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Impact of Centralization and Transformational Leadership on Job Satisfaction

1. IntroductionCentralization is one of the various properties of a typical Bureaucratic Organization.

Due to long level of hierarchy of authority and their quest for achieving the high

efficiency level, centralization is taken as the appropriate approach in this kind of setting.

In order to maintain the morale and effectiveness of manpower of an organization it is

very essential to use an appropriate kind of leadership style. The purpose of this study is

to measure the impact of Centralization and the transformational leadership style on job

satisfaction of employees in working organization.

1.1Job SatisfactionJob satisfaction is in regard of ones feeling or state of mind regarding the nature of

their work. Job satisfaction describes a positive feeling about a job, resulting from an

evaluation of its characteristics. A person with a high level of job satisfaction holds

positive feelings about his or her job, while a person with a low level holds negative

feelings. Job satisfaction can be influenced by a variety of factors, e.g., the quality of

one's relationship with their supervisor, the quality of the physical environment in

which they work, degree of fulfillment in their work, etc.

1.2CentralizationCentralization refers to the hierarchical level that has authority to make decisions.

When decision making is kept to the top level, the organization is centralized. When

decisions are delegated to lower organizational levels, it is decentralized.

Centralization is the structural element that actually describes the distribution of

power in organizations. Power distributions are determined in advance of doing much

else in organizations. For example, founders of organizations determine which

decisions they will make and which will be made by those lower in the organizational

echelon. Organizations in which all the important decisions are made by the head-quarters or general office are centralized; those in which many important decisions

are delegated to lower-level managers are decentralized. The feature on the

Challenger shows how a lack of centralization can have disastrous results.

The degree of centralization reflects what an organization thinks of its members. A

high degree of centralization reflects an organization that feels its members need high

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degrees of control; decentralization implies that an organization feels its employees

can govern themselves.

1.3Transformational LeadershipLeadership and management are often confused. John Kotter of the Harvard Business

School argues that management is about coping with complexity. Good management

brings about order and consistency by drawing up formal plans, designing rigid

organization structures, and monitoring results against the plans. Leadership, In

contrast, is about coping with change. Leaders establish direction by developing a

vision of the future; then they align people by communicating this vision and

inspiring them to overcome hurdles. Leadership can be defined as the ability to

influence a group toward the achievement of a vision or set of goals.

Transformational Leaders are the leaders who inspire followers to transcend their

self-interests for the good of the organization and can have an extraordinary effect on

their followers. Some characteristics of Transformation Leaders are:

Idealized Influence: Provides vision and sense of mission, instills pride, gains

respect and trust.

Inspirational Motivation: Communicates high expectations, uses symbols to focus

efforts, and expresses important purposes in simple ways.

Intellectual Stimulation: Promotes intelligence, rationality, and careful problem

solving.

Individualized Consideration: Gives personal attention, treats each employee

individually, coaches, and advises.

2. Review of LiteratureSamuel Nguni et al [4] examines the effects of transformational and transactional

leadership on teachers' job satisfaction, organizational commitment, and organizational

citizenship behavior in the context of schools in a specific developing country context,

that of Tanzania. It does so by testing a model of such effects using a set of data collected

from a sample of Tanzanian primary school teachers. Transformational leadership had

significant add-on effects to transactional leadership in prediction of job satisfaction,

organizational commitment, and organizational citizenship behavior. Job satisfaction

appears to be a mediator of the effects of transformational leadership on teachers'

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organizational commitment and organizational citizenship behavior. Implications and

directions for future research are discussed.

Kara A. Arnold et al [2] did two studies investigated the relationship between

transformational leadership, the meaning that individuals ascribe to their work, and their

psychological well-being. In Study 1, the perceptions of meaningful work partially

mediated the relationship between transformational leadership and positive affective

well-being in a sample of Canadian health care workers (N = 319). In Study 2, the

meaning that a separate sample of service workers (N = 146) ascribed to their work fully

mediated the relationship between transformational leadership and psychological well-

being, after controlling for humanistic work beliefs. Overall, these results support and

add to the range of positive mental health effects associated with transformational

leadership and are suggestive of interventions that organizations can make to improve

well-being of workers.

Kenneth David Strang [3] evaluated effective and ineffective leader behaviors from direct

participant observations in several cases of a large multiyear cross-industry international

research project to prove the hypothesis that effective team performance management

requires strong transformational leadership. Several popular and proven group leader

behavior measurement constructs are discussed to show how they can be applied for

assessing group leader behavior in any field. Two flexible taxonomies are built for

assisting in quantitatively and qualitatively explaining stakeholder perceptions of group

leader behaviors and team performance. Four theoretically sampled case studies are

analyzed. The taxonomies are analyzed quantitatively and the results are qualitatively

evaluated.

Aminuddin Yusof, Parilah Mohd Shah [1] used leadership substitutes theory as

framework to examine the extent to which situational variables moderate the relationship

between transformational leadership behaviors and coaches' job satisfaction at NCAA

Division III institutions. The Transformational Leadership Behavior Inventory was used

to measure coaches' perception of the transformational leadership behaviors of their

athletic directors. Professional orientation was discovered to be a leadership neutralizer,

while group cohesion to be a substitute of transformational leadership behaviors. It was

concluded that transformational leadership behaviors of athletic directors have a direct

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relationship with coaches' job satisfaction in the absence of a strong leadership substitute

or neutralizer. However, in the presence of leadership substitute and neutralizer,

transformational leadership behaviors influence coaches' job satisfaction indirectly,

through the moderating effects of the substitute and neutralizer.

Richard A. Yoder, Scott L. Eby [5] using Swaziland's Ministry of Health as a case study

assessed the extent to which the empirical data supports anecdotal information and trends

towards decentralized and participatory management systems. Specifically, this study

measures the level of participation in decision making and assesses its impact on job

satisfaction, measures the level of and analyses differences in job satisfaction by job

classification, and identifies and analyses the determinants of employee job satisfaction.

Data were obtained from a survey questionnaire which was constructed and administered

to 447 employees of the Ministry of Health, a 42 per cent sample, at fifteen representative

locations throughout the country. Simple descriptive statistics and multivariate techniques

are used to analyze the data. From the analysis, policy implications are developed for

designing administrative structures and systems that respond to emerging quality of

work life needs, strengthening productivity, and improving the quality of services

provided.

Acorn S et al [6] tested a theoretical model of the following variables, decentralization,

professional autonomy, job satisfaction, and organizational commitment. Data were

collected through a comprehensive survey of first-line nurse managers (N = 200) in acute

care hospitals with more than 100 beds in British Columbia, Canada. The final model

excluded all explored personal characteristics of the nurse manager-gender, health or

vitality status, marital status, age, education, and years of supervisory or management

experience. Job satisfaction was found to be an important predictor of organizational

commitment. However, decentralization was most important because it affected

organizational commitment directly, as well as indirectly, through professional autonomy

and job satisfaction.

3. Research Methodology3.1Research Objective

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This study has two major objectives. The first is to determine the impact and

relationship of level of centralization with the job satisfaction of employees in the

organization setting. Second objective is to check whether transformational

leadership style and centralization in the organization are correlated. Based on

these objectives following research question are formed:

Q1. Is there any relationship between level of Centralization and job satisfaction

of employees?

Q2. Is there any relationship between Centralization and transformational

leadership and job satisfaction of employees?

3.2HypothesisThe following Hypothesis were developed and tested for this study on the basis of

research questions:

(1)H0: There is no significant relationship between level of Centralization and jobsatisfaction of employees.

H1: There is relationship between level of Centralization and job satisfaction of

employees.

(2)H0: There is no significant relationship between Centralization andtransformational leadership style.

H1: There is relationship between Centralization and transformational leadership

style.

3.3Research DesignIn order to determine the perspective of employees in different organizations the

Descriptive Research method of Conclusive Research Design is followed to

understand the employees point of view regarding the impact of leadership style and

level of formalization on job satisfaction. Since the objective of Descriptive research

is to describe the characteristics on the basis of the prior formulation of specific

hypothesis, it is very much relevant for this study. In the descriptive research, the

primary emphasis is on data collection through a survey. It includes selecting the right

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kind of respondents, designing an appropriate questionnaire, collecting the data

preparing it, and finally concluding with the findings of the research tools. In order to

perform the descriptive research, in this study, single cross-sectional design is

followed. In this methodology of descriptive research one sample of respondents is

drawn from the target population and information is obtained from this sample once.

Thereafter the hypothesis would be tested using the appropriate research tools.

3.4Sampling PlanSampling is the act, process, or technique of selecting a suitable sample, or a

representative part of a population for the purpose of determining parameters or

characteristics of the whole population. Sampling is one of the components of a

research design. It is the only feasible way to collect research data in this

organizational structure and behavior problem.

Target Population

The target population is people who are working in organizations having

organizational structure and leadership style appropriate to this study. People who

are working at different hierarchy level and playing different roles in the organization

are in the target population.

Sampling TechniqueThe study is a single cross sectional study because the data were collected at a single

point of time. For the purpose of present study, a related sample of population was

selected on the basis of convenience.

Reasons for using Convenience Sampling Technique:

Convenience sampling is least expensive. Convenience sampling is least time consuming. In convenience sampling the sampling units are accessible easily. In this kind of sampling the sampling units are easy to measure and cooperative.

Sample size and Design

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Sample size- A sample 54 employees have responded for the questionnaire. Theactual employees were contacted on the basis of convenience sampling.

Data collection mode- Online questionnaire. Research period- Research work is carried out for a period of 5-8 days. Research Instrument- The research work is carried out through self-

administered questionnaires.

References:

[1].Samuel Nguni et al, Transformational and transactional leadership effects on teachers'job satisfaction, organizational commitment, and organizational citizenship behavior in

primary schools: The Tanzanian case, School Effectiveness and School Improvement -

SCH EFFECTIVENESS SCH IMPROV , vol. 17, no. 2, pp. 145-177, 2006.

[2].Kara A. Arnold et al, Transformational Leadership and Psychological Well-Being: TheMediating Role of Meaningful Work, : Journal of Occupational Health Psychology -

J OCCUP HEALTH PSYCHOL , vol. 12, no. 3, pp. 193-203, 2007.

[3].Aminuddin Yusof, Parilah Mohd Shah, Transformational Leadership and LeadershipSubstitutes in Sports: Implications on Coaches' Job Satisfaction, International Bulletin

of Business Administration, Issue 3 (2008).

[4].Kenneth David Strang, Examining effective and ineffective transformational projectleadership, Team Performance Management , vol. 11, no. 3/4, pp. 68-103, 2005.

[5].Richard A. Yoder, Scott L. Eby, Participation, job satisfaction and decentralization: Thecase of Swaziland, Public Administration and Development, Volume 10, Issue 2, pages

153163, April/June 1990.

[6].Acorn S et al, Decentralization as a determinant of autonomy, job satisfaction, andorganizational commitment among nurse managers, Nurs Res.1997, Jan-Feb; 46(1):

52-8.