Leadership Styles, Subordinates’ Satisfaction with the Leader and Perceived Effectiveness A Study in a Nepali Telecommunications Company

The current leadership literature is based on studies mostly carried out in the West. This study attempts to examine the relationship between leadership styles and employee and organizational outcomes in a Nepali telecommunication company. It proposes and tests a model suggesting direct relationship between leadership styles and employees' satisfaction with the leader, leader effectiveness, and work-unit effectiveness as well as the mediating effect of satisfaction with the leader on the relationships between leadership styles and leader effectiveness and work-unit effectiveness. Bass and Avolio’s multifactor leadership questionnaire (MLQ) 5X (short) was used to measure leadership styles and employee’s satisfaction with the leader. The sample consisted of 115 employees working in a Nepali telecommunication company. Structural Equation Modeling was employed to test the hypothesized relationships. Path analysis results indicated that (1) transformational leadership is positively related with outcomes; (2) transformational leadership is the stronger predictor of employee’s satisfaction with the leader, leader effectiveness and work-unit effectiveness than transactional leadership; (3) the relationship between transformational leadership and leader effectiveness and work unit effectiveness were partially mediated by employee’s satisfaction with the leader. Consistent with the findings of previous studies, the findings of this study clearly indicate that transformational leadership style significantly contribute to leader effectiveness and work-unit effectiveness and gives more satisfaction to the subordinates. These findings highlight the importance of transformational leadership style in achieving desired individual and organizational level outcomes. Relatively small sample size, sample drawn from a single organization, and subordinate's ratings for assessing leadership styles and outcomes limit the generalizability of the findings. For increased generalizability, further research with samples from different organizations and objective measures of outcomes will be needed.