Abstract

Researchers and Academicians have given substantial amount of attention to investigate the link between leadership styles and organizational performance. However, the link between these two constructs remains unclear.  The object of this paper therefore was to clarify the link between leadership and organizational performance by assessing the relationship between these two constructs with the focus on banking sector.  This study reviewed 110 valid questionnaires sent to a randomly selected employees comprising of middle level managers of a banking company operating in the State of J&K.  The study used a well established scale MLQ developed by Bass and Avolio (1997) to measure leadership styles.  Organizational performance was measured using seven subjective performance measures- Sales Growth, Market Share, Profitability, Quality of Products, New Product Development, Employee Satisfaction and overall Organizational Performance.  The results of this study indicate that Leadership styles have a significant impact on organizational performance. The conclusion reached that there are no one best leadership style that can fit in all situations and organizational leaders should apply the mix of both transformational and transactional leadership styles to address various issues of organizations.

Key Words:  transformational leadership, transactional leadership, organizational performance, banking sector, India.