Emotional intelligence – the moderator of leadership styles and performance

Abstract

By applying emotional intelligence (EI), a manager can make a positive impact on the performance of the organization. The leader or manager should understand EI and the need of the employees. The objective of the study is to predict whether the leadership style and emotional intelligence assists in predicting the performance of an organization. Quantitative methodology was applied in the study. Primary data was collected through an online survey among 222 branch managers working in a large banking and financial sector company. Data collected was analysed through the application of statistical techniques like exploratory factor analysis, confirmatory factor analysis and structural equation modelling. Results of the study show that attributes such as passive defensive leadership style negatively impact the organization’s performance and attributes of emotional intelligence positively moderate the relationship between leadership style and the organization’s performance.

Introduction

The present-world organizations have unanimously recognized and appreciated the undefeatable importance of the ability and performance of their human resources, as an addition to essential technology and tools, for the overall progress of the entities (Butler & Chinowsky, 2006).

Leadership has been recognised in the distant past as playing an important role in human development and bringing about major changes throughout an organization and its membership, which significantly focused on pushing an organization towards its common goals and objectives (Slack, 1997). The crucial position occupied by leaders in organizations has resulted in the adoption of various styles of leadership in the organization, such as democratic, people or relationship-centred approach, or autocratic, production-centred method, etc. for achieving organizational effectiveness (Cheong, 2008; Chiang & Wang, 2012; Clark, Hartline, & Jones, 2009).

The positive association between Emotional Intelligence and leadership, and its further impact on the organizational culture, is claimed to eventually result in enhancement of capability of the organization to change. This is asserted to have positive improvement prospects for the organization in terms of its competitiveness and performance (organizational/financial) (Sin and Yazdanifard, 2013). Thus, literature has rigorously reviewed the relationship between such organizational factors, which has significantly meant that there is a strong correlation between the leadership style and the associated efficiency attained in mobilization, allocation, and utilization of the resources (Saasongu, 2015), which ultimately enhances the organizational performance.

Furthermore, there is a role of emotional intelligence, where a leader should manage his or her emotion and that of others. As a result, it would assist the leader in developing a relationship with employees and subordinates, which in turn, will make an impact on organizational performance (Ovans, 2015).

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