Leadership Practices,Cultural Values,and Organizational Performance

I investigated the relationship between transformational leadership practices, culture, and organizational effectiveness in 12 small manufacturing and service companies. Companies were separated into high‐and mixed‐performance groups based upon sales revenue, manpower levels, and above‐industry‐average profit margins. Only management completed the Leadership Practices Inventory (LPI). All respondents completed the Organizational Culture Profile (OCP). I expected to find high‐performance companies differed from mixed‐performance companies on leadership and culture. I expected to find a relationship between leadership and culture that explained performance. I expected to find high performance affected by multiple leaders and multiple cultures. Findings concluded no significant differences in leadership practices, although a pattern of responses suggested multiple levels of leadership only in high‐performance companies. On the OCP, high‐performance companies differed significantly on the value Emphasis on Rewards. Mixed‐performance companies differed significantly on Attention to Detail, Outcome Orientation, and Team Orientation. A relationship between Challenging the Process, Aggressiveness, and Team Orientation accounted for only 14% of the variance in effectiveness.