African Journal of Business Management Vol. 5(21), pp.

8634-8641, 23 September, 2011

Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM11.1156
ISSN 1993-8233 ©2011 Academic Journals

Full Length Research Paper

Structural equation modeling analysis of effects of

leadership styles and organizational culture on
effectiveness in sport organizations
Farshad Tojari*, Mahboub Sheikhalizadeh Heris and Ali Zarei
Department of Physical Education and Sport Sciences, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
Accepted 28 June, 2011

This study examines the effects of leadership styles and organizational culture on organizational
effectiveness in Iranian sport organizations. 341 sport experts in the Physical Education Organization of
the Islamic Republic of Iran and various sport Federations voluntarily filled out the Denison
organizational culture survey (DOCS), multifactor leadership and organizational effectiveness
questionnaires. Results of structural equation modeling (SEM) showed that transformational leadership
has a significant positive influence on the effectiveness and organizational culture. Transactional
leadership had a direct significant negative influence on organizational effectiveness and indirectly had
a significant positive influence through organizational culture. In conclusion, the results showed that
the proposed model has a good fit with this research data.

Key words: Leadership style, organizational culture, effectiveness, sport organizations.

INTRODUCTION

In recent years, effectiveness has become a topic of and shared behavioral expectations (Cooke and Szumal,
growing interest in the field of human service organiza- 1993, 2000), or a particular set of values, beliefs, and
tions (Cho, 2007). Scientists and scholars believe that behaviors that characterizes the way individuals and
effectiveness is the key to all organizational analysis and groups interact in progressing toward a common goal
so, many organizations have concentrated on building up (Eldridge and Crombie, 1974). Schneider notes that,
the capabilities of its members to perform well in dynamic “(organizational) culture establishes the conditions for
environments (Lewis et al., 2009). determining internal effectiveness; it determines whether
Scholars of management define effectiveness as the performance is effective or ineffective and what effective
extent to which an organization achieves its goals and ineffective mean in the organization” (Kwantes and
(Cameron, 1981; Scott, 1977). With respect to sport orga- Boglarsky, 2007). Several research results indicate that
nizations, Chelladurai and Haggerty (1991) noted that organizations whose culture strengthen the staff partici-
organizational effectiveness refers to how smoothly, pation in decision making, establish obvious and logical
efficiently and goal-directed an organization’s internal goals, adapt working methods and design for optimum
processes are. Scholars believe that various factors work, perform at a higher level than organizations which
affect organizational effectiveness including: organiza- feature less of these factors. Likert (1961), and many
tional culture and leadership style. Organizational culture scientists, have suggested that the type of positive,
has been defined as relatively stable beliefs, attitudes, employee-focused management practices that are
and values that are shared among organizational mem- consistent with the values espoused by the group culture
bers (Williams et al., 1993), shared normative beliefs are likely to inspire employees to contribute more effort to
their work, which should result in higher levels of
organizational effectiveness (Gregory et al., 2009).
One of the other factors affecting organizational effec-
*Corresponding author. E-mail: tiveness is leadership and its styles. House et al. (1999)
[email protected]. Tel: +982188443809 noted that leadership is: the ability of an individual to
 Tojari et al. 8635

influence, motivate, and enable others to contribute head coaches with the multifactor leadership question-
towards the effectiveness and success of the organiza- naire (MLQ) form 5X and results show that coaches'
tion (Donovan, 2002). The issue that has attracted most satisfaction, effectiveness, and extra effort were positively
researchers is what kind of leadership style would be associated with transformational leadership (idealized
useful in the process of change and improving organiza- influence, attributed charisma, individualized considera-
tional performance; that is, whether leaders should: tion, intellectual stimulation, inspiration) and transactional
interact with those they supervise, consider their needs, leadership (contingent reward). Coaches' satisfaction and
and direct them by using reward or punishments or effectiveness were negatively associated with
appealing to higher-level needs that might motivate them management-by-exception (active). Coaches' satisfac-
(Black, 2006; Aarons, 2006; Gardner and Stough, 2002). tion, effectiveness, and extra effort were negatively
Effective leaders consistently use distinctive styles and associated with management-by-exception (passive) and
influence their fellow members (Ethem and Nurcan, passive- avoidant leadership. None of the leadership
2008).The findings show that transformational leadership styles had a significant relationship with organizational
has a significant direct influence on frustration and opti- commitment. According to the results of hierarchical
mism, with the negative influence of frustration having a regression analysis, only transformational leadership had
stronger effect on performance than the positive influence a significant effect on coaches' satisfaction, effectiveness,
of optimism(Kennedy and Anderson, 2002). Success of and extra effort. The result of Chiun et al. (2009) and
sport organizations depends on implementation of Buciuniene and Skudiene’s (2008) research indicated
management and effective leadership styles In fact, that transformational leadership had a significant positive
leadership and management style are the factors that effect on organizational commitment and transactional
facilitate and encourage employees and influences leadership has no significant effects on organizational
organizational effectiveness directly or indirectly. In the commitment (Chiun et al., 2009). Passive-avoidant
following brief review of related literature, the key leadership had a negative and significant relationship
variables of this study are discussed with employees’ affective and normative commitment and
doesn't have any significant correlation with continuance
commitment (Buciuniene and Skudiene, 2008). Also, the
DIRECT EFFECTS OF LEADERSHIP STYLES ON results of Riaz and Haider’s (β010) research showed that
ORGANIZATIONAL EFFECTIVEMNESS AND ITS transformational and transactional leadership have
INDICES (COMMITMENT, SATISFACTION AND significant positive effects on job success. Transforma-
PERFORMANCE) tional leadership has a positive significant effect on job
Leadership style is considered to be particularly important satisfaction, but transactional leadership has no
in achieving organizational goals (McColl-Kennedy and significant effect on job satisfaction.
Anderson, 2002). Studies by Burton and Peachey (2009),
and Rowold and Rohmann (2009) indicated that transfor- Indirect effects of leadership styles on organizational
mational leaders in comparison with transactional leader effectiveness and its indices
achieve better organizational outcomes (satisfaction,
effectiveness and extra effort) and passive-avoidant Leadership style can affect organizational effectiveness
leadership has significant negative effects on organiza- through organizational culture. The results of Xenikou
tional outcomes (Rowold and Rohmann, 2009). The and Simosi’s (2006) research demonstrated that trans-
result of Xirasagar et al. (2005) research demonstrated formational leadership haa an indirect positive impact on
that in combination, transformational, transactional and performance via achievement orientation culture. The
laissez-faire leadership explain 68% of the variation in study by Hsu (2002) on 822 full-time employees in
rated effectiveness, 66 percent of satisfaction and 71% of Taiwan sport/fitness clubs showed that leadership
subordinates’ extra effort. Transformational and transac- (transformational and transactional) has a positive and
tional leadership are both positively associated with stronger significant effect on organizational effectiveness
effectiveness and transformational leadership shows a via organizational culture. Also, the results of Agbonna
larger effect size than transactional leadership. Laissez- and Harris’ (β000) research showed that leadership style
faire leadership was negatively associated with the (participative style and supportive leadership) had a
effectiveness variables. Ipinmoroti (2005) in his study positive significant effect on organizational performance
investigated 169 athletes who participated in the Nigeria indirectly. Instrumental leadership had a negative effect
Colleges of Education Games in June 2005. The results on organizational performance indirectly. The result of
reveal that transformational leadership behaviour of Wallace and Weese’s (1995) research showed that the
coaches had a significant impact on athletes’ satisfaction organizations led by high transformational leadership,
with their performance and therefore athletes who eva- culture-building activities of managing change, achieving
luate their coaches as highly transformational were more goals, coordinated teamwork, and customer orientation
likely to be satisfied with their performance task. Doherty are administered to a greater degree than organizations
and Danylchuk (1996) in their study investigated 114 led by low transformational leaders.
8636 Afr. J. Bus. Manage.

Effects of organizational culture on organizational indicated that there is a positive and significant relation-
effectiveness and its indices ship between leadership styles and organizational
culture. Transformational leadership is a predictor of
Conceptually, the relationship between organizational constructive culture and transactional leadership is a
culture and effectiveness is strong (Kwantes and predictor of defensive culture.
Boglarsky, 2007), thus studying the relationship between Considering the literature review and afore mentioned
the variables mentioned has been receiving more studies, it turns out that some studies consider the effect
attention in recent years. The results of Faerman (2009), of leadership style on organizational effectiveness as
Denison et al. (2007), Kwantes and Boglarsky (2007), having a direct effect while others consider it as having
and Hsu’s (β00β) research showed that there is a positive an indirect effect via organizational culture and some
and significant relationship between organizational studies confirm the effect of organizational culture on
culture and effectiveness and the results of Yilmaz and effectiveness and others reject it. Also, most research in
Ergun’s (2008) research indicated that organizational relation to the considered variables are conducted
culture has a positive and significant effect on organiza- separately but a few studies have been conducted in
tional effectiveness. The involvement trait is the most terms of simultaneous effect of these variables on each
prominent of the four traits in terms of fostering employee other. Thus, regarding the previous literature review, a
satisfaction and overall performance. The mission trait theoretical model has been specified for research
had a strong significant effect on financial performance variables and the main purpose of this study has been to
and overall performance and no significant effect on test a specified model (effect of leadership styles and
employee satisfaction. Consistency and adaptability traits organizational culture on organizational effectiveness in
don't have any significant effect on employee satisfaction sport organizations) with variance- covariance obtained
and overall performance. Denison and Mishra (1995) sample data and simultaneous effect of variables in
investigated 764 organizations and contended that orga- research model is tested accordingly.
nizational culture is a strong predictor for organizational
effectiveness indices such as; quality, job satisfaction and METHODS
performance. Also the results of Denison, Haaland, and
Goelzer’s (2003) research indicated that there is a Since the purpose of this research is investigating the effect of
significant relationship between all twelve organizational leadership style and organizational culture on organizational effec-
culture indices and overall organizational effectiveness in tiveness, the purpose of the research is practically-oriented. The
the three regions, North America and Europe, Mid-East, collection of data indicates that it is present-oriented; but in terms of
structural equation modeling, it is future-oriented; considering the
and Africa (EMEA), but there is no significant relationship data collection method it is descriptive and considering correlation it
in the Asia region. Similarly, Denison et al. (2007) in a is regression analysis and covariance.
research aimed at diagnosing organizational culture exa-
mined 169 organizations in North America. The results
showed that there is a significant correlation between Statistical population
organizational culture and effectiveness. Fey and
The population of the study consisted of experts of a physical
Denison (2003) indicate that consistency and adaptability education organization of the Islamic Republic of Iran and all Iran
were found to be the prime drivers of effectiveness for sports federations'.
Russian firms struggling in a transition economy, but for
firms in the US the mission trait appears to be the
strongest determinant of effectiveness. The results of Participation
Coffey’s (β00γ) research indicated that consistency,
The sample of the study was 400 experts (Bachelor degree and
adaptability and mission traits (based on organizational above) of physical education organization and all sports federations'
culture Denison's model) had a positive and significant of the Islamic Republic of Iran. Sample size was determined using
relationship with organizational effectiveness, but there is Krejcie and Morgan’s table and a stratified sampling method has
no significant relationship between the involvement trait been used to select samples from two populations. Of 411 ques-
and organizational effectiveness. The results of Gregory tionnaires distributed among the participants, 341 questionnaires
(82.9 %) were returned.
et al.’s (β009) research showed that organizational
culture had a direct positive impact on people’s
satisfaction and had an indirect impact on organizational Measures
effectiveness via people’s satisfaction.
Organizational culture

Effects of leadership styles on organizational culture The Denison organization culture survey (DOCS) was used to
measure respondents' perceptions of organizational culture. DOCS
included 60 items component form of involvement trait (15 items),
Sarros et al. (2008) noted that transformational leader- consistency (15 items), adaptability (15 items) and mission (15
ship had a positive and significant effect on organiza- items) and participants in a five point 1-5 Likert scale (strongly
tional culture. The results of Eppard’s (2004) research disagree = 1, disagree= 2, Neutral= 3, agree= 4, strongly agree= 5)
 Tojari et al. 8637

Table 1. Descriptive statistics for the constructs used in the study.

Variable Mean SD 1 2 3 4 5
Transformational leadership 2.71 0.491 (0.92)a
Transactional leadership 2.39 0.511 0.875** (0.86)
Avoidant leadership 1.52 0.654 -0.254** -0.152** (0.75)
Organizational effectiveness 3.01 0.704 0.637** 0.593** -0.250** (0.96)
Organizational culture 3.12 0.492 0.540** 0.537** -0.125* 0.732** (0.96)
a
Reliability coefficient alphas in diagonal in parentheses; ** p < 0.01, * p< 0.05.

answered questions. In a research on γ5474 people, Cronbach’s the structural model (correlation between latent variables) path
alpha for the involvement trait (0.89), consistency (0.88), adapta- analysis was used. To analyze data, SPSS (version 16) and
bility (0.87) and mission (0.92) and a CFI of 0.99 suggesting robust LISREL 8.51 software with 95% confidence level was used.
construct validity (Denison et al., 2006).

Leadership style RESULTS

The multifactor leadership questionnaire (MLQ) form 5X-short was Reliability and validity
used to measure leadership style profiles in sport managers. MLQ
included 36 items and five subscales; idealized attributes (4 items), The measurement items were evaluated for reliability and
idealized behaviors (4 items), intellectual stimulation (4 items),
validity. Construct reliability was first estimated with the
inspirational motivation (4 items), individual consideration (4 items)
for transformational leadership and three subscales; contingent internal consistency method using Cronbach’s alpha. In
reward (4 items), management- by- exception (active) (4 items), Table1, the Cronbach’s alpha values of each scale in this
management- by- exception (passive) (4 items) for transactional study range from 0.75 to 0.96, the suggested cut-off
leadership and one subscale; Laissez faire (4 items) for passive/ value of 0.70 or higher (Nunnally and Bernstein, 1994).
avoidant leadership. Participants responded to a five point 0 to 4 Based on the measurement model, convergent validity
Likert scale (not at all = 0, once in a while = 1, sometimes = 2, fairly
often = 3, and frequently, if not always = 4) answered questions.
of the constructs was assessed. A construct’s convergent
MLQ is probably the most widely used scale to measure leadership, validity is recognized if the items are significantly related
and has produced reliable results across various cultures (Rehman to the factor (Nunnally and Bernstein, 1994). Also, a stan-
Toor, Ofori, 2009). Avolio et al. (1995, 1999) used confirmatory dardized factor loading of 0.50 or higher, ideally 0.70 or
factor analysis (CFA) on large pool of data (N=1394), in order to higher, provides strong evidence of convergent validity
provide for construct validity of the MLQ-5X. According to them, the
(Hair et al., 2005). In this study, all the items have signifi-
MLQ-5X scales exhibited high internal consistency and factor
loading. Tejeda et al. (2001) confirmed the validity of the MLQ-5X cant factor loadings, that is., t-values are greater than
and found internal consistency coefficients (Cronbach alpha) of 1.96 at the significance level of 0.05, and most items
0.90 for idealized attributes; 0.91 for idealized behaviors; 0.94 for have factor loadings greater than 0.70, suggesting
inspirational motivation; 0.91 for intellectual stimulation; 0.93 for adequate convergent validity.
individual consideration; 0.88 for contingent reward; 0.79 for
management- by- exception (active); 0.90 for management- by-
exception (passive) and 0.88 for Laissez faire.

Tests of measurement model

Organizational effectiveness
Before testing the structural model, to ensure the
The Hsu organizational effectiveness questionnaire (OEQ) was
used to measure overall effectiveness and their indices. OEQ
accuracy of measurement model, confirmatory factor
included 19 items and four subscales; decision making (5 items), analysis (CFA) was used. Factor analysis of second-
organization (5 items), job satisfaction (6 items) and personnel order was performed for exogenous variables (leadership
relationships (3 items). Participants responded to a five point 1 to 5 styles) and endogenous variable (organizational culture
Likert scale (strongly disagree = 1, disagree = 2, Neutral = 3, agree and organizational effectiveness). The fit indices for
= 4, strongly agree = 5) answered questions. Organizational effec- measurement models suggested a good fit to the data (all
tiveness questionnaire validity was approved by 10 Associate and
χ / df < γ, all NFI ≥ 0.96, all NNFI ≥ 0.98, and all CFI ≥
2
Assistant Professors level degree in sports management The
reliability of the questionnaire in this study using Cronbach alpha 0.98) (Table 2).
was calculated at 0.96.

Statistical methods
Tests of structural model

To examine correlations between latent variables and the observed The structural equation model (SEM) technique was
variables a confirmatory factor analysis was used and to examine utilized to test the proposed effects between latent
8638 Afr. J. Bus. Manage.

Table 2. Fit indices for measurement models.

Variable Χ2 df P-value χ2/df RMSEA NFI NNFI CFI

Style leadership 1228.47 558 <0.01 2.20 0.059 0.96 0.98 0.98
Organizational effectiveness 223.18 146 <0.01 1.52 0.042 0.99 1.00 1.00
Organizational culture 2737.41 1704 <0.01 1.60 0.042 0.96 0.98 0.99

variables. The results of the structural model showed that leaders strengthen the independence and challenges and
2
calculated indices provided good model fit [χ (109, N = motivate them through understanding and extending their
341) = 190.44; RMSEA = 0.047; CFI = 1.00; NNFI = 1.00; self-discovery to do their utmost and in this way sports
RMR=0.036; χ2 /df= 1.75]. Standardized path coefficients, organizations can increase effectiveness. In sum, the
can be used as a standardized regression coefficient for results of this study are consistent with previous research
examining one latent variable in relation to another. conducted by Burton and Peachey (2009), Rowold and
Results from this study indicate that transformational Rohmann (2009), Xirasagar et al. (2005), and Doherty
leadership significantly and positively influenced on and Danylchuk (1996).
organizational effectiveness ( = 0.71, p < 0.01) and Transformational leadership has an indirect but signi-
organizational culture ( = 0.37, p < 0.01). Furthermore, ficant and positive effect on organizational effectiveness
transactional leadership significantly and positively through organizational culture. Bass noted that transfor-
influenced on organizational culture ( = 0.β8, p < 0.01) mational leaders frequently work towards changing the
and significantly and negatively influenced on organi- organizational culture in line with their vision. Similarly,
zational effectiveness ( = -0.56, p < 0.01). Passive- Brown (1992) observes that good leaders need to
Avoidant leadership is not a significant influence on develop the skills that enable them to alter aspects of
organizational culture ( = 0.06, p > 0.05) and significant- their culture in order to improve their organizational per-
ly and negatively influenced on organizational effective- formance (Ogbonna and Harris, 2000). This study
ness ( = -0.23, p < 0.01). Finally, organizational culture suggests that sport transformational leaders can have
significantly and positively influenced organizational favorable impact on organizational culture by determining
effectiveness ( = 0.64, p < 0 .01) (Figure 1). short and long term goals, drawing organizational vision,
Table 3 presents the direct, indirect effects and total developing organizational learning, increasing coordina-
effects of research model variables. Examination of the tion and integration in different parts of the organization,
path coefficients showed that transformational leadership increasing empowerment, developing team-oriented
has a stronger direct impact on organizational effective- capabilities, introducing new ideas into the organization
ness than indirect (0.71 vs. 0.24). Although transactional and encouraging creativity and organizational innovation,
leadership has a significant and negative direct effect on changing degree of formalization and organizational
organizational effectiveness (-0.56), it has a significant centralization, and in this way can increase athlete and
and positive indirect effect via organizational culture employee performance and improve effectiveness in
(0.18). Passive-avoidant leadership has a significant and sports organizations. The results of this study about the
negative direct effect on organizational effectiveness (- effect of transformational leadership on organizational
0.23), but this effect is not significant indirectly (0.04). effectiveness through organizational culture are consis-
tent with the previous research conducted by Xenikou
and Simosi (2006), Hsu (2002) and Ogbonna and Harris
DISCUSSION (2000) and with regard to the effect of transformation
leadership on organizational culture the results are co-
The purpose of this research was to study the effect of nsistent with the previous research conducted by Sarros,
leadership styles and organizational culture on organiza- Cooper and Santora (2008) and Eppard (2004).
tional effectiveness. The results showed that transfor- The results showed that transactional leadership has a
mational leadership has a strong significant and positive significant and negative influence on organizational effec-
effect on organizational effectiveness. Transformational tiveness directly and has significant and positive effects
leaders inspire their employees, engage with them and on organizational effectiveness through organizational
emphasize on higher levels of success achievement by culture indirectly. In explaining the reason for negative
increasing needs and motivations of their followers in the impact, it can be said that according to Burns, transac-
workplace (Mandell and Pherwani, 2003). Sport transfor- tional leadership is used for static and non-changing
mational leaders communicate with their employees, situations. Since sports organizations operate in a
coaches and athletes and pay attention to individual dynamic environment, it seems probable that in this
differences and help their subordinates in fulfilling their environment transactional leadership does not have a
potential talents and increasing their responsibilities in positive effect on organizational effectiveness and using
the organization (Jandaghi et al., 2009). Also, these transformational leadership for this organization can be
 Tojari et al. 8639

T Value = 8.98
0.37 Organizational
Transformational Culture
T Value = 6.77
0.28

T Value = 11.99
Transactional T Value = -12.80 0.64
-0.56
T Value = 16.16
T Value = 1.20 0.71
0.06
Passive - Organizational
Avoidant T Value = - 4.51 Effectiveness
- 0.23

Figure 1. Structural model for research variables.

Table 3. Effects of study variable.

Organizational effectiveness Organizational culture

Variable
Total Direct Indirect Total Direct
Transformational leadership 0.95** 0.71** 0.24** 0.37** 0.37**
Transactional leadership -0.38** -0.56** 0.18** 0.28** 0.028**
Avoidant leadership -0.19** -0.23** 0.04 0.06 0.06

more effective. Burns (1978) stated that transactional via organizational culture. The results of this study about
leaders focus on the current needs of subordinates indirect and positive effect of transactional leadership on
(Gardner and Stough, 2002) and include some organizational effectiveness through organizational cul-
“exchanges” between the leader and follower, in which ture are consistent with the previous research conducted
followers are rewarded for meeting specific goals or by Hsu (2002).
performance criteria (Aarons, 2006; Schriesheim et al., The results showed that passive-avoidant leadership
2006). In this leadership style, leaders operate within the has a direct significant and negative influenced on organi-
existing environment and prefer efficiency and zational effectiveness and indirectly no significant effects
predictability to creativity and change (Block, 2003). So, on organizational effectiveness. The Lassez faire style
effectiveness is low and can be inverted. In explaining the means that the leader is the most passive leadership in
reasons for positive effect of transactional leadership on the spectrum of leadership. In this type of leadership, the
organizational effectiveness through organizational leader shows a state of non transactional and avoids
culture, it can be stated that within the organization, tran- decision making and assign responsibilities (Burke and
sactional leaders emphasize work standards, assign- Collins, 2001). There is no reward, negotiation and the
ments, task oriented goals, implement rules and leader doesn't try to control subordinates and so emplo-
regulations, so, emphasis on these factors directs organi- yees often lack motivation (Bass, 1997; Bass and Avolio,
zational culture to organizational consistency and mission 1993). Also, their followers must identify organizational
achievement (according to the model of Dennison). problems and resolve them (Fisher, 2003). Bass (1990)
According to Fey and Denison (2003), Denison et al. noted that Lassez faire leadership has negative correla-
(2007), Mian and Jun (2008) and Yilmaz and Ergun tions with other active styles of leadership and negative
(2008) it turns out that focusing organizational culture on effects on subordinate’s behaviour and performance.
consistency and a mission has a positive and significant Overall, passive-avoidant leadership is considered as an
impact on organizational effectiveness, and so transac- ineffective leadership style (Antonakis et al., 2003; Hartog
tional leadership has a positive impact on effectiveness et al., 1997). The results of this study are consistent with
8640 Afr. J. Bus. Manage.

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