Comparing transformational and instrumental leadership

Abstract

Purpose The purpose of this study is to investigate the influence of transformational and instrumental leadership on the individual performance of the employee and the financial performance in Brazilian startups. Design/methodology/approach The adopted methodological construction strategy was structural equation modeling, with the purpose of applying the model to primary data collected from a sample of leaders of Brazilian startups (n = 126). Findings Results suggest that when leadership types are analyzed separately, both directly influence employee performance. Originality/value This study has four main contributions: to test the influence of the two leadership styles on employee performance and thus to help advance the theoretical understanding of leadership; to perform this test in the context of Brazilian startups; to equip professionals with more information about the effects of crucial leadership types on individual type of employee performance; and to expand knowledge for recruitment and managerial training in initial-stage companies.