Transformational leadership and management control systems in human service not-for-profit organizations

Abstract

This study examines the effect of transformational leadership style on the use of management control systems, specifically Simons’ (1995) levers of control, in human service not-for-profit organizations. Unlike prior studies in which transformational leadership style has been treated as an aggregate construct, we decompose the construct and examine its effect at the dimensional level. Using matched survey and archival data for 271 organizations in Australia, we find two dimensions of transformational leadership, articulating a vision and facilitating acceptance of group goals, to be dominant in their influence on the use of the levers of control. This finding is consistent with the context of human service not-for-profit organizations that are heavily dependent on communication, cooperation, and collaboration across multidisciplinary teams for effective service delivery.