TRANSACTIONIONAL LEADERSHIP AND EMPLOYEE JOB SATISFACTION

ABSTRACT

This research work is to examine Transactional Leadership and Employee job satisfaction (A Case Study of Selected Multi-national Firm in Rivers State). Multinational firm are deeply concerned with understanding, searching and developing leadership that will facilitate the attainment of organizational goals and objectives. Transactional leadership is discerned to play a vital role in establishing high performing ms and employee job satisfaction through the use of rewards and motivational incentives leaders are facing greater challenges than ever before due to the increased environmental complexity and the changing nature of the organization. If we trace ck into the history, it becomes evident that leaders should have the ability to draw out changes in relation with environmental demands. The current era not only demands having a competitive edge and sustained profitability but also the maintenance of ethical standards, complying with civil commitments and establishing safe and equitable work environment. Transactional leadership is one of the critical elements in enhancing employee job satisfaction, and organizational performance. Being responsible for the development and execution of strategic organizational decisions, transactional leaders have to acquire, develop and deploy organizational resources optimally in order to bring out the best from the employee for the purposed of achieving organizational goal.

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Transactional leadership is been considered as very important aspect of managing people, it’s contribute to the success or failure of any organization. For multi¬national firm to succeed and also to achieve its aims and objectives the organization must have an effective leader and for that leader to be very effective, he or she must be able to exercise all the objectives and functions of leadership. The objective of leadership is to achieve the aims and goals of the organization, while the functions of leadership refer to the activities and processes that enable organization to achieve its goals.

To do these, the key will be to support leaders’ actions. The reason for leadership is followership, these simply means that followers willingness to accept directives from the leader and the influence of a leader on followers, make him or her a leader. However, leadership can be viewed as any act or performance by group member that advances the effectiveness of the group or organization.

Max Weber in 1947 was the first to introduce the transactional style of leadership and thereafter Bernard Bass in 1981. Transaction style of leadership is most often used by managers to motivate employee for high performance in the organization.

The attention of transaction leader is on the basic management function of controlling, organizing and short-term planning. Successful leaders that have put this style of leadership into test are McCarthy and Gaulle. Transactional leadership focuses on the interpersonal transaction between managers and employees. Leaders are seen as engaging in behaviours that maintain a quality interaction between themselves and followers. Robert Kreitner & Angelo Kinicki (2004).

The power of transactional leaders comes from their formal authority and responsibility in the organization. The transactional leader believes in motivating employee or followers through a system of rewards and punishment. If an employee does what is desired by the leader, the leader will reward him or her and if he does not, punishment will follow. The transaction between manager and employee enable multi-national firm to achieve routine performance goals. This transaction involves four dimensions which include:

Contingent Rewards: Transactional leaders link the goals to rewards, clarify expectations, provide necessary resources, set mutually agreed goal, and rewards for high performance. Transactional leaders also set specific, measurable, attainable, realistic and timely (Smart) goals for their followers.

Active Management by Exception:       Enable

transactional leaders to monitor the work of their subordinates, and take corrective action to prevent mistakes and deviation from rules and standards.

Passive Management by Exception: Transactional leaders intervene when standards are not met or when performance is low. The leader use punishment as a response to correct low performance by the subordinates.

Laissez-Faire: The transactional leaders provide an environment, where the subordinates will have opportunities to be involved of decision making process. The leader delegate responsibilities and involves subordinates in decision making process in the organization. Transactional leader considers both the needs of the company and his employees and seeks practical ways to achieve them.

Transactional leadership is a style of leadership that focuses on the transactions between leaders and their followers (Bass, 1990) while transformation leadership is a leadership approach that causes change in individuals (Bass, 1990). In view of this, the project research is to examine critically the effect of transactional leadership and employee job satisfaction, with the aim to finding out if a transactional leadership could in one way or the other affect the employees’ job satisfaction positively or negatively in multi-national firm. But in most cases a transactional leader that is very effective, taking into consideration rewards in order to influence its subordinate towards achieving the organizational goals. Transactional leader is therefore dynamic life-giving element in every multi-national firm, its success rest on the transactional leadership. Effective application of transactional leadership ensures employee’s job satisfaction that leads to optimum performance. Most motivational leaders and managers in the organization are based on-transactional applications of reward power, that is, the use of various incentives such as salary raised bonus and promotions to get things done. These rewards of various incentives by transactional leaders and managers ensure employee’s job satisfaction and motivation in multi-national firm like Agip & NLNG.

Therefore, the effects of this research in multinational firm, simply means that results which a leader or manager expects from the transactional leadership he or she uses, to ensure employee’s job satisfaction. It is the leader who manage the organization resources both human and non-human resources by planning, directing and putting all the resources into more efficient use. The employee job satisfaction of any multi-national firm to a considerable extent depends on the capabilities of the transactional leader. However, the focus of this study centres on the transactional leadership and employee job satisfaction.

1.2 STATEMENT OF THE PROBLEM

The problem of this study is to determine the relationship that exists between transactional leadership and employee job satisfaction as measured by the performance of multi-national firm in Rivers State. It is believed that human wants are unsatisfied and the means of satisfying them are limited, the effort by multinational firm towards employee job satisfaction is inevitable, leaders affect employee job satisfaction (Chen, 2008, Ozmen, 2008, Finn, 2008) and employee satisfaction affects work-related outcomes (Chow & Keng- Howe, 2006) such as employee productivity, employee retention and organizational performance. The general problem is that leadership is often focused on the tasks that make employees more productive without realizing the impact leadership style has upon satisfaction and performance. Duserick et al (2007) pointed out that effective  leadership leads to high employee job satisfaction that leads to optimum productivity. The lack of current knowledge on the subject and between these variable   hinders our ability to place value on transactional leadership and its importance on employee job satisfaction in multi-national firm.

1.3 OBJECTIVE OF THE STUDY

In evaluating the identified problems of this study, the objective of the study will include the following:

1)     To know the important is of transactional leadership.

2)     To find out how transactional leadership can enhance employee job satisfaction.

3)     To understand the relevance of transactional leadership and employee job satisfaction in multi-national firm.

4)     To identify the role and benefit of transactional leadership and employee job satisfaction.

5)     To suggest useful recommendation based on the finding of the study.

1.4 SIGNIFICANCE OF THE STUDY

This research will be beneficial to the multi-national firm, private companies, employees of government and the public at large. It is assume that at the end of this study, multi-national firm and interested organization will gain from this research work, to the multinational firm, this research will provide sufficient information on transactional leadership and also its application to improved employee job satisfaction, thereby providing a measure for effective transactional leadership. This study will also contribute to the expansion of the total knowledge based in this aspect of study and in the future will often be a basis for future researchers as regards to reference materials when analyzing other issues related to this study.

1.5   RESEARCH QUESTION

1)     Does effective and efficient transactional leadership affect employee job satisfaction?

2)     To achieve good transactional leadership, what are some of the organizational goals?

3)     What ways does’ transactional leadership contributes to employee job satisfaction in multi-national firm?

1.6   RESEARCH HYPOTHESIS

This research work will be guided by the following null hypothesis:

Ho1: There is no relationship between transactional leadership and employee job satisfaction.

H02:        Effective transactional leadership do not improve employee job satisfaction.

Ho3:        Staff dedication to duties and loyalty to authorities does not enhance organizational progress.

1.7   SCOPE OF THE STUDY

The scope of this study is limited to selected multinational firm in Rivers State as a case study, such as AGIP and NLNG to be specific in Rivers State and the area, of research include transactional leadership and employee job satisfaction.

1.8 LIMITATION OF THE STUDY

There were so many challenges encountered in the course of this research work. The most silent ones have been itemized as follows:

1)     Inadequate Funds: Initially, there  was no

Enough money to commence the   research

Work; this obstacle actually delayed the commencement of the project. Even when the fund finally come, it was not enough to see the project through. But thank God that the Research actually started.

2)     Insufficient Time Frame; This research project period coincided with period and also the period used in preparing for the semester examination. It was difficult to give attention to all this important aspect of the academic work. The problem of collecting data from respondent and other involvements affected this work considering the time frame.

3)  Scarcity of Materials: The materials on the project topic, transactional leadership and employee job satisfaction was very scarce. It therefore required visiting library, internet and the selected firm in search for materials and information relevant to the project topic. But despite all these challenges encountered, with the special grace of God and the cooperation of my supervisor (Mr. U. N. Q. Johnny), the job was successfully completed.

1.9 DEFINITION OF TERMS

Behaviour: Is the actions and attitudes of people, the way one behaves especially towards other people.

Effectiveness: Simply means achievement of goals irrespective of time, personal or financial involvement.

Employee: These are human resources (staffers) of an organization that contribute their effort positively to the achievement of organizational goals.

Efficiency: This can be defined as the ratio of useful work performed.

Goals: Is the end-results toward which  all organizational activities are directed.

Job Satisfaction: Is defined as a pleasurable emotional state resulting from the appraisal of one’s job an effective reaction to one’s job and attitude towards one’s job.

Leader: Is the most influential person who is capable of persuading other to more enthusiastically towards the achievement of group goals, Alla & Robert (1969).

Leadership: Ralph & Stogdell (2001) defined it as the process of influencing the activities of an organized group towards goal setting and achievement.

Leadership Style: Nwaizu (1968) views it as the behavior pattern leaders exhibits when attempting to influence the activities of others as perceived.

Motivation: Is a desire which arouses behavior in a particular way the person feels will lead to rewards.

Multinational Firm: Is defined as an organization with multi-country affiliate each of which formulates its own business strategy base on perceived market differences.

Organisation: This is a group of people bound together to provide unity of action for the achievement of predetermined objectives.

Productivity: It is the ratio of output to input.

Reward: Is something tangible or intangible given for work done.

Subordinate: Is someone that is under the control and authority of another person.

Transactional Leadership: Identifies what followers want or prefer and help them achieve level of performance that results in rewards that satisfy them.