Correa et al., 2007;
Zhu et al., 2005). This relationship is either moderated or mediated by
innovation-supportive climate, organizational learning, or support for innovation
(Aragon-Correa et al., 2007; Jung et al., 2003). In specific, Mumford and Licuanan (2004)
stated that the level of process innovation is low when there is no identifiable leader,
particularly, transformational leader. It was reasoned that team members were lacking
enormous interactions among themselves and between leaders. Providing support to
this notion, Aragon-Correa et al. (2007) also found that transformational leaders
increase the rate of introduction of new products into the market as well as frequently Transformational
change the operations-related practices. leadership
Focusing on the direct association between transformational leadership and quality,
a longitudinal study conducted by Keller (1992) proved that project members who behaviors
were working under charismatic leaders reported of having attained high project
quality. In order to improve product quality as well as continuous improvement
process, transformational leaders establish quality-supportive environment in their 213
organizations, coordinate all the departmental functions together to achieve common
goals with the help of their communication skills and promote empowerment among
employees (Berson and Linton, 2005; Geralis and Terziovski, 2003; Goodale et al., 1997).
Further, such leaders follow ethical standards, respect and coach their employees and
improve employees’ morale and as a result, employees pay more attention towards
ensuring the quality of services (Jabnoun and Rasasi, 2005; Hui et al., 2007). Employees
also perceived of achieving service quality as they were offered rewards in pursuit of
achieving organizational performance (Zhu et al., 2005; Goodale et al., 1997). Table II
shows the findings of the research studies investigated the associations between
transformational leadership and quality-related factors. Based on the above
arguments, it is proposed that:
P2. Transformational leadership behaviors have significant and positive
associations with quality-oriented strategies.

Transformational leadership and delivery

Delivery strategies are formulated in pursuit of increasing delivery speed and
improving delivery reliability. According to Hill (1989), delivery speed refers to as
the speed at which a particular firm fulfills a customer order in comparison to its
competitors, whereas reliability refers to as a firm’s commitment or promise of
delivering a particular order on or before the due date. Delivery strategy is frequently
formulated in the organizations that aim to add more value to customers. In this
direction, they improve commitment among employees since committed employees
depend on the organization and so they exert ample efforts to satisfy customers
(Morrow, 1993; Meyer and Allen, 1988; Parasuraman et al., 1991).
From a systematic literature review, Emery and Barker (2007) listed out factors such
as organizational commitment, organizational dependability, willingness to participate
in quality improvement, organizational participation, work ethic and job satisfaction
that are associated with customer satisfaction. It is important to understand that
transformational leadership characteristics are highly related to such factors. For
example, Podsakoff et al. (1996) found that articulating vision behavior has significant
impact on organizational commitment, and individualized support has positive impact
on civic virtue – a form of organizational participation. Walumbwa et al. (2005) found
that transformational leaders are significantly and positively associated with
organizational commitment and job satisfaction after controlling for employee’s age,
education, tenure, rank and gender. Emery and Barker (2007) mentioned that
organizational commitment is correlated with organizational dependability. Following
the notion that customer satisfaction is the function of the delivery performance,
Gonzalez and Garazo (2006) asserted that the behaviors and attitudes of employees
having contact with customers affect customer satisfaction and service quality. Since
transformational leaders are well versed with implementing new technology, it is also
IJOA
Reference Relationship Findings of study
22,2
Keller Transformational This longitudinal study conducted among three research and
(1992) leadership and development organizations revealed that groups of employees
quality working for projects attained project quality when they were led
by leaders having both charismatic and intellectual stimulation
214 behavior. In parallel, project managers were also perceived the
association between transformational leadership and project
quality. Since these leadership behaviors always encourage
creativity among employees, they deliver high performance while
performing research projects than developmental projects
Berson and Transformational With the help of a sample of 511 researchers and
Linton leadership and 876 administrative employees working for an Israeli
(2005) quality telecommunication firm, this study confirmed that
transformational leaders establish quality-supportive
environment more frequently than transactional leaders. Since
transformational leaders have extraordinary communications
kills and always emphasize empowerment among employees,
they have great influence over their employees on improving
product quality
Jabnoun Transformational 240 responses of customers and 201 responses of employees
and Rasasi leadership and collected from six hospitals for this study provided support to the
(2005) quality relationships between transformational leadership behaviors and
service quality dimensions. As transformational leaders are
following ethical standards, respecting and coaching employees,
and improving employees’ morale, employees had paid more
attention towards ensuring the quality of customer services
Hui et al. Transformational With the help of a sample of 511 frontline employees, this study
(2007) leadership and found that ethical leadership was positively related to employees’
quality service quality
Geralis and Empowerment and This study found that empowered employees involved in
Terziovski quality activities that improved customer service, customer satisfaction
(2003) and customer loyalty. It also found that empowered employees
have high morale and job satisfaction, which positively affected
the service quality. These results were derived from a sample of
320 bank employees
Goodale Empowerment and From a sample of 89 customer representatives, this study found
et al. (1997) quality that empowered employees perceived improvement in the service
quality. It was reasoned that such employees were satisfied with
their job as they perceived improvement in the quality
Zhu et al. Transformational From a sample of 170 Singaporean firms, this study found that
(2005) leadership and transformational leadership behaviors are positively associated
reward for service with reward strategy, which was persuaded by leaders in pursuit
of improving organizational performance. Though transactional
leaders frequently devise reward strategy, transformational
behavior also offers rewards to motivate employees towards
Table II. achieving organizational goals
Summary of the findings Goodale Reward for service This study found that both intrinsically motivated and
on the association et al. (1997) and quality extrinsically employees perceived attainment of service quality.
between transformational In addition, the perception level of achieving service quality was
leadership and quality higher for employees who were intrinsically motivated than were
strategy extrinsically motivated
expected that organizations led by transformational leaders will provide fast delivery to Transformational
customers as well as will attempt to meet delivery promises. Trofino (2000) also proved
that leaders who have a futuristic vision achieve excellence in service delivery.
leadership
According to Handfield and Pannesi (1992), supplier relationship and decision-making behaviors
in the manufacturing department are the important factors of increasing delivery speed.
In this direction, it is transformational leaders who maintain very close relationship with
their suppliers and encourage their employees to make quick decisions by providing 215
empowerment (Fredendall et al., 2005; Berson and Linton, 2005), and as a result, they
enhance delivery performance. In addition, they are also encouraging implementation of
advanced manufacturing technologies as they achieve improvement in the delivery speed
(Jayaram et al., 2000). More explanation of some of the above research studies is shown in
Table III. Based on the above arguments, it is proposed that:
P3. Transformational leadership behaviors are positively related to delivery
speed and reliability.

Transformational leadership and cost

It is also expected that transformational leaders will focus on developing strategies to
reduce unnecessary costs associated with business functions. Thyer (2003) stated
that when transactional leaders are trained for transformational leadership behaviors,

Reference Relationship Findings of study

Fredendall et al. Transformational This study was conducted among 2,500 Institute of
(2005) leadership and JIT in Supply Management’s members to investigate the
relations to supplier associations between visionary leadership and
relationship cooperation with suppliers. It is revealed that
visionary leaders maintain very close relationship
with their suppliers and influence suppliers to
provide feedback on quality and delivery
performance
Neufeld et al. (2007) Transformational They conducted a survey among 209 employees
leadership and involving in IT implementation. It was found that
information system charismatic leaders emphasize the need for achieving
organizational goals, promote empowerment, build
social networks and concentrate more on increasing
resource capabilities. So employees voluntarily
accept new technology implemented in their firms
Jayaram et al. (2000) Information system Data collected from 57 suppliers of the American
infrastructure and automotive industry confirmed that establishing
delivery speed and information system infrastructure was correlated
reliability with delivery speed and reliability. In specific,
designing and integrating all the manufacturing
functions together provided support to achieve
improvement in deliver speed of orders. Table III.
Implementing advanced manufacturing technologies Summary of the findings
such as robotics and flexible manufacturing system on the association
also helped to ensure delivery reliability. This study between transformational
also proved the positive association between IT and leadership and delivery
delivery performance strategy
IJOA they assisted organizations to improve overall performance as they lowered
22,2 employees’ absenteeism, increased employees’ morale and creativity and followed
cost savings methods. Though these findings are observed from healthcare industry,
these are significantly relevant in this nexus of transformational leadership and cost.
Ward and Zhou (2006) described that lean practices facilitate firms to reduce inventory
investment, enhance capacity and equipment utilization and reduce production cost.
216 As a result, such practices support to lower overall cost. In this direction, Steed (2011)
proved that transformational behaviors are essential to deploy lean management
practices in any organizations. Supporting the above notions, Menguc et al. (2007)
found that transformational leadership behaviors are positively associated with
low cost strategies. Further, Ammeter and Dukerich (2002) found that leaders
communicating business goals to employees, following ethical standards and fostering
empowerment helped to reduce overall project cost. In specific, it is charismatic
and intellectual stimulation behaviors predominantly support cost performance
(Keller, 2006). Based on the above arguments, it is proposed that:
P4. Transformational leadership behaviors are positively associated with
manufacturing cost strategy.

Discussions and conclusion

Literature written in the field of leadership had given enough space for
explaining transformational leadership development programs in the context of
implementing change management process in relation to operational methods and
achieving competitive advantage. It is reasoned that transformational leaders
effectively implement change management process through achieving a vision for
future by influencing their employees. On the other hand, transformational leaders
establish IT system and organizational culture and implement KM process,
TQM practices and HRM practices in their organizations. As a result, they become a
source for achieving and sustaining competitive advantage (Barney, 1991; Reed et al.,
2000). Very few research studies have explained the direct associations
between transformational behaviors and manufacturing oriented practices (Puffer
and McCarthy, 1996; Reed et al., 2000; Steed, 2011) and however, the impacts of
transformational leadership on strategies in relation to flexibility, quality, delivery and
cost are not explained in detail as well as not empirically examined in the literature.
Taking a first step in this direction, efforts were initiated to investigate in what ways
transformational leadership style exhibited by both top-level managers and middle-level
managers supports implementation of manufacturing strategies such as flexibility,
quality, delivery and cost strategies. Research studies that explain direct and indirect
influences of transformational leadership on each manufacturing strategy were selected.
Based on the findings of these studies, this study had derived four propositions.
Transformational leaders explore new relevant technologies implemented in the
industry and adapt and implement those technologies in their firms to reduce
manufacturing lead time and set-up time. Simultaneously, they make efforts to
implement lean manufacturing practices comprising of JIT manufacturing, TQM
practices, HRM practices, and TPM. These practices transform production system
into more flexible system, create new products, and increase customer satisfaction.
Further, transformational leaders enhance flexibility through empowering
employees, allowing high-risk projects, and investing on research and development.
Importantly, their influence on flexibility is high when they perceive uncertain Transformational
environment. Studies have also emphasized the importance of developing leadership
transformational leaders for implementing quality management programs in firms
(Waldman, 1993; Trofino, 2000). Top-level transformational leaders set goals for behaviors
lowering defective rate and simultaneously, they develop and disseminate quality
policy to all the departments. Middle-level leaders explain quality-related goals and
ways to accomplish these goals to their employees. For this purpose, they create 217
quality circles to discuss job problems and its solutions in order to effectively work
towards achieving goals. Further, in order to improve product or service quality,
top-level leaders establish empowerment culture and offer monetary rewards to
extrinsically motivate employees, whereas middle-level leaders design jobs that
intrinsically motivate employees. Since transformational leaders have willingness to
invest on new technologies, they concentrate on technological mechanisms such as
robotics and ERP to deliver customer orders as quick as possible. They also suggest
employees use technology to find shortest path to reach customer destinations in order
to deliver their order before the date of delivery. In addition, these leaders also focus on
low cost strategies, in the form of optimizing resource utilization and reducing
production cost and inventory cost. At the same time, they maintain production system
more responsive to their customers.
It is also important to empirically examine the mentioned propositions between
transformational leadership behaviors and manufacturing strategies such as
flexibility, quality, delivery and cost strategies. Developing a measure for each
construct of leadership behavior and manufacturing strategy is a prerequisite for
conducting empirical research study. In this direction, Podsakoff et al. (1996) developed
a measure for transformational leadership that comprised of six factors. Bass and
Avolio (1995) have developed multifactor leadership questionnaire (MLQ) that includes
transformational leadership measures and Alimo-Metcalfe and Alban-Metcalfe (2001)
have also developed a new transformational leadership measure, which was analyzed
in British organizations. On exploring measures for manufacturing strategy, it was
found that Ward and Duray (2000) have constructed a 15-item measure for
manufacturing strategy and Youndt et al. (1996) developed a 31-item measure for
manufacturing strategy. With the help of these measures, the propositions explaining
the associations between transformational leadership behaviors and manufacturing
strategies will be empirically examined and at what extent transformational behaviors
explain each strategy could also be found in future.
This study has a number of implications for operation managers. Firms must
organize training programs to develop transformational leadership among managers
as this development, in general, will help firms to improve overall performance.
Top-level transformational leaders should empower their operations managers by
means of providing responsibilities for certain manufacturing functions, providing
authority to make decisions, and giving autonomy to perform certain operational
activities. In this direction, top-level leaders must establish empowerment-supportive
organizational culture and its importance should be informed to all of their employees.
When empowerment is practiced throughout firm, product and process flexibility will
be improved and at the same time, quality of product and service would also be
enhanced. Further, top-level transformational leaders must clearly express the
business goals to be achieved to their employees through a public meeting.
IJOA Middle-level managers can create goals for their departments in alignment with
22,2 business goals and these should be conveyed to employees through notice boards and
emails. Managers must be in close contact with their customers and suppliers and must
reward their employees who are in frequent contact with customers. Further, managers
must exercise control over the resources and operational functions in order to reduce
cost growth while carrying out project activities.
218 This study also has a number of implications for researchers. Extension of this
study will provide answer to – for what reason transformational leaders formulate
manufacturing strategies. Many studies have investigated the impacts of
manufacturing strategy and operational performance (Swamidass and Newell, 1987;
Youndt et al., 1996; Ward and Duray, 2000). In this direction, this study will be
extended to analyze the role of transformational leadership in the association
between manufacturing strategy and organizational performance. In addition, the role
of transformational leadership in the relationship between manufacturing strategy and
competitive advantage will also be examined in future. Importantly, studies found that
the influence of transformational leaders on employees’ human capital benefits is
greater in private organizations than public organizations (Birasnav et al., 2010). In this
direction, researchers can also examine the differences in transformational leaders’
contribution between public and private companies while implementing
manufacturing strategy. Further, the contribution of transactional leadership on
implementing manufacturing strategies will also be focused and compared with the
contribution of transformational leadership in future.

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About the author 223

Dr M. Birasnav received a Bachelor of Engineering degree in mechanical engineering
from Bharathiar University, Coimbatore; a Master of Engineering degree in industrial
engineering from Anna University, Chennai; and PhD from Indian Institute of Technology
Roorkee in management studies. His research papers are published in international
journals and are presented in international conferences. At present, he is working as an
Assistant Professor of quantitative methods in the School of Management, New York Institute of
Technology, Kingdom of Bahrain. M. Birasnav can be contacted at: birasnav@gmail.com

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