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cognition directly, over and above the indirect influence through information- processing phases. One might expect this conclusion, as leadership is a relatively comprehensive process that guides, structures, and facilitates all aspects of activities and relationships in a group. The direction of influence of the two leadership types is congruent with Hypotheses 1 and 2. The influence of both transformational and transactional leadership is strong and positive.
Probably the most interesting result of the study is that the effect of contingent reward leadership and organizational learning is practically equally strong as the effect of transformational leadership. Hence, this study offers no support for Hypothesis 3. The classical theoretical arguments presented in the literature review clearly argue that transformational leadership is a much more effective type of leadership in various settings and with various leadership outcomes. However, the results support the more recent theoretical developments of Vera/Crossan (2004) that propose a contingent approach toward leadership and organizational learning. In the present study, contingent reward leadership (as a major part of transactional leadership) proves to be even slightly more effective in facilitating organizational learning than transformational leadership.
Three reasons can contribute to such finding. First, contingent reward leadership enables followers to perceive the consistency in leadership behaviour as well as the reliability of their leaders. The leader secures agreements on the requirements of the job and rewards others in exchange for satisfactorily carrying out the assignment. The workers can rely on their leaders honouring their efforts through instrumental support or assistance in confrontations with superiors. From the perspective of followers, the consistent honouring of transactional agreements builds trust, dependability, and perceptions of consistency with regard to leaders, each of which form a basis for effective group performance (Avolio/Bass, 1991).
A second factor that may have affected the results of the study is the context. Although in its essence transformational leadership may be universally effective (Bass 1997), its effectiveness varies across different contexts. In a similar manner, the effectiveness of transactional leadership may also vary across different contexts. Especially in rapidly changing transitional economies, where many managers have not yet mastered higher forms of leadership, the kinds of behaviours specified by contingent reward leadership might be relatively more effective than in nations with a long tradition of management practice and science. Contingent reward leaders clarify each person?s tasks, responsibilities, and expectations, find a common meaning as to what is fair and only give rewards for fulfilling the requirements. They emphasize goal-setting, giving instructions, clarifying structures, and conditions. These qualities were lacking in the previously predominant leadership styles of past. In addition, without a solid base of transactional leadership, transformational leadership might not develop to its full extent.
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Finally, it is also possible that organizational learning belongs to a group of leadership outcomes for which contingent reward leadership is especially effective. In their meta-analysis, Judge and Piccolo (2004) examine the effectiveness of various leadership behaviours against six outcome criteria and found that contingent reward leadership was more effective than transformational leadership for three of them (follower job satisfaction, follower motivation, and leader job performance). The meta-analysis did not include organizational learning as the outcome criteria. However, since contingent reward types of behaviours are essential facilitators of the organizational learning process, nurturing this aspect of transactional leadership might be just as important as transformational leadership.
Implications for managerial practice
New information and knowledge is constantly emerging from sources within and outside the company. Channels and conduits for their distribution are evolving. An ever-present pressure to interpret this information in ways that enable emerging business opportunities to be understood and exploited exists. The role of leadership in this context is crucial. Above all, leaders need to promote learning at all levels and to create opportunities for people to acquire information from heterogeneous sources while leaders have a particularly strong impact on the acquisition of information. Leaders also need to establish opportunities for employees to distribute information, meet, discuss ideas, and facilitate interpretations based on wider perspectives. By emphasizing the company?s vision and mission and personal encouragement and empowerment, leaders need to encourage employees to act upon this information and support changes that will contribute to organizational performance.
Secondly, both transformational and contingent reward leadership seem to be equally important for facilitating organizational learning. Leaders should therefore focus on developing both types of leadership, depending upon the situation. First, they should build respect and trust based on working with individuals, on setting up and defining agreements in order to achieve specific work goals, on clarifying expectations, and on providing rewards for the successful completion of tasks. Apparently, a significant number of subordinates or situations call for instrumental approaches to convincing people that learning does pay off – individually as well as organization-wide. Only when they have built solid transactional foundations can they extend them by adding typical transformational behaviours that inspire followers to go beyond their self- interest and exert extra effort to achieve the shared vision of becoming a learning organization.
The findings at hand also suggest that leaders can influence some elements of the organizational learning process directly and others only indirectly. From this perspective, the information-acquisition phase seems to be crucial. It is of the
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utmost importance for leaders to facilitate and encourage employees to use all of the available sources, channels, and means of both internal and external information acquisition. They should create opportunities for people to meet and talk, be alert to changes in the business environment, and above all create an open organizational culture wherein trust and cooperation are core values. Contributions
This study makes several important contributions to the field. First of all, it integrates two previously relatively disparate fields of organizational learning and leadership from an empirical perspective. Secondly, the study empirically proves that transformational leadership strongly affects organizational learning. Thirdly, the study also establishes a strong relationship between contingent reward leadership and organizational learning, thus highlighting the importance of such a type of leadership for successfully developing a learning organization. Fourthly, the study provides empirical confirmation for the contingent perspective towards leadership and learning (Vera/Crossan 2006), which claims that the most effective strategic leaders are those best able to function in both transformational and transactional modes, depending upon the situation. Finally, the study expands the scope of empirical research by examining leadership and the learning process in the context of a small transitional economy. By testing existing (predominantly Anglo-Saxon) theories of leadership and organizational learning in different cultural, economic, and political contexts, the study enhances the generalizability and validity of these theories and constructs. Limitations and directions for further research
Some of the study?s strengths are also its weaknesses. From the methodological point of view, the sample and context are always an issue. While using Slovenia as a target population contributes to the research?s generalizability, it is also a weakness. Further expansion of the research to other nations (with different national cultures, nations of different sizes, histories, etc.) would significantly contribute to understanding the link between leadership and learning. The second key limitation is the cross-sectional nature of the study. It is possible that at least certain aspects of leadership and its impact on the learning process emerge with some kind of time lag. A longitudinal treatment of data might yield additional insights into the impact of leadership styles and organizational learning. Thirdly, due to its low reliability, it was not possible to measure the higher-order factor of transactional leadership (as specified by the MLQ). Instead, we use contingent reward leadership (which shows signs of high reliability and validity) as a proxy for transactional leadership.
Fourthly, this research is limited to the direct effect of leadership on organizational learning. However, moderating variables, such as organizational culture and structure, might attenuate this effect. Future research should extend
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the understanding of the leadership style as antecedent to the organizational learning process by involving some moderating and mediating variables. Using in-depth interpretive studies to answer many of the ?hows? emerging, this article may generate additional insights into this clearly intriguing area of research.
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