The Relationship Between Transformational Leadership Behaviour, Organization’s Mission and Employees Job Performance of Abu Dhabi National Company

Introduction

Job performance has been extensively studied in the leadership and management literature. Several studies have reported various organisational factors that impact the performance of employees (Al-Tit, 2017; Boon et al., 2012; Diamantidis and Chatzoglou, 2019; Pandey, 2019; Zhang). A total of 133 research studies were found on the Scopus database using the search query “organisational factors affecting job performance”. The search results were further filtered to include only empirical studies, and a total of 88 studies were found. Furthermore, the researcher filtered the search results to include a ten-year period of 2008-2019, and the total search results were reduced to 70 studies.

Furthermore, Campbell et al. (1993) opine that performance is behaviour. It is something that is done by an employee, and it differs in every way from the outcomes. He added that the outcomes are the result of an individual’s performance. Hence, performance determines outcomes and how productive an individual employee is. Campbell et al. (1993) further stated that job performance has to be goal-relevant; that is, it must be directed towards the organisation’s goals relevant to a particular job or task. The relationship between leadership and job performance is not new. Several scholars have hypothesised how leadership influences organisational outcomes.

Similarly, the concept of leadership has generated lots of empirical and theoretical models (Hijazi, 2017). The leadership concept is one of the most discussed, scrutinised and yet complex ideas in social science research (Hijazi, 2017). It has been viewed as a critical element for the commencement and execution of transformations in organisations. Hence, the leadership literature shows that it is an important topic in both private and public organisational contexts for several years now (Zhang, 2010; Hijazi, 2017) and has gained significance in every aspect of life, from businesses to educational and social organisations (Kala, 2014).

Aklamanu, Degbey and Tarba (2016) defined leadership as a complex process that begins from the communication and collaboration between a leader, organisational members and the state. These factors are, therefore, significant to the management (leadership) process (Aklamanu et al., 2016). There are many definitions of leadership behaviour that have been developed from previous studies of management and leadership since the early 19th century, particularly from western countries. Notwithstanding, leadership develops, modifies or alters management and assists those who are in the position to lead. Nahavandi, (2009) stated that there is also the need to be conscious of how leadership develops as well as how the beliefs of a good leader evolve within an organisation (Aklamanu et al., 2016). Besides, the term leadership is very difficult to define; yet various researchers have defined its various forms. For instance, Russell, (2005) described leadership as the “interpersonal influence exercised by an individual or a group of persons, through the process of communication, towards the attainment of the organisation’s goals. Also, Northouse (2012) defines leadership as the process by which individuals influence a group of people to achieve common goals. Hsin Kuang Chi & Nan Haw, (2008) defined leadership as the ability to influence people’s willingness to follow another person’s guidance or to observe an individual’s decision, usually the leader.

Furthermore, leadership is seen as a process in which one or more persons influence a group of people to achieve a desired or set target or outcome. There is evidence suggesting that transformational leadership influences the job performance of employees (Biswas, 2009; Chang et al., 2017; Devanna, 1990; Eisenbach, Watson & Pillai, 2009; Elrehail et al., 2018; Enwereuzor, Ugwu & Eze, 2018; Khasawneh, Omari & Abu-Tineh, 2012; Musa et al., 2018). However, it is not known if mission mediates such relationship. Hence, this study would examine the effect of transformational leadership behaviour on the job performances of Abu Dhabi National Oil Company employees using the organization’s mission as a mediating variable.

Literature Review

Transformational leadership

Transformational leaders try to make changes that result in an increased overall performance and organisational effectiveness, generate additional productivity and surpass mere possibilities (Bass, 2009). Likewise, transformational leaders focus on employees’ values and achieve an extensive role in instances of struggling (Northouse, 2007). Such leaders increase workers’ non-public values and self-principles, and encourage them to exceed their very own self-interest for the sake of the organisation (Bass and Riggio, 2006). They reduce pressure among personnel by creating an experience of individuality within a network of support (Bass and Avolio, 2000; Yukl, 2010). Consequently, transformational leaders try to revise the visions and cultures of the enterprise correctly by promoting creativity among employees and developing relationships between them (Yukl, 2010). Hence, there are several factors which contribute to being a great leader.

Meanwhile, leadership behaviour has a massive impact (i.e. whether positive or negative) on employees’ task performance. According to Northouse (2007), transformational leaders’ awareness of employees’ values play a critical role in developing the organisation. To elucidate the impact of transformational leadership on job performance, Jiang et al. (2017) examined the extent to which transformational leadership affects job performance with the mediating role of the organisational citizenship using a sample of 389 employees. They found that transformational leadership positively affects employees’ job performance with the organizational citizenship as a mediator. Likewise, Kala’Lembang et al., (2015), in their study, reported the mediating role of the organizational culture in the relationship between transformational leadership and employees’ job performance from a sample of 300 respondents. Findings from the study revealed that there was an indirect relationship between transformational leadership and employees’ overall performance. These studies, at the very least, suggest that transformational leadership affects job performance either directly or through the mediating role of some organisational variables. Also, contextual factors may play a crucial role in this regard. Thus, this study adopts the transformational leadership theory proposed by Bass and Avolio (1999) in examining the effects of transformational leadership on the job performance of middle managers in the UAE.

Organisational Factors Affecting Job Performance

Al-Tit (2017) investigated the effects of the organisational culture on the organisational performance of manufacturing firms using a sample of 93 firms in Jordan, consisting of employees and middle managers. Findings from the study revealed that organisational culture has a significant impact on job performance. The author cited cultural assumptions, values and beliefs as possible explanations for the significantly high impact of organisational culture on employees’ job performance. Similarly, Kalaiarasi and Sethuram (2016) reported that organisational culture positively and significantly influences individual and organisational performance. An, Yom and Ruggiero (2011) reported that constructive cultural styles had positive impacts, and dysfunctional defensive styles had a negative impact on both individual and organisational performance. Biswas (2009) also reported that the innovative and competitive cultures of an organisation had a direct, strong and positive relationship with employees’ job performance. Navimipour et al. (2018) also proposed a new model to determine the impact of organisational culture, information technology and job satisfaction on the performance of employees in an organisation. Findings from the study revealed that all the three independent variables, including organisational culture, played important roles in enhancing the job performance of employees in the organisation. These studies support organisational culture as a significant organisational variable affecting the performance of an organisation.

Furthermore, several studies have shown that individual and organizational performance is significantly related to employees’ engagement (Ayu Putu Widani Sugianingrat et al., 2019); transformational leadership (Chinedu and Wilfredo, 2015; Hurduzeu, 2015; Madanchian et al., 2016; Musa et al., 2018); contingent reward and management by exception (Chinedu and Wilfredo, 2015); job demands i.e. physical effort (Uppal, Mishra & Vohra, 2014), cognitive faculties like information processing (Bakker and Demerouti, 2014), and effective demands (Greenidge, Devonish & Alleyne, 2014), individual resources such as individual personality, qualities, experience, orientations, behaviour etc. (Ferris et al., 2015; Judge and Zapata, 2015; Lanyon and Goodstein, 2016).

Given that several organisational factors affect job performance, the researcher chooses to explore the effect of transformational leadership through the mediating role of the organisational mission in the job performance of the employees. The variables, transformational leadership and organisation’s mission, were chosen as both independent and mediating variables respectively, because studies have shown that transformational leadership in organisations builds the needed relationship between leaders and subordinates to achieve organisational goals and objectives. Similarly, studies have also shown that the organisation’s mission cultivates both consciously and subconsciously the underlying belief systems, values, dispositions and cultural assumptions held by organisational members within an organisation. Hence, it would be particularly interesting to determine how a synthesis of transformational and organisation’s mission impacts the job performance of employees.  Despite the vast number of leadership research literature, not much has been done in the context of the UAE and in the oil and gas industry as well. Therefore, investigating the effect of transformational leadership on job performance through the mediating role of the mission statement of the organisation becomes particularly important. The outcomes of this research may help reshape the leadership practices of ADNOC as well as aid in the development of an organisational model that impacts Job performance positively.

Mission

A mission statement is a declaration of a business or a reason for an organisation’s existence. In up-front words, a mission statement uncovers what the organisations want to be and whom they want to serve (Khan, Afzal & Chaudhry, 2010). Besides, the mission gives a purpose and a meaning to the organisation by defining a meaningful long-term direction for the organisation.  It answers the question “do we, as an organisation, know where we are going?”. Ahmady et al. (2016) describe a mission as the most important characteristic or feature of the organisational culture. They argued that organisations that do not have a clearly defined mission (i.e. an account of where they are going), as well as their current situation, are usually unsuccessful. Mission provides the drive-through in which employees work together to achieve desired goals for the business enterprise (Denison et al., 2012). It is therefore important for the organisational members to recognise which direction the organisation is moving towards (Pirayeh et al., 2011). Consequently, with a clear direction that is well defined, organisational members can have a direct sense of motive to accomplish the organisational goals and strategic objectives. The mission is composed of three traits. 1) Strategic Direction and Intent: provides clear strategic goals that are in line with the organisation’s purpose, specifying how every employee can contribute to the success and development of the organisation. 2) Goals and Objectives: comprise of a clear set of goals and objectives that can be linked to the organisation’s vision, mission and strategy, by providing everyone with a clear direction in their respective task accomplishment. 3) Vision: symbolises the core values that the organisation represents. It gives special attention to people’s organisation. Hence, by capturing people’s hearts and minds, the organisation has a shared view of a desired future state while providing guidance and direction (Pirayeh et al., 2011).

Thus, necessitating the need for this study; it is hypothesised that;

H₁: There is a significant positive relationship between transformational leadership and job performance.

H₂: There is a significant positive relationship between mission and Job performance. 

H₃: There is a significant positive relationship between transformational leadership and mission.

Methodology

Research Design

This research was designed through explanations of explanatory research by using survey methods. It particularly scrutinised the effects of transformational leadership on the job performance of middle managers in the UAE. According to Creswell (2012), “research design is a set of procedures used to acquire and examine information to develop or establish knowledge regarding a specific topic or issue”. Every research study requires a suitable and appropriate design that needs to be decided upon by the researcher. Therefore, a survey questionnaire was mailed to selected respondents of 450 employees from different departments at Abu Dhabi National Oil Company. Also, the use of the questionnaires was intended to collect facts as a means to answer the research questions from established patterns to allow for generalisation. For  ease of analysis, the questionnaire layout deployed close-ended questions in its design. Thus, for this study, all constructs and variables were measured using a 5-point Likert scale with options starting from (1) strongly agree to (5) strongly disagree.

Data Analysis Techniques

The data analysis approach used is based on the objectives of the study. The type of data that is collected is also a focal point in determining the analysis type to be performed. Hence, the initial stage in selecting the statistical analysis performed is dependent on whether data is nominal, ordinal, interval or ratio level of measurement (Khan et al., 2010). Thus, based on the objective of this research study, the data obtained is an ordinal data measure, which is most suitable for the questions that rate the effect of quality or behaviour. Therefore, it suits the logic of the research project and the research instrument (Bell, E. & Bryman, 2007).

Results

Data collected were analysed to identify and determine the relationship between the variables using the SPSS Version 20 and SmartPLS software. Furthermore, this chapter presents the research findings obtained from the questionnaire distributed to answer the research questions for the study.

Multivariate statistical analysis

Table 1: Constructs Reliability and Validity

In order to examine the internal reliability of the constructs, the Cronbach’s alpha test was utilised. The value of the alpha coefficient varies between zero and one, where a value of one indicates perfect internal reliability, and a value of zero means there is no internal reliability. Overall, the general rule of thumb is that if the value of the Alpha coefficient is more than 0.7, this refers to an acceptable degree of reliability (Bryman & Bell, 2015. Therefore, in this study, all values above .70 are conventionally acceptable.

Table 2: Outer loadings

Given the nature of this study, factor loadings between 0.4 and 0.9 were accepted by merit. The essence of this was to determine how each construct theoretically contribute to the overall evaluation of the target model (Hair et al., 2013)

Table 3: Discriminant Validity

The discriminant validity or otherwise known as the divergent validity, is used to test the relatedness of concepts or constructs in any given measurement (El-nahas & Abd-el-salam, 2012). However, being distinct from the convergent validity, the discriminant validity measures items to determine that they do not unintentionally measure another variable or construct (Liu, 2013). As shown in the above Table 3, discriminant validity is achieved among all the study constructs.

Table 4: Heterotrait-Monotrait Ratio (HTMT)

The analyses of this study also passed the HTMT criterion,  as all the values were between 0.85 and 0.9, as shown in Table 4. Furthermore, after the possible discriminant validity tests, it has been found out that the discriminant validity is not a problem in this study (Alawneh, 2015). Thus, the data is fit to be used to estimate the parameters of the structural model. Moreover, this study also examines the mediation relationship that was proposed in the study.

Figure 1: Measurement Model with Constructs and Indicators

Table 5: Path Coefficient and Hypothesis Testing

According to the above table, it can be explained that; transformational leadership style had a significant positive effect on job performance. Transformational leadership had a significant positive effect on Mission. Likewise, Mission had a significant positive effect on job performance.

The Mediating Relationship Analysis

Mediation is an intervening or process variable. The concept of a mediator has been recognised by psychologists for quite a long time, Kenny, (2016). Nitzl, (2016) noted that researchers focus only on examining the direct relationship or association between variables and mostly ignore the indirect relationship, also known as mediation relationship. PLS software can be used to test the indirect effect, particularly in complex path models as well as to test hypothesis (Nitzl, 2016).

Thus, in this study, the variable mission was hypothesised to mediate the relationship between transformational leadership style and job performance. The main objective of this analysis was not just to determine any significant path coefficients but rather to identify the level of significance and the importance of the indirect effect of the relationship. On the other hand, direct effects can be characterised as the relationships between two constructs that are associated with a single line, whereas the indirect effect constitutes relationships which are often between constructs that pass through one or more other constructs. Measuring the mediating effect can support the identification of an ideal and total relationship among related constructs. According to the value of VAF derived, the following conditions related to the mediation effect is specified by Hair et al., (2014):

VAF = (p12 * p23) / (p13 + p12 * p23) 

• If 0 < VAF < 0.20, then No mediation
• If 0.20 < VAF < 0.80, then Partial mediation
• If VAF > 0.80, the Full mediation

Figure 2: The Mediating Effect of the mission on Transformational Leadership and Job performance

A = 0.485, G = 0.537, F= 0.334

Indirect effects = G x F

0.537 x 0.334 = 0.179

Total effects = A + G x F = 0.664

VAF (variance accounted) for indirect effects divided by the total effect = 0.179/0.664 = 0.267. Therefore, the VAF result of 0.2.67 indicates that there is a partial mediation between transformationalleadership and job performance mediated by mission since the value derived ranges between 20% and 80%. This implies that in organisational settings and climates, where the organisations’ mission is clearly articulated and understood by employees, with a leadership that is defined by transformational attributes, job performances would increase in such an organisation.

Discussion

This study adds to the literature on the relationship among transformational leadership behaviour, organisational mission and employees job performance. All hypothesized relations are supported by the data. Transformational leadership behaviour is significantly positively related to employees’ job performance. That is consistent with Birasnav (2014), who claimed that the transformational leader has an intrinsic motivation which turns into performance. It is found that transformational leadership has a positive relationship with the organisational mission. This finding is consistent with the opinion of Pourbarkhordari et al., (2016) and Avery et al., (2007), that the leader who leads the employees with transformational characteristics, that are in line with the orgainsiational mission and goals, will turn them to be more engaged to their work. Organisational mission is significantly positively related to employees’ job performance. This finding is consistent with the previous research Yazhou & Jian (2011), that employees who are guided by the orgainsational mission tend to engage to their work and will be more innovative and achieve good performance, Yazhou, W. A. N. G. & Jian, L. I. N.(2011). According to Bakker (2012) and Pourbarkhordari et al., (2016),  employees who engage to their work with a clear vission of the organisation will be more innovative and achieve good performance.

The result  is that there is a mediating role of the orgainsatioal mission in the relation between transformational leadership behaviour and employees’ job performance. The organizational mission explains the relation between transformational leadership and employees’ job performance. This result means that when transformational leadership is present, employees are more guided to their work, which, in turn, promotes job performance. This finding is in line with the opinion of W. A. N. G. & Jian, L. I. N. (2011), that the organisational mission is a prominent variable to improve the employees’ performance. The trusted leader imposes the orgainsiational mission, which reflects on the job performance. When the leaders lead the employees with a transformational leadership style, then the employees will be more concerned with the organisational mission and objectives, which will improve their performance (Pourbarkhordari et al., 2016).

The main objective of this study was to investigate the effect of transformational leadership on the job performance of the Abu Dhabi Oil National Company through the mediating role of mission. Notably, this study was motivated by the inconsistent results in related studies regarding the relationship between transformational leadership, organisational mission and job performance. It was argued that the corporate mission context might play a crucial role in determining the extent to which transformational leadership impacts the job performances of employees. Hence, the organisation’s mission was used as a mediator to examine the relationship between transformational leadership and employees’ job performance. Most of the studies conducted on job performance were on companies in well-developed counties, while emerging countries such as Middle Eastern countries have not been well researched in terms of the role leadership plays in influencing employees’ job performances with organization’s mission mediating such a relationship (Alawneh, 2015; Shanker, Bhanugopan, Heijden & Farrell, 2017).

Additionally, Musa et al. (2018) stated that countries in the Middle East have a somewhat different leadership style from other developing and developed nations and that these differences are the result of changes in norms, attitudes, values, beliefs and behaviours. Likewise, Diaj and Omira, (2015) stressed that there is a need to scrutinise how leaders in different counties influence the attitudes and behaviours of their followers using a different cultural context or environment which has not been explored before. Hence, the present research is centred on providing a cross-cultural understanding of different constructs and the effects that these constructs have on job performance vis-a-vis the organisation’s mission (Ahmed et al., 2016). Khasawneh, Omari & Abu-Tineh, (2012) pointed out that in the Middle East and particularly in Gulf countries, public organisations have frequently been associated with weak or ineffective management, and this has led to poor job performances within organisations. Nevertheless, only a few organisations can fathom the reasons for such poor performances, which is mostly traceable to poor leadership practices in these organisations (Khasawneh et al., 2012).

Recommendations and Suggestions for Future Research

Findings from the study may also be used to create benchmark criteria for the selection and training of leaders and administrators in oil and gas companies. This benchmark and selection criteria for leaders may help higher authorities and leaders of these organisations in identifying traits or attributes in potential leaders, which could be further developed to bring the goals of the organisation to fruition. Furthermore, the results of the study will be valuable for researchers and theorists who are concerned with investigating the relationship between leadership style, organisation’s mission statement, and job performance. These findings can be used as additional sources of literature that may aid researchers in carrying out future studies related to the study area. Therefore, leaders and administrators in oil and gas organisations would be able to evaluate their leadership styles and ascertain how to best develop themselves to reflect transformational as well as transactional leadership attributes.

Furthermore, by understanding the nature of the relationship between transformational leadership, organisational culture and employees’ job performance, leaders may be able to inculcate practices in their guidance that further promote employees’ performance. Hence, Oil and gas leaders and administrators may be further trained to build and develop core transformational and transactional leadership behaviour, taking cognisance of the results from this study. Leadership training programs may also be organised for potential and future leaders in the oil and gas industry, using the identified traits of transformational and transactional leadership and organisational culture elements as essential development tools. These potential leaders, having been trained, may be required to take up leadership positions within their respective organisations. Furthermore, to be able to draw conclusions that are generalizable across the United Arab Emirates context as well as other countries in the Middle East that have similar organisation’s mission, replicating the present study is encouraged. Likewise, the model of the current research can be validated in other countries that have a unique and strong performance. This study considered the organization’s mission only as a mediating variable.

Implications

The study may be limited in terms of the data collection method used, as data was collected at the one-point time. Only one method of data collection (survey) was used to collect data from respondents. Hence, opportunities to triangulate the outcomes of the research to various research method were not present. However, the researcher justified the choice of the methodology used, which is equivalent to the nature of the study, which was also deductive.  Since the use of additional methods of data collection does not align with the objectives of the study chosen by  the researcher , the survey methodology adopted is justified.  Similarly, since the study was not longitudinal, and data was collected only at one point in time, the results might have been different if the research design was longitudinal rather than cross-sectional.

Conclusion

The proposed research model was analysed using PLS-SEM by proposing and examining alternative models. Hence, findings from this study provide empirical evidence that supports the mediating effect of the organisation’s mission in the relationship between transformational leadership behaviour and the employees’ job performance. Likewise, the results of the study would be beneficial for the national economic growth and the sustainability of the petrochemical industry. Understanding the fundamental differences between transformational leadership, organization’s mission and the employees’ job performance has been brought upon to light from the findings of this study. The leadership of the Abu Dhabi National Oil Company can structure the company in such a way that its new leadership characteristics and structure in combination with organisation’s mission and practices, can inspire more productivity from employees in the organisation. More productivity for the company would consequently mean more financial turnover, reduction of the associated cost of operations, optimised work processes, and so on. If ADNOC, being the largest UAE oil and gas company, becomes more productive, it undoubtedly  translates into a national economic development for the UAE. Similarly, the sustainability of an organisation can be linked to the leadership style adopted by an organisation. Hence, results from this study can be used to model a leadership structure which can, in turn, strengthen the sustainability of the organisation.

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