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ECOFORUM
[Volume 6, Issue 2(11), 2017]
Ljubomir DRAKULEVSKI
Faculty of Economics-Skopje
Ss.Cyril and Methodius University in Skopje
drakul@eccf.ukim.edu.mk
Stojan DEBARLIEV
Faculty of Economics-Skopje
Ss.Cyril and Methodius University in Skopje
stojan.debarliev@eccf.ukim.edu.mk
Aleksandra JANESKA-ILIE
Faculty of Economics-Skopje
Ss.Cyril and Methodius University in Skopje
aleksandra@eccf.ukim.edu.mk
Angelina TANEVA-VESHOVSKA
Institute for Research in Environment, Civil Engineering and
angelina@iege.edu.mk
Abstract
The purpose of the research is to empirically evaluate leadership behavior of managers, focusing on
transformational vs. transactional leadership at the same time exploring the relationship between emotional
intelligence and transformational leadership in a specific economic and cultural setting, as the Republic of
Macedonia. Questionnaire-based survey on managers at different management levels in Macedonian companies
was conducted in order obtain the data necessary for evaluating the leadership styles and testing the proposed
hypotheses The data was analyzed using descriptive statistics and hierarchical regression analysis. Results
indicate that leaders in Macedonian companies show higher affection towards transformational leadership. The
ability to perceive and understand emotions and the ability to manage emotions have a positive impact on
transformational leadership style. As a theoretical and practical implication of research, we aim to generalize
the idea for the positive relationship between the emotional intelligence and transformational leadership by
confirming the applicability of the model that examines this relationship in the case of the Republic of
Macedonia
Key words: emotional intelligence, Republic of Macedonia, transformational leadership, transactional
leadership.
JEL Classification: D23
I. INTRODUCTION
Leadership is perhaps one of the most important aspects of management, immensely contributing to the
general wellbeing of organizations and nations (Weihrich et al, 2008). One essential leadership function is to
help the organization adapt to its environment and acquire resources needed to survive (Hunt, 1991; Yukl, 1998).
During the development of leadership theories, the research has dominantly focused on the leader (leader
traits and behavior) (Bass, 1990; Yukl, 1998), more than on the psychological effects on followers, hence the
readiness of understanding leadership still seems to have much to gain by research that concentrates on
psychological effects on followers (Hunt, 1999; Lord and Brown, 2004). In other words, to understand
leadership, it is needed to develop theories related to the psychological processes that translate leader behavior
into follower action. In this regard, the most contemporary effort in the recent research of leadership has been the
development of transformational leadership theory.
Although there has been a great deal of research demonstrating the effectiveness of transformational
leadership behavior in organizations (Judge and Piccolo, 2004), there has been a relative lack of research
investigating the antecedents of these behaviors (Rubin, Munz, and Bommer, 2005). In terms of psychological
factors, transformational leadership has been linked with the higher levels of the traits extraversion,
agreeableness, emotional stability, and openness (Bono and Judge, 2004). Higher levels of intelligence have also
been found to be related to transformational leadership (Atwater and Yammarino, 1993).
A STORY ON LEADERSHIP STYLES FROM MACEDONIAN COMPANIES: COMPONENTS OF
TRANSFORMATIONAL VS. TRANSACTIONAL LEADERSHIP INFLUENCED BY ASPECTS OF
EMOTIONALL INTELLIGENCE
ECOFORUM
[Volume 6, Issue 2(11), 2017]
Research and relevant literature claims that the correlation between IQ and success in life (achieving a
higher position in the organization, life satisfaction, work productivity, etc.) is about zero (Goleman,1998).
Furthermore, highly intelligent people are not more likely to be successful in life and as well as satisfied in
comparison to people with lower IQ . On the other hand, emotional intelligence turned out to be significantly
positively associated with success in life. Also, results indicate that emotional intelligence is significantly
positively associated with successful coping in stressful situations, as the main features of the times in which we
live (Whetten, Cameron, 2002,p. 122) Goleman and his colleagues further adapted the concept of emotional
intelligence in the business world by describing its importance as an essential ingredient for business success
(Goleman et al 2002; Goleman 2004; Mayer, Goleman, Barrett and Gutstein 2004). Studies conducted including
almost 200 large, global companies, reported that ‗truly effective leaders are distinguished by high degree of
emotional intelligence‘ (Goleman 1998a). Research also suggests that emotional intelligence is a positive
predictor of leadership (Caruso et al., 2002; Goleman, Boyatzis, and McKee, 2002; Sosik and Megerian, 1999;
see also Zaccaro et al., 2004).
Explaining the essence of transformational leadership, Bass (1997) argues that there is universality in the
transformational–transactional leadership paradigm. He retains that the same conception of phenomena and
relationships can be observed in a wide range of organizations and cultures, and exceptions can be understood as
a consequence of unusual attributes of the organizations or cultures. Thus, according to Bass, leaders who
engage in transformational behaviors will be more effective than those who don‘t, regardless of culture.
Moreover, Bass acknowledges that the transactional and transformational theory may have to be fine-tuned as it
applies to different cultures, and the specific behaviors and decision styles may change to some extent.
Having in mind the importance and necessity for directing the research of leadership in the field of
psychological effects of leaders on followers, i.e. the psychological processes that translate leader behavior into
follower action, as well as the relevance of the concept of emotional intelligence to the success in the business
world and in particular for the effective leadership, it seems as a very inspiring theme for exploring. Moreover,
starting from the standpoint of Bass for universality in the transformational–transactional leadership paradigm
regardless of the culture differences, it would be even more inspiring to test the generalizability of the
transformational leadership in the specific economic and cultural settings, as it is the case of the Republic of
Macedonia.
Hence, the purpose of this research is to empirically evaluate the leadership behavior and explore the
determinants of leadership styles of managers, in the specific economic and cultural settings, as it is the case of
the Republic of Macedonia. Hence, two main objectives of research appear: first, to measure and evaluate the
leadership behavior among managers in the Republic of Macedonia, focusing on transformational vs.
transactional leadership; second, to evaluate the relationship between emotional intelligence and
transformational leadership.
Based on the purpose and objectives of this research, two main research question are proposed:
What portrays leadership behavior in Macedonia? Could they be described predominantly as
transformational or transactional leaders?
Could emotional intelligence used as a predictor of transformational leadership style?
In order to answer to the second research questions, we formulated the main hypothesis of research:
Emotional intelligence is a positive predictor of transformational leadership.
In the Analytical framework section the specific hypotheses are formulated, which are tested and
evaluated in the Results and analysis section.
As a theoretical and practical implication of research, we aim to generalize the idea for the positive
relationship between the emotional intelligence and transformational leadership by confirming the applicability
of the model that examines this relationship in the specific economic and cultural settings, as it is the case of the
Republic of Macedonia.
II. LITERA TURE REV IEW
As it is mentioned in the introduction, the scope of the research is the leadership behavior and
determinants of leadership styles of managers, in the specific economic and cultural settings, as it is the case of
the Republic of Macedonia. Therefore, we studied previous researches in the area of leadership style theories,
and focused on the characteristics of transformational and transactional leadership. We also considered
emotional intelligence theories with special attention on the models of Mayer, Salovey and Caruso in respect to
emotional intelligence.
Concepts of leadership and leadership theories
Leadership proposes a number of theories respectively pursuing to clearly identify and accordingly clarify
the apparently influential effects of leader behavior or personality attributes upon the satisfaction and
performance of hierarchical subordinates. These theories fail to settle in many respects, but have in shared the
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[Volume 6, Issue 2(11), 2017]
element that none of them systematically accounts for very much criterion variance. Many have complained that
the construction of leadership lacks a common and established definition by which it can be evaluated, no
dominant paradigms for studying it, and little agreement about the best strategies for developing and exercising it
(Hackman and Wageman, 2007; Barker, 1997; Higgs, 2003).
After the initial classical period in discussing leadership in the first half of the twentieth century, a new
era of study started in the second half. Nevertheless this phase of theoretical discussion is considered to sustain
even nowadays binding to contemporary discussion of leadership. Within this period transformational and
transactional leadership occurs starting with Burns in 1978. With a background on political science, Burns
discusses the various types of leadership, especially those that differ from transactional leadership.
Acording to the review of Xiaoxia et al. (2006) leadership theories can be featured generally as being
concerned with who leads (i.e., characteristics of leaders), how they lead (i.e., leader behaviors), under what
circumstances they lead (i.e., situational theories, contingency theories), or who follows the leader (i.e.,
relational theories) (Cleveland, Stockdale and Murphy, 2000). According to researchers, trait approaches,
behavioral approaches, contingency theories and situational theories belong to traditional theories of leadership;
whereas relational-based theories are most recent development of leadership theories. Two influential
relationship-based leadership theories are the Leader-Member Exchange (LMX) model by Dansereau, Graen,
and Haga (1975) and Transformational Leadership by Bass and Avolio (1994).
Transformational and transactional leadership
Transformational leadership in the U.S. was primarily theorized by Burns and fully developed by Bass in
non-educational contexts. An expanded and refined version of Burn‘s transformational leadership theory has
been utilized in organizations since the 1980s (Bass, 1985; Bass, Waldman, Avolio, and Bebb, 1987; Tichy and
Devanna, 1986). Prior to this time much attention had been given to the examination of the approaches of leaders
who successfully transformed organizations. According to Burns, the purpose of leadership is to motivate
followers to work towards transcendental goals instead of immediate self-interest. Burns characterized
transformational leadership as a phenomenon that ―occurs when one or more persons engage with others in such
a way that leaders and followers raise one another to higher levels of motivation and morality‖ (Burns, 1978). He
believed that transformational leadership could raise followers from a lower level to a higher level of needs
which agrees with Maslow‘s hierarchy of needs. Bass (1985) refined and expanded Burns‘ leadership theory.
Bass (1985) said that a leader is ―one who motivates us to do more than we originally expected to do‖. Since the
1970s, transformational leadership has undergone major development by various scholars. Their research
explored the following aspects of transformational leadership: leader characteristics, leader behaviors and
interaction with context factors (e.g., culture).
Research studies have repeatedly indicated that transformational leadership is positively linked to
personal outcomes (Dumdum, Lowe, and Avolio, 2002; Fuller, Patterson, Hester, and Stringer, 1996). The
relationship between transformational leadership and personal outcomes such as job satisfaction and
commitment is well established (Bass, 1998). Avolio, and Shamir (2002) revealed that transformational leaders
had a direct impact on followers‘ empowerment, morality, and motivation. In another experimental study,
Barling, Weber and Kelloway (1996) reported a significant impact of transformational leadership on followers‘
commitment and unit-level financial performance. Other studies also showed positive relationships between
transformational leadership and personal outcomes such as satisfaction, performance, and commitment (Bycio,
Hackett and Allen, 1995; Koh, Steers and Terborg, 1995).
Transactional leaders work within their organizational cultures following existing rules, procedures, and
norms; transformational leaders change their culture by first understanding it and then realigning the
organization's culture with a new vision and a revision of its shared assumptions, values, and norms (Bass,
1985). Whereas non transformational (i.e., transactional) leadership is seen as focused on the status quo and
fostering performance, on well-defined tasks to meet set performance objectives, transformational leadership is
proposed to highlight the necessity of change and to promote creativity, so transformational leadership should be
especially suited to foster innovation (Eisenbiess, Knippenberg, and Boerner, 2008). Transactional leadership
produces incremental changes in way followers behave, for instance, transactional leaders generally reward or
discipline followers depending on the adequacy of the follower‘s performance. Transformational leadership
produces essential changes in followers‘ beliefs and attitudes about the organization (Cleveland, Stockdale and
Murphy, 2000).
Components of transformational and transactional leadership
Transformational leadership has traditionally been defined as the display of the following components:
charisma, intellectual stimulation, and individualized consideration (Avolio et al., 1999). Transformational
leadership refers to the leader moving the follower beyond immediate self-interests through idealized influence
(charisma), inspiration, intellectual stimulation, or individualized consideration. This type of leadership is
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considered to promote the follower‘s level of maturity and ideals as well as concerns for achievement, self-
actualization, and the well-being of others, the organization, and society.
Beyond the different dimensions of transformational leadership mentioned, Bass and Avolio‘s (1997) full
range model of leadership also contains three transactional leadership factors: contingent reward, management-
by-exception (active), and management-by-exception (passive). Whereas contingent reward refers to the degree
leaders operate according to economic and emotional exchange principles with followers. In this respect leaders
set out clear goals and expectations, as well as rewards for followers for working toward them. Management by-
exception (active) is the extent to which a leader actively monitors followers for mistakes and tries to correct
them. Management-by-exception (passive) refers to leaders who wait for mistakes to occur before acting to
correct them.
The concept of emotional intelligence
Emotional intelligence essentially describes the ability to effectively join emotions and reasoning, using
emotions to facilitate reasoning and reasoning intelligently about emotions (Mayer and Salovey, 1997). This
relatively narrow definition of emotional intelligence, as the ability to understand how others‘ emotions work
and to control one‘s own emotions, was expanded by Goleman to include such competencies as optimism,
conscientiousness, motivation, empathy and social competence (Goleman 1995, 1998b).
The term emotional intelligence appears for the first time in academic journals during the nineties in the
United States. The history of emotional intelligence research is undoubtedly marked by theoretical and empirical
research of authors such as Salovey, Mayer, Goleman, Caruso, Bar-On and Paker (Mayer et al. 2000).
Mayer, Salovey i Caruso have performed research on emotional intelligence distinguishing three
approaches to emotional intelligence, each differing from the others and followed by significant critical remarks
(Mayer et al., 2000). The first approach is called zeitgeist, or reffering to emotional intelligence as a scientific
cultural trend. The second approach for determining the meaning of the term an emotional intelligence is where
it is considered to be a synonym to the concept of personality. The third approach considers emotional
intelligence as a cognitive ability, i.e mental ability. Proponents believe that emotional intelligence is facilitated
through both the emotional and cognitive system. It acts as an integral concept, which is visible through four
complementary processes: perceive emotions in oneself and others accurately, (b) use emotions to facilitate
thinking, (c) understand emotions, emotional language, and the signals conveyed by emotions, and (d) manage
emotions so as to attain specific goals.
Theoretical models of emotional intelligence
In the literature on emotional intelligence two dominant models of emotional intelligence could be
distinguished. The distinction is made upon their initial starting point at explaining the concept of emotional
intelligence, its structure and methods of measurement, considering mental and socio-emotional models.
Mayer and Salovey are representatives of mental ability model, known as the more restrictive model of
emotional intelligence. In this line the initial definition of emotional intelligence is that it is "the ability to
perceive, evaluate and generate emotions to facilitate thinking, to understand emotions and emotional knowledge
and reflective to regulate emotions to improve emotional and intellectual development (Mayer, Salovey, 1997).
"This definition implies that emotions makes the thinking process more "intelligent", i.e. unites emotions and
intelligence in an integrated functional whole. Their claims are based on research results performed in this area,
reinforcing attitudes about the relationship between cognitive and emotional processes. This team of scientists
were later joined by Caruso and they together redefine emotional intelligence In this sense "emotional
intelligence is the ability to accurately perceive and express emotion, assimilate emotion-related feelings, to
understand and resonate considering the presence of emotions and adjust emotions for himself and others
"(Mayer et al., 2000).
The socio-emotional model for defining emotional intelligence is conceptually different from the mental
ability model. This model is wider and as part of the emotional intelligence includes traits which are not
considered as cognitive abilities. According to Goleman emotional intelligence is completely independent and
different from general intelligence, related to some personality traits. He presents a simple two-dimensional
model of emotional intelligence, one dimension referring to personal skills (aimed at managing themselves) and
other focused on social skills (used for managing others). Personal skills include the following components: self-
awareness, self-regulation and motivation. Whereas social skills include the following components: empathy and
social skills.
Measuring Emotional Intelligence
In the short history of the study of emotional intelligence it has been observed the attempt to construct a
quality measuring instrument. The nature of measuring instruments is determined by theoretical models of the
operationalization of the emotional intelligence, because there is substantial differences between them. More
recent attempts to construct a measuring instruments have proven themselves as better. For the most grounded
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[Volume 6, Issue 2(11), 2017]
measuring instruments for the emotional intelligence as a mental ability are considered the tests referring to
Mayer, Salovey i Caruso directly measure EI as an ability (Caruso,Salovey, 2004)). The starting point at the
construction of the measuring instrument for EI is the theory according to which emotional intelligence is
considered a form of intelligence because it is related to the mental capabilities of processing information. They
constructed the Multifactor Emotional Intelligence scale (MEIS), which is consisted of 12 measures of sub-
competencies related to EI grouped into four categories: perception, facilitating, understanding and managing
emotions. The test MEIS was revised in 2004 as Mayer Salovey Caruso Emotional Intelligence Test - MSCEIT
with two versions MSCEIT RV1.0 and MSCEIT RV2.0. With its use a composite score of EI is received, as well
as sub-scores for the following groups of skills: perception and identification of emotions; facilitating the process
of thinking, understanding emotions; and managing emotions.
Emotional intelligence and leadership
The impact of emotional intelligence on leadership can be explored by analyzing the different styles of
leadership, their emotional structure, the interaction of leaders and followers, success in work and more. Many
researchers have proposed different leadership styles, depending on the emotional intelligence of leaders, their
behavior and influencing followers.
There is no precise formula for great leadership, because there are many ways to achieve different
personal styles of leadership. Daniel Goldman (Goldman et al.,2002)) argues that effective leaders must have at
least one developed great skill of the four components of emotional intelligence: self-awareness, self-
management, social awareness and management of relationships with other individuals. Emotionally intelligent
leaders should have highly developed management and leadership skills, and highly developed emotional skills
(Caruso, Salovey ,2004). Daniel Feldman (Feldman,1999) examines the skills of emotionally intelligent
leadership. He distinguishes between two groups one related to basic skills (knowledge of oneself, maintaining
control, reading to others, just perception and communication flexibility); skills and higher order (taking
responsibility, generating elections, creating a vision, having courage and finding solutions).
III. ANALYTICAL FRAMEWORK
Research model
Based on the purpose of this research, two main objectives of research appear: first, to measure and
evaluate the leadership behavior among managers in the Republic of Macedonia, with a focus on
transformational vs. transactional leadership; second, to evaluate the relationship between emotional intelligence
and transformational leadership.
For the purpose of this research, we have created our own model. We mainly ground the model on one
core factor and one explanatory factor. The core factor is related to transformational leadership expressed
through four leadership factors. The explanatory factor is related to emotional intelligence, expressed through
three subdimensions.
The theoretical construct for transformational leadership style, we base it on Bass and Avolio‘s (1994)
―full range of leadership‖ model which comprises three styles: (a) transformational (b) transactional (c) laissez-
faire. Within the transformational leadership construct, authors identified four factors, or types of leadership
behavior that are classified as transformational: (1) Idealized Influence; (2) Inspirational motivation; (3)
Intellectual stimulation; (4) Individualized consideration.
The explanatory factor, related to emotional intelligence is based on the theory of Mayer and Salovey and
the underlining mental ability model of emotional intelligence. Given the fact that different versions of
measuring instruments have been constructed within this model, we use version of Vladimir Takšić, which is
indeed a shortened version of the model proposed by Mayer and Salovey. It consists of three subscales that
intend to be evaluate: the ability to perceive and understand emotions; the ability to express emotions; and the
ability to manage emotions
Furthermore the group of three control variables (age, education level and management position) are
included in the research model, considering their high potential for influence on the dependent variable, and in
line with the aim of this paper to test the relative relationship between emotional intelligence and leadership
styles. The control variables itself are not in the primary focus of interest
Based on the purpose and objectives of this research, two main research question are proposed:
What portrays leadership behavior in Macedonia? Could they be described predominantly as
transformational or transactional leaders?
Could emotional intelligence used as a predictor of transformational leadership style?
In order to answer to the second group of research questions, we formulated the main hypothesis of
research: Emotional intelligence is a positive predictor of transformational leadership.
Development of hypothesis
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[Volume 6, Issue 2(11), 2017]
Based on the main hypothesis of the research, specific hypotheses are formulated and presented in this
section, which are later tested and evaluated in the results and analysis section.
There are a number of theoretical arguments to be made for the relationship between emotional
intelligence and effective leadership, especially considering transformational leadership (Daus and Ashkanasy,
2005). Most of these studies have demonstrated emotional intelligence to be a significant predictor of the
transformational leadership style, in general (Mandell and Pherwani, 2003; Hartsfield, 2003; Ashkanasy and Tse,
2000; Sosik and bMegerian, 1999). From research including almost 200 large, global companies, Goleman
reported that ‗truly effective leaders are distinguished by a high degree of emotional intelligence‘ (Goleman
1998a, p. 82). Other studies also suggest that emotional intelligence is a positive predictor of leadership (Caruso
et al., 2002; Goleman, Boyatzis, and McKee, 2002; Sosik and Megerian, 1999; Zaccaro et al., 2004). Experts in
the field of emotional intelligence argue that elements of emotional intelligence such as empathy, self-
confidence, and self-awareness are the core underpinnings of visionary or transformational leadership (Goleman,
Boyatzis, and McKee, 2002). According to conducted research in this field, for those in leadership positions,
emotional intelligence skills account close to 90 percent of what distinguishes outstanding leaders from those
judged as average‖ (Kemper, 1999, p. 16)
Given the fact that different versions of measuring instruments have been constructed within this model,
we use version of Vladimir Takšić, which is indeed a shortened version of the model proposed by Mayer and
Salovey. It consists of three subscales that intend to be evaluate: the ability to perceive and understand emotions;
the ability to express emotions; and the ability to manage emotions
Since the research model of this study is based on the theory of Mayer and Salovey and the underlining
mental ability model of emotional intelligence, we have formulated the following specific hypotheses:
H1: The ability to perceive and understand emotions is positively related to transformational leadership
style H2: The ability to express emotions is positively related to the transformational leadership style
H3: The ability to manage emotions is positively related to the transformational leadership style
Figure 1. Research model and hypotheses
Source: Model proposed by authors
IV. METHODOLOGY
Research approach
In order to answer the proposed research questions it has been decided to do a survey using a
questionnaire. The data is analyzed using descriptive statistics and hierarchical regression analysis which was
performed within the software SPSS. In order to answer the first research question (What portrays leadership
behavior in Macedonia? Could they be described predominantly as transformational or transactional leaders?),
we have conducted descriptive statistics, comparing the values related to the two researched leadership styles,
transformational vs. transactional leadership. In order to answer the second research question (Could emotional
intelligence used as a predictor of transformational leadership style?), i.e. to test the hypothesis proposed in the
research model, we have conducted hierarchical regression analysis.
Age
Education level
Management position
The ability to perceive and
understand emotions
The ability to express
emotions
The ability to manage
emotions
Transformational
leadership
Control variables
H3
H2
H1
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The hierarchical multiple regression is most often used to: (a) take into account covariates; and (b) test the
additional importance of one or more independent variables in predicting the dependent variable. Practically, the
hierarchical multiple regression analysis allows the importance of the independent variable(s) to be assessed
after all covariates have been controlled for. The research aims at understanding the unique contribution of
emotional intelligence competences in predicting the leadership style, at the same time taking into consideration
some demographic and general characteristics of managers (age, education level and management position)
which have been set as controlling variables .
Data collection
The survey is based on a questionnaire which has been distributed to managers at different management
levels (lower, middle and top) in Macedonian companies. The conducted survey obtained the data necessary for
evaluating leadership styles and testing the proposed hypotheses. The companies were selected randomly from
several lists of companies on the territory of the Republic of Macedonia with no limitations related to their size
and industry sector.
After preparing the questionnaire followed by the testing phase, the questionnaire was distributed
personally in hard copy or electronic form to randomly selected potential respondents.
Questionnaire design
The questionnaire consists of three parts: background information, leadership styles and emotional
competences.
Questions Concerning Background Information
Three general questions were formulated in order to get some information about respondents, including
their: age, education level and management position. This set of questions are formulated to serve as a control
group of variables in the research model. Considering the age a dummy variable has been created. This appears
as a rare mode of expressing this type of variable, but our pre-testing phase of the proposed research model
indicated that there is a significant difference in the leadership styles in terms of age. Namely results indicated a
difference among managers aged up to 30 and over 30 years, hence the decision has been made to divide the
respondents into two groups: 0 – up to 30 years and 1 - over 30 years. For the level of formal education, also
dummy variable has been created, and the respondents has been divided into two groups: 0-not graduates and 1-
the graduates and postgraduates. For the management position we use dummy variable with two groups 0 - lower
and middle level management, 1 - top level management.
Questions Concerning Leadership Styles
The questionnaire includes 21 questions concerning leadership styles. This part of the questionnaire was
based on a Multi-Factor Leadership Questionnaire (MLQ) developed by Bass and Avolio (1998). The MLQ is a
well-known instrument used to measure perceived frequency of transformational and transactional leadership
behavior. It has been used in many studies (Bass, 1995; Bass, Avolio, Jung and Berson, 2003; Carless, 1998;
Den Hartog, Van Muijen and Koopman, 1997). The MLQ uses a five-point rating scale from 0 to 4.
The transformational leadership style consists of four dimensions, including 12 questions. Each
dimension is followed by three questions. The five dimensions include: idealized influence, inspirational
motivation, intellectual stimulation and individualized consideration. The transactional leadership style consists
of three dimensions, including 9 questions. Each dimension is followed by three questions. The three dimensions
include: contingent reward, management-by-exception and laissez-faire leadership. For each factor a minimum
of 0 and a maximum of 12 points is set. So in order to get a result for the final score for transformational, i.e
transactional leadership, the final points for the relevant factor should be summed.
Questions Concerning Background Information
This set of questions refers to emotional competency proposed by Vladimir Takšić, which as mentioned
in the analytical framework, is a compressed version of the model proposed by Mayer and Salovey. This part of
the questionnaire has 45 statements and contains 3 subscales which have the aim to assess: the ability to perceive
and understand emotions; the ability to express emotions; and the ability to manage emotions. Respondents reply
to all of the statements on a Likert scale of 1-5. Individual results were calculated for each capability, and total
result for emotional competence for each respondent.
Science, a questionnaire was employed to measure different, underlying constructs, such as: leadership
styles and emotional intelligence competences, in order to test reliability of the proposed scales related to the
research sample of this study, Cronbach‟s alpha was calculated. Cronbach‘s alpha indicated that the overall
reliability of the two scales for transformational and transactional leadership styles, as well as the three scales for
emotional intelligence competences are at a good level from above 0.7. In particular, we look for values in the
range of 0.7 to 0.8. In all cases α is above 0.7, which indicates good reliability, except for the α of the scale for
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transactional leadership style with the value of 0.629, which can be slight problematic (Table 1). Since, there is
no space to methodologically improve the reliability of this scale, as well as the proposed variable, as a part of
Multi-Factor Leadership Questionnaire (MLQ) is artificially constructed from two leadership styles
(Transactional and Laissez-Faire Leadership), it could be considered that the result is more or less expected,
hence we decided to retain this variable.
Table 1. Cronbach’s α of latent variables
Latent variable
Cronbach’s α
Transformational leadership
0.826
Transactional leadership
0.629
The ability to perceive and understand
emotions
0.756
The ability to express emotions
0.767
The ability to manage emotions
0.780
Source: Authors‘ analysis
Sample
A total of 200 questioners have been sent out to the selected potential respondents. The total received
replies were 80, indicating the response rate of 40%. Among all the 80 responses, 4 samples were invalid due to
the non-compliance. Thus, the samples of 76 participants were available for analysis.
Most Respondents or over 37% fall in the category of 41 to 50 years. While at the same time 71.6% of
respondents are male, which implies the dominance of this gender in the segment of leadership and leadership
positions. More than half of the respondents have acquired an university degree. The majority of companies, i.e.
52.65% of the companies included in the sample are part of the service sector, which is in line with the market
dominated by companies active in the field of services. In relation to size 75% have fewer than 50 employees,
which is no surprise given that over 90% of companies in the country are considered to be in the segment of
small business. More than 67% of the respondents are part of top management, whereas 79% have more than 15
years of management experience.
V. RESUL TS A ND AN ALYS IS
Results of survey on leadership styles
The fundamental research topic and one of the main objectives of this research is to empirically evaluate
the leadership styles in the Republic of Macedonia, with a focus on transformational vs. transactional leadership.
In order to find out what kind of leadership style Macedonian managers adopt, we formulated 12 questions to
test transformational leadership style and 9 questions to test transactional leadership style. The evaluation of
leadership styles is conducted using descriptive statistics (minimum, maximum, means and standard deviations).
The descriptive statistics is reported in the table below. Table reports means and standard deviations values
appointed for the two researched leadership styles, transformational vs. transactional leadership.
Table 2. Descriptive statistics of leadership styles and dimensions
Leadership styles and dimensions
N
Minimum
Maximum
Mean
Std. Deviation
Transformational leadership
76
17.0
48.0
36.250
6.4418
Transactional leadership
76
11.0
36.0
25.526
4.8096
Idealized Influence
76
4.0
12.0
9.461
1.7847
Inspirational motivation
76
3.0
12.0
9.145
1.9846
Intellectual stimulation
76
1.0
12.0
8.447
2.2473
Individualized consideration
76
3.0
12.0
9.197
1.9323
Contingent reward
76
1.0
12.0
8.934
2.4295
Management-by-exception
76
6.0
12.0
9.474
1.7008
Laissez-faire leadership
76
1.0
12.0
7.118
2.4329
Valid N (listwise)
76
Source: Authors‘ analysis
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[Volume 6, Issue 2(11), 2017]
According to the results related to the leadership style it can be noted that the results for six of seven
factors have had an approximate value. This indicates that respondents use simultaneously the two styles of
leadership, transactional and transformational. Only the laissez-faire style of leadership, which according to the
methodology of MLQ is considered as the third factor in respect to transactional leadership, managers use it less
often. Also, if we compare the theoretical value (6.00) and the calculated values for each factors it can be
concluded that transformational and leadership are developed more than average, which means that leaders use
both styles of leadership in their everyday work.
Descriptive analysis of the factors of the leadership style indicate that factor 1, idealized influence is most
common for transformational leadership, which means that participants enjoy the trust and respect of their
followers. In transactional leadership the most frequent factor is 6 management-by-exceptions, which indicated
that participants actively monitor followers for mistakes and tries to correct them. In other words, they do not
wait for mistakes to occur before acting to correct them.
In terms of the aggregate results related to transformational and transactional leadership, the comparison
of the theoretical value (28.00) and the calculated value of transformational leadership (36.25) indicate that
respondents often or very frequently use this style of leadership, with nearly equal use of all four factors, except
of factor 3 related to Intellectual stimulation. The results for the value of transactional leadership (25.53)
compared to the theoretical value (16.00) shows that this style of leadership is above average developed,
although not to the a degree as in the case of transformational leadership, meaning that leadership styles
respondents relatively often make use of it.
Instead the composite results, the mean for both styles of leadership is calculated, the transformational
leadership attains a value of 9.06 (on a scale from 0 to 12) whereas transactional leadership attains a value of
8.51 (on a scale from 0 to 12).This basically suggests that, although both styles of leadership are developed
above average, i.e. leaders use both styles of leadership in its business, however there is some slight preference
related to transformational leadership.
Results of regression analysis of emotional intelligence and transformational leadership
As it was mentioned above, the second objectives of the research is to empirically explore the
determinants of leadership styles, i.e. to evaluate the relationship between emotional intelligence and
transformational leadership. In order to answer the research question concerning the relationship between
emotional intelligence and leadership, the data is analyzed using hierarchical regression by the statistical analysis
software SPSS.
In our research we want to be able to understand the unique contribution of emotional intelligence
competences in predicting the transformational leadership style, after some demographic and general
characteristics of managers have been controlled for.
The assumptions of independence of observations (i.e., independence of residuals), linearity,
homoscedasticity of residuals, multicollinearity, unusual points (outliers, high leverage points or highly
influential points) and normality of residuals were met. There is independence of residuals, as assessed by a
Durbin-Watson statistic of 1.910. A linear relationship exists between the dependent and independent variables
collectively, as well as between the dependent variable and each of independent variables. There is
homoscedasticity, as assessed by visual inspection of a plot of studentized residuals, versus unstandardized
predicted values. In order to satisfy the assumption of non-existence of unusual points, some of the cases that
had larger than desired leverage value were deleted. The values of the both measures of multicollinearity
(Tolerance and VIF) support the analysis indicating no presence of multicollinearity. Presented in Table 3, it
could be stressed that all tolerance values are greater than 0.1 (the lowest is 0.288). A variance inflation factor
(VIF) greater than 10 is usually considered problematic, in this respect the highest in the table is 3.468 which is
in compliance to the set scales. The errors in prediction (i.e. the residuals) are normally distributed.
Table 3. Collinearity statistics
Independent variables
Collinearity Statistics
Tolerance
VIF
Age
.912
1.096
Education level
.748
1.337
Management position
.859
1.164
The ability to perceive and understand
emotions
.274
3.644
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The ability to express emotions
.348
2.874
The ability to manage emotions
.288
3.468
Dependent
Variable: Transformational leadership style
Source: Authors‘ analysis
The full model of control variables (age, education level and management position) and emotional
intelligence competences as predictors of transformational leadership style (Model 2) is statistically
significant, R2 = .430, F(6, 65) = 8.174, p < .001; adjusted R2 = .377. The addition of emotional intelligence
competences to prediction transformational leadership style (Model 2) led to a statistically significant increase
in R2 of .342, F(3, 65) = 13.020, p < .001. Furthermore he model that includes only the control variables (age,
education level, management position) explains only 8.8% of the variations in the dependent variable. By adding
the three variables related to emotional intelligence competences, the explanatory power of the model rises up to
43%. All four variables have made a statistically significantly contribution to the prediction, p < .05. Regression
coefficients and standard errors are presented in Table 4.
Table 4. Results from hierarchical regression
Source: Authors‘ analysis
Following up on the discussion related to the relationship between the dependent and each of
independent variables, according to Model 1, which includes only control variables, two variables indicate a
statistically significant impact on the transformational leadership style: age and education. The findings suggests
that the transformation leadership style is more emphasized at managers aged over 30 years, in comparison to
managers aged up to 30 years, i.e. older managers are more likely to act as a transformational leaders. Managers
with an university degree and master degree are also more likely to use transformational leadership than mangers
with no degree.
In the second model as it was mentioned, three latent variables are added: the ability to perceive and
understand emotions, the ability to express emotions, and the ability to manage emotions. By adding these three
new variables, the association between age and educational level and transformational leadership style fades.
The effect of educational levels becomes statistically insignificant, whilst the effect of manager‘s age remain
statistically significant with a similar strength. What is more importantly, two out of three dimensions of
emotional intelligence have positive impact on transformational leadership: the ability to perceive and
understand emotions and the ability to manage emotions This means that managers with a higher ability to
perceive and understand emotions and the ability to manage emotions tend to be more oriented towards
transformational leaders.
VARIABLE
Model 1
Model 2
B
β
B
β
Constant
31.389
2.558
Age
3.219
.220***
2.715
.185***
Education level
3.560
.259**
.841
.061
Management position
.003
.000
-1.360
-.100
The ability to perceive and understand
emotions
.488
.500*
The ability to express emotions
-.232
-.233
The ability to manage emotions
.272
.324***
R2
.088
.430
F
2.175***
8.174*
ΔR2
.088
.342
ΔF
2.175***
13.020*
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These results confirm hypothesis 1, and 3. In other words, according to the results from the hierarchical
regression, the two variables related to emotional intelligence – the ability to perceive and understand emotions
and the ability to manage emotions – have a positive impact on transformational leadership style. On the other
hand, the main hypothesis is not fully supported, but since the addition of emotional intelligence competences to
the prediction of transformational leadership style led to a statistically significant increase in variance of
transformational leadership, i.e. emotional intelligence competences explain a pretty high 34.2% of the
variability of transformational leadership style, we can conclude that emotional intelligence of leaders positively
influences transformational leadership style.
Considering the survey results of this paper it clearly aligns with the majority of the literature in the field
of leadership and emotional intelligence. The results are almost unanimous in respect to the relationship between
these two variables (Mandell and Pherwani, 2003; Hartsfield, 2003; Ashkanasy and Tse, 2000; Sosik and
Megerian, 1999; Caruso et al., 2002; Goleman, Boyatzis and McKee, 2002; Sosik and Megerian, 1999; Zaccaro
et al., 2004). Differences exist due to the expressing and measurement emotional intelligence. From the countless
number of leadership styles transformational leadership could be considered to be the closest with emotional
intelligence. Studies show that there is a correlation between emotional intelligence and transformational
leadership. Transformation leaders create a vision, communicate the vision and successfully build a commitment
to the vision of followers. These leaders motivate and inspire followers to work on common goals, paying
special attention to achieving and development considering the needs of followers, assessing themselves to be
self-conscious and able to manage their own emotions.
VI. CONCLUSION
The research empirically evaluates leadership behavior and explores the determinants of leadership styles
of managers in the specific economic and cultural settings, as it is the case of the Republic of Macedonia.
Discussion evolves around the characteristic of leadership behavior in Macedonia, taking into perspective
transformational and transactional leaders. Furthermore as a part of the objectives of this paper is also emotional
intelligence in light of transformational leadership or more precisely the relationships that are occurring between
these two dimensions.
Taking into consideration the first research questions results indicate that leaders in Macedonian
companies show higher affection towards transformational leadership and its generally accepted values of
orientation to people and their support in the organization. Simultaneously managers present a great dedication
towards the job requirements, as being content with standard performance, meaning they exhibit a strong
discipline towards work. Considering the second research question results suggest that the ability to perceive
and understand emotion and the ability to manage emotions have a positive impact on transformational
leadership style. Although the main hypothesis is not fully supported (the ability to express emotions fails to
predict the transformation leadership), since the overall emotional intelligence competences explain a high
percent of the variability of transformational leadership style, we can conclude that emotional intelligence of
leaders positively influence transformational leadership style.
Also we can conclude that we have succeeded in our aim to generalize the idea for positive relationship
between the emotional intelligence and transformational leadership by confirming the applicability of the model
that examines this relationship in the specific economic and cultural settings, as it is the case of the Republic of
Macedonia.
VII. LIMI TAT IONS OF TH E RESEAR CH
One of the limitations of research lies in the questionnaire‘s bias. Using only the self-rating as a way to
measure leadership styles rather than actual leadership effectiveness there may exist a difference among
leadership style reported and actually practiced. Similarly, measuring emotional intelligence, the research has
used self-report measures whereas trait-based measures generally rely on participants self-reporting their levels
of emotional intelligence. Ability-based measures require participants to engage in tasks that assess emotional
intelligence based on performance (Mayer, Salovey, and Caruso, 2004).
Future research
As a field for further research should be considered the assessment of effectiveness considering different
leadership styles. Maybe in different cultures, the effective leadership may not be the same. Also cross-cultural
research of relationship between emotional intelligence and transformational leadership would potentially
provide more valuable insights in the theory and practice of emotional intelligence and leadership behavior
styles.
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[Volume 6, Issue 2(11), 2017]
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