EFFECT OF TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP STYLES ON FINANCIAL PERFORMANCE OF A COMPANY: A CASE STUDY OF REAL ESTATE BUSINESSES IN ISTANBUL

Abstract

The purpose of this research is to show and evaluate the effect of the leadership styles (Transformational and Transactional Leadership) of managers in real estate businesses in Istanbul on the financial performance of the organization. In addition, the research aims to compare transformational leaders and transactional leadership styles. There is some evidence that different leadership styles have an impact on the performance of an organization. In addition, some results have been obtained showing that the application of different leadership styles in the same organization also causes different results. Financial performance is one of these results. In recent years, the real estate sector in Turkey has developed significantly and many foreign buyers are investing in this sector. In this context, it is necessary to grasp the leadership styles of such organizations and their relationship with financial performance. For this purpose, data were collected from 94 real estate organizations in Turkey for the research. Results were tested using linear regression analysis. The results show that there is a positive relationship between transactional and transformational leadership styles with financial performance. The results of this research will provide guidelines to assist investors, managers, and academics in understanding the importance of transformational and transactional leadership styles in creating and sustaining financially successful firm performance in developing countries. The results suggest that businesses that want to be more competitive, especially in the real estate sector, should consider adopting a transformational leadership style as it is associated with higher financial performance and sustainability than transactional leadership styles