Moderating Effects of Transformational and Transactional Leadership Styles on Commitment and Satisfaction: A Comparative Study between Korean and US employees

In this study, the effects of two leadership styles on organizational commitment (OC) and job satisfaction (JS) are compared across countries. Based on culturally endorsed implicit leadership theory (CLT), we developed and empirically tested a two-by-two matrix model to identify differences in leadership effectiveness depending on the cultural context. Bass (1985) argued that transformational leadership (TFL) is built on a base of transactional leadership (TSL); therefore, a positive moderating effect may exist between these two leadership types. However, House (1996) challenged that argument by insisting that TSL has a negative moderating effect on employee outcome. In this study, we suggest that the moderating effect of TSL may differ depending on the culture. The results of our analysis of four groups classified according to the perceptions of subordinate workers (315 Korean and 181 U.S. employees) of TFL and TSL styles showed highest values for both OC and JS in the high-TFL and high-TSL groups in the Korean sample, while values for the high-TFL and low-TSL groups were highest for U.S. employees. To elucidate these findings further, we investigated the moderating effects of various subdimensions of TFL and TSL. The results indicated that TFL and TSL had positive moderating effects on OC and JS in Korea. However, no such moderating effect was evident in the U.S. sample. These results were consistent with the results of the two-by-two matrix. The findings of this study provide important insight into how managers can lead Korean and U.S. employees more successfully.