TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL PERFORMANCE: A SYSTEMATIC REVIEW AND EMPIRICAL ANALYSIS ACROSS DIVERSE PHILIPPINE INDUSTRIES
Keywords:
transformational leadership, organizational performance, employee engagement, digital self-efficacy, structural equation modeling, Philippines enterprise sectorAbstract
The accelerating volatility of post-pandemic macroeconomic environments requires organizational leadership capable of mobilizing human capital, driving digital adaptation, and sustaining operational productivity. This study investigates the direct and indirect relationships between transformational leadership dimensions—idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration—and multi-dimensional organizational performance across key employment sectors in the Philippines. Utilizing an explanatory cross-sectional quantitative design integrated with structural equation modeling, empirical data were gathered from a stratified sample of 768 mid-level managers and operational personnel across five major Philippine industries: Business Process Outsourcing, Healthcare, Higher Education, Banking and Finance, and Telecommunications. The findings indicate that transformational leadership exerts a robust positive direct effect on overall organizational performance (β = 0.218, p < 0.001). Furthermore, dynamic structural path modeling demonstrates that employee engagement (β = 0.294, p < 0.001) and digital self-efficacy (β = 0.158, p < 0.001) significantly mediate this relationship, yielding a cumulative indirect effect of β = 0.452. Inspirational motivation emerged as the strongest single dimension driving operational efficacy, whereas intellectual stimulation significantly enhanced non-financial performance metrics, particularly innovation and adaptive capability. Comparative sector analysis revealed significant cross-industry variations, with knowledge-intensive sectors exhibiting higher sensitivity to intellectual stimulation and human-centric service sectors showing stronger alignment with individualized consideration. The study concludes that transformational leadership functions as a structural catalyst that enhances psychological resources and technological readiness. Practical implications recommend that organizational developers embed transformational behaviors into executive leadership frameworks, prioritize digital empowerment, and tailor leadership development interventions to industry-specific operational realities.
References
1. Agag, G., Abdelmoety, Z. H., Aboul-Dahab, S., Daher, M., Sharkasi, N., Taha, E., Yousaf, A., & Abdelwahab, M. (2025). A cross-cultural meta-analysis of transformational leadership–performance outcomes relationship. International Studies of Management & Organization, 55(4), 1–41. https://doi.org/10.1080/00208825.2025.2566556
2. Avolio, B. J., & Bass, B. M. (2004). Multifactor Leadership Questionnaire: Manual and sampler set (3rd ed.). Mind Garden.
3. Backhaus, L., & Vogel, R. (2022). Leadership in the public sector: A meta-analysis of styles, outcomes, contexts, and methods. Public Administration Review, 82(6), 986–1003. https://doi.org/10.1111/puar.13516
4. Barlan, J. M. (2023). Exploring the challenges faced by higher education institutions in implementing the Philippine Quality Award framework: Basis for action planning [Conference paper]. In Proceedings of the International Conference on Industrial Engineering and Operations Management. IEOM Society International. https://doi.org/10.46254/ap04.20230114
5. Bass, B. M., & Avolio, B. J. (Eds.). (1994). Improving organizational effectiveness through transformational leadership. Sage.
6. Blau, P. M. (1964). Exchange and power in social life. Wiley.
7. Burns, J. M. (1978). Leadership. Harper & Row.
8. Cao, T. T., & Le, B. P. (2024). Impacts of transformational leadership on organizational change capability: A two-path mediating role of trust in leadership. European Journal of Management and Business Economics, 33(2), 157–173. https://doi.org/10.1108/EJMBE-06-2021-0180
9. Eastin, M. S., & LaRose, R. (2000). Internet self-efficacy and the psychology of the digital divide. Journal of Computer-Mediated Communication, 6(1). https://doi.org/10.1111/j.1083-6101.2000.tb00110.x
10. Goestjahjanti, F. S., Pasaribu, S. B., Sadewo, T. I., Srinita, S., Meirobie, I., & Irawan, A. P. (2022). The effect of transformational leadership, servant leadership, and organizational learning on manufacturing industry performance. Frontiers in Psychology, 13, Article 895361. https://doi.org/10.3389/fpsyg.2022.895361
11. Hobfoll, S. E. (1989). Conservation of resources: A new attempt at conceptualizing stress. American Psychologist, 44(3), 513–524. https://doi.org/10.1037/0003-066X.44.3.513
12. Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: Translating strategy into action. Harvard Business School Press.
13. Katou, A. A., Koupkas, M., & Triantafillidou, E. (2022). Job demands–resources model, transformational leadership and organizational performance: A multilevel study. International Journal of Productivity and Performance Management, 71(7), 2704–2722. https://doi.org/10.1108/IJPPM-06-2020-0342
14. Khan, N. A., & Khan, A. N. (2019). What followers are saying about transformational leaders fostering employee innovation via organisational learning, knowledge sharing and social media use in public organisations? Government Information Quarterly, 36(4), 101391. https://doi.org/10.1016/j.giq.2019.07.003
15. Le, T. T., & Le, B. P. (2021). Mediating role of change capability in the relationship between transformational leadership and organizational performance: An empirical research. Psychology Research and Behavior Management, 14, 1747–1759. https://doi.org/10.2147/PRBM.S333515
16. Li, J., Wang, Y., & Han, J. (2026). A study on the relationship between digital leadership, digital self-efficacy, and work engagement: The moderating role of technostress. Frontiers in Psychology, 17, Article 1751207. https://doi.org/10.3389/fpsyg.2026.1751207
17. Mamdouh, A., Adel, R., Khourshed, N., & Ragheb, M. A. (2025). Impact of digital leadership on employee performance with mediation roles of digital self-efficacy and employee motivation. Business Ethics and Leadership, 9(3), 109–129. https://doi.org/10.61093/bel.9(3).109-129.2025
18. Sahu, S., Pathardikar, A., & Kumar, A. (2018). Transformational leadership and turnover: Mediating effects of employee engagement, employer branding, and psychological attachment. Leadership & Organization Development Journal, 39(1), 82–99. https://doi.org/10.1108/LODJ-12-2014-0243
19. Schaufeli, W. B., Bakker, A. B., & Salanova, M. (2006). The measurement of work engagement with a short questionnaire: A cross-national study. Educational and Psychological Measurement, 66(4), 701–716. https://doi.org/10.1177/0013164405282471
20. Yacon, A. M., & Cayaban, N. B. (2023). Transformational leadership and adaptive performance in the international schools in the Philippines: A basis for an organizational support framework. International Journal of Advanced Research, 11(01), 318–349. https://doi.org/10.21474/IJAR01/16023
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Journal for the Advancement of Sustainable Development Goals
This work is licensed under a Creative Commons Attribution 4.0 International License.
License Statement
Creative Commons Attribution 4.0 International License (CC BY 4.0)
All articles published in the Journal for the Advancement of Sustainable Development Goals (JASDG) are licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0).
Under this license, users are free to:
-
Share — copy and redistribute the material in any medium or format;
-
Adapt — remix, transform, and build upon the material for any purpose, including commercial use;
provided that appropriate credit is given to the original author(s) and the source, a link to the license is provided, and any changes made are indicated.
The licensor cannot revoke these freedoms as long as the license terms are followed.
Authors retain copyright of their work while granting JASDG the right of first publication. The published work remains freely available to readers and may be used, distributed, reproduced, and adapted by others in accordance with the terms of the CC BY 4.0 license.
For more information about this license, please visit:
https://creativecommons.org/licenses/by/4.0/
Copyright Notice
Copyright © 2026 The Author(s).
Articles published in the Journal for the Advancement of Sustainable Development Goals (JASDG) are distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits unrestricted use, distribution, reproduction, and adaptation in any medium, provided the original author(s) and source are properly credited.
