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Organisational Leadership: How Much Does It Matter?

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  • Haile, Getinet Astatike

    (University of Nottingham)

Abstract

We study the influence of leadership on organisational performance and worker wellbeing using data from the 2004 and 2011 Workplace Employment Relations Survey (WERS). Our most conservative estimates from fixed effects regressions on a panel of organisations reveal that virtuous leadership is significantly and positively linked to an upbeat assessment of organisational performance, and an increase in worker wellbeing. Specifically, the estimates reveal that an increase in leadership quality by one standard deviation increases organisational performance and worker job satisfaction by 0.27 and 0.73 standard deviations, respectively, while it leads to a fall in worker job anxiety by 0.13 standard deviations. The results support the hypothesis that good leadership is vital for the success of business including worker wellbeing, which organisational policy makers ought to heed. There is a dearth of evidence on organisational leadership as an institution and its influence on organisational outcomes, which this paper aims to address.

Suggested Citation

  • Haile, Getinet Astatike, 2022. "Organisational Leadership: How Much Does It Matter?," IZA Discussion Papers 15554, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15554
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    Cited by:

    1. Haile, Getinet Astatike, 2023. "Precarious employment and workplace health outcomes in Britain," Social Science & Medicine, Elsevier, vol. 320(C).

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    More about this item

    Keywords

    linked data; worker wellbeing; organisational performance; leadership; Britain;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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