¶ … leadership is understood today is in the dichotomy between transactional leadership and transformational leadership. Where the former focuses on execution of tasks, the latter has become more popular in the knowledge economy. The basic theory of transformational leadership is said to "transform followers' personal values and self-concepts and move them to higher level of needs and aspirations" (Gumusluogu & Ilsev, 2009, 1). In essence, transformational leadership encourages both individual transformational, and by way of that, transformation of the organization as a whole. Since the concept was first developed, transformational leadership has been studied extensively, and there is evidence to support the idea that transformational leadership is associated with superior performance at both individual and organizational levels (Wang et al., 2011). However, there remains a need to understand the way by which this process works. In other words, we know that transformational leadership often has a positive influence on an organization, but we do not know why it does, and how it works. This study will focus on investigating the influence of transformational leadership on employee's work behaviors and outcomes" with an eye to understanding why transformational leadership is so effective. Background of the Problem

The study of transformational leadership goes back at least 25 years (Wang et al., 2011), so there is a rich body of literature that has allowed us to understand what transformational leadership is, and what the outcomes associated with transformational leadership are. Generally, across industries, transformational leadership has a positive influence on performance outcomes (Resick et al., 2009). The gap in the literature lies with understanding the processes by which transformational leadership works. One input factor found is that transformational leaders are found to have higher levels of emotional intelligence than transactional or laissez-faire leaders (Harms & Crede, 2010).

One key element is the relationship between the transformational leader and followers, specifically how the leader influences follower behavior. Gumusluogu & Ilsev (2009, 1) investigated how transformational leadership can influence creativity, particularly juxtaposed against transactional leadership, a style less oriented towards encouraging creative thinking. They also studied the contextual factors that influence the degree to which transformational leadership influences innovation (Gumusluogu & Ilsev, 2009, 2). Pieterse et al. (2009) argue that transformational leadership creates an environment of psychological empowerment that allows innovation to flourish. Puranova & Bono (2009) investigated the differences between how transformational leadership works in face-to-face situations, versus how it works in virtual teams. The arrival of the virtual team has allowed for such comparisons, which can shed light about how transformational leadership works, given that the nature of interaction between leaders and followers is different in the virtual context. The role of follower characteristics has also been studied, but findings indicated that follower engagement can be increased with transformational leadership (Zhu, Avolio & Walumbwa, 2009). Another moderator is the trust that the followers have in the leader -- the higher the trust level the more effective the leader will be (Liu, Siu & Shi, 2010). Team diversity is another influencing factor (Kearney & Gebert, 2009).

The many moderating factors have contributed to the challenges of pinning down exactly how and why transformational leadership is effective. Factors such as virtual teams and increased diversity have added to our knowledge about the effectiveness of transformational leadership, but have also added increased complexity to the study. The current state of the research continues to confirm that transformational leadership is effective, but the added complexity of the study indicates that it is time to move towards understanding why it is effective. Thus, the purpose of this study is to investigate the influence of transformational leadership on employees' work behaviors, and from there the outcomes.

Theoretical Foundation

Transformational leadership has been a theme in leadership study for at least the past 25 years. The concept of transformational leadership is typically juxtaposed against transactional leadership, though other style such as laissez-faire can also fit within this paradigm. Leadership study has often focused on whether or not transformational leadership is effective, concluding that it is (Resick et al., 2009). Companies that succeed also have higher levels of transformational leadership than companies that have failed (Jandaghi, Matin & Farjami, 2009). The transformational-transaction dichotomy has also been used as a framework for understanding other concepts of leadership such as complexity leadership, e-leadership and leader-member exchange (Avolio, Walumbwa & Weber, 2009). The field of applied psychology in particular has focused on understanding why transformational leadership styles work, and what the antecedents of transformational leadership are, so this will form a lot of the theoretical framework for understanding the research problem.

Review of the Literature

Transformational leadership affects performance in a number of ways. Some of the influences of leadership on the organization...

The effects are also moderated by a number of different factors, such as subordinates' attitudes (Jung, Yammarino & Lee, 2009), situational factors (Puranova & Bono, 2009), or follower engagement (Zhu, Avolio & Walumbwa, 2009). A substantial amount of study has investigated the psychological effects of transformational leadership, particularly how it influences organizational learning (Morales et al., 2012) and creativity/innovation (Wang & Rode, 2010). These effects, however, are not universal across all cultures, which raises some important issues for the applicability of transformational leadership to all environments, particularly the diversity of the 21st century workplace (Leong & Fischer, 2010).
Alignment

The theoretical framework provides sufficient understanding of the nature of transformational leadership and evidence for its success. Transformational leadership affects a number of different aspects of the organization, but a lot of its success does seem to relate to the interaction between the leaders and followers, which has led most recent research down the path of investigating the moderating factors of this relationship. But understanding the moderating factors is still only building to our ultimate understanding of how and why transformational leadership has enjoyed the success it has. Knowing why it works better in some countries might also shed some light as to the mechanisms by which transformational leadership influences employee behaviors, and thus influences organizational outcomes.

Problem Statement

It is not known to what extent transformational leadership influences employee behaviors, only that it does. To understand the influence that transformational leadership has on employees' work behaviors and outcomes, in particular how that influence works. The population to be studied will be employees within multiple corporations. This population is necessary because of the need to smooth out the different moderating factors, which can only be done through diversification (using multiple companies). Additionally, it is hoped that this study will be applicable to American or Western corporations in general, so the study will be designed in such a way as to allow for extrapolation to this larger population of employees of American corporations. While numerous studies have explored the moderating factors, few studies if any have directly tackled the issue of how and why transformational leadership is so successful.

Research Questions & Hypotheses

There are essentially two main research questions. The first is "how does transformational leadership influence employee behavior?" And the second is "how does transformational leadership influence outcomes." There should be a third question as well, that elaborates on the link between employee behavior and outcomes -- "to what degree does the change in employee behavior translate to a change in organizational outcomes?"

The study will be quantitative in nature. This requires operationalization of the concepts in the research questions. Transformational leadership will be an independent variable and taken as a given, whereas it will be the outputs that will be the dependent variables. The following hypotheses will be tested:

Hypothesis 1: Transformational leadership improves self-empowerment in employees

Alternate: Transformational leadership does not improve self-empowerment in employees

Hypothesis 2: Transformational leadership improves innovative mindset in employees

Alternate: Transformational leadership does not improve innovation mindset in employees

Hypotheses 3: Improved self-empowerment leads to positive organizational outcomes

Alternate: Improved self-empowerment does not lead to positive organizational outcomes

Hypotheses 4: Improved innovative mindset leads to positive organizational outcomes

Alternate: Improve innovative mindset does not lead to positive organizational outcomes

Significance of the Study

The study will be significant because it will fill in one of the critical gaps in the current literature. It will seek to determine the degree to which key factors such as self-empowerment and innovation mindset are affected by transformational leadership, and how much they affect organizational outcomes. Thus, the study will create a critical link between transformational leadership and organizational outcomes, and this link will have explanatory power. This study will thus also provide a framework for future studies as to why transformational leadership is effective, and will lead to future studies to understand other potential mechanisms by which transformational leadership delivers positive results to organizations. This understanding will help organizations not only to understand leadership better, but to better identify leadership candidates. Moreover, organizations can use this knowledge to enhance their own performance, by focusing their best transformational leaders on the tasks and units within the organization where their contributions will make the most difference.

Rationale for the Methodology

Quantitative study is best for this study because the variables can be effectively operationalized using surveys. In general, variable that can be quantified should be,…