Transformational Leadership, Transactional Leadership, Locus of Control, and Support for Innovation: Key Predictors of Consolidated-Business-Unit Performance

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The authors used measures of leadership, locus of control, and support for innovation to predict the consolidated-unit performance of 78 managers. Results revealed that 3 transformational-leadership measures were associated with a higher internal locus of control and significantly and positively predicted business-unit performance over a 1-year interval. Transactional measures of leadership, including contingent reward and management by exception (active and passive), were each negatively related to business-unit performance. Causal relationships between the transformational-leadership behaviors and unit performance were moderated by the level of support for innovation in the business unit.

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