Relationship Between Transformational, Transaction and Laissez-faire Leadership Styles and Employee Commitment

Abstract

The study aimed to find empirical evidence of relationship between transformational, transaction and laissez-faire leadership styles and employee commitment in the insurance sector of Sri Lanka. Multifactor Leadership Questionnaire, which formulated by Bass and Avolio’s in1997 was used to determine leadership style and the Organizational Commitment was obtained using the Revised Version of Meyer and Allen’s (1997) Three-Component Model of employee commitment. Leadership was identified as the independent variable and organisational commitment as the dependent variable. The analysis showed that there is a strong positive relationship between transformational leadership and organizational commitment with r = 0.872. A weak, but significant, positive relationship was found between transactional leadership and organizational commitment with r = 0.257. Also a weak, but significant negative correlation was found between laissez-faire leadership and organizational commitment with an r = - 0.375.The Overall findings from this study suggest that transformational, transactional and laissez-faire leadership behaviors do play important roles in determining levels of organizational commitment.

Keywords: Insurance Industry, Transformational Leadership style, Transactional Leadership style, Laissez-faire Leadership style, organizational commitment.