Predicting unit performance by assessing transformational and transactional leadership

How do leadership ratings collected from units operating under stable conditions predict subsequent performance of those units operating under high stress and uncertainty? To examine this question, the authors calculated the predictive relationships for the transformational and transactional leadership of 72 light infantry rifle platoon leaders for ratings of unit potency, cohesion, and performance for U.S. Army platoons participating in combat simulation exercises. Both transformational and transactional contingent reward leadership ratings of platoon leaders and sergeants positively predicted unit performance. The relationship of platoon leadership to performance was partially mediated through the unit’s level of potency and cohesion. Implications, limitations, and future directions for leadership research are discussed. The pace of change confronting organizations today has resulted in calls for more adaptive, flexible leadership. Adaptive leaders work more effectively in rapidly changing environments by help-ing to make sense of the challenges confronted by both leaders and followers and then appropriately responding to those challenges. Adaptive leaders work with their followers to generate creative solutions to complex problems, while also developing them to handle a broader range of leadership responsibilities (Bennis, 2001). Bass (1985) labeled the type of adaptive leadership described above transformational. The literature accumulated on testing transformational leadership theory has provided general support for the hypothesized relationships between transformational lead-ership, transactional leadership, and performance (Avolio, 1999; Bass, 1998). For example, ratings of transformational leadership were positively correlated with supervisory evaluations of mana-gerial performance (Hater & Bass, 1988; Waldman, Bass, & Ein-stein, 1987), recommendations for promotion (Waldman, Bass, &amp