How CEO Transformational Leadership Emerges and Affects Firm Performance
Abstract
The importance of the Chief Executive Officer’s (CEO) transformational leadership (CTL) has been increasingly recognized, yet our understanding of how CTL arises and how it impacts firm performance remains limited. Building on the current body of leadership research, we theorize that market dynamism in part gives rise to CTL, and that CTL then affects firm performance through influencing two critical firm strategic orientations, namely, customer orientation and innovation orientation. Data collected from a sample of 206 manufacturing firms indicate support for the hypotheses. The findings advance our understanding of the interrelationship among the firm’s market context, emergence of CEO transformational leadership, firms’ chosen strategic orientation, and firm performance.