The Influence of Transformational Leadership on Organisational Commitment in the Banking Sector of Pakistan

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The British University in Dubai (BUiD)
The purpose of this dissertation is to learn about degree of diffusion of transformational and transactional leaderships across the banking sector in Pakistan and its subsequent impact on innovation and organisational citizenship behavior that entails ramifications on employee perception of organisational commitment. As organizations try to keep pace with the ever-increasing world of competition and changing industry dynamics, a considerable pressure is being put on the leaders to ensure productivity and sustained profitability. This dissertation tries to explicate the prevailing leadership style in the banking sector that ensures this profitability. The research general framework was exploratory in nature since a small sample of bankers from Pakistan's banking sector was chosen to be interviewed. The researcher tried to explicate subjective perspective of the interviewees to probe into the leadership style prevailing in banking sector. Questions were semi structured and few were theory-driven making the study design iterative. Twenty managers were chosen through theoretical sampling from public and government, private sector and foreign banks. A content analysis was carried out to interpret the data collected from the participants and all transcripts were diligently reviewed to identify recurrent themes. After reviewing and discussing the leadership styles and their transformation in Pakistan’s banking sector, one can understand that the prevailing style is transactional one with transformational aspects. A degree of diffusion between transformational and transactional leadership traits was found in the banking sector of Pakistan where leadership styles are greatly influenced by culture, religion and exposure to western education. From interviews with the bankers it is evident that the prevailing leadership style is transactional with a mix of transformational aspects. This inclination that is being shown towards transformational leadership style has not only enhanced the performance of the banks in Pakistan but also introduced job and pay satisfaction as well as organisational citizenship behaviour and commitment among the employees. The uses of totally self reported measures raise concerns over the authenticity of the results. Future studies should incorporate multiple sources of data collection. The study was based on a small sample so generalization of findings is a research constraint that researcher acknowledges. Since very limited literature is available on Pakistan and its banking sector and leadership styles, evaluating the implications of the study was another limitation. It is concluded that policy makers and HR of banks should focus on leadership development programs and workshops to ensure institutionalisation of transformational leadership. Last but not least, conclusions are drawn from organizational study and recommendations are made to improve the situation arising due to the problem. In doing so, linkage with relevant global experiences and literature review is also carried out.
transformational leadership, organisational commitment, banking sector, Pakistan, organisational citizenship behavior, leadership styles