Transformational Leadership, Strategic Agility and Performance of State Corporations in Kenya

Abstract

State corporations in Kenya have undergone major reforms in the last ten years and in more stable settings, public sector in Kenya has performed dismally even in employing strategy processes such as strategic planning and government budgeting routines. Therefore, for them to achieve exceptional performance in the current volatile and uncertain socio-economic environment, state corporations in Kenya require agile leadership capabilities and effective management styles. The purpose of this research was to examine the influence of transformational leadership on organizational performance of state corporations and further explore whether strategic agility mediates that relationship. The study was grounded on transformational leadership, dynamic capability, stakeholder and game theories. Empirically the study investigated the relationship between the individual components of transformational leadership namely, Idealized influence, Inspirational motivation, Intellectual stimulation and Individual consideration, on organizational performance and strategic agility constructs as the mediating variable. The Multifactor Leadership Questionnaire (MLQ -5X)” of Bass and Avolio (1997) was adapted to measure the different dimensions of transformational leadership and Balance Score Card (BSC) to measure performance. Pragmatism research philosophy approach was employed using descriptive cross-sectional mixed method survey design. The research collected empirical data using structured and semi structured questionnaire instrument from valid sampled respondent 215 top leadership and management from 55 State Corporations. The data was analyzed using the Statistical Package for Social Sciences Program (SPSS) and Structural Equation Model (SEM). The analyses generated both descriptive and inferential statistics on transformational leadership and strategic agility on performance of state corporations in Kenya. The study tools showed strong reliability of Cronbach’s Alpha α of up to 0. 941. Transformational leadership through its four components had positive and significant influence on organizational performance with R2 of 0.845. Strategic Agility mediation effect on the relationship between transformational leadership and organizational performance upraised R2 to 0.904 indicating partial mediation influence. This study concluded that transformational leadership and strategic agility are vital capabilities to enhance organizational performance in the state corporations. Practically, this research confirms that each construct of transformational leadership influences performance differently. Therefore, this finding can help companies with their leadership development process. The results of this study will have significant implications on theories, leadership and management of state corporations. The originality of this research provided basic configuration of modelling Transformational leadership by Structural Equation Model and conceptual model that proved the effect of idealized influence, inspirational motivation, intellectual motivation, individual consideration on high performance of state corporation inserting strategic agility as mediation effect of the influence between variables that were performed in previous researches.