Leadership Styles, Organizational Culture and Organizational 
Effectiveness: A Study of Multilatinas 
 
 
 
By 
Ana Claudia Alvarez Echavarría 
 
 
 
 
A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree of 
Doctor of Business Administration  
 
 
CENTRUM CATÓLICA GRADUATE BUSINESS SCHOOL 
PONTIFICIA UNIVERSIDAD CATÓLICA DEL PERÚ 
MAASTRICHT SCHOOL OF MANAGEMENT 
Bogotá, Colombia, July, 2018 
 
 
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© 2018 by Ana C. Alvarez  
All Rights Reserved  
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Dedication 
This is dedicated to my beloved father, Ernesto Alvarez, who taught me since I was born 
that I could achieve whatever my mind could dream. And here I am, becoming a doctor 
and achieving an incredible world of knowledge that I would not imagine. I also dedicate 
this to my husband Nestor and my little daughter Daniela, who have been so patient and 
supportive during my DBA studies, always encouraging me to give the extra mile, while I 
left them few hours on their own. 
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Acknowledgements 
This achievement could not be possible without my tutor Fernando D’Alessio. Thank you 
for your prompt response, your guidance and inspiration. His relentless and encouraging 
support throughout my doctoral studies motivated me to dive deep into the wonderful 
world of knowledge. You are a symbol of true leadership worth following. 
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Abstract 
The relationship of leadership and organizational culture on performance has been 
empirically proven (Eppard, 2004), determining that the combination of transformational 
leadership and constructive culture yields in positive job performance, while on the 
contrary, transactional leadership and defensive culture has negative outcome. Given that 
both leadership and culture are constructs with differentiated variables (Bass & Avolio, 
1993; Cooke & Szumal, 2000), different combinations of leadership style and 
organizational culture, could result in various outcome scenarios. Previous scholar findings 
about leadership and culture frameworks are abundant in developed economies, not so 
much in emerging regions such as Latin America, the latter with increasing importance in 
the worldwide economy. Particularly multilatinas, face the challenge of short term 
economic hurdles, outstanding therefore the importance of improving knowledge of 
leadership and organizational culture as key drivers for sustained growth and evolution. 
The objective for the proposed research was to identify the relationship between leadership 
style, organizational culture, and organizational effectiveness, in Latin American 
transnational corporations, or as so called, multilatinas. Surveys were implemented in three 
large multilatinas located in Central America and Andean region, in the retail, construction 
and food industries. Findings of the research pointed that the constructive culture was the 
most relevant variable in the development of higher attainment of organizational 
effectiveness, even beyond the transformational leadership. The Latin American multilatina 
leader was valued due to the heroic-ethic transformational profile in conjunction with the 
contingent reward transactional one. The ambiguity from followers appreciating a heroic 
leader, but at the same time demanding detailed direction from leaders, thus avoiding own 
responsibility, posed the need for future research for collective-empowering leadership rather 
than an individual one.  
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Table of Contents 
List of Tables ........................................................................................................................ x 
List of Figures .................................................................................................................... xii 
Chapter 1: Introduction ...................................................................................................... 1 
Background of the problem ............................................................................................... 3 
Problem Statement ............................................................................................................. 6 
Purpose Statement .............................................................................................................. 8 
Significance of the Study ................................................................................................. 10 
Nature of the Study .......................................................................................................... 10 
Research Questions .......................................................................................................... 11 
Hypotheses ....................................................................................................................... 11 
Theoretical Framework .................................................................................................... 13 
Definition of Terms ......................................................................................................... 15 
Assumptions ..................................................................................................................... 19 
Limitations ....................................................................................................................... 20 
Delimitations .................................................................................................................... 20 
Summary .......................................................................................................................... 22 
Chapter 2: Literature Review .......................................................................................... 23 
Business failure because of leadership and culture clash ................................................ 23 
Evolution of the leadership concept ................................................................................. 25 
Power and behavior in leadership. ............................................................................... 27 
Burns (1978) and Bass (1985) transformational and transactional theory. .................. 28 
Evolution of the organizational culture concept .............................................................. 30 
Unconscious level of organizational culture. ............................................................... 32 
National culture and the impact in organizational performance. ................................. 33 
Cooke’s organizational culture inventory. ................................................................... 35 
Organizational effectiveness as a proxy to measure performance ................................... 37 
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Summary .......................................................................................................................... 41 
Conclusion ....................................................................................................................... 43 
Chapter 3: Method ............................................................................................................ 45 
Research Design .............................................................................................................. 45 
Appropriateness for Design ............................................................................................. 46 
Research Questions .......................................................................................................... 47 
Population ........................................................................................................................ 48 
Informed Consent ............................................................................................................ 50 
Sampling Frame ............................................................................................................... 51 
Confidentiality ................................................................................................................. 51 
Geographic location ......................................................................................................... 52 
Instrumentation ................................................................................................................ 52 
Data Collection ................................................................................................................ 54 
Data Analysis ................................................................................................................... 54 
Summary .......................................................................................................................... 55 
Chapter 4: Results ............................................................................................................. 56 
Demographics .................................................................................................................. 59 
Data Descriptive Analysis ............................................................................................... 62 
Logistic Regression .......................................................................................................... 65 
Hypothesis 1 .................................................................................................................... 66 
Hypothesis 2 .................................................................................................................... 70 
Hypothesis 3 .................................................................................................................... 74 
Hypothesis 4 .................................................................................................................... 77 
Hypothesis 5 .................................................................................................................... 81 
Multivariate analysis ........................................................................................................ 86 
Main findings by demographic segmentation – hierarchical level .................................. 88 
Summary .......................................................................................................................... 89 
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Chapter 5: Conclusions and Recommendations ............................................................. 91 
Conclusions ...................................................................................................................... 92 
Transformational and transactional styles in symbiosis for optimal effectiveness ...... 93 
The Latin American leader, heroic and effective. ........................................................ 94 
Constructive culture as the main driver of effectiveness ............................................. 96 
Beware of management by exception leadership with a passive culture: are detractors 
of organizational effectiveness. .................................................................................... 98 
A dose of aggressiveness is well appreciated............................................................... 98 
Upper management still far from earth ........................................................................ 99 
Implications ................................................................................................................... 100 
The need of more independent and self-motivated followers .................................... 100 
Leadership for multilatinas to global multinationals endeavor. ................................. 101 
Recommendations .......................................................................................................... 102 
References  .................................................................................................................... 105 
Appendix A: Survey Permission MLQ .......................................................................... 116 
Appendix B: Survey Permission OCI© – OEI .............................................................. 117 
Appendix C: Sample invitation letter for firms to participate - Latin American 
transnational Nutresa ............................................................................... 119 
Appendix D: Sample invitation email for employee to participate in the survey ...... 121 
Appendix E: Informed consent form ............................................................................. 122 
Appendix F: Demographic information ........................................................................ 124 
 
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List of Tables 
Table 1. Demographics from respondents of the combined OCI© and MLQ surveys ........ 60 
Table 2. Organizational effectiveness frequency table ........................................................ 63 
Table 3. Kolmogorov-Smirnov test for the errors distribution normality of the five 
hypotheses with linear regression ......................................................................... 64 
Table 4. Organizational effectiveness categories frequency table ...................................... 66 
Table 5. Case processing summary for organizational effectiveness Hypothesis 1 ............ 67 
Table 6. Model fitting for logistic regression Hypothesis 1 – Likelihood ratio test ............ 67 
Table 7. Goodness of fit for logistic regression Hypothesis 1 ............................................. 68 
Table 8. Pseudo R-square for logistic regression Hypothesis 1.......................................... 68 
Table 9. Likelihood ratio test for logistic regression Hypothesis 1..................................... 69 
Table 10. Logistic regression parameter estimates for Hypothesis 1 ................................. 69 
Table 11. Prediction rate of occurrence for Hypothesis 1 .................................................. 70 
Table 12. Case processing summary for organizational effectiveness Hypothesis 2 .......... 71 
Table 13. Model fitting for logistic regression Hypothesis 2 – likelihood ratio test ........... 71 
Table 14. Goodness of fit for logistic regression Hypothesis 2 ........................................... 71 
Table 15. Pseudo R-square for logistic regression Hypothesis 2........................................ 72 
Table 16. Likelihood ratio test for logistic regression Hypothesis 2................................... 72 
Table 17. Logistic regression parameter estimates for Hypothesis 2 ................................. 73 
Table 18. Prediction rate of occurrence for Hypothesis 2 .................................................. 73 
Table 19. Case processing summary for organizational effectiveness Hypothesis 3 .......... 74 
Table 20. Model fitting and likelihood ratio test for logistic regression Hypothesis 3 ....... 75 
Table 21. Goodness of fit for logistic regression Hypothesis 3 ........................................... 75 
Table 22. Pseudo R-square for logistic regression Hypothesis 3........................................ 75 
Table 23. Likelihood ratio test for logistic regression Hypothesis 3................................... 76 
Table 24. Logistic regression parameter estimates for Hypothesis 3 ................................. 76 
Table 25. Prediction rate of occurrence for Hypothesis 3 .................................................. 77 
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Table 26. Case processing summary for organizational effectiveness Hypothesis 4 .......... 78 
Table 27. Model fitting and likelihood ratio test for logistic regression Hypothesis 4 ....... 78 
Table 28. Goodness of fit for logistic regression Hypothesis 4 ........................................... 79 
Table 29. Pseudo R-square for logistic regression Hypothesis 4........................................ 79 
Table 30. Likelihood ratio test for logistic regression Hypothesis 4................................... 79 
Table 31. Logistic regression parameter estimates for Hypothesis 4 ................................. 80 
Table 32. Prediction rate of occurrence for Hypothesis 4 .................................................. 81 
Table 33. Case Processing Summary .................................................................................. 82 
Table 34. Step model for Hypothesis 5 ................................................................................ 82 
Table 35. Model fitting and likelihood ratio test for logistic regression Hypothesis 5 ....... 83 
Table 36. Goodness of fit Hypothesis 5 ............................................................................... 83 
Table 37. Pseudo R-square for Hypothesis 5 ...................................................................... 83 
Table 38. Likelihood ratio test for Hypothesis 5 ................................................................. 84 
Table 39. Logistic regression parameter estimates for Hypothesis 5 ................................. 85 
Table 40. Prediction rate of occurrence for Hypothesis 5 .................................................. 86 
Table 41. Case processing summary for organizational effectiveness  
multivariate analysis ........................................................................................... 87 
Table 42. Step summary for multivariate analysis – effect selection test ............................ 87 
Table 43. Kruskal-Wallis analysis of significant variances by hierarchical level .............. 88 
  
 
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List of Figures 
Figure 1. Theoretical framework on leadership styles and organizational culture as they 
predict organizational effectiveness .................................................................... 14 
Figure 2. Residues of Poison regression model for Hypothesis 1....................................... 65 
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Chapter 1: Introduction 
Leadership and culture researchers have grown their interest in the past 30 years, in 
the context of management, after empirical findings have shown the impact of human 
involvement in either a positive, or negative outcome of a firm (Bass, 1999; Howell, & 
Avolio, 1993; Schein, 2010; Walumbwa, Peterson, Avolio, & Hartnell, 2010). With the 
understanding that there could only be a leader if there are followers (Burns, 1978), the 
transformational leader has emerged as the ideal individual who exhibits charisma, 
individualized consideration, and intellectual stimulation (Bass & Avolio, 1993), who 
throughout the constant work with his or her followers, is able to provide superior results. 
The research about transformational leaders is paramount and of particular interest to 
scholars, with the joint influence of organizational culture, “the organization’s culture 
develops in large part from its leadership while this culture can also affect the development 
of its leadership” (Bass & Avolio, 1993, p. 1). 
Results of leadership and organizational culture on performance has been 
empirically proven (Eppard, 2004), determining that the combination of transformational 
leadership and constructive culture yielded in positive job performance, while on the 
contrary, transactional leadership and defensive culture has negative outcome. Given that 
both leadership and culture are constructs with differentiated variables, as presented in the 
transformational and transactional framework from Bass and Avolio (1993), and the 
Organizational Culture Inventory (OCI©) from Cooke and Szumal (2000), different 
combinations of leadership style and organizational culture, could result in various 
outcome scenarios. Scholars still have not answered which are the most desired 
combinations of leadership and culture that would better predict performance. 
Regarding the measurement of performance, researchers have not agreed on a 
single framework, but rather, a myriad of methodologies, from financial, to strategy, 
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marketing, customer satisfaction, operations and human related behaviors indicators 
(Krishnakumar & Sethi, 2012). Together with the rise of leadership and culture interest, 
job performance has also become of increased interest, as a proxy to measure business 
performance. Therefore, measurements such as organizational effectiveness, may be 
approached to set a rating of a firm performance (Cooke & Szumal, 2000; Avolio, Bass, & 
Jung, 1999). 
There are few scholars that have attempted to deploy research on leadership and 
organizational culture in emerging countries, because these had been done mainly in 
developed economies. Considering that emerging economies are diverse, Latin America in 
particular presents an array of different cultures worth understanding. With countries 
exhibiting, for example, large power distance such as Mexico and low power distance such 
as Costa Rica (Hofstede, Hofstede, & Minkov, 2010) there is not necessarily a unique 
Latin America leadership style or culture profile that may predict performance. Latin 
America in the XXI century has become a target region for international foreign 
investment, where transnational firms had been taking advantage of improved GDP per 
capita (Economic Commission for Latin America and the Caribbean [ECLAC], 2015c, p. 
81) increasing their presence in the region, both in the case of Latin America based 
transnationals as well as for international transnationals operating in this region (ECLAC, 
2015b). The Latin America transnational phenomenon has been well documented, 
describing the expansion of these firms in the 1980’s and1990’s as the result of the 
economic liberalization of Latin America economies (Cuervo-Cazurra, 2010; Castro, 
Castro & Jaller, 2012).  However, recent economic global turbulence, with commodities 
price drop, currency devaluation and economic deceleration, the GDP per capita trend and 
the outwards FDI by trans-Latin firms was negatively impacted (ECLAC, 2016b, p. 31). 
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Higher qualities in leadership and management of organizational culture could 
assess transnational companies to cope with the environment while at the same time 
attaining their business goals. The knowledge gap of leadership and organizational culture 
in Latin America firms, could be addressed with further research of both constructs. 
Therefore, the objective of this research was to identify the extent of the relationship 
between leadership styles, organizational culture styles into the organizational 
effectiveness in Latin America transnational firms. 
Background of the problem 
Leadership and culture in the ambitus of management had gained relevance since 
the 1980s, after empirical studies supported that with better exhibition of transformational 
leadership and constructive cultures, a firm could be able to achieve better performance 
(Bass & Avolio, 1993; Howell & Avolio, 1993; Cooke & Szumal, 2000; Fey & Denison, 
2003). Businesses nowadays demand increased competencies to manage firms with global 
operations and in the middle of diverse cultures. A complex environment of intense 
competition, internationalization, and strive to obtain results faster, has fostered the need 
for top talented leaders responsible of challenging businesses and expected to have 
consistent results. Leaders with the ability to motivate employees, think differently and 
create a new set of paradigms, at the end should result in having a new behavior among 
their followers and thus, improved performance (Babić, Savović, & Domanović, 2014). 
The human factor impacting business performance has a large body of research 
support, because on one hand, employees lead by committed leaders who are able to share 
a vision, understand particular needs of followers, encouraging them to innovate and learn, 
may have a larger probability to have higher job satisfaction, and thus, higher performance 
(Braun, Peus, Weisweiler, & Frey, 2013). On the contrary, when a business is facing a 
4 
 
large organizational change, employees may experience uncertainty and stress leading to 
lower levels of job satisfaction, commitment to change, management turnover and 
acceptance of change. Poor leadership and neglecting new culture approach may have an 
ultimate negative impact on the financial, operational, and strategic outcomes (Babić et al., 
2014; Covin, Kolenko, Sightler, & Tudor, 1997; Nemanich & Keller, 2007; Vasilaki & 
O'Reagan, 2008).  
Reviewed literature presented multiple models of leadership and culture, with 
important emphasis on theoretical frameworks with quantitative approach, suggesting that 
there is empirical evidence of the relationship among these two variables. In terms of 
leadership one of the most used frameworks is the transformational and transactional 
leadership (Bass, 1985, 1999; Bass & Avolio, 1993). Transformational leaders exhibit 
openness, charisma, interest for others, and sharing of vision as their dominant pattern to 
attain goals. Various moderating variables intervened transformational leadership style 
such as improved job performance and job engagement (Breevaart, Bakker, Demerouti, 
Sleebos, & Maduro, 2014), personality traits extraversion, agreeableness and openness to 
experience (Bono & Judge, 2004), and business unit performance (Howell & Avolio, 
1993). Regarding culture, as well, empirically proved frameworks described traits to gauge 
organizations, with independent layers, namely, adaptability, mission, consistency, and 
involvement (Fey & Denison, 2003), and with the differentiation between constructive and 
defensive cultures (Cooke & Szumal, 2000). Empirical research has proved the 
relationship between culture and leadership, however, defining the ideal dose of leadership 
and culture management has not been solved yet in a single theory, and thus further 
analysis is necessary to determine the extent to which leadership, culture, or a combination 
of these yields better results in terms of performance. 
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Achieving a positive business performance would be the result of an ideal 
combination of leadership and culture, however, the three variables connected was not 
found as a consolidated theory in the revised literature. The definition of performance is 
abundant and differentiated according to businesses and research settings, and as 
summarized in the meta-analytical framework proposed by Krishnakumar and Sethi 
(2012). With more indications of the importance of human intervention in the success of an 
organization, measurements such as organizational effectiveness were proved to be 
satisfactory to measure business performance (Cooke & Szumal, 2000). Researchers 
recommend exploring even further the relationship between leadership, organizational 
culture, and performance (Eppard, 2004).  
In terms of the geographical approach, previous research related to the impact of 
leadership and culture, most scholars have focused on developed economies, while scarce 
research on culture and leadership in emerging and transitional economies Serbia (Babić et 
al., 2014), Mexico, and Chile (Littrel & Cruz, 2013), Colombia, Venezuela, and Ecuador 
(Varela, Salgado, & Lasio, 2010), just to mention a few of them. Latin America is facing 
important economic challenges, and firms operating in this region need to deal with 
environmental uncertainties, that at the end, require better leadership and management of 
organizational culture to cope with difficulties and reach performance goals. 
ECLAC (2016) informed that the Latin America region faced in 2015 economic 
decrease in GDP of −0.5%, derived from China’s economy slowdown and commodities 
price decrease. With Latin America economies having large dependence on oil and gas, 
with lower prices, currencies devaluated particularly in Brazil, Colombia and Mexico. 
However, the situation is not homogeneous in all countries in the region, few small 
countries as Panama and Dominican Republic grew their GDP in 2015 compared to 
previous year, 5.8% and 7% respectively. 
6 
 
Problem Statement 
ECLAC (2014) reported that in the early 2000s most of the transnational 
corporations had their headquarters in the USA, Europe, or other developed countries. In 
recent years, the share of emerging markets in the global economy has gained 
preponderance, evidenced by the increase in foreign direct investment outflows from home 
town to abroad. While in 1999 developed economies had more than 90 per cent share of 
global foreign direct investment outflows, and developing and transition economies less 
than 10 per cent, in 2013 the first had 60 per cent and the latter 40 per cent. When referring 
to developing and transitional economies, ECLAC (2014) stated that, 
Many of them have large domestic markets, which are posting growth rates in 
excess of 6% amid sustained growth in consumers’ disposable incomes. These 
economies have aroused the interest of corporations across the globe, not only on 
account of their GDP growth and economic stability, but also as sources of talent, 
capital, and business development. 
This situation was the result of the evolution of the economy in Latin America. In 
2010 the GDP growth of Latin America and Caribbean was 6.2 per cent, outperforming 
developed economies’ growth. While slightly lower, 2011 GDP growth was 4.7 per cent 
still showing positive trend. GDP growth in 2012 and 2013 was 2.9 per cent (ECLAC, 
2014). The period between 2007 and 2012 with economic growth, gave Trans-Latin firms 
the opportunity to expand, especially because most of their target markets remained in 
Latin America. 
The positive GDP growth, however, reverted into slower evolution of 1.2 per cent 
in 2014 and −0.5% in 2015, due to the price drop of oil and minerals, hurting commodity 
dependent economies such as Mexico, Brazil, Colombia, Venezuela, and Ecuador. 
Currencies in Mexico, Brazil, and Colombia dropped dramatically, impacting not only total 
7 
 
revenue of transnational operations in terms of dollars, but also in terms of local revenue 
due to inflation and consumption’s decrease. The problem with this sudden change, is that 
in 2015, FDI outflows had a downturn of −15%, impacted mainly by foreign operations of 
trans-Latin firms in Brazil (ECLAC, 2016).  
Reviewing the multilatinas or trans-Latin firms’ phenomenon, Cuervo-Cazurra in 
2010 mentioned that it blossomed after the 1980’s with the Washington Consensus or neo-
liberalization, where economic policies allowed openness for Latin America countries after 
the debt crisis. When countries needed to leave the import substitution model with less 
regulations, entrance of firms to local markets and privatization of government firms, 
companies were prompted to increase their competitiveness, improving efficiencies which 
at the end made enabled them to compete internationally. In the 1980-2010 period, Latin 
America multinationals found a fertile soil in the neighbor market, taking advantage of 
vicinity, language and cultural similarity, expanding their frontiers and moving to previous 
exports efforts to sustainable foreign operations.  Large Latin American transnationals 
have been able to expand and become leaders, such as cement firm Cemex from Mexico or 
airplane manufacturer Embraer from Brazil (Cuervo-Cazurra, 2010).  
The downturn in outward and inward FDI shed a signal about the need of 
transnational firms operating in Latin America, to reinforce their abilities to manage 
changing and challenging environments, and being prepared to embrace the organizations 
through turbulent times. Latin America multinationals have larger challenges in terms of 
creation of value compared to multinationals based and operating in developed economies 
(Losada-Otálora & Casanova, 2014). Leadership and culture played a central role in 
management positions in transnationals, in order to ensure that performance is achieved, 
although there is scarce academic research on that regard.  
 
8 
 
Leadership and culture studies in Latin America are scarce and disperse, because 
most of the research has been conducted in USA, Europe, and other developed regions. 
Large scale multinational studies about culture, as Hofstede et al. (2010) reported national 
culture indicating patterns for Latin American countries. For example, power distance and 
masculinity in most countries in the region is high, indicating tendency to accept and need 
of authority and the understanding that power is right. Also to value opportunity for higher 
earnings and having a challenging job. This pattern could be opposite to the 
transformational leader who could tend to have a more democratic style involving others 
and in underpinning personal needs into the development of the mission. This 
contradiction might be the reflection that there has not been enough research about Latin 
America ideal leadership, and that probably the leadership style and organizational culture 
could have own patterns for the region. Therefore, there is a need to provide more 
empirical evidence, to provide better frameworks attainable to Latin American 
transnational corporations in terms of combined effects of leadership, culture, and 
effectiveness, which might enlighten these corporations to obtain the best of their 
investment in the Latin America region. 
The objective for the proposed research was to identify the relationship between 
leadership style, organizational culture, and organizational effectiveness, in Latin 
American transnational corporations. 
Purpose Statement 
The purpose of this quantitative descriptive study was to determine whether 
organizational effectiveness was associated with leadership style and organizational 
culture. Literature review showed that the investment of transnationals in Latin America 
might be hindered due to short-term economic slowdown. If a combination of leadership 
9 
 
style and organizational culture profile could be adequately used in Latin American 
transnationals, there might be a possibility to increase the success rate, having employees 
with a higher commitment to the business, and thus, achieve a higher organizational 
efficiency.  
The second purpose of the study was to provide a better insight into the Latin 
American market, where studies related to leadership, culture, and effectiveness have not 
been deeply analyzed, and so the novelty of this type of research could be a basis for 
immediate application in the business world to foster better business success rates. Also, to 
be the ground for future research in terms of the human factor of Latin American 
leadership and culture. 
The last purpose of this research was to have a better understanding of the 
transformational and transactional leadership styles and its relationship to organizational 
culture styles, and if the combination of the above-mentioned variables provided better 
results in terms of organizational effectiveness. To note, in the context of performance and 
efficiency, most of the research on this topic has pointed out that the best leadership profile 
is the transformational, however, the transactional may be important in specific cases of 
Latin America transnationals, given the high indices of power distance and uncertainty 
avoidance (Hofstede et al., 2010).  
The research was intended to be developed in Latin American countries, using 
reliable instruments to measure leadership, organizational culture, and organizational 
effectiveness. The surveys were administered via internet and those were answered by 
employees in a sample of three Latin American transnationals each one in a different 
industry.  
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Significance of the Study 
The role of a leader needs to be adaptive to different types of change and business 
moments. Although the transformational leadership style has received most of the attention 
regarding business outcomes, little has been said about the leadership profile more suitable 
to different kind of changes, in this case of transnational Latin American firms. This study 
filled a gap in research and also provided better direction for both academia and businesses 
to set insights on the type of leadership and organizational culture that should be 
encouraged for a process as complex as growth and expansion of Latin American 
transnational firms. 
As pointed by ECLAC (2014) the increased interest in doing business in America, 
both by regional multinationals going abroad as well as the persistent interest of developed 
economy industries to have business in Latin America, demands more understanding of the 
level of leadership and management of organizational culture in order to succeed. This is 
because although culture in Latin America could be perceived as one, in reality there is an 
amalgamation of sub-cultures worth understanding (Hofstede et al., 2010) and acting 
accordingly.  
Nature of the Study 
The nature of this study was quantitative, because it pretended to find the 
correlation between the independent variables leadership style and organizational culture, 
and organizational effectiveness as dependent variable. Previous studies that analyzed 
these variables have used quantitative methods by using surveys with Likert scale. In terms 
of leadership, these surveys were answered by employees in Latina America 
transnationals. Avolio and Bass (2004) presented the Multifactor Leadership Questionnaire 
(MLQ 5X short) to measure leadership styles. To measure organizational culture, the 
11 
 
survey that was applied was the Organizational Culture Inventory (OCI©) from Cooke and 
Lafferty (1994) from Human Synergistics.  
Dependent variables were the ones pointed in the literature as human related factors 
to business performance, in terms of organizational effectiveness as the outcome of 
organizational culture and leadership.  This outcome was measured also with the 
Organizational Culture Inventory (OCI©) from Cooke & Lafferty (1994), defined by role 
clarity, employee satisfaction and service quality. 
Research Questions  
The following were the study research questions: 
RQ 1. Is there a relationship between transformational leadership style and 
organizational effectiveness?  
RQ 2. Is there a relationship between transactional leadership style and 
organizational effectiveness?  
RQ3. Is there a relationship between organizational culture and organizational 
effectiveness? 
RQ4. Is there a relationship between transformational leadership style, 
organizational culture and organizational effectiveness?  
RQ5. Is there a relationship between transactional leadership style, organizational 
culture and organizational effectiveness?  
Hypotheses  
Hypotheses respond to the research questions and were described in terms of the 
relationship among variables per the findings on the literature review. 
12 
 
The definition of leadership in the proposed study belonged to the management and 
relationship theories, with the transactional and transformational leadership profiles in 
Bass’s (1985) theoretical modeling. Walumbwa et al. (2010) stated, “A rise in interest in 
this positive form of leadership is due in part to mounting evidence supporting the role of 
positivity in enhancing human well-being and performance” (p. 3). A transformational 
leader builds rather than exchanges relationships with followers and can spark the 
emotional involvement of followers to higher levels of identification, commitment, and 
trust in the leader and the organizational mission (Jung & Avolio, 2000). In a research 
conducted by Eppard (2004), empirical evidence showed that transformational leadership 
was positively and significantly correlated with constructive culture, and that transactional 
leadership was positively and significantly correlated with defensive culture, thus the first 
two hypotheses proposed are based on previous findings. 
H1. The transformational leadership style will have a positive effect on 
organizational effectiveness. 
H2. The transactional leadership style will have a negative effect on organizational 
effectiveness. 
Culture from a broad perspective could be defined as something largely shared by 
members (Murphy, Cooke, & Lopez, 2013) and specifically regarding organizational 
culture are the set of beliefs maintained not only in the mind of members but also in the 
minds of other stakeholders who interact with the organization (e.g., customers, suppliers, 
labor organizations, neighbors, authorities, the press) (Hofstede et al., 2010). 
H3. Constructive organizational culture will have a positive effect on 
organizational effectiveness. 
13 
 
Leadership and culture work close together and it is almost impossible to think of 
one without the other (Nguyen & Mohamed, 2011). If culture is the set of spoken and 
unspoken rules within an organization and leadership is related to the aim of fostering 
change and ensure things are well implemented (Moore, 2003), then its relationship is 
evident, however, different leadership styles are not the same for different cultures. It 
would be expected that one style could be suited to a particular type of organizational 
culture.  
Business changes and demanding environments requires from leaders a significant 
impact on employee attitudes and in this sense, transformational leadership has been 
pointed as the style that yields in better response to manage stress, anxiety and worry in 
employees about new structures and job continuity (Babić et al., 2014).  
H4. The transformational leadership style and the constructive organizational 
culture will have a positive impact in the organizational effectiveness.  
H5. The transactional leadership style and the defensive organizational culture will 
have a negative impact in the organizational effectiveness.  
Theoretical Framework 
Leadership and organizational culture are related but they are different constructs. 
The researched presented by Eppard (2004) provided insights in the conceptual framework 
where transactional and transformational leadership styles were correlated with 
constructive and defensive organizational culture styles. The research intended to define a 
predictive model where leadership style was considered as the independent variables, while 
organizational culture the dependent variable. In the case of this research on Latin 
American transnational firms, leadership and culture were considered as independent 
variables and organizational outcome as dependent variable, as a proxy to measure 
14 
 
business outcome. With the previous findings about the significant correlation between 
transformational style and constructive organizational culture, and transactional style and 
defensive culture, the model assumed there is an impact of the overall leadership style on 
organizational culture style. Bass and Avolio (1993) stated that the organizational culture 
is a result of the leadership and vice versa. With empirical findings from Eppard (2014), 
the theoretical model assumed only one-way effect leadership to culture.  Figure 1 presents 
the theoretical framework that will guide the connections between variables in this 
research. 
 
Figure 1. Theoretical framework on leadership styles and organizational culture as they predict 
organizational effectiveness  
15 
 
Definition of Terms 
Although leadership and culture are common concepts in scholar and business 
environments it is necessary to address the specific definition intended for this research.  
Leadership styles. Burns (1978) highlighted the difference between 
“transformational leadership” and “transactional leadership”. Bass (1985) defined the 
transformational leader as that who motivates the followers to accomplish their goals even 
further from what was originally expected. This is done through a transformational process 
of thought (i.e. beliefs and values) and behavior (i.e. attitudes and attributes), all 
considered higher order. The factors that were implied in the transformational leader are 
charisma/inspiration, intellect stimulation, and individualized consideration. The 
Transactional leader in contrast, was defined by Bass (1985) as contingent performer. The 
leader agrees with its followers on what they need to do to get rewards or avoid 
punishment. There is no concerted effort to change followers’ personal values, nor 
necessarily a need to develop a deep sense of trust and commitment to the leader. Instead, 
the transactional leader works with followers’ current needs and tries to satisfy those needs 
with desired outcomes once agreed upon performance levels are achieved. Two factors are 
proposed for the transactional leadership style, which are contingent reward and 
management by exception. The profile that along the research was found more powerful in 
deriving high performance results is the transformational leadership, although 
extraordinary leaders, according to the situation can manage also the transactional style 
(Bass, 1999). From these findings, it is more likely that a business wants to find and keep a 
transformational leader than a transactional one, however multiple behaviors mirroring the 
situational leader from Blanchard could also be well valued for their ability to adapt to the 
environment (Hersey, Blanchard, & Natemeyer, 1979). The tool used to rate leadership 
16 
 
skills was the Multifactor Leadership Questionnaire (MLQ) 5x short with 45 items on a 
Likert scale (Avolio & Bass, 2004). 
Transactional leadership. Avolio, Waldman, and Einstein (1988) described the 
transactional leader as the one who operates in a passive or an active phase and does so in 
two ways. Passive avoidant in this passive role, the leader allows the existence of status 
quo as long as no problem arise, or management by exception, where the leader reacts 
negatively to confront a person or a situation when a problem arises. Transactional leaders 
do not involve followers in their own needs or expectations, or in the business shared 
vision. 
Transformational leadership. The most important characteristic of the 
transformational profile is that the attempt to increase the need of followers through a 
consistent process of sharing a common vision, understanding the follower’s needs, and 
ensuring followers have more responsibility and autonomy over time. Transformational 
leadership in turn is explained in four distinctive profiles.  
Charismatic or inspirational profile: Bass (1985) described the transformational 
profile in terms of the way followers perceive and act according to the leader’s 
expectations. This kind of leader is prone to exert large levels of emotion in people, 
resulting in support of the leader’s values and mission. 
Individualized consideration: When a leader exhibits individualized consideration, 
the relationship with followers is one-on-one and includes mentoring as a process to 
incentivize development of personal needs. 
Intellectual stimulation: Where followers are encouraged to change, the past and 
find new ways of doing things. This process occurs not only through rational assessment 
but through inspiration on values, beliefs, and expectations. 
17 
 
Idealized behaviors: Inspire trust among followers through power and pride. Act 
with integrity, have self-confidence, moral rationale and optimism. 
Organizational culture. From anthropological roots organizations are conformed 
by human beings, denoting a symbiosis and community creation, which fosters culture 
development. Hofstede et al. (2010) indicated that organizational culture is a topic that has 
been reviewed since the early 1980s where authors pointed that the excellence of a firm is 
related with culture angles such as the way people think and feel. 
Researchers Cooke & Lafferty (1994) proposed a comprehensive framework to 
explain the traits of the organization culture. 
Constructive culture. Constructive culture: represented by four patterns: (a) 
achievement, expectation on setting challenging but attainable goals and pursue them with 
enthusiasm; (b) self-actualizing, enjoy their work and develop themselves; (c) humanistic-
encouraging, being supportive, constructive and open to influence when dealing with one 
another; (d) affiliative reflects the fact that members care for the others, are friendly, open 
and respond the thoughts of other members of the group. 
Passive/defensive culture. Explained by other four patterns: (a) approval, members 
expected to agree with, gain the approval of and be liked by others; (b) conventional 
norms, conform, follow rules and make good impression; (c) dependent, expectation to do 
what is told and clear all decisions with superiors; (d) avoidance, shift responsibilities to 
others and avoid possibility of being blamed.  
Aggressive/defensive culture. finally defined also by four norms: (a) oppositional, 
expectation to be critical and oppose others’ ideas making safe decisions; (b) power, 
expectation to take charge and control of subordinates and do as superiors determine; (c) 
competitive, operate within a win-lose framework and outperform others, working against 
peers, and (d) perfectionist, expectation to appear competent and keep track of everything. 
18 
 
The previous mentioned 12 behaviors set what the author calls the operating 
culture. This framework provides two other interesting pillars for the theoretical model 
worth considering for a holistic view of a culture model within an organization, the 
antecedents of culture and outcomes, although the latter were not considered in the 
research proposal. 
Organizational effectiveness. This is a label applied to the result reached by an 
organization as perceived by individuals “the construct of effectiveness is not a real 
property of any organization, but rather a label, which people use with varying degrees of 
agreement” (Taylor, Cornelius, & Colvin, 2013). An important factor when describing 
organizational effectiveness is the capacity to describe individual variables that are 
discernible and significant (Cooke & Szumal, 2000) and that are taken from the point of 
view of the employee. 
Business disruptions, sudden changes in business orientation, macroeconomic 
environment challenges, or a process of acquisition, represent a major focus of confusion, 
anxiety, and trauma. The way employees perceive change will have an impact in their 
behavior and thus managers seek to take the best out of employees to ensure business 
continuity, good performance, and perhaps to manage one of the most fearful situations 
during this process that is retention. Organizational effectiveness appears to have an 
important role in terms of the measurement of the behavior of an employee and should be 
measured separately from other hard variables such as strategic fit, financial performance 
and soft variables such as leadership and culture (Raukko, 2009). There is not a unique 
consensus on the way to measure effectiveness however the approach proposed by the 
authors Allen and Meyer (1990) provided three main independent constructs, which could 
be portrayed as the reason for an employee to stay in a firm. The first is because they want 
to or the affective component, the second is they need to or the continuance component and 
19 
 
the third because they ought to or the normative component. This approach allowed to set 
the theoretical model as organizational effectiveness, measured in terms of their 
perceptions about their satisfaction, their view of the quality of the organization and their 
understanding of their role.  
Transnationals. A transnational is a corporation with operations and investments 
in many countries around the world. It has its headquarters in one country and operates 
wholly or partially owned subsidiaries in one or more other countries. The subsidiaries 
report to the central headquarters. Some of the objectives of a transnational are increasing 
market share, diversify products and services, achieve operational flexibility, share risk and 
reach financial efficiencies. The latter, either through the dilution of costs, taking 
advantage of foreign direct investment in cross-border acquisitions to acquire a variety of 
capital or to get tax efficiencies.  
Multilatinas. Trans-Latinas or multilatinas are companies whose origin are in Latin 
American markets with this region economic resources, and particularly originated in 
countries with former colonies of Spain, Portugal or France, and which have value added 
operations outside their headquarters (Cuervo-Cazurra, 2010). These companies may 
operate too in Latin America, in Brazil, in North America and in other continents. 
Assumptions 
With previous research related to leadership styles, organizational culture and 
organizational effectiveness, the research assumed that this relationship exists and still it is 
important to state whether the impact is positive or negative within the transformational-
transactional styles and with constructive – defensive styles. It was also assumed that 
participants that filled in the survey experienced the variables in research, such as being 
either follower or leaders for the leadership rating and that they work in a Latin American 
20 
 
transnational firm, thus lived and understood the regional culture and the organizational 
culture in a multi-country set. Although there is always the risk of bias, the research 
assumed that respondents provided clear and truthful information and that the requested 
experience would be recent. The research considered transnational firms originated in 
Spanish speaking Latin America, or “multilatinas” and operating in Spanish speaking Latin 
America. 
Limitations 
Given the fact that the measurement of leadership and employee performance is 
subjective, there might be a bias in the true intention in the rating of the leadership style, in 
the perception of the organizational culture and the organizational effectiveness. Due to the 
length of the questionnaire, it was not possible to separate two different versions, one for 
leader and one for followers. The survey rated the leadership style as an overall construct, 
and thus, there was not an identification of the style of the leader, but an overall assessment 
of the firm leadership style.   
Delimitations 
The quantitative study was cross-sectional since the responses were given in a 
moment of time, and did not compare performance in two or more periods of time. The 
research was conducted in Latin American transnationals, with headquarters in Latin 
America, and operating in this region in at least one more country besides headquarters. 
The sample was multi-industry, due to the recommendations of previous researchers who 
conducted Transformational Leadership only in one organization (Nemanich & Keller, 
2007; Nemanich & Vera, 2009). The surveys included employee perceptions of 
organization leadership style, organizational culture and input about organizational 
effectiveness. The geography was delimitated by the researcher convenience and ease of 
21 
 
approach, so the target firms were based in Colombia and Costa Rica.  The research was 
composed of three multilatinas. Pozuelo, Sodimac and HL Ingenieros.   
Pozuelo, is a subsidiary of Nutresa, leading processed food multilatina from 
Colombia (formerly known as Compañia Nacional de Chocolates). Pozuelo operates the 
Central American market, with headquarter in Costa Rica. It is the market leader of the 
biscuits category in the isthmus. The survey was implemented in Costa Rica, Panama, 
Guatemala, El Salvador and Nicaragua. The second firm was Sodimac, which is an affiliate 
of SACI Fallabela holding, and is a large specialized retailer in household hardware and 
home improvements. It has the headquarters in Chile and has stores in Chile, Peru, 
Argentina, Colombia and Brazil. The third firm HL Ingenieros is a Colombian construction 
firm which enables civil work projects for various industries such as infrastructure, oil & 
gas, cement, mining and iron & steel. Operates in Colombia, Dominican Republic, 
Panama, Ecuador and Bolivia.  
Another aspect important to remark, is that there were no companies from Brazil or 
Mexico, the two largest markets. The reason was merely for the convenience of the 
researcher that took advantage of geographical closeness to Colombia and Costa Rica. This 
however supports the fact that there is less research in the latter countries than in Brazil or 
Mexico thus providing inedited findings related to multilatinas behavior, leadership and 
organizational culture. 
Other delimitation of the research was the language, only Spanish, which is aligned 
with culture closeness, meaning that countries close to headquarters, might share similar 
culture, language and economy making it easier to compete. One language was also easier 
in terms of the survey implementation. This delimitation set the research in Spanish 
speaking countries, excluding for the population framework Brazil and the Caribbean 
English & French speaking islands. 
22 
 
Summary 
Leadership and organizational culture are key drivers for organizations, where 
scholars have demonstrated empirically that these constructs can be measured 
quantitatively and that the combination of levers could turn into various outcomes. 
Organizations strive to attain goals and maneuver their ability to cope with the global and 
changing word, and are aware that human behavior are key drivers of organizational 
performance, therefore considering that people ratings are valuable indicators of 
organizational effectiveness. Important though that these findings about leadership and 
culture frameworks are abundant in developed economies, not so much in emerging 
regions such as Latin America, the latter with increasing importance in the worldwide 
economy. Particularly multilatinas, face the challenge of short term economic hurdles, 
outstanding therefore the importance of improving knowledge of leadership and 
organizational culture as key drivers for sustained growth and evolution.  
23 
 
Chapter 2: Literature Review 
The objective of the literature review is to inquire the most current research in the 
target topics of leadership, organizational culture, and organizational effectiveness, to 
understand the state of the knowledge in each one of the key variables, the relationship 
amongst them and the outstanding questions. A focus will be granted to the situation of the 
above-mentioned variables in Latin America, in the ambitus of multilatinas, because as 
stated by Cuervo-Cazurra (2010) the phenomenon is rising in importance in the global 
arena yet with important challenges to expand and become larger. For this matter, the 
research was done mainly in the on-line library resources of the CENTRUM Graduate 
Business School where amongst others, the, Emerald, J Stor, APA, PsycNet, and Proquest 
databases were consulted. 
Business failure because of leadership and culture clash 
In the revision of the literature, leadership appeared to be a crucial factor to 
determine success or failure in an organization (Bass & Avolio, 1993; Howell & Avolio, 
1993) and was also a key factor influencing organizational culture (Schein, 2010). 
Abundant research was reviewed on the combined effect of leadership and culture, which 
provided insights into the role of both concepts into business performance, because at the 
end, organizations aim to deliver their goals and to be able to cope with both external 
factors related to the environment, and the internal factors which are based in 
organizational processes, productivity and job satisfaction (Rodsutti & Swierczek, 2002). 
With the genesis of the transformational leadership framework presented by Burns in 1978, 
there is more empirical evidence of effects of this type of leadership in improved results or 
contrary, issues in performance due to transactional leadership. Howell and Avolio (1993) 
explained that in a study performed in 78 managers during one year, the transformational 
24 
 
leadership style yielded better business results than the transactional one. In a study 
conducted by Avolio, Zhu, Koh, and Bathia (2004), 520 nurses surveyed reported that 
there was a connection between transformational leadership style and organizational 
commitment, mediated by the psychological empowerment and structural distance. These 
and other examples found in the literature about leadership insisted in providing the 
transformational leadership style a special importance as a mean to reach positive business 
objectives, namely follower job satisfaction, organizational commitment, business unit 
perceived performance and in other cases positive financial indicators. 
Regarding organizational culture, there was also paramount empirical evidence on 
business performance, related to the way leaders approached and managed the culture 
inside an organization, either using it as a lever to share a vision and motivate followers or 
neglecting the observed culture and behaving with own preconceived rules. Balthazard, 
Cooke and Potter (2006) developed a large scale study with 60,900 respondents of the 
organizational culture inventory, and proved empirically that organizational cultures 
exhibiting constructive style performed better than organizational cultures with 
dysfunctional defensive profiles.  
There are also researchers that studied both variables, leadership and culture jointly, 
as the case of Nguyen and Mohamed (2011), who presented conclusions about 
organizational culture and knowledge management, where they proved that two aspects of 
the transformational leadership, the charismatic and contingent reward, proved having 
greater influence in all dimensions of knowledge management practices. These authors 
also concluded that transformational leadership greatly influenced innovation as antecedent 
to supportive organizational culture. 
Lauser (2010) posited that change was a major challenge for organizations, 
becoming a focus topic for managers, however change does not always convey positive 
25 
 
results. In this research the author states that one of the largest change process a firm can 
face is the post-merger phase after a merger or an acquisition. Research on this matter 
explained that leadership and culture clash was more evident in an M&A due to the 
unavoidable combination of two different organizations, making worthwhile reviewing 
existing literature on this phenomenon. Despite the positive intention of M&A, research 
cannot conclude about its certain success, indeed many papers pinpoint the fact that a large 
portion of M&A transactions fail. Reasons related to issues in planning, not realistic 
expectations, talent loss, and cultural clash impacted M&A failure in a rate between 50% 
and 75%, according to Papadakis (2005). In an analysis performed by the Hay Group in 
Europe in more than 200 transactions in 2007, only 9% of surveyed leaders reported 
complete success (Weber & Tarba, 2012). In 2009, another study conducted in 58 
multinationals in emerging economies that boarded 433 mergers, approximately half of the 
cross-border expansions did not create value in acquired firms (Aybar & Ficici, 2009). A 
KPMG study involving executives of companies with deals similar to mergers or 
acquisitions, reported in 83% of the cases that the outcome failed, not producing wealth for 
the buyer (Gill, 2012). Examples of M&A failure abound in the literature and are present 
either as case studies or described in the news, and it is worthwhile mentioning few of 
them to highlight the findings in M&A research regarding the high incidence of failure in 
these transactions.  
Evolution of the leadership concept 
Analyzing the evolution of leadership theories makes sense in order to set the 
current panorama of the onboarding of this concept, opening the appropriate setting of the 
theoretical framework. This is because there is abundant research on leadership, and the 
scope was set to the firm environment, so it was necessary to limit the findings to 
26 
 
leadership in organizations and management in the realm of psychology, which necessarily 
surrounds leadership. The way leadership exercise and leadership research, evolved in the 
past century, with particular profusion of studies and publications in the past 30 years 
(Howell & Avolio, 1993).  
Which were the origins of leadership as known now in management? A short 
review of the paradigms around leadership in the 19th and mid-20th century will be briefly 
described to place context of the understanding of this broad term. During this period, the 
dominating theory about leadership was called the “great man”. This could hardly be called 
theory because it does not have scientific ground, however is worth explaining as the 
genesis of the current research on leadership. As stated by Allio (2013), this theory 
intended to explain leadership at the beginning of the industrial revolution by the 19th 
century and inspired by Thomas Carlyle who wrote about heroic leadership. The 
characteristic of heroic leaders as Napoleon or Dante, just to mention a few, were the 
appraisal as leaders due to their personality and resemblance of power and authority (Van 
Seters & Field, 1990). There are two main issues around this supposed theory, the first is 
that heroism is also connected to the historic situation, such as Napoleon and the French 
revolution, and second that personality is very difficult to imitate and thus difficult to apply 
in management.  
After Great Man theory, the traits theory was presented by researchers in the first 
half of the 20th century, intending to go beyond personality and define traits that define a 
good leader (Van Seters & Field, 1990). This however again proved of low applicability 
because traits and personality vary so much according to the individual that it was of no 
value to set a manual to improve leadership. Since the 1970s more formal scientific ground 
has evolved in the analysis of leadership, which will be the focus in the following part of 
the review of literature on leadership.  
27 
 
Power and behavior in leadership. Theories about power and influence emerged 
in the 1980s and as stated by Yukl in 2013, explained that leadership effectiveness comes 
from “the amount of power possessed by a leader, the types of power and how power is 
exercised”, as a learning that leadership goes beyond performance and has a relationship 
with individuals who are led. In the power approach the leadership pretends to rule with 
high levels of power which are sourced not only from personality but also from the 
situation and from relationship (Van Seters & Field, 1990). The importance of power in 
organizations is ambiguous because political and certain level of authority could be 
expected of leaders while at the same time, too much politics and excess power are 
criticized by followers and go in detriment of the capacity to influence (Pfeffer, 1992). 
This theory remains as an interesting indicator of how to exercise leadership however puts 
a lot of emphasis on the leader and less in the followers. That is why in the 1970s the new 
leadership theories were developed in terms of the contingency of the situation pretending 
still to define “leadership models” applicable to management exercise. It is not coincidence 
that the conglomerate period in M&A happened during this time, the 1980s where 
exhibitions of corporate power were present in major transactions. 
Capitalizing on the power and influence theories, Blanchard developed a new 
approach towards leadership called the situational leadership (Hersey et al., 1979). This 
contingency model drew the attention to the six different sources of power of the leader: 
(a) coercive power, based on fear; (b) connection power, based on influence over people; 
(c) expert power, which is created by the possession of expertise, skill, and knowledge; (d) 
information power, which is granted to the one who owns or has access to information; (e) 
legitimate power, based on the position held; (f) referent power according to personal 
traits, and (g) reward power, which is the belief of followers that the leader will 
compensate with salary raise or similar.  
28 
 
With this background in context, the situational leadership presented a model in 
which the maturity of the follower dictates the style of leadership that should be exerted 
and the power of use needed to have results. There are four different styles of leadership: 
(a) “directing”, is for low maturity, in which the leader needs to be very explicit in terms of 
the directions and specific ways to perform a task. It emphasizes directive behavior (b) 
“coaching”, is for low to moderate maturity where people want to take the responsibility 
but does not know how to do it, here again it is important to devote direct leadership style. 
The third refers to (c) “supporting”, is for moderate to high maturity, where the follower 
has the ability but lacks self-confidence, in this case there is a two-way communication and 
the leader is a facilitator, and finally (d) “delegating”, for mature followers with both high 
ability and motivation, who can decide how to perform on their own with low supervision.  
Additional to the situational leadership model from Blanchard, other researchers 
have presented models based on contingency, such as the Vroom & Yetton (1973) decision 
making model, which pretended to present a normative behavior pattern for a manager to 
make decisions according selecting a range from autocratic to advisory decision-making 
style. Despite the purpose of providing behavioral frameworks for leaders, the contingency 
models proved their limited applicability because leaders in their day to day performance 
have very little time to analyze which style should be used according to the situation (Van 
Seters & Field, 1990). 
Burns (1978) and Bass (1985) transformational and transactional theory. 
When heroic and contingent leadership theories proved their scarce applicability and due to 
the evolution of leadership research devoting more importance to the relationship between 
leader and follower, a shift in leadership theory started in the 1980s, which is relevant until 
today, namely the transformation era of leadership research (Van Seters & Field, 1990). In 
1978, Burns introduced the transactional and transformational leadership styles in his 
29 
 
seminal book Leadership, where he firstly claimed that if there is leadership there is also 
followership. The impact of a leader in a follower could be a key determinant in the 
success or failure of a particular aim, either political or entrepreneurial. Following this 
theory, Bass (1985) defined the transformational leader as one who motivates followers to 
accomplish their goals even further than was originally expected through a 
transformational process of inspiration of higher order thoughts (i.e. beliefs and values) 
and higher order behaviors (i.e. attitudes and attributes). Important characteristics of the 
transformational leader are charisma, inspiration, intellect stimulation, and individualized 
consideration.  
In contrast, the transactional leader was described by Bass (1985), as a contingent 
performer. The leader agrees with the followers on what they need to do to get rewards or 
avoid punishment. There is no concerted effort to change followers’ personal values or 
develop a deep sense of trust and commitment to the leader. The transactional leader works 
with followers’ current needs and tries to satisfy those needs with desired outcomes once 
agreed upon performance levels are achieved (Bass, 1985). Two characteristics of the 
transactional leadership style are contingent reward and management by exception. The 
literature showed the transformational leadership style as more powerful in obtaining high 
performance results, yet in some situations, extraordinary leaders are successful with the 
transactional style. 
To note, transactional and transformational leadership are bonded together in the 
leadership theories exposed by Bass (1985) and further by prominent leadership authors 
such as Avolio et al. (1988), Avolio, Bass & Jung (1999), and Avolio et al. (2004). Since 
1985 this is the most cited theory in leadership and different types of research have been 
trying to prove empirical application, concluding correlation, among others, between 
transformational leadership and organizational change (Eisenbach, Watson, & Pillai, 
30 
 
1999), organizational commitment (Dunn, Dastoor, & Sims, 2012; Avolio et al. (2004), job 
satisfaction (Shurbagi, 2014). Researchers expert in leadership have demonstrated that 
transformational leadership style conveys better and more sustainable business results, 
while at the same time providing nurturing environments for people development for long 
term stability (Jung & Avolio, 2000).  
Evolution of the organizational culture concept  
Initial insights about organizational culture were originated in studies about 
organizational development in the 1950s which then turned into a topic of interest both for 
researchers and practitioners in the 1970s due to the interest of the culture as a variable that 
could bring success for a firm (Smircich, 1983). Organizational culture cannot be defined 
outside the anthropology context, because a firm is a living community which in order to 
attain results need to preserve order, have foundation, shared beliefs, symbols, and 
patterns. Despite the social origin of the concept of an organization as a community, 
further implications of the organizational culture are worth reviewing to provide a 
comprehensive understanding of the different schools of thought around this concept. The 
aforementioned author Smircich in 1983 provided a framework for organizational culture 
including three main perspectives useful to conceptualize culture.  
The first one is the cognitive perspective, which is the related to the full set of 
symbols, beliefs, like a set of system of knowledge shared within the members of an 
organization providing a sense of how to behave, to expect response from other members 
and the way to make decisions. In terms of business, organizational culture was defined by 
Weber and Tarba (2012) as a “developing system of beliefs, values, and assumptions 
shared by the managers about the desired way of managing the organization so that it can 
adjust to its environment”. By having differences in the way people approach these 
31 
 
assumptions, research points that cultural differences could be a source of risk and a clog 
to achieve the objectives of a firm (Stahl & Voigt, 2008). This perspective provided 
importance to rules and the way things are perceived by individuals in such a way that 
collectively there is a behavior and system of business appraisal.  
The second perspective in terms of organizational culture is the symbolic one which 
gives less importance to the rules but to the implicit understandings about symbols and 
rituals. Within this territory, Schein (2010) stated “the culture of a group can now be 
defined as a pattern of shared basic assumptions learned by a group as it solved its 
problems of external adaptation and internal integration, which has worked well enough to 
be considered valid and, therefore, to be taught to new members as the correct way to 
perceive, think, and feel in relation to those problems”. The origin of shared values and 
symbols are in the first perspective, the cognitive, where some artifacts are granted with 
symbols that will only become shared and acknowledged by the organization once it passes 
social validation. The importance of the symbolic nature of culture is that it defines non-
written understanding of the corporate culture. It will affect how to evaluate the behavior 
of an individual. If for instance the culture of a firm outstands customer orientation, the 
fact that a manager provides a discount that could hurt short term profits could be well 
evaluated. On the other hand, the same behavior in a firm that is prone to defend financial 
ratios, the same behavior could be understood as mismanagement with bad consequences. 
Which is good or bad? It all depends on the unspoken set of patterns, symbols, and 
behaviors shared by the organization that at the end define its own organizational culture. 
It is important to note the evolutionary nature of the adoption and understanding of 
symbols and rituals, because they change according to events along time.  
The third tier, unconscious level, is more complex and is where true leadership acts 
in order to provide better direction to use organizational culture in favor of business goals. 
32 
 
It is a projection of the collective mind meaning, in terms of the firm, where practices are 
done under collective unconscious processes (Smircich, 1983). Hofstede is one of the top 
researchers on culture and in his seminal book Cultures and Organizations (Hofstede et al., 
2010) refers to culture in this sense as  
the collective programming of the mind which distinguishes the members of one 
group or category of people from those of another and consequently, organizational 
culture can be defined as the collective programming of the mind that distinguishes 
the members of one organization from others. (ch. 10, n.p.) 
Each one of the tiers mentioned conforms an evolutionary vision of organizational 
culture, from the simplest way of just connecting and surviving to a more complex and 
abstract concept, embedded into universal conscientiousness. These previous concepts 
about culture, provided ground to the feasibility of transmission of culture from one 
generation to another which in terms of the organization denotes the heritage from one 
department to another or in the case of a merger or acquisition the acculturation process of 
two or more firms. In this sense the value created in the process of sharing all the array of 
values, symbols, and behaviors turns to be a powerful asset for an organization in order to 
reach common goals both in terms of team building but also in terms of business 
achievement.  
Unconscious level of organizational culture. Schein (2010) identified three 
different tiers in the approach to organizational culture. The first tier is related to the 
artifacts which are the things that could be seen, heard, or felt, including physical things 
such as the building, language, clothing, myths and stories, rituals and ceremonies. This 
author explains that although the artifacts look simple in essence in reality these need to be 
fully understood in terms of the meaning in order to have a true understanding of the nature 
of the culture. Trying to describe a culture only by observing an artifact in isolation could 
33 
 
result in a wrong judgment of the real culture. That is why it is important to go deeper and 
inquire into espoused beliefs and values, which is the second tier of the Schein 
organizational culture model. This one relates to the system of decision making process an 
organization defines tacitly about the ways to resolve a problem, communicate, or execute 
to perform. If a previous mode of leadership or decision-making process provided positive 
results, then it is possible that the beliefs of such conduct would be evaluated as the modus 
operandi for future endeavors. The last tier relates to shared assumptions or what Smircich 
described as unconscious level, which is the relatively stable set of agreements, 
understandings, and ways of behavior that provide the group stability, sense of belonging, 
and reinforce self-esteem. It is in this realm that organizations set a more controlled 
management system allowing less disruptive executions. Schein debates whether this 
approach in reality provides performance or is a paradox because change is each time more 
relevant in current organizations and stability could hinder possibility to learn and evolve.  
Although there is extensive research on organizational culture with abundant 
frameworks and quantitative models to measure it, there are three researchers that have 
provided complementary angles to approach organizational culture, all of them within the 
symbolism and unconsciousness platforms previously described. Hofstede developed a 
comprehensive cultural model borne out of the country of origin explaining different traits 
according to the nationality. Denison on the other hand provide a pragmatic approach to 
measure organizational culture in terms of the traits with a framework used to measure 
culture in organizations. Finally, Cooke relates organizational culture in terms of the 
behaviors and decision-making processes of individuals.  
National culture and the impact in organizational performance. Hofstede 
national culture framework was firstly presented in 1980 and further exposed in several 
research studies. This framework defined how cultural norms in one country differ from 
34 
 
another and are measured according to four main variables (Hofstede et al., 2010). The 
GLOBE survey is a wide used report where Hofstede reports the levels found for each 
nationality. The first variable is power distance and refers to the degree of inequality 
among people and that is referred as normal in the context of the culture of the nationality. 
Many nations in Latin America, France, and Hong Kong are high in power distance, while 
Germany and UK are low in this score. Higher power distance means that authority is not 
questioned and that the fact that there is inequality is a reality accepted. Cultures with high 
power distance have a high appreciation for authoritarian leaders that command what needs 
to be done and do not see with good eyes if a subordinate is in opposition. In fact, an 
authority that accepts this type of trait is seen as weak and losing respect. The second 
variable is uncertainty and means the degree of preference of structured versus 
unstructured situations. Nations such as Switzerland are low in uncertainty meaning that 
individuals are able to cope with situations with low structure and ambiguous while 
Guatemalans prefer to have all structures set and not questioned. Unstructured situations 
provoke high anxiety and are not seen as normal episodes. The third variable is 
individualism, and is described as preference to act as individuals versus being part of a 
collective the need of belonging to a group or society. The combination of high power 
distance and low individualism portrait societies that prefer to behave according to mass 
rules and will change if authority is decisive to turn around previously established status. 
In terms of the fourth variable, masculinity and femininity is not related directly to gender 
but to the supposed interpretation of gender behavior. Masculinity conveys assertiveness, 
performance and competitiveness while femininity is more skewed towards quality of life, 
relationship protection and solidarity. One of the countries with largest masculinity index 
is Japan, while one of the lowest in this factor is Netherlands (Hofstede, 1994). Later 
studies by Hofstede et al. (2010) posited other two variables, long term orientation and 
35 
 
indulgence. No needless to mention that although this framework is applicable to nations, 
indeed organizations could use this type of variables for individual and corporate analysis. 
In research however, this framework has been used mostly to compare national cultures in 
terms of the performance of mergers and acquisitions (Morosini, Shane, & Singh, 1998; 
Gill, 2012). 
Cooke’s organizational culture inventory. Finally, a comprehensive theoretical 
model of organizational culture was presented by Robert Cooke with the Organizational 
Culture Inventory (OCI©) (Cooke & Lafferty, 1994) which is based on the behaviors that 
members of an organization are expected to deploy. It is conceptualized in two main 
dimensions; the first dimension differentiates between concern for people and concern for 
task while the second dimension is based on either satisfaction needs or security needs. 
Distributed along these two dimensions, there are 12 sets of behavioral norms which in 
turn are clustered in three different prototypes of organizational culture, as described in the 
OCI© guide “Using the organizational culture inventory” (Cooke & Szumal, 2000): the 
constructive, passive/defensive and aggressive/defensive.  
Some researchers have clustered into only two types of organizational cultures, the 
constructive and the defensive, the latter grouping both the passive and the aggressive. 
Cooke and Szumal (2000) reported that countries in the Latin America, Latin Europe, and 
Far East, may expect constructive behaviors, while Anglo cluster would expect defensive 
organizational culture. Related to national culture profile, Cooke and Szumal (2000) also 
reported that countries like United States which are individualistic, have weak uncertainty 
avoidance and moderate power distance, and would prefer constructive norms rather than 
defensive ones. There could be differences regarding the ideal or expected role model of 
organizational culture and this could also depend on other variables. 
36 
 
Antecedents of culture mean the ways an organization is structured with will in turn 
derive a perception and a way of deploying activities and are seen as levers for change. 
Cooke and Szumal (2000) defined them as structures, systems, technology, and 
skills/qualities.  
Structures means way components of an organization are ordered and are identified 
in terms of roles, influence, and decision making. Systems refer to interrelated sets of 
procedures such as human resources, accounting, and quality control systems all used to 
support activities and solve problems. Systems are conceptualized in terms of training, 
appraisal, reinforcement, and goal setting. Technology in the context of Cooke framework 
is referred as the methods that an organization uses to turn input into output. Perhaps at the 
beginning of the 20th century this meant the accessibility to technological means to make a 
task easier and faster but with technological advances nowadays it means the 
characteristics of a job in terms of skill variety and support tools to make it easier. 
Technology in Cooke’s framework is structured as job design, complexity, and inter-
dependence. Finally, skills/qualities are pertinent to organization members and directed to 
leadership roles. Three characteristics are evaluated here, leadership, communication, and 
bases of power.  
Lastly, Cooke’s model provides a model to measure outcomes which is the 
Organizational Effectiveness Inventory, OEI (Cooke & Szumal, 2000). This model has 
been quantitatively tested and reliability has been confirmed in various research studies in 
complement with the OCI©. Outcomes are defined in terms of three units of analysis: 
individual, group, and organizational.  
Individual outcomes are explained in terms of the motivation, performance, 
satisfaction, and stress. Group outcomes are measured regarding teamwork, inter-unit 
37 
 
coordination, and unit level quality. Organizational outcomes are measured according to 
organizational level quality, quality of customer service and external adaptability.  
All previous authors and frameworks analyzed in the literature review reflect the 
fact that culture facilitates capabilities for adapting (Murphy et al., 2013) conveying a 
sense of “what should be done” versus “what is done” and that an organization makes 
choices to define its culture.  
Organizational effectiveness as a proxy to measure performance 
Predicting performance is not an easy matter firstly because there are innumerable 
variables affecting business outcome and second because performance may have different 
meanings, as was shown in the literature review (Bass, Avolio, Jung, & Berson, 2003; 
Howell & Avolio, 1993; King, Dalton, Daily, & Covin, 2004). A revision of the 
performance management systems was presented by Franco-Santos et al. (2007) where 
they pointed that the massive body of research about Business performance measurement 
Systems (BPM) did not yield into a comprehensive and shared framework, moving from 
operations management, to human resources, organizational behavior, information 
systems, accounting, and marketing. In their literature review they explained the role of the 
BPM and said that “53 per cent consider ‘strategy implementation/execution’, 41 per cent 
‘focus attention/provide alignment’, ‘internal communication’ and ‘measure 
performance/evaluation’” (Franco-Santos et al., 2007, p. 795). Their approach covered 
ample specter variables, and proposed that there is not a unique way to measure 
performance, but that the effectiveness and efficiency measures, as well as the 
organizational behavior matters are in the vision of the evaluation of the performance of a 
firm.  
38 
 
Following a similar perspective, Riratanaphong and van der Voordt (2015) 
presented a review on performance measurement systems on regard to workplace change –
referring to architectural change–, and presented a revision of some of the performance 
measurement frameworks. They posited that the objective of having performance 
measurement systems were related to planning, resource allocation, assessing improvement 
plans, measuring customer satisfaction, employee motivation to achieve targets, 
understanding bottlenecks, amongst others. Their findings pointed that there is not a unique 
way to measure performance and that companies seldom use them consistently. In the 
researched, two case studies in Thailand, and one in the Netherlands used the work 
environment diagnostics instrument (WODI) which had employee satisfactions questions.  
Another context is the M&A performance, which as pointed out by Lauser (2010), 
is a major change and disruption in a business, where the need to measure performance 
becomes relevant after large economic and organizational efforts are made. King et al. 
(2004) presented a meta-analysis of post-acquisition performance moderators. Their 
analysis was based in 93 studies and used as independent variable the financial result of a 
change initiative in terms of the abnormal return, return on assets, ROA, return on equity, 
ROE, and return on stock, ROS, with moderating variables conglomerate or related 
acquisition, method of payment (cash or equity), and prior acquisition experience. The 
most relevant results of the study showed that “the true population relationship between the 
presence of M&A activity and the performance of acquiring firms is very near zero or 
negative beyond the day a merger or acquisition is announced” (King et al., 2004, p. 195). 
This means that the initial abnormal returns of the acquired firm may not be sustainable 
beyond day one for the acquiring firm. Their most important contribution is related to the 
various uses of measurement of the M&A outcome, the findings about no evidence of 
superior financial performance in the post-acquisition phase and the advice for future 
39 
 
research to include measurements beyond the financial ones in order to determine 
significant moderators to explain M&A performance. Similar proposals were made by 
Krishnakumar and Sethi (2012), who pointed that in M&A performance studies between 
2010 and 2012, the use of balance score card was very popular and involved other factors 
beyond the financial ones, such productivity increase, overhead reduction, turnover 
variation, organizational climate, and top management turnover. This provided insights 
about the importance of human factors to measure the success or the failure of an M&A, 
and likewise, the importance of such factors in the performance of businesses in different 
situations.  
Human factor is then, pinpointed as critical factor to determine business 
performance, and particularly leadership and culture factors appear to have important 
relevance, because leaders are pivotal in planning, implementing and following up 
organizational change and should demonstrate the ability to understand the complexities of 
conducting business in varied environments and cultures (Bauer & Matzler, 2013). Now, 
connecting leadership and culture to business performance, could be tied to measuring also 
human related factors, therefore, the perceptions about performance can be measured in 
terms of effectiveness.  
Understanding the importance of culture and leadership in business performance, 
and particularly related to human rating effectiveness researchers have developed 
frameworks to measure effectiveness as a result of a combination of leadership and culture. 
Denison, Haaland, and Goelzer (2004) commented that there is lack of agreement on the 
appropriate way to measure effectiveness, and that empirical evidence showed that mission 
and consistency may predict profitability, that involvement and adaptability could predict 
innovation, and that adaptability and mission could predict sales growth. As a mirror of the 
Denison culture model (Fey & Denison, 2003), effectiveness can be explained through the 
40 
 
four main traits explained in the model: (a) involvement, effective firms are able to foster 
team work, empower their employees, where their input will be valuable to reach the goals 
of the company; (b) consistency, this is related to the strength the culture is communicated 
and lived by members of the organization, coordination the power of stability to provide a 
framework of security where members can exchange diverse points of view still ensuring 
sharing same set of values; (c) adaptability, this is the ability to change according to the 
needs of the customers and the environment, still with consistency; (d) mission, effective 
businesses have a clear sense of purpose and the vision is clear and shared by all members. 
In a research performed in various countries to measure culture and effectiveness of retail 
stores, the measurement tool used was the Denison Organizational Culture Survey (Fey & 
Denison, 2003), where also measures of employee perceptions of performance were used 
such as sales growth, profitability, quality of products and services, employee satisfaction, 
and overall organizational performance (Denison et al., 2004). In this study empirical 
results showed that, in contrast, United States had significant correlations between 
empowerment, goals and objectives, organizational learning and team orientation, and 
performance, while in Japan the only two significant correlations with performance were 
strategic direction and core values. The study showed that given the fact that cultures 
changes from one country/region to another, such will be the traits that should be levered 
for effectiveness. 
Cooke and Szumal (2000) showed empirical relationship between culture and 
effectiveness, in the research using the OEI survey, where constructive norms –related to 
culture– are positively related to employees rating of teamwork, contrasting with defensive 
culture where employees regarded as difficult to promote team work and quality of 
relations. With a constructive culture, individual, group, and organizational effectiveness 
proved significantly positive whilst defensive cultures yielded negative perceptions of 
41 
 
individual motivation, job satisfaction, teamwork, quality of work, and quality of customer 
service.  
Empirical evidence showed that business performance did not have a specific 
measurement system, involving different potential factors, from financial, marketing, 
customer, and employee perspective. The latter had gained importance since the 1990s 
with important contributions on researches related to leadership and culture, outstanding 
the importance of the human factor in the evolution and results of a business. Therefore, 
ratings of performance according to employee perception are acceptable measures of 
achievement, amongst which organizational effectiveness had proved empirical 
frameworks with quantitative measure approach (Howell & Avolio, 1993; Denison et al., 
2004; Cooke & Szumal, 2000). 
Summary 
Leadership and organizational culture are topics that on their own have been 
extensively researched in the past 40 years, given the evidence that the appropriate 
deployment of an organizational culture by transformational leadership provided better 
results in various outcomes in the exercise of an organization.  
When reviewing the state of the literature in terms of leadership an important shift 
on the conception of the leader is revealed in the research on this topic, where the genesis 
of leadership studies in the early 20th century stated that good leadership depended on 
certain personality characteristics, confining heroic profile to good leaders such as the case 
of male politicians in world war I and world war II. Later research posited that it was not 
necessarily a messianic profile the one that determined good leadership but the response to 
particular situations, presenting the situational leadership as the formula to develop leaders. 
The latter also proved to fail due to the difficulty of a leader to decide which position to 
42 
 
take according to the situation. Nowadays leadership is presented as an array of styles, 
influenced by emotions and critical thinking. The most prominent school that defined a 
theoretical framework for leadership is the transformational leadership, originated by 
Burns in 1978 and then amplified by Bass in the 1980s, and while there are still various 
ways to measure leadership this transformational – transactional framework seems to be 
the most acknowledged theory to review leadership. It makes sense because a more 
humanistic role has been placed onto leadership, after understanding in this century that if 
there is leadership it is because there are followers and that the role of the leaders is to 
transform followers so that their inner believes and behaviors work towards the 
achievement of organizational goals. 
In terms of organizational culture, review identified the necessary anthropological 
origin of culture due to the influence of abstract ideations of perceived norms, conduct, 
values that at the end deploy in behaviors well shared by a community. It was in the 1950s 
that researchers acknowledged the impact of organizational culture in the achievement of 
more sustainable and effective business results. Later in the 20th century sophisticated 
tools to measure organizational culture became popular not only in academia but in 
research, providing quantitative vision for empirical findings on culture impact. Two 
streams of organizational culture are present in the literature, the first regarding nations 
culture by Hofstede and the measurement of perceptions in terms of power distance, 
uncertainty avoidance, masculinity-femininity and individualism, each defining behaviors 
and expectations, and as pointed in various papers, if not well managed, having the 
capacity to result in mismanagement. The other stream is related to organizations 
regardless of the country of origin, acknowledging the fact that if there are smaller groups 
inside an organization, there are also subcultures. Some of the most reviewed researchers 
43 
 
in this sense are Schein, Denison, and Cooke, who provided frameworks to measure and 
review impact of organizational culture. 
Conclusion 
In terms of the appraisal of leadership, since there are multiple schools of thought 
to define it, this research will base its definition in the management and relationship 
theories, following the transactional and transformational leadership profiles as per Bass 
(1985) theoretical modeling. “A rise in interest in this positive form of leadership is due in 
part to mounting evidence supporting the role of positivity in enhancing human well-being 
and performance” as stated by Avolio (2010). A transformational leader then can be 
described as the one who build more than exchange relationship with their followers, they 
are able to engage the emotional involvement of their followers to build higher levels of 
identification, commitment, and trust in the leader and his or her mission (Bass et al., 
2003). Both layers of the leadership style are robust and proven empirically to be 
differentiated and complementary. 
The basis of transformational and transactional leadership theories is Bass’ (1985, 
1988) research in which Bass described the transformational leaders as individuals who not 
only engaged in relationships with followers but also transform them. As stated by Jung 
and Avolio (2000), such leaders spark the emotional involvement of their followers to 
build higher levels of identification, commitment, and trust in the leader and the 
organizational mission. Transformational leaders have the extraordinary capacity of 
sharing a vision and prompting followers to align their personal values and interests with 
this vision. This type of leader probably is better equipped to cope with continuous 
business challenges and environments and thus, have better abilities to perform. 
44 
 
The transactional leader is more passive, getting involved only when a problem 
develops and focusing on the mistakes of their followers. Jung and Avolio (2000) defined 
the latter style as a contractual or exchange process between leaders and followers, in 
which this leader identifies specific followers’ expectations and provides rewards in 
exchange for performance. Although scholars suggest that transformational leaders have 
higher records of positive job performance, followers’ identification with the business unit, 
and business indicators such sales or profit, the transactional profile perhaps has been 
diminished and confining to not positive behaviors. A combination of both profiles could 
propose an attempt to explain a more comprehensive leader that is able to inspire a vision 
while at the same time being able to manage tasks and short-term interventions with 
followers. 
“For an organizational culture to become more transformational, top management 
must articulate the changes that are required” (Bass, 1999). “The most central issue for 
leaders is to understand the deeper levels of a culture, to assess the functionality of the 
assumptions made at that level, and to deal with the anxiety that is unleashed when those 
assumptions are challenged” (Schein, 2010, p. 34).  
Finally, of utmost interest is to go deeper into the understanding of the Latin 
American leader and the different executions of organizational cultures, which is 
interesting to research amidst the richness of cultures and intensified economic 
development of the region. Of particular interest is the understanding of these leaders 
behaving in transnational firms, which have presence in multiple countries, coping with 
diversity in various fronts, countries, its sub-cultures, languages, evolving middle class and 
improvements in overall education.  
 
45 
 
Chapter 3: Method  
This chapter described the methodology of the research method, the design, the 
proposal for the population and the sample. The purpose of this quantitative research was 
to identify the potential relationship among human perceived organizational effectiveness, 
with leadership style and organizational culture. The research design explained the 
research questions, sampling and validation of the measurement instrument.  
Research Design 
The knowledge platform used in this quantitative research was the post positivist 
paradigm. The dimensions of the study were confirmatory, basic research, design was 
cross-sectional because it measured one point in time, due to time and economic concerns 
from the researcher. The objective of this research was to define if there is a relationship 
between leadership styles and organizational culture, with organizational effectiveness. It 
was significant, because it provided empirical evidence about the best arrangement of 
leadership styles and organizational cultures that conveyed higher organizational 
effectiveness in Latin America transnationals.  
It is important to explain the election of the quantitative approach for this research. 
Perhaps a key difference between culture concepts in general, with its anthropology 
background and organizational culture, was the foundation in terms of research methods. 
Studies around cultures were largely based on observation and qualitative methods which 
had enable the understanding of the evolution of different cultures around the world as a 
key driver for the development of the society and human kind preservation (Smircich, 
1983). This trend, however turned towards empirical methods with quantitative data 
(Cooke & Szumal, 2000; Fey & Denison, 2003), to measure the relationship of different 
culture factors in business efficiency. Likewise, leadership moved from a merely 
46 
 
qualitative approach during the great man theory to quantitative embracement with the 
current frameworks of transformational and transactional leadership. Subject matter expert 
scholars have used this type of quantitative approach to measure leadership (Bass & 
Avolio, 1993; Howell & Avolio, 1993; Eppard, 2004). 
There is a specific interest to conduct the research in Latin American transnational 
firms. According to Losada-Otálora and Casanova (2014), it is a key success factor for 
Latin America multinationals, to understand their ability to have competitive strategy as 
they expand internationally, by identifying natural markets advantage. The latter meaning 
that countries close to headquarters, might share similar culture, language and economy 
making it easier to compete. This would demand leaders capable of managing the culture 
variable to maximize success. This finding, placed a delimitation of the research in Spanish 
speaking countries, excluding for the population framework Brazil and the Caribbean 
English-French speaking islands. The research used Spanish-based surveys to collect 
information on the three variables of the theoretical framework, namely leadership styles 
and organizational culture as independent variables and organizational effectiveness as 
dependent variable.  
Appropriateness for Design 
The research was descriptive with quantitative paradigm and used two sets or 
questionnaires. To measure the independent variable leadership style, the research applied 
the MLQ (5x short) or Multi Leadership Questionnaire from Mind Garden©, based on the 
theoretical framework built by Avolio and Bass (2004). This framework is widely used 
both in academia and in business, and the authors are considered as subject matter experts 
in leadership. The MLQ (5x short) had been extensively used in a variety of regions, such 
as United States, Europe, Oceania, Singapore and South Africa, with reliabilities ranging 
47 
 
from .74 to .94. To measure the second independent variable, organizational culture, the 
research used the Organizational Culture Inventory (OCI©) from Human Synergistics, 
based on the research from Cooke and Lafferty (1994). The dependent variable 
organizational effectiveness was measured through questions from the OCI©, which 
resembled the employee perceptions of their satisfaction, role clarity and organization 
quality. Human Synergistics is a well reputed institute in the United States, who have 
hosted for more than 15 years organizational culture assessments for business and for 
academia. Szumal (2001) reported the reliability and validity of this survey after 
implementing a sample of 6,444 members and 1,080 organizational units.  
Research Questions 
RQ 1. Is there a relationship between transformational leadership style and 
organizational effectiveness?  
RQ 2. Is there a relationship between transactional leadership style and 
organizational effectiveness?  
RQ3. Is there a relationship between organizational culture and organizational 
effectiveness? 
RQ4. Is there a relationship between transformational leadership style, 
organizational culture and organizational effectiveness?  
RQ5. Is there a relationship between transactional leadership style, organizational 
culture and organizational effectiveness?  
These research questions will be validated through the following hypothesis: 
48 
 
H1. The transformational leadership style will have a positive effect on 
organizational effectiveness. 
H2. The transactional leadership style will have a negative effect on organizational 
effectiveness. 
H3. Constructive organizational culture will have a positive effect on 
organizational effectiveness. 
H4. The transformational leadership style and the constructive organizational 
culture will have a positive impact in the organizational effectiveness.  
H5. The transactional leadership style and the defensive organizational culture will 
have a negative impact in the organizational effectiveness.  
Population 
The target firms of the research were the Latin American Transnationals and the 
unit of analysis was the employee working at those firms. Target firms were expected to 
have headquarters in Latin American Spanish speaking countries and must operate in at 
least than two countries besides their home town, in order to research culture diversity in 
terms of nationality (Hofstede et al., 2010). With the objective of defining the sampling 
framework, two streams were conducted, one to determine the target firms and second the 
employees working there. 
As far as Latin American Transnationals are concerned, in this region, there is not a 
unified entity that consolidates the information of the target population Latin America 
transnationals or multilatinas.  Each country, according to the regulations, have different 
ways to identify and classify companies. Colombia, for instance, has official databases but 
having full access to these databases is costly and difficult, not affordable for by the 
49 
 
researcher. Colombia has a popular secondary source of information for company ranking 
Publicaciones Semana (2015a, 2015b, 2016), Ranking de Empresas. In smaller countries, 
Costa Rica has the Cámara de Industrias de Costa Rica, CICR (2015), but there is not an 
obligation for the firms operating in this country to register, and thus, it is not exhaustive. 
The Panamá, Ministerio de Comercio e Industrias, Sedes de Empresas Multinacionales 
(2015) convey a detailed list of multinationals operating in the country, but similar to the 
Costa Rican case, it is not necessarily exhaustive. These three databases were condensed in 
an ad hoc database for the researcher, but was not useful to determine the multilatinas 
target, their size and the ranking. In conclusion, there is not a formal repository of 
multilatinas neither in individual countries nor regionally in Latin America.  
A source with good reputation among businessmen is the America Economía 
multilatina ranking, which in the 2016 edition presented that the top 100 multilatinas. In 
fact, the top five multilatinas Mexichem, Cemex, Latam, Grupo JBS and Gruma, employ 
altogether 358,618 people and have sales for US$77.5 bn in 2015. The top three 
Colombian multilatinas Avianca-Taca, ISA and Grupo Sura hire 55,142 employees and 
reported sales of US$10.4 bn.  The most important countries in this ranking are Brazil 
30%, Mexico 26%, Chile 19%, Colombia10%, Argentina 7% and Peru 5%.  
The sample of the research was set in two parts. First the selection of the target 
firms and second the definition of number of employees in the sample. The target firms 
were selected by convenience of the researcher, due to geographical proximity in 
Colombia and Costa Rica and due to having key contacts in selected participants. To note, 
these companies, in time, had operations in other countries, not included in the two 
mentioned before, therefore providing more countries in the overall responses. The 
objective was to reach at least three different companies operating in different industries, 
50 
 
thus providing a more comprehensive framework of results in terms of industries and 
countries, for a more representative description of the Latin American transnational firm.  
The second target population, the employees working in multilatinas, considered 
the fact that it is infinite above 10,000 sampling units. Participating employees were 
assigned by the Human Resources departments in each one of the three firms, defining 
their ability to understand the survey and the tools to fill it in, either a laptop, iPad or 
access to a computer terminal. These set the target to top manager down to analysts. Blue 
collar workers were not considered in the sample. 
When the firms confirmed their participation and the respondents identified, 
employees received and email from Human Synergistics containing the two surveys, plus 
the control and demographic information. An informed consent was also sent and signed 
before starting the survey, ensuring confidentiality and anonymity. The data was collected 
by Human Synergistics and placed together in a database that was shared with the 
researcher. Human Synergistics placed a condition that the information should be shared 
with them for research purposes. Given that all the measurement instruments have proven 
reliability, a pilot test was not considered.  
Informed Consent 
All participants of the study, employees working in Latin American transnational 
corporations, received an informed consent, describing the purpose of the study, 
guaranteeing confidentiality and anonymity with the information they respond in the 
survey. The informed consent was placed at the beginning of the survey in web format, and 
the signature mode was a check into the space “accept terms and conditions”. In Appendix 
E is the template that was issued to the participants before answering the survey.  
51 
 
Sampling Frame 
The unit of sampling was the employee working at a Latin American transnational. 
Given the fact that the employee needed to rate leadership, organizational culture and 
organizational effectiveness, the sampling was directed to administrative personnel, thus 
excluding plant or field operation workers.  
The employees sampling analysis considered that the universe of employees in 
Latin America transnational firms which is >10,000, that with a confidence level of 95% 
and error of 5%, the sample resulted in 384 target surveys. Previous research on leadership 
and culture showed response rate of 90% (D’Alessio, 2008), 80% (Avolio et al.,2004) and 
62% Walumbwa et al. (2010). The latter had multi-industry sampling and since this 
research considered three different companies in multiple countries, the researcher 
considered a lower response rate to estimate the total number of surveys. Estimating a 
response rate of 60%, then the research aimed for a total of 616 leads to reach at least the 
384 surveys. The researcher asked the firms selected in the survey to include between 200-
300 employees from top management to coordinator level. This target was carefully 
reviewed because over sampling carried additional costs for the researcher and thus the 
surveys released were controlled by the researcher and the HR department. 
Confidentiality 
Participants were informed through the informed consent template that the research 
preserved confidentiality, both in terms of the name and personal data of the participant. 
Individual results by participant or by company were not disclosed in the findings, nor was 
an assessment presented in the research for isolated performance. Confidentiality was also 
proposed to participating firms, in case they did not want to disclose their results with 
academia community, in which case, the name of the company would be omitted for the 
52 
 
final and public version. Please review in Appendix C the invitation letter for firms, in 
Appendix D the invitation letter for employees and in Appendix E the informed consent 
form. 
Geographic location 
The scope of the research included Latin America transnationals, with headquarters 
in Latin America Spanish Speaking countries and operating in the region. The researcher 
was a resident of Costa Rica, with Colombian nationality, and thus, due to researcher’s 
convenience, the target firms were contacted mainly in Costa Rica and Colombia. The 
researched companies Nutresa-Pozuelo, Sodimac and HL Ingenieros, reported results from 
Costa Rica, Panama, Guatemala, Nicaragua, El Salvador, Ecuador, Bolivia, Dominican 
Republic and Colombia.  
Instrumentation 
Given the geographic dispersion of the sample, the survey was administered on web 
platform and as presented in Appendix D, Human Synergistics hosted in their web based, 
both surveys the OCI© and the MLQ. 
Multifactor Leadership Questionnaire (MLQ) rater form 5x-short. The 
following is the recommendation of the MLQ Manual from Avolio and Bass (2004).  It is 
an individual 45 items appropriate for leader report. Each one describes a full range of 
leadership summarized in 12 factors, out of which nine describe the leader style and three 
the outcome. In terms of the style, there are five transformational factors, namely (1) 
attributed charisma, (2) idealized influence, (3) inspirational motivation, (4) intellectual 
stimulation and (5) individualized consideration. The three transactional leadership factors 
measured are (1) contingent reward, (2) management-by-exception active and (3) 
management-by-exception passive. The extra outcome factors are (1) extra effort, (2) 
53 
 
effectiveness and (3) satisfaction. The latter outcome factors were not considered in the 
theoretical framework because the organizational outcome was measured using the OCI©. 
Appendix A provides permission to use the MLQ by Mind Garden.  
Organizational Culture Inventory (OCI©). This survey from Cooke and Lafferty 
(1994) and copyrighted by Human Synergistics was designed to measure the operational 
culture inside an organization, and consisted of 12 factors. The first four factors describe a 
constructive culture, and are identified as (1) achievement, (2) self-actualizing; (3) human 
encouraging and (4) affiliative. The next four factors describe a passive/defensive culture 
which are (1) approval, (2) conventional (3) dependent and (4) avoidance. The last four set 
of factors describe the aggressive/defensive style and are posited as (1) perfectionists, (2) 
competitive, (3) power, (4) oppositional. 
To measure dependent variable organizational effectiveness, the OCI© measured 
four factors: (1) role clarity, (2) role conflict, (3) quality of service and, (4) employee 
satisfaction.  
Appendix B indicates permission to use OCI©, with further confirmation of 
charges per the sampling model definition. 
Control and demographic variables. Previous leadership and organizational 
culture quantitative research, have stated the use of control variables and demographic 
information (Avolio et al., 1999; Eppard, 2004), to measure dependent and independent 
variables differences. For demographic information, the survey included: (a) age, (b) 
gender, (c) education level, (d) tenure in the organization, (e) country of location, (f) 
hierarchical level, (g) work area.  
54 
 
Data Collection 
At least 20 leads were sent to potential multilatinas, many of them did not answer 
and others replied that they already have measurements of the leadership and 
organizational behavior. The most efficient way to close the deal, was through personal 
contact of the researcher with upper management of the firms, to explain the survey, the 
intention of the research and to support the initiative as part of their social corporate vision. 
Appendix C shows a sample of this invitation.  
When the firms accepted to participate, in exchange the researcher offered to share 
the database, the analytics of the results and an assessment upon the findings. The firm 
shared with the researcher a database with the employees chosen for the research. The 
sample was defined by the participating firm per the employee level, excluding blue collar 
workers. Once the database was defined by the firm, it was sent to Human Synergistics 
who sent altogether with the OCI© and MLQ to each participant. Human Synergistics have 
strong copyright policies and would not allow others to administer their surveys. They 
offered to host the MLQ, and Mind Garden accepted the proposal. The researcher 
confirmed Human Synergistics with the number of surveys to be issued, and they sent the 
invitation. As an example, please review Appendix D. An informed consent was sent prior 
to the survey to guarantee anonymity and confidentiality. The survey, altogether with the 
OCI© and MLQ© took about 40 minutes to fill in. Surveys were administered in Spanish, 
all had been tested in this language.  
Data Analysis 
When Human Synergistics returned the databases with the surveys filled, statistical 
analysis was performed using the SPSS specialized statistical software. The data was tested 
for normality, linearity and homoscedasticity, and review if transformations were needed. 
55 
 
Next, correlations were reviewed for the primary factors, leadership style, organizational 
culture and organizational effectiveness. The initial analysis was done with linear 
regression analysis which was used previously by D’Alessio (2004), and Avolio, 
Waldman, and Einstein (1988) in leadership quantitative research. Due to noncompliance 
with logistic regression conditions such as normality, the analysis was then turned to 
logistic regression, to test each one of the hypotheses.  
Summary 
With the objective of answering the research questions related to the relationship 
between leadership, organizational culture and organizational effectiveness in Latin 
American transnationals, this chapter described the used methodology, following a 
quantitative paradigm, deductive logic and cross-sectional design. The research took place 
in Latin American transnational firms and the sampling unit were the employee working in 
these firms.  
The used instruments were the MLQ (Multi Leadership Questionnaire) from Avolio 
and Bass (2004) to measure the independent variable leadership, and the OCI© 
(Organizational Culture Inventory) from Cooke and Lafferty (1994) to measure the second 
independent variables organizational culture. To measure the dependent variable, 
organizational effectiveness, the survey that was implemented was also the OCI© 
measuring employee satisfaction, role clarity and service quality.  
Following the information collection through the surveys, statistical software SPSS 
was used to analyze the information and its correlations per the hypotheses presented at the 
beginning of this chapter. Results of the analysis are described in chapter 4 and the 
conclusions and recommendations in chapter 5. 
 
56 
 
Chapter 4: Results 
The purpose of this research was to find the relationship between leadership styles, 
organizational culture and organizational effectiveness, the latter as a proxy to 
organizational performance. The scope of the research was Latin America Multinationals 
or “multilatinas” as these types of firms emerged since the 1990’s after the Washington 
Consensus in response to market liberalization in Latin America prompting firms to 
increase competitiveness. Leadership embarks challenging characteristics among managers 
of these companies who need to cope with culture diversity, internationalization and most 
important of all, development of competitiveness in order to participate in similar terms 
with developed countries’ multinationals.  
The research employed quantitative methods with proofed surveys from Human 
Synergistics and Mind Garden to measure organizational culture and organizational 
effectiveness with the instrument OCI© (organizational culture inventory) and leadership 
with the MLQ © (Multifactor leadership questionnaire). 
The purpose of this chapter is to report the findings of the research, after the 
surveys were administered in three multilatinas, one in the food business, the second in the 
retail and the third in construction.  The findings aimed to test a model to predict the 
organizational effectiveness due to leadership and culture. 
The data collection process followed five main steps. First the election of the 
participating firms, second the assignment of the employees to be surveyed, third the 
survey implementation, fourth the issue of the survey result from Human Synergistics and 
last, the presentation of results to each one of the participant firms. 
The election of the participating firms was done via direct contacts in multilatinas. 
About 20 companies were approached to invite them to participate in the survey. The 
57 
 
initial contact was either the CEO or the HR lead. These contacts were previously known 
by the researcher or referred by colleagues and Centrum Graduate Business Schools 
classmates. Massive invitations were not considered due to confidentiality concerns from 
the companies. About 20 leads where issued during the March 2016 and March 2017 
period, resulting in three companies providing positive response  
The first company to accept participation was Pozuelo, a firm belonging to Nutresa, 
Colombian multilatina leader in the food industry. Nutresa is positioned in the America 
Economia multilatina ranking 2016 in the 45th place with sales of US$2,897 bn in 2015.  
Pozuelo is a subsidiary of Nutresa in Costa Rica and is leader of the cookie and crackers 
manufacturing industry. Pozuelo has a dominant market share in Central American 
countries, Costa Rica, Guatemala, Panama and Nicaragua. The first contact point to 
Pozuelo was the Managing Director who endorsed the initiative and delegated authority to 
the HR Manager. All the planning meetings were held with human resources in the March 
– June 2016 period, with schedules that included communication processes, list of 
participants and planned use of the results of the survey. The researcher offered to deploy 
the survey for free and in exchange offered a complete diagnostic of the leadership style 
and organizational culture of the firm. 
Once the agreement was set with Pozuelo, the firm assigned a list of 300 employees 
to receive the survey in Costa Rica, Panama, Guatemala, Nicaragua and El Salvador. These 
employees were assigned in various departments and from the top management level down 
to analyst. The researcher and the firm agreed not to include blue collar workers nor in 
store demo staff due to probable low education level that may hinder their ability to 
understand the survey questions.  
Before issuing the surveys to employees, the HR analyst, the IT analyst and the 
researcher received a pilot test that fulfilled two objectives, first to make sure the IT 
58 
 
department could ensure the survey did not fall into spam messages and second to review 
the appropriate translation of the questionnaire to Spanish. The pilot test confirmed both 
aspects and the survey was issued to employees in August 17, 2016 and was closed on 
October 7, 2016 to 301 employees. 
After the surveys were closed, Human Synergistics sent the final report which 
consisted of a document with main results and an excel database with the answers of the 
254 respondents of the OCI©/MLQ. Taking as base the MLQ and the OCI©, the response 
rate was 84.4%. With the results, the researcher presented the diagnostic of their 
organizational culture and their leadership style. A complete report was presented to the 
management team of Pozuelo in December 2016. The report included an explanation of the 
survey process, the demographics, the result of the findings and an assessment on how to 
address the gaps between the ideal culture and the found culture, and the leadership styles.  
After the experience gained with the first firm, a similar path was followed in terms 
of logistics, HR arrangements and questionnaire issuing with the remainder two 
companies. As mentioned, the last two only implemented the OCI© and the MLQ.   
The second company was HL Ingenieros. This is a construction firm with 
headquarters in Bogota - Colombia, who started operations 45 years ago, as a family 
owned company. Their main business scope are electromechanical large-scale projects for 
the cement, oil and gas and mining industries. Their main projects are related to civil 
engineering for oil and gas firms, operating internationally since the 90’s, besides 
Colombia, in Panama, Guatemala, Dominican Republic, Ecuador and Bolivia. As reported 
by Ediciones Semana – 1000 largest companies in Colombia 2016, HL Ingenieros reported 
operating income of US$65 million increasing 20.3% versus previous year. HR department 
appointed 154 employees to answer the survey across their different subsidiaries in Latin 
America, from their different work areas, administrative and engineering operations, 
59 
 
excluding blue collar workers. The survey was issued from May 29, 2017 to June 11, 2017. 
From 154 employees that received the survey, 122 answered it, which is a 79.2% response 
rate. 
The third company researched was Sodimac Colombia. This is a leading retailer in 
the construction and home improvement sector in Latin America, with headquarters in 
Chile. International operations include Chile, Colombia, Peru, Argentina, Uruguay, Brazil 
and Mexico. As per their financial reports, have sales of US$5.600 million and more than 
1.700.000 of point of sale square meters. The multinational is an affiliate of the SACI 
Falabella group. Sodimac Colombia accepted the invitation to participate in the survey 
where 328 employees received the survey in the June 5, 2017 to July 7, 2017 period.  
Sodimac Colombia decided to launch the survey to the whole organization, including 
administrative and store employees, however stores sales staff were excluded, for a total of 
328 employees. Finally, 226 employees responded the survey meaning a response rate of 
68.9%. Adding up the three firms, the overall rate response of the 602 surveys was 76% 
which was above the target of 60% response rate and above the initial target of 384 
effective responses.  
Demographics 
The final results of the surveyed employees from the three participating 
multilatinas, was 602 respondents, 254 from Pozuelo, 122 from HL Ingenieros and 226 
from Sodimac. In terms of location countries, two of them lead the survey, Colombia with 
318 and Costa Rica with 175. The total demographic structure can be detailed in 
60 
 
Table 1. 
61 
 
Table 1  
Demographics from respondents of the combined OCI© and MLQ surveys 
 n % 
Age   
20-29 years old 89 14.8 
30-39 years old 192 31.9 
40-49 years old 257 42.7 
50-59 years old 49 8.1 
60 years old or more 10 1.7 
Prefers not to respond 5 0.8 
Gender   
Masculine 366 60.8 
Feminine  213 35.4 
Prefers not to respond – Missing 21 3.8 
Education   
High School 32 5.3 
Some bachelor education  38 6.3 
Technical  32 5.3 
Bachelor degree 198 32.9 
Graduate Degree 149 24.8 
Master’s Degree 128 21.3 
Doctorate 1 0.2 
Other 7 1.2 
Prefers not to respond – 
17 2.8 
Missing 
Continued → 
62 
 
Continued → 
Years in the organization   
Less than 6 months 18 3.0 
6 months to 1 year  34 5.6 
1-2 years  49 8.1 
2-4 years  94 15.6 
4-6 years  88 14.6 
6-10 years  103 17.1 
10-15 years 114 18.9 
More than 15 years  81 13.5 
Prefers not to respond – 
21 3.5 
Missing 
Location – Country   
Costa Rica  175 29.1 
Guatemala 31 5.1 
El Salvador 20 3.3 
Panama 15 2.5 
Nicaragua 14 2.3 
Colombia 318 52.8 
Bolivia 3 0.5 
Ecuador 3 0.5 
Dominican Republic 8 1.3 
Prefers not to respond – 
15 2.5 
Missing 
Continued → 
63 
 
Continued → 
Business Area   
CEO – President 7 1.2 
Operations – Logistics 259 43.0 
Commercial  103 17.1 
Human Resources 72 12.0 
Finance 28 4.7 
IT 10 1.7 
Business Development 26 4.3 
Administrative 16 2.7 
Prefers not to respond – 
81 13.5 
Missing 
Hierarchical level   
CEO - President 4 0.7 
Director - Vicepresident 54 9.0 
Area Manager 111 18.4 
Coordinators – Specialists 316 52.5 
Analyst – not managerial 71 11.8 
Prefers not to respond – 46 7.6 
Missing 
 
Data Descriptive Analysis 
Before implementing linear regression, variables were revised for normality, 
random, homoscedasticity collinearity and correlation. For normality, two instances were 
reviewed. First the normality of the dependent variable organizational effectiveness and 
second, the error distribution of the linear regression of the five hypotheses. 
64 
 
The initial revision, as presented in Table 2, showed that the dependent variable 
organizational effectiveness presented non-continual distribution, suggesting the need to 
implement transformation of this variable to be able to fulfill the assumptions of the 
regression models (Hair, Black, Babin, & Anderson, 2010). 
Table 2 
Organizational effectiveness frequency table 
 Frequency Percent Valid Percent Cumulative Percent 
2.0 2 0.3 0.3 0.3 
2.5 2 0.3 0.3 0.7 
3.0 33 5.5 5.5 6.1 
3.5 24 4.0 4.0 10.1 
Valid 
4.0 259 43.0 43.0 53.2 
4.5 63 10.5 10.5 63.6 
5.0 219 36.4 36.4 100.0 
Total 602 100.0 100.0  
 
As expected given the distribution of the target variable as non-continual, one of the 
main assumptions of the linear regression models, which is the normality in the residues, 
was not met. As can be seen in the 
65 
 
Table 3, the one sample Kolmogorov-Smirnov test for the errors of the distribution 
normality for the hypotheses, had in all instances a p-value <,05 indicating that the null 
hypotheses, residuals have normal distribution were all rejected. 
66 
 
Table 3 
Kolmogorov-Smirnov test for the errors distribution normality of the five hypotheses with 
linear regression  
Hypothesis Test Summary for null hypothesis  
 Null Hypothesis Test Sig. Decision 
The distribution of the standardized One-sample Reject null 
1 residual is normal with mean 0.0000 Kolmogorov 0.001
1 
and a standard deviation 0.9999 Smirnov Test hypothesis 
The distribution of the standardized One-sample 
2 residual is normal with mean 0.0000 Kolmogorov 0.001
1 Reject null 
hypothesis 
and a standard deviation 0.9999 Smirnov Test 
The distribution of the standardized One-sample Reject null 
3 residual is normal with mean 0.0000 Kolmogorov 0.001
1 hypothesis 
and a standard deviation 0.9999 Smirnov Test 
The distribution of the standardized One-sample Reject null 
4 residual is normal with mean 0.0000 Kolmogorov 0.001
1 
and a standard deviation 0.998 Smirnov Test hypothesis 
The distribution of the standardized One-sample 
1 Reject null 
5 residual is normal with mean 0.0000 Kolmogorov 0.001  hypothesis 
and a standard deviation 0.998 Smirnov Test 
Note. Asymptotic significances are displayed. The significance level is ,05. 
1 Liliefors Corrected 
 
Per the above, it was determined that it was better to use a statistical model that 
considered the behavior of the distribution of the variable organizational effectiveness as 
non-normal. Poisson regression model was considered, approaching the integer values of 
the target variable where unlike the linear regression model, the normality assumption was 
fulfilled for all models. However, in the tested models an over dispersion in the residues 
was evidenced, as shown in Figure 2, with deviance residues and the predicted value for 
the Hypothesis 1. Considering these facts about the residues of both the linear and Poisson 
models, the researcher opted to reorient the analysis using the logistic regression model. 
 
67 
 
   
Figure 2. Residues of Poison regression model for Hypothesis 1 
 
Logistic Regression 
As recommended by Hair et al. (2010), logistic regression is recommended in the 
cases that normality of the dependent variable is not met and results can be measured as 
binary results. For the use of logistic regression then it was decided to group the target 
variable organizational effectiveness into 3 categories. The logic of the grouping 
considered three criteria regarding organizational effectiveness: 5- (equivalent to totally 
satisfied), 4- (equivalent to satisfied) and 3- (equivalent to just satisfied or less). Binary 
analysis considered score 3 as the base and scores 4 and 5 as the binary measures 
compared to the probability of attaining 3. In Table 4 is shown the distribution of the new 
target variable called Organizational Effectiveness. 
68 
 
Table 4 
Organizational effectiveness categories frequency table 
 Frequency Percent Valid Percent Cumulative Percent 
3 61 10.1 10.1 10.1 
4 259 43.0 43.0 53.2 
Valid 
5 282 46.8 46.8 100.0 
Total 602 100.0 100.0  
 
With this new transformed variable, the hypothesis testing was performed with 
logistic regression. To note, before running the logistic regression model, all hypotheses 
were tested for key assumptions required, randomness, correlation and multicollinearity. 
All the statistical analysis reported accomplishment of these criteria and with assumptions 
reviewed the following step of the statistical analysis was to check the five hypotheses. 
Hypothesis 1 
The first hypothesis stated that “the transformational leadership style will have a 
positive effect on organizational effectiveness”. Firstly, the dependent variable 
organizational effectiveness was analyzed in terms of the three categories. In Table 5 are 
shown the results of the case processing. To generate a model with greater predictive 
capacity in relation to the three categories of the model, random samples were worked for 
categories 4 and 5 corresponding to the approximate size of category 3, which is the 
smallest. Additionally, category 3 was chosen as the reference category for interpretations. 
 
69 
 
Table 5 
Case processing summary for organizational effectiveness Hypothesis 1 
  N Marginal Percentage 
3 61 36.3% 
Organizational 4 55 32.7% 
Effectiveness 
5 52 31.0% 
Valid 168 100.0% 
Missing 0 
 
Total 168 
 
Subpopulation 11 
 
 
However, it should be clarified that the greatest use that was be made of the results 
of logistic regression models was to verify the research hypotheses by means of the 
significance and sign of the estimated coefficients. Therefore, the predictive use of the 
model was reviewed but at a second level of importance.  
The model fitting information for Hypothesis 1, in Table 6 validates the overall fit 
of the model with p-value <.05, showing that there was statistical evidence of the overall 
model where transformational leadership was a factor that influenced organizational 
effectiveness at a significant level of 5%. 
Table 6 
Model fitting for logistic regression Hypothesis 1 – Likelihood ratio test 
Chi-Square df Sig. 
16.805 2 0.00 
 
70 
 
In terms of the goodness of fit results evidenced in the Person and Deviance 
statistics in Table 7, there is evidence of an acceptable logistic regression at a significant 
level above 5%.   
Table 7 
Goodness of fit for logistic regression Hypothesis 1  
  Chi-Square df Sig. 
Pearson 20.167 18 0.324 
Deviance 23.021 18 0.190 
 
The former statistics of model adjustment were complemented with the Pseudo R 
square where the statistics Cox and Snell, Nagelkerke and McFadden presented acceptable 
values, as shown in Table 8. Also, when reviewing the Pseudo R-square the model 
provided evidence of low but acceptable level of adjustment. 
Table 8 
Pseudo R-square for logistic regression Hypothesis 1 
Cox and Snell 0.095 
Nagelkerke 0.107 
McFadden 0.046 
 
After defining there was a statistical model and that there was acceptable 
adjustment, the likelihood ratio test analyzed the relationship of the specific variable 
transformational leadership at a level of 5%. Table 9 described that there is sufficient 
statistical evidence to verify that the independent variable transformational leadership 
explained the dependent variable organizational effectiveness.  
 
71 
 
Table 9 
Likelihood ratio test for logistic regression Hypothesis 1 
Organizational Effectiveness Chi-Square df Sig. 
Intercept 17.145 2 0.000 
Transformational Leadership 16.805 2 0.000 
 
Now that there was a statistical prove of the relationship of both variables the 
parameter estimates provide both the factors for the model and the direction of the 
influence. Table 10 indicated that transformational leadership provided a positive influence 
in organizational effectiveness, in both instances category 4 with B factor 0.266 and 
category 5 with B factor 0.824. The Exp(B) statistic indicated that for each point of 
incremental transformational leadership it had 2.27 more probability to attain category 5 of 
organizational effectiveness compared to category 3. 
Table 10 
Logistic regression parameter estimates for Hypothesis 1 
95% Confidence Interval for 
Organizational Effectiveness B Std. Error Exp(B) 
Exp(B) 
Lower Bound Upper Bound 
    
Intercept −0.791 0.616 
4    
Transformational leadership 0.266 0.223 1.304 0.843 2.019 
Intercept −2.500 0.741 
5    
Transformational leadership 0.824 0.245 2.279 1.409 3.686 
 
The logistic regression formula was as follows. For the probability to have a score 
of 5 in organizational effectiveness, Log_nat (−2.5 +0.824 * transformational leadership). 
For the probability to have a score of 4 in organizational effectiveness Log_nat (−0.791 
+0.266 * transformational leadership).  
72 
 
The prediction of the overall model as shown in Table 11 was an adjustment of 
45.8% which had low predictability, indicating that there are other factors besides 
transformational leadership that explained organizational effectiveness. As per categories, 
the model had higher predictability for category 3 and 5. 
Table 11 
Prediction rate of occurrence for Hypothesis 1 
Observed Predicted 
3 4 5 Percent Correct 
 
3 33 20 8 54.1% 
4 24 19 12 34.5% 
5 17 10 25 48.1% 
Overall Percentage 44.0% 29.2% 26.8% 45.8% 
 
A final test was deployed to open the sub components of the transformational 
leadership array. The step model analysis showed that the characteristics that produce more 
variance on organizational effectiveness were inspirational motivation and idealized 
behaviors. 
In conclusion, Hypothesis 1 “the transformational leadership style will have a 
positive effect on organizational effectiveness” was confirmed at a significant level of 5% 
however it was presumed that transformational leadership was not the unique explanatory 
factor for organizational effectiveness.  
Hypothesis 2 
In contrast to the first hypothesis, the second pretended to find the relationship with 
transactional leadership. “The transactional leadership style will have a negative effect on 
organizational effectiveness”. With similar approach to the data treatment of Hypothesis 1, 
the dependent variable organizational efficiency was measured in 3 categories, 3 for just 
73 
 
satisfied, 4 satisfied and 5 very satisfied. Random sampling was used to determine a 
smaller selection of category 4 and 5 answers.  
Table 12 
Case processing summary for organizational effectiveness Hypothesis 2 
  N Marginal Percentage 
3 61 31.1% 
Organizational 4 65 33.2% 
Effectiveness 
5 70 35.7% 
Valid 196 100.0% 
Missing 0 
 
Total 196 
 
Subpopulation 10 
 
 
The model fitting criteria as presented in Table 13 proved the overall 
significance of the model at p-value <.05. 
Table 13 
Model fitting for logistic regression Hypothesis 2 – likelihood ratio test 
Model Chi-Square df Sig. 
Final 25.497 2 0.000 
 
The adjustment of the logistic regression model was acceptable as shown in Table 
14 with goodness of fit statistics Pearson and Deviance both above 5% significance level. 
Table 14 
Goodness of fit for logistic regression Hypothesis 2  
  Chi-Square df Sig. 
Pearson 17.406 16 0.360 
Deviance 19.714 16 0.233 
74 
 
The goodness of fit model adjustment also confirmed with the Pseudo R-square in 
Table 15 with acceptable statistics.  
Table 15 
Pseudo R-square for logistic regression Hypothesis 2 
Cox and Snell 0.122 
Nagelkerke 0.137 
McFadden 0.059 
 
The influence of transactional leadership on organizational effectiveness was 
proved to be significant as is shown in Table 16 however the model still needed to 
determine if the influence was positive or negative. 
Table 16 
Likelihood ratio test for logistic regression Hypothesis 2 
Organizational Effectiveness Chi-Square df Sig. 
Intercept 22.068 2 0.000 
Transactional leadership 25.497 2 0.000 
 
Transactional leadership styles had a positive effect on organizational effectiveness 
as is shown in Table 17, where B parameter both for categories 4 and 5 are positive. The 
hypothesis stated that the influence was negative, thus although there was a confirmed 
statistically proven relationship, the direction model shows that the relationship is positive, 
thus the null hypothesis is rejected. Against the expectations of Hypothesis 2, one point of 
transactional leadership had 3.235 more probability to attain category 5 with higher 
organizational effectiveness than category 3. In both categories, transactional leadership 
proved as positive influence on organizational effectiveness. 
75 
 
Table 17 
Logistic regression parameter estimates for Hypothesis 2 
95% Confidence Interval for 
Organizational Effectiveness B Std. Error Exp(B) 
Exp(B) 
    Lower Bound Upper Bound 
Intercept −1.843 0.803 
4    Transactional Leadership 0.645 0.263 1.906 1.138 3.193 
Intercept −3.520 0.902 
5    
Transactional Leadership 1.174 0.282 3.235 1.860 5.626 
 
The logistic regression formula would be as follows. For the probability to have a 
score of 5 in organizational effectiveness, due to transactional leadership was: Log_nat 
(−1.843+0.645*transactional leadership). For the probability to have a score of 4 in 
organizational effectiveness Log_nat (−3.520+1.174*transactional leadership).  
The prediction model of the logistic regression with the independent variable 
transactional leadership influencing organizational behavior had an overall adjustment of 
39.3% as evidenced in Table 18, which is low, meaning there were more factors explaining 
organizational effectiveness besides transactional leadership. 
Table 18 
Prediction rate of occurrence for Hypothesis 2 
Observed Predicted 
3 4 5 Percent Correct 
 
3 25 22 14 41.0% 
4 19 16 30 24.6% 
5 7 27 36 51.4% 
Overall Percentage 26.0% 33.2% 40.8% 39.3% 
 
76 
 
Transactional leadership in conclusion, appeared to influence organizational 
effectiveness and contrary to the original hypothesis with negative direction, it appeared 
positive. Thus Hypothesis 2 could not be confirmed.  
Hypothesis 3 
This Hypothesis 3 pretended to establish the effect of organizational culture in 
organizational effectiveness. “Constructive organizational culture will have a positive 
effect on organizational effectiveness”.  Here again, the dependent variable organizational 
efficiency was measured in 3 categories, 3 for just satisfied, 4 satisfied and 5 very satisfied. 
As stated in Table 19, random sampling was used to determine a smaller selection of 
category 4 and 5 answers.  
Table 19 
Case processing summary for organizational effectiveness Hypothesis 3 
  N Marginal Percentage 
3 61 33.5% 
Organizational 4 60 33.0% 
Effectiveness Category 
5 61 33.5% 
Valid 182 100.0% 
Missing 0 
 
Total 182 
 
Subpopulation 13 
 
 
The model fitting criteria proved significance of the model at p-value <0.05 as is 
shown in Table 20. The model showed thus an overall significant relationship between 
the variables.  
77 
 
Table 20 
Model fitting and likelihood ratio test for logistic regression Hypothesis 3 
Model Chi-Square df Sig. 
Final 42.194 2 0.000 
 
The adjustment of the model did not perform as good as the first two hypothesis 
with Goodness of fit lower than 5% in the Pearson and Deviance statistics, as reviewed in 
Table 21. The Pseudo R-square is at the minimum acceptable level in the 20% as per Table 
22, so it is determined that the model has an acceptable minimal adjustment to pursue 
evaluating the model. 
Table 21 
Goodness of fit for logistic regression Hypothesis 3  
  Chi-Square df Sig. 
Pearson 40.778 22 0.009 
Deviance 36.496 22 0.027 
 
Table 22 
Pseudo R-square for logistic regression Hypothesis 3 
Cox and Snell 0.207 
Nagelkerke 0.233 
McFadden 0.106 
 
Referring now to the specific relation of the independent variable constructive 
culture, as seen in Table 23, the likelihood ratio test for the influence of constructive 
organizational culture in organizational effectiveness proved statistically significant with 
p-value <.05 
78 
 
Table 23 
Likelihood ratio test for logistic regression Hypothesis 3 
Effect Chi-Square df Sig. 
Intercept 40.960 2 0.000 
Constructive Culture  42.194 2 0.000 
 
In order to determine the direction of the influence of the constructive culture, 
either positive or negative, the parameter estimated in Table 24 showed positive influence. 
Table 24 
Logistic regression parameter estimates for Hypothesis 3 
95% Confidence Interval for 
Organizational Effectiveness B Std. Error Exp(B) 
Exp(B) 
    Lower Bound Upper Bound 
Intercept −3.611 1.432 
4    
Constructive Culture 0.936 0.365 2.549 1.247 5.211 
Intercept −7.777 1.880 
5    
Constructive Culture 1.921 0.454 6.825 2.804 16.607 
 
There was statistical evidence of a positive relationship between constructive culture 
and organizational effectiveness and thus there was no evidence to reject the null hypothesis. 
The logistic regression formula for the probability to attain category 4 in organizational 
effectiveness was Log_nat (−3.611+0.936*constructive culture). The logistic regression 
formula for the probability to attain category 5 was Log_nat (−7.777+1.921*constructive 
culture). 
The predictive capacity of this model proved overall at 54.9% as in Table 25, was 
higher than the first two hypothesis, but still showed that individually the constructive 
culture was not able to explain organizational effectiveness.  
79 
 
Table 25 
Prediction rate of occurrence for Hypothesis 3 
Observed Predicted 
3 4 5 
 Percent Correct 
3 29 20 12 47.5% 
4 13 33 14 55.0% 
5 8 15 38 62.3% 
Overall Percentage 27.5% 37.4% 35.2% 54.9% 
 
Constructive culture was proved in Hypothesis 3 to be a positive predictor of 
organizational effectiveness with significance at 5% and thus there was no evidence to 
reject the null hypothesis.  
Hypothesis 4 
The last two hypotheses pretended to find the relation of culture and leadership 
with organizational effectiveness. Hypothesis 4 stated: “the transformational leadership 
style and the constructive organizational culture will have a positive impact in the 
organizational effectiveness”.  
Following same path as in previous hypothesis, the first transformation for the 
dependent variable organizational effectiveness was its establishment in categories 3, 4 and 
5. Table 26 resembles the random sample assigned for categories 4 and 5.  
80 
 
Table 26 
Case processing summary for organizational effectiveness Hypothesis 4 
  N Marginal Percentage 
3 61 34.9% 
Organizational 4 55 31.4% 
Effectiveness Categories 
5 59 33.7% 
Valid 175 100.0% 
Missing 0 
 
Total 175 
 
Subpopulation 57 
 
 
The overall fit of the model proved statistical significance at p-value <0.05, as 
per Table 27, meaning that due to at least one variable there is a model with 
significant relationship with organizational effectiveness, which was previously 
confirmed in Hypothesis 1 and 3.  
Table 27 
Model fitting and likelihood ratio test for logistic regression Hypothesis 4 
Model Chi-Square df Sig. 
Intercept Only 
   
Final 79.127 4 0.000 
 
Confirming there was an existent model, its adjustment proved to be acceptable 
through the goodness of fit and Pseudo R-square. Goodness of fit as explained in Table 28 
shows that the statistics Pearson and Deviance had a significance above 5%. 
81 
 
Table 28 
Goodness of fit for logistic regression Hypothesis 4  
  Chi-Square df Sig. 
Pearson 91.838 108 0.867 
Deviance 96.273 108 0.783 
 
In complement, Table 29 provided data of the adjustment statistics in the 20%-40% 
range also confirming acceptable model adjustment. 
Table 29 
Pseudo R-square for logistic regression Hypothesis 4 
Cox and Snell 0.364 
Nagelkerke 0.409 
McFadden 0.206 
 
After finding the overall model adjustment, to determine if transformational 
leadership and constructive culture influenced organizational effectiveness, the likelihood 
ratio test was performed with results showing in Table 30. It was confirmed with statistical 
significance at 5% that the two independent variables had influence on the dependent one.  
Table 30 
Likelihood ratio test for logistic regression Hypothesis 4 
Organizational effectiveness Chi-Square df Sig. 
Intercept 77.502 2 0.000 
Transformational Leadership 6.820 2 0.033 
Constructive culture 63.829 2 0.000 
 
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To determine if the influence was positive or negative and the parameters for the 
logistic regression formula, Table 31 shows that both models predicted the organizational 
effectiveness in the assigned category in positive direction. 
Table 31 
Logistic regression parameter estimates for Hypothesis 4 
95% Confidence Interval for 
Organizational Effectiveness B Std. Error Exp(B) 
Exp(B) 
    Lower Bound Upper Bound 
Intercept −5.192 1.334 
   
4 Transformational leadership 0.274 0.220 1.315 0.855 2.023 
Constructive culture 1.135 0.310 3.113 1.696 5.714 
Intercept −14.121 2.031 
   
5 Transformational leadership 0.674 0.254 1.963 1.194 3.228 
Constructive culture 2.928 0.441 18.697 7.874 44.398 
 
The statistic Exp(b) for the constructive culture in category 5 showed that for each 
point of constructive culture there were 18.67 times more probability to attain category 5 
compared to probability to get category 3, being this independent variable the highest so 
far in influencing organizational effectiveness.  No statistical evidence was found to reject 
the null hypothesis; thus, the relationship was confirmed positive and significant. There 
was a major influence of the constructive culture over the organizational effectiveness than 
the transformational leadership style. The logistic regression formula for the probability to 
obtain a category 4 in organizational effectiveness, was Log_n (−5.192+0.274* 
transformational leadership+1.135*constructive culture). For the probability to obtain 
category 5, the logistic regression formula was Log_n (−14.121+0.674*transformational 
leadership+2.928*constructive culture).  
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With more variables in the model, transformational leaderships and constructive 
culture, the predictability of the model improved to 60% as indicated in Table 32, with 
categories 3 and five also with probability above 60% to be attained through the model. 
Table 32 
Prediction rate of occurrence for Hypothesis 4 
Observed Predicted 
3 4 5 Percent Correct 
 
3 38 16 7 62.3% 
4 17 26 12 47.3% 
5 5 13 41 69.5% 
Overall Percentage 34.3% 31.4% 34.3% 60.0% 
 
 Constructive culture appeared as a strong variable in the statistical analysis which 
altogether with transformational leadership confirmed a positive influence over 
organizational effectiveness, thus confirming Hypothesis 4. 
Hypothesis 5 
In contrast with the latter, this hypothesis tested the transactional leadership style 
with defensive culture in order to determine the effect on organizational effectiveness. 
“The transactional leadership style and the defensive organizational culture will have a 
negative impact in the organizational effectiveness”. Since defensive culture was 
composed of two clusters, the aggressive defensive and the passive defensive and the 
transactional leadership contingent reward and transactional leadership management by 
exception, all were entered in the model to review their influence in organizational 
effectiveness. 
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For this last hypothesis, Table 33 provided information on the transformation for 
the dependent variable organizational effectiveness in categories 3, 4 and 5.  
Table 33 
Case Processing Summary 
  N Marginal Percentage 
3 61 36.3% 
Organizational Effectiveness 4 61 36.3% 
5 46 27.4% 
Valid 168 100.0% 
Missing 0 
 
Total 168 
 
Subpopulation 168 
 
 
The step model analysis shown in Table 34 proved that all sub-variables had 
statistical significance on organizational effectiveness, also proven in the likelihood ratio 
test in Table 35.  
Table 34 
Step model for Hypothesis 5 
Model Action Effect(s) Effect Selection Tests 
Chi-Square df Sig. 
   
Step 0 0 Entered Intercept 
   
Transactional contingent 
Step 1 1 Entered Reward  36.447 2 0.000 
Step 2 2 Entered Passive Aggressive culture 17.028 2 0.000 
Transactional management by 
Step 3 3 Entered exception 7.668 2 0.022 
Step 4 4 Entered Aggressive Defensive culture 9.790 2 0.007 
 
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Table 35 
Model fitting and likelihood ratio test for logistic regression Hypothesis 5 
Model Likelihood Ratio Tests 
Chi-Square df Sig. 
 
Intercept Only 
   
Final 75.836 8 0.000 
 
The goodness of fit in Table 36 showed above 5% for Deviance but <5% for Person, 
but the Pseudo R-square in Table 37 statistics proved acceptable adjustment of the model.  
Table 36 
Goodness of fit Hypothesis 5 
  Chi-Square df Sig. 
Pearson 389.979 326 0.009 
Deviance 290.528 326 0.922 
 
Table 37 
Pseudo R-square for Hypothesis 5 
Cox and Snell 0.363 
Nagelkerke 0.410 
McFadden 0.207 
 
When reviewing individual variables and their significance, the likelihood ratio test 
in Table 38 indicated that the four variables were significant at 5% showing all of them are 
significant in explaining organizational effectiveness.  
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Table 38 
Likelihood ratio test for Hypothesis 5 
Effect Likelihood Ratio Tests 
Chi-Square df Sig. 
 
Intercept 11.956 2 0.003 
Aggressive Defensive culture 10.043 2 0.007 
Passive Aggressive culture 17.127 2 0.000 
Transactional contingent Reward 41.345 2 0.000 
Transactional management by 10.208 2 0.006 
exception 
 
With the fact that there is a significant relationship between the variables, Table 39 
showed the individual influence on organizational effectiveness, where there was negative 
direction with passive defensive style in both category 4 and 5, but in the case of 
aggressive defensive it resulted negative in category 4 and positive in category 5. This 
could mean that people less satisfied with the organizational effectiveness are more 
influential of the aggressive culture, while more satisfied people consider a little bit of 
aggressiveness as positive to attain better results. The parameter estimates also revealed 
that the transactional leadership contingent reward style is positive while the management 
by exception did not convey positive results. 
87 
 
Table 39 
Logistic regression parameter estimates for Hypothesis 5 
95% Confidence Interval for 
Organizational Effectiveness B Std. Error Exp(B) 
Exp(B) 
    Lower Bound Upper Bound 
Intercept −0.378 0.853 
   
Aggressive defensive culture −0.125 0.257 0.882 0.533 1.462 
Passive defensive culture −0.857 0.271 0.425 0.250 0.722 
4 
Transactional contingent reward 0.941 0.224 2.563 1.653 3.973 
Transactional management by 
exception −0.222 0.193 0.801 0.548 1.170 
Intercept −3.795 1.157 
   
Aggressive defensive culture 0.697 0.298 2.007 1.119 3.600 
5 Passive defensive culture −1.224 0.324 0.294 0.156 0.555 
Transactional contingent reward 1.674 0.305 5.334 2.934 9.695 
Transactional management by −0.707 0.227 0.493 0.316 0.769 
exception 
 
With the finding that transactional leadership proved to have a positive effect on 
organizational effectiveness when was contingent and that the passive-defensive culture 
proved negative, there was enough statistical evidence to reject the null hypothesis. It 
cannot be said that the transactional leadership together with defensive culture had a 
negative effect on organizational effectiveness. The formula of this model for Hypothesis 
5, for the probability to attain category 4 was: Log_n (−3.78−0.125*aggressive defensive− 
0.857*passive defensive+0.941*transactional contingent reward−0.222*transactional 
management by exception). For the probability to obtain category 5, the logistic regression 
formula was Log_n (−14.121+0.674*transformational leadership+2.928*constructive 
culture).  
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The predictability of the model provided in Table 40 indicated 59% which is 
similar to the model shown in Hypothesis 4 with constructive culture and transformational 
leadership. Both models however are different since each had different variables. Thus, 
more analysis was necessary to determine the combination of variables to attain better 
organizational effectiveness. 
Table 40 
Prediction rate of occurrence for Hypothesis 5 
Observed Predicted 
3 4 5 Percent Correct 
 
3 44 11 6 72.1% 
4 15 33 13 54.1% 
5 6 17 23 50.0% 
Overall Percentage 38.7% 36.3% 25.0% 59.5% 
 
Multivariate analysis 
With previous results concluding that transformational leadership was not as strong 
as constructive culture, that the transactional leadership did not prove to be negative in all 
instances on organizational effectiveness, and that the aggressive-defensive culture could 
be accepted in persons with more satisfaction, it was necessary to conduct a reviewed 
statistical model to predict the organizational effectiveness due to leadership and culture. 
The researcher proved a multivariate analysis to determine the relationship of all the sub 
components of each one of the independent variables. For leadership, transformational 
leadership and transactional leadership and for culture, constructive, aggressive-defensive 
and passive-defensive. The analysis maintained the rationale of the logistic regression with 
three categories to estimate the probability of occurrence of each one of them due to the 
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combination of the sub categories. Table 41 provided the random sample selected for 
categories 4 and 5 to match the sample of category 3.  
Table 41 
Case processing summary for organizational effectiveness multivariate analysis 
  N Marginal Percentage 
3 61 33.0% 
Organizational 4 61 33.0% 
effectiveness categories 
5 63 34.1% 
Valid 185 100.0% 
Missing 0 
 
Total 185 
 
Subpopulation 178 
 
 
The step model analysis performed for the five variables, in Table 42 indicated 
significance influence on organizational factor for transformational leadership and for 
constructive culture, which was very similar to the Hypothesis 4 findings, resulting in the 
highest predictability of 60%. Thus, no further analysis was conducted.   
Table 42 
Step summary for multivariate analysis – effect selection test 
Model Action  Effect(s) Chi-Square df Sig. 
Step 0 0 Entered Intercept 
   
Step 1 1 Entered Constructive culture 55.404 2 0.000 
Step 2 2 Entered Transformational 11.395 2 0.003 
leadership 
 
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Main findings by demographic segmentation – hierarchical level 
To compare media results of dependent and independent variables, the hypothesis 
test of Kruskal-Wallis was performed. This is the alternative ANOVA for non-parametric 
model. All demographic levels were tested, finding significant differences at 5% in two 
groups: country and hierarchical level.  
Colombia showed a significant difference in transactional and transformational 
leadership, compared to Costa Rica, El Salvador, Guatemala, Nicaragua and Panama. This 
is aligned with the same significance in Sodimac, compared to HL Ingenieros and Pozuelo, 
because all the sample of Sodimac was in Colombia.  
In terms of the hierarchical level, as reviewed in Table 43, transformational 
leadership had lower rating followers, meaning positions below General Manager and 
Director, with statistical significance. Aligned with this result, general management 
believes there is less transactional leadership than what is perceived by their reports.  
Table 43 
Kruskal-Wallis analysis of significant variances by hierarchical level 
General 
  Analyst/ not Area Coordinators/ Director/ Manager/ 
managerial Manager Specialists Vicepresident 
President 
  (A) (B) (C) (D) (E) 
Passive defensive culture B 
    
Constructive Culture A A 
   
Aggressive defensive culture 
     
Transformational leadership E D E A B D E E 
 
Transactional leadership D E D E D E 
  
Organizational Effectiveness A A A   
 
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There seemed to be a dichotomy in the believe of the upper level management and 
the direct reports, in both cases leaders believed things were better than what their followers 
did.  
Summary 
The objective of the research was to find the effect of culture and leadership on 
organizational effectiveness. The linear regression models did not prove correct for the 
model due to non-normal distribution of the organizational effectiveness variable, which 
led to logistic regression for better adjustment. All hypotheses were tested with the 
transformed variable organizational effectiveness in three categories, 5- (equivalent to 
totally satisfied), 4- (equivalent to satisfied) and 3- (equivalent to just satisfied or less). 
Hypothesis 1, “transformational leadership will have a positive impact in organizational 
effectiveness” was confirmed, albeit with a low prediction rate of 45.8% confirming there 
are other variables that explain organizational effectiveness. Hypothesis 2 “transactional 
leadership will have a negative impact in organizational effectiveness” was not confirmed, 
because although there was a significant relationship at 5% it was positive and not negative 
as supposed. Hypothesis 3, “constructive culture will have a positive impact in 
organizational effectiveness” was confirmed, and showed the power of this independent 
variable, which exposed the highest Exp(B) factor in all models with 18 incremental 
probability to obtain a score of 5 versus a score of 3 in organizational effectiveness all due 
to constructive culture. Hypothesis 4 “constructive culture and transformational leadership 
will have a positive influence in organizational behavior” was confirmed, both due to 
direction of the influence and due to the significance at 5%. The sub model attained with 
these variables showed a predictive ratio of 60% being the strongest among all variables. 
For Hypothesis 5 “transactional leadership and aggressive culture will have negative 
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impact in organizational effectiveness” the leadership and culture variables were analyzed 
into its individual components, transactional contingent reward and transactional 
management by exception for leadership, and aggressive-defensive and passive defensive 
for culture. The four variables were considered into the logistic regression showing 
through the model fitting and likelihood ratio test that there existed a statistically 
significant relationship. However, not all variables were negative impacting culture. 
Transactional contingent reward showed significant and positive effect on organizational 
leadership for categories 4 and 5. Passive-aggressive cultural style resulted positive in the 
probability to attain category 5 but negative in category 4. Transactional management by 
exception and passive defensive culture proved negative in all instances. With the myriad 
of results of Hypothesis 5, the null hypothesis was rejected and the hypothesis could not be 
sustained. 
The best model after analyzing combination of the variables, resulted the ones 
shown in Hypothesis 4, constructive culture and transformational leadership with a 
predictive capacity of 60%, meaning there are other factors different from culture and 
leadership that influence organizational behavior. Noteworthy that transactional leadership 
is a positive factor for organizational leadership and was not seen as negative influence. 
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Chapter 5: Conclusions and Recommendations 
Multilatinas or multinational firms with headquarters originated in Latin America is 
a growing phenomenon where incumbents showed growth above global multinationals by 
the beginning of the 21st century until 2013, however the economic downturn after the oil 
price drop put them in a challenging situation with lower growth (ECLAC, 2013). This 
situation enhanced the importance of leadership and culture to cope with economic 
challenges and people uncertainty. Former studies on culture and leadership were 
performed mostly in developed countries, but few in developing regions such as Latin 
America. The purpose of this research was to find the relationship between leadership and 
culture with organizational effectiveness, in order to provide multilatinas and leadership 
scholars with management findings about the most effective combination of culture and 
leadership that would conduct to better business outcome. The research was done with the 
positivist paradigm with quantitative research tools that have shown positive results in 
previous studies, because these provide specific action items to modulate leadership, 
culture and effectiveness. Two well recognized questionnaires were used, the MLQ 
(Multilevel Leadership Questionnaire) from Bass and Avolio (1993) and the OCI© 
(Organizational Culture Inventory) from Cooke and Laferty (1994). The MLQ measured 
independent variable leadership style, the OCI© measured the independent variable 
organizational culture and the dependent variable organizational effectiveness. Three 
multilatinas were surveyed, Pozuelo from Nutresa, Sodimac and HL Ingenieros, with a 
total of 602 respondents who answered in a web base platform administered by Human 
Synergistics.  
Given the fact that the measurement of leadership and employee performance is 
subjective, there could be a bias in the true intention in the rating of the leadership style, in 
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the perception of the organizational culture and the organizational effectiveness. Due to the 
length of the questionnaire, it was not possible to separate two different versions, one for 
leader and one for followers. The survey rated the leadership style as an overall construct, 
and thus, there was not an identification of the style of the leader, but an overall assessment 
of the firm leadership style.   
This chapter illustrated the conclusions of the quantitative research of the 
leadership style and organizational culture in multilatinas, providing ample insights on the 
effects of these variables in employees’ organizational effectiveness beliefs. Conclusions 
not only drew findings of leadership and culture in Latin America, but also the 
implications for talent development, to ensure CEO’s, directors and managers exhibit 
specific behaviors and skills to support international expansion. With the novelty of the 
research findings, implications are also valuable for the research community in the 
leadership, organizational culture, multilatinas and EMNEs topics. Finally, in this chapter 
were portrayed recommendations for leaders holding influencing positions in multilatinas, 
advice for future researchers in similar topics as well as proposed new questions that were 
not answered in the scope of the present study.  
Conclusions 
This dissertation answered the following questions: Is there a relationship between 
transformational leadership style and organizational effectiveness?  Is there a relationship 
between transactional leadership style and organizational effectiveness?  Is there a 
relationship between organizational culture and organizational effectiveness? Is there a 
relationship between transformational leadership style, organizational culture and 
organizational effectiveness?  Is there a relationship between transactional leadership style, 
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organizational culture and organizational effectiveness? The conclusions of the study are 
the following: 
Transformational and transactional styles in symbiosis for optimal 
effectiveness. This study proved that the first research question, the effect of the 
transformational leader in organizational culture was positive and significant but could not 
support the second question, the transactional leadership negatively affecting the 
organizational culture. Evidence proved that employees with high scores of organizational 
effectiveness embraced both profiles.  
For the transformational leadership style, the traits better perceived were the 
inspirational motivation and the idealized behaviors. This finding concludes that in Latin 
America multinationals, employees grant importance to the charisma of a leader combined 
with solid integrity and ethical behavior. As explained in previous research (Bass & 
Avolio, 1993), the transformational leader can share a vision among followers, has an 
impactful strategic orientation and is able to convey masses with individual commitment 
towards a business objective. In multilatinas this characteristic is important to lead 
employees to exert superior performance in midst of changing environments, adapt new 
cultures, expose cosmopolitan behaviors, entrepreneurism and with the resilience to adapt 
to other country business settings (Yeganeh, 2016). Transformational leadership by itself 
was significant but was only able to explain 45% of the variation of organizational 
effectiveness, concluding that this only characteristic was not enough to produce high 
levels of effectiveness and that this should be accompanied by other variables. 
Contrary to what the initial hypothesis stated about a negative impact of the 
transactional leadership style into organizational effectiveness, evidence in this study 
proved otherwise, indicating that it is significantly and positively correlated with 
effectiveness. It was concluded that the part of the transactional leadership that exercised 
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largest and positive influence in effectiveness was the contingent reward. It was especially 
influential in Colombia where there is appreciation for power distance (Hofstede et al., 
2010) and the fact that a leader is specific in the rules, the rewards, the way of 
implementing expected tasks is interpreted as good leadership. The management by 
exception profile, which is the leader that only shows up when there is trouble, did not 
even prove to be significant in the effectiveness variable.  
In terms of the demographic variables, the leadership score, did not show 
significant differences by age nor by gender. There were however, significant differences 
in leadership style appreciation per country of origin and per organization hierarchy. The 
Colombians provided higher scores for both transformational and transactional, compared 
to Costa Rica, El Salvador, Guatemala, Nicaragua and Panama. Middle management 
believes that there are higher scores of transformational and transactional, compared to 
what CEO’s and Vice-presidents believe, concluding that as managers get more separated 
from lower hierarchical levels, their beliefs about leadership get distorted, believing they 
are doing either too good –there is not such a transactional leadership– or too bad –we still 
need to go further on transformational leadership–.  
The Latin American leader, heroic and effective. Both traits of the leadership 
framework from Bass and Avolio (1993), the transformational and the transactional were 
positively rated among Latin America employees. Similar findings of the conjunction of 
the transformational – transactional leader was presented by Prasad and Junni (2016) 
where a research on the influence of the CEO in the organizational innovation proved that 
a combination of both characteristics was positively and significantly correlated with 
innovation. The transformational leadership posed the visionary communication of the 
corporate strategy while the transactional determined the detailed managerial practices 
expected to convert initiatives in innovation. For the Latin American case, this finding 
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concludes that there seems to be an ambiguous expectation of the leader: the one who 
proposes a vision and entails individuals to have initiative, but at the same time the urge to 
have a detailed managerial direction on how things should be done, the framework of the 
relationship to get reward/punishment. This finding concludes that the Latin American 
business leader is admired and effective, somewhat feared, which is a profile that looks 
somehow contradictory, because if the transformational leader delegates and empowers 
how is it that followers demand that transactional leader provide detailed direction, place 
the task prior to the person and command rules about rewards? Conclusion from the 
research shows that this ambiguity was positively rated to ensure business goals are 
attained with committed employees. 
Transformational leadership traits showing the highest influence were inspirational 
motivation and idealized behavior, both indicating aspirational personality still resembling 
the XX century leader that was considered powerful not for their interaction with followers 
but for their heroic halo. Results concluded that leaders that develop others’ intellectual 
capacity, incentive career conversations and scarify own needs to satisfy the group did not 
produce higher levels of satisfaction nor admiration. It is possible that followers want 
leaders with an admirable personality and high ethics rather than a “down to earth” person 
that cares for the individuals and delegates indiscriminately. 
In parallel, the transactional leader was not regarded as a negative influence but 
rather proved as a positive for organizational effectiveness. The conclusion about the 
positive rating of the contingent reward profile shows that a leader that has a constant 
presence providing clear direction is expected rather than the leader than only shows up 
when there are problems. The effective leader that provides specific guidance in terms of 
the job to be done seems to be better appreciated than the leader that entails individual 
engagement, getting “too personal”. Followers prefer strong and idealistic personalities 
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that tell exactly what to do, giving employees a sense of security of a leader responsible, 
knowledgeable and with high standards. 
In opposition to the contingent reward profile, the study concluded that the 
management by exception active-passive was not a significant driver of organizational 
effectiveness. This finding shows that a manager that is not close to direct reports does not 
influence at all in the effectiveness of an organization. This behavior received a low score 
under 3 in the likert scale, indicating that this type of leader is not present in the three 
organizations researched.  
The combination of a heroic-ethical figure with strong direction style forms the 
ideal of the Latin American leader. The emphasis to transactional leadership might be 
associated with the power distance demonstrated in various countries of the Latin 
American culture, where the leader is expected to be a strong authority, and far from being 
perceived as a tyrant, is understood as a person that unquestionably can move entire 
crowds and thus is trustable. In conclusion, the successful multilatina leader is a 
transformational-transactional leader whose guidance is expected and accepted, because 
comes from individuals that create environments full of emotion, vision, with proved ethics 
and full of optimism.  
Constructive culture as the main driver of effectiveness. Culture has been also 
extensively reviewed as main factor influencing business outcome and with scholar 
indication of the constructive culture as the dominant style (Cooke & Laferty, 1994; Cooke 
& Szumal, 2000). In the case of this research, the third research question, is the 
constructive culture positively and significantly related to organizational effectiveness, was 
empirically confirmed. 
This conclusion is totally aligned with the expectations of the Organizational 
Culture Inventory from Cooke and Laferty (1994) where their ideal culture is a 
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constructive one. Constructive culture appeared by far as the most important variable 
influencing organizational effectiveness. In the multivariate statistical analysis, this type of 
behavior appeared to impact about six times more than transformational leadership in the 
probability to attain the highest organizational effectiveness score. A constructive culture 
seems to have a universal applicability. In studies conducted in developed economies and 
in this research with multilatinas from various countries in Latin America, employees think 
business results would be better when the believes and behaviors of the group are towards 
affiliation, achievement, care about human beings and creativity.  
The fact that Latin Americans want to work in an environment full of teamwork, 
appreciation, achievement and affiliation, contrasts with the fact that they want to have a 
clear direction and heroic leadership. This could mean that they feel comfortable to attain 
positive business results if the environment is friendly, oriented to people, inciting 
achievement, if it is done within the group and not individually. Combined with the fact 
that followers want to be told what to do, the constructive culture grants a setting where 
individuals merge with others in a safe environment with high level of affiliation, but with 
difficulty wanting to outstand from the crowd. Since the boss tells what to do, and the 
group achievement conveys in positive organizational effectiveness, why bother thinking 
differently and risking the position with new ideas. Even if they believe that the culture 
promotes creativity and develop on their own, they still want the protection of their hero to 
maintain their job stability. Another way to understand this conflict, is that employees do 
appreciate the self-actualizing culture but they run it within safe frames that protect their 
jobs.  
The constructive culture had an overwhelming agreement among all demographic 
groups, namely age, gender, country, education, years in organization, work area. The only 
significant difference was in the hierarchical level, where area managers, coordinators and 
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directors, believed that the constructive organizational behavior is higher than other 
upper/lower levels. It is possible that this middle management is effectively living in their 
day to day a constructive culture, while lower levels as analyst have lower perceptions and 
upper management is still not believer of the good constructive culture their followers are 
living. 
Beware of management by exception leadership with a passive culture: are 
detractors of organizational effectiveness. The last research question, about the influence 
of aggressive culture and transactional leadership exhibited mixed results. Each variable 
was statistically tested by subcomponents. For the transactional leadership, the contingent 
reward and the management by exception were statistically tested and for culture, the 
aggressive and the passive traits. The management by exception and the passive culture, 
proved to be negative in organizational effectiveness, while the contingent reward and the 
aggressive culture were positive.  
Findings on passiveness and avoidance are aligned. A culture where it is expected 
to find agreement without discussion, avoid responsibility to blame others for failure and 
discourage initiative, indicates either total absence of a leader or strong authoritarian one 
who only interacts to inflict punishment after unwanted behaviors. Although this type of 
passiveness and contingent reward was not high is score in multilatinas, these types of 
behaviors are wrong and should be not be present in Latin America multinationals if the 
pursue is to continue innovating and expanding internationally.   
A dose of aggressiveness is well appreciated.  Also derived from question 5 
empirical evidence proved that aggressive defensive culture, resulted in positive direction 
in the probability to attain category 5 or high in organizational effectiveness. Aggressive 
defensive culture is characterized by opposition, power, competitiveness and 
perfectionism. A little bit of aggressiveness could be a counter balance of affiliation where 
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people want to agree with the team need to be accepted. Aggressiveness also provide the 
possibility to outstand from the group and show a different opinion all to move to a new 
level of innovation. The OCI organizational culture inventory from Cooke and Laferty 
(1994) also indicate a minimum level of aggressiveness as positive order to have a healthy 
culture. There were not significant differences per demographic group, showing unanimous 
belief about the important of a dose of aggressiveness in the multilatinas culture. 
Conclusions from this study reveal that while in developed countries lower levels of 
aggressiveness are precursors of high effectiveness, in Latin America these traits are well 
appreciated and considered necessary to survive and ensure there is recognition of 
company quality, employee satisfaction and role clarity.  
Upper management still far from earth. When analyzing significant difference 
among demographic groups in all studied variables, the only one that showed significant 
differences was the hierarchical level. Upper management seems a kind of naïve, still 
thinking that they are either to nice or too harsh. Findings in this research show that 
multilatinas leaders perceive they are strong in transformational leadership but their 
followers don’t. Likewise, they believe that their leadership is normal in transactional 
leadership but followers rated significantly higher this leadership style. This is a call for 
senior management to come down to the earth and understand better what are their 
followers thinking about their performance. Might look contradictory with the fact that 
employees granted a higher rating to a distant heroic leader, the problem is that the leader 
believes this and behaves this way.  Leaders should open more communication channels 
reducing power distance and challenging their reports to openly say what they think, how 
they feel and what are their suggestions, without any punishment for behaving this way.  
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Implications 
Findings of this research propose new insights in the multilatinas leadership 
challenge. Developed countries frameworks did not necessarily proved aligned with Latin 
America posing the need to do amplify research on leadership and culture, and propose 
new schemes that develop multilatinas organizations into global multinationals. 
The need of more independent and self-motivated followers. Should the leader 
be directive and heroic, promoting a safe environment? Empirical results might direct to 
this conclusion, but that is the vision of a backward paradigm. The future of the leader of 
the XXI century is much more challenging, with an environment that is in constant change, 
with full diversity being accepted, and with world shifts occurring faster than before. The 
adaptive leader, of the Latin America multilatinas, should be a catalyzer of the imminent 
change of the society, maintaining the mystery of the heroic hero, but still motivating to 
work as a team, regardless of the position, gender, race or sexual orientation. A leader that 
can show vision, but is able enough to adapt to change and communicate this at the 
individual and group level. A leader that is humble enough to accept being defeated, 
showing with example that it is possible to fail as the way to promote innovation to move 
faster to new worlds. This XXI century leader at the same time is skilled in reaching 
results, there will be no leader with proven achievements, after trying, failing but 
consequently attaining results worth following. The cradle for this type of leader is 
certainly the constructive culture which is fertile, but cannot grow to the next level if the 
leader maintains distant and the follower keeps safe in the anonymity. Is a two-sided effort 
to build a more developed Latin America that could cope with challenging environment, 
but with the certainty that with revised leadership is able to develop new multilatinas and 
be successful in the attempt. 
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The challenge is not to pursue on heroic leadership and constructive culture as the 
recipe of a dynamic organization but to be promoters of change in the level of maturity of 
current employees that seem to be low, being reluctant to take control of their own fate and 
are waiting for their boss to tell them what do. 
The responsibility of such behavior, is not necessarily a short-term vision of the 
employee of the XXI century, but the results of the Latin American culture which is still 
entrepreneurial avoidant with hurdles to implement innovation, thus is easier to follow the 
leader and be told what to do and what to think. It is precisely the leaders the ones to 
become more sensible to the need to take their followers out of their comfort zone, provide 
a safe environment to develop themselves and promote a sincere relationship with lower 
power distance. 
Leadership for multilatinas to global multinationals endeavor. The fast 
evolution of multilatinas is aligned with the development of emerging markets 
multinationals or EMNEs, sharing same ground characteristics as the evolution of the 
middle social class, favorable neoliberal policies and growth beyond developed markets. 
This is not a Latin America phenomenon but a global one, evidenced in other emerging 
markets multinationals such as the ones from China, South Korea, Thailand, and Hong 
Kong (Yeganeh, 2016). While overall there is scarce research on multilatinas, the few 
found is related to internationalization strategies rather than mere leadership 
considerations. De Villa (2015) reports in the case study for Nutresa, that human factor 
was definitive in the internationalization process of this large processed food enterprise 
from Colombia. Commitment, talent, innovation, and responsibility were pointed by upper 
management as a key driver, along with competitive product and brand offer to foreign 
markets. Connecting findings from this research and proposing new approach to collective-
empowering leadership, it is implied that future multilatinas’ leaders need to develop their 
104 
 
teams from bottom to top levels of the organization to promote innovation, accountability 
for results in order to embrace internationalization beyond Latin America. Leadership and 
culture in multilatinas, despite being central to definition of strategy still seems to be a 
separate construct worthwhile being further developed. 
 
Recommendations 
For future research it is recommended to deepen into the scope of the multilatinas 
and into revised concepts of leadership. In terms of scope, this study had limitations due to 
geographical reach and budget, thus aiming only to three multilatinas in 9 countries. While 
it was innovative to include countries different from Brazil and Mexico, it is recommended 
for future research to include more countries to establish a real Latin American leadership 
and culture profile. It is also advised to include more types of industries, beyond retail, 
construction, and processed food. In the multilatinas ranking 2016, the largest multilatinas 
are in the petrochemical, finance – banking, cement, airline, and telecommunication, which 
were not considered here in this research. 
In terms of novel leadership findings, for future research it is recommended to 
delve into the concept of collective-empowering leadership. On one hand conclusions 
revealed that the ideal leader is considered a one portraying heroism and ethics, probably 
traits from an individual. On the other hand, the imminent appraisal of a constructive 
culture, understood as a collective understanding of behaviors, artifacts, and decision-
making processes. The fracture between individual and collective thinking, might avoid the 
integral vision posed by Burns (1978), where leadership cannot be appraised an individual 
crusade but a system among individuals and stated that leadership is a “structure of action 
that engages persons, to varying degrees, throughout levels and among the interstices of 
society” (p. 3). This gap is worth more analysis in research to determine the impact in 
105 
 
Latin America led organizations and in other social systems such as politics or religion 
where the leader exerts larger power than the follower. The implications of the collective-
empowering leadership for multilatinas is important so they can develop more leaders and 
not only followers. This region has an immense need to evolve to a more collective vision 
of success, abandoning beliefs about the solely responsibility of the leader in the company 
results and turning into a collective responsibility where everyone has a superlative role 
into the system efficiency. This evolution needs visionary leaders who will devote more 
time to the transformational aspect of the leadership profile, delegating more, and 
encouraging individuals to respond for their acts while at the same time respecting the 
possibility to fail. This evolved behavior from leaders and from follower-leaders starts not 
only on the job, but right from home education further nurtured by university. Leadership 
education should turn into massive responsibility for own’s fate within interaction with the 
society. 
With novel findings towards attraction for transactional leadership, it is 
recommended to do further qualitative and quantitative research to understand the 
underlying reasons for this belief. Due to the nature of closed questions with Likert scale, it 
was not possible to appraise the qualitative reasons for the answers of the acceptance of 
transactional leadership, acceptance of constructive culture, and rejection of the passive 
culture. Future research should delve into unconscious influences from family education, 
Latin America history legacy, and business evolution in the past 40 years after economic 
liberalization, may provide hints to turnaround these beliefs. 
Findings of the research on leadership and culture in multilatinas provided new 
knowledge about the Latin American leadership style opening doors for future leadership 
profiling, both in the academic world as well as for business applicability. In the academic 
world, findings show that the Transformational-Transactional framework might not be 
106 
 
totally attainable for all societies, and do not necessarily represent the new leader of the 
XXI century since the model does not explain totally the influence on result. New research 
could be developed around new leadership models or the combination of leadership with 
other factors in business such as innovation and strategy. In business, findings about the 
high appraisal for transactional leadership pose a challenge for leaders to devote more 
effort to develop other leaders, to challenge their employees to be more independent, and 
to take higher risks. 
In the business world, findings of this research show that the multilatinas 
phenomenon is a rising one and that leaders of this firms have shown with results their 
ability to succeed amidst challenging and changing environments. Future research could be 
directed towards exploring additional factors different from leadership and culture, that 
influence the expansion of multilatinas to become global multinationals. 
This research is one of the scarce efforts in Latin America leadership scholar 
initiative. There is a lot more room to develop more research in Latin American leadership, 
not only to uncover the status, but to envision the new regional leader able to cope with 
multiple changing challenges or our economies and societies. 
107 
 
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Appendix A: Survey Permission MLQ 
 
 
 
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Appendix B: Survey Permission OCI© – OEI 
 
 
120 
 
 
121 
 
Appendix C: Sample invitation letter for firms to participate - Latin American 
transnational Nutresa 
 
 
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Appendix D: Sample invitation email for employee to participate in the survey 
 
 
 
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Appendix E: Informed consent form 
Inventario de cultura organizacional (OCI/) y Liderazgo Multifactor (MLQ) - Consentimiento 
informado del encuestado 
Por favor lea la siguiente información con respecto a su invitación para llenar esta encuesta para 
su organización. Después de que usted haya leído acerca de la encuesta, usted debe elegir 
"Consentimiento" o "Rechazar”. Se garantiza que la participación en la encuesta es 
anónima y confidencial. No habrá identificación individual en las respuestas, ni en los 
reportes a HL Ingenieros, ni en la presentación consolidada de la encuesta para propósitos 
de estudios. 
Utilice la barra de desplazamiento a la derecha para revisar las diferentes secciones de este 
documento de consentimiento. 
Las siguientes secciones le proporcionarán información sobre la encuesta: controlador de datos, 
procesador de datos, propósito del proyecto y destinatarios de los informes. Se informará también 
sobre su participación voluntaria, su derecho de acceso y la transferencia de datos. 
 
Las encuestas 
Inventario de cultura organizacional (OCI) ® 
El Inventario de cultura organizacional de Human Synergistics International es una encuesta que 
proporciona a las organizaciones una imagen de su cultura operativa del día a día.  Mide la cultura 
en términos de los comportamientos que los miembros creen se espera de ellos dentro de la 
organización. Estas "normas de comportamiento" se relacionan con valores compartidos, 
creencias y otros factores dentro de las organizaciones. 
La OCI® le pide que revise 120 declaraciones breves que describen comportamientos diferentes 
que se pueden esperar en las organizaciones con diferentes tipos de cultura. Se les pide 
responder en la medida en que cada comportamiento sea esperado o implícitamente requerido de 
usted y personas como usted. La encuesta también incluye algunos puntos sobre su satisfacción 
con la organización, la calidad del servicio prestado a los clientes o consumidores y la claridad y la 
consistencia de las expectativas. 
Encuesta de Liderazgo Multifactor  ® (MLQ) 
Esta encuesta de Mind Garden, Multifactor Leadership Questionnaire ® pretende medir el estilo de 
liderazgo de una organización. Es un grupo de 45 preguntas en las cuales se pregunta sobre el 
estilo de liderazgo que  los líderes de la organización exhiben en su forma de trabajar. 
Human Synergistics se reserva el derecho de corregir los errores u omisiones en la recolección de 
datos, relacionados con las variables la unidad de negocios, demográficos, o posicionales, que de 
lo contrario pueden afectar la viabilidad o la exactitud de los reportes de agrupaciones o unidades 
de negocio dentro de la organización. 
Destinatarios de los informes 
Los informes sobre los resultados compuestos serán proporcionados de manera agregada al 
departamento de recursos humanos de HL Ingenieros y otras personas asignadas por la empresa 
en iniciativas de desarrollo.  Esta encuesta está siendo realizada dentro del marco de la 
investigación de un estudio de carácter doctoral en empresas en Latinoamérica para identificar la 
relación entre cultura organizacional, estilo de liderazgo y efectividad organizacional. Pueden 
solicitar mayor información a anaclaudiaalvarez@hotmail.com.   
125 
 
Los encuestados al completar la encuesta on-line no reciben retroalimentación sobre sus propias 
respuestas; por el contrario, sus respuestas se almacenan en un servidor en la Unión Europea o 
Estados Unidos para combinar con las otras encuestas mundiales.  
La participación es voluntaria 
Participación en el proceso de la encuesta es voluntaria. Los invitados a participar deben 
proporcionar su consentimiento informado con el fin de completar la encuesta. Los invitados que 
opriman clic en "Rechazar" en la parte inferior de esta pantalla no serán capaces de aportar 
comentarios a menos que vuelvan a visitar este site y elegir el "Consentimiento". Los encuestados 
pueden saltar preguntas que prefieren no responder; sin embargo, las preguntas que son 
contestadas por los que dejan a muchos espacios en blanco, podrían no ser incluidas en el 
informe de retroalimentación. 
Derecho de acceso 
Después de haber presentado la encuesta, los encuestados pueden re-ingresar y revisar sus 
respuestas a la encuesta, mientras que aún se están recopilando datos. Por favor contactar a 
Human Synergistics para solicitar este acceso. 
Transferencia de datos (y almacenamiento en) los Estados Unidos o la Unión Europea 
Los datos serán transferidos a los Estados Unidos o a un Estado miembro de la Unión Europea 
para el análisis y preparación del informe en cumplimiento del contrato. No habrá identificación 
específica de cada participante ya que la encuesta se envía de manera anónima. 
Los datos pueden almacenarse en un servidor seguro en los Estados Unidos o en un Estado 
miembro de la Unión Europea durante un período razonable de tiempo en relación con la finalidad 
de la recolección de datos y procesamiento indicado y para permitir el análisis del cambio en el 
tiempo que puede ser solicitada por el controlador de datos. 
Los datos almacenados se pueden utilizar para realizar investigaciones sobre individuos, grupos y 
organizaciones. La investigación por personal de Human Synergistics y coautores se rige por el 
código de ética de la American Psychological Association. Se mantiene la confidencialidad de los 
participantes individuales y sus organizaciones en el uso de estos datos. 
Transferencia de datos a terceros 
Datos de la encuesta para este programa no se transferirán a terceros. Ver la sección "Los 
destinatarios de informes" para obtener información sobre los destinatarios de los informes de 
retroalimentación, que se basan en los datos recolectados de la encuesta. 
 
¿Preguntas? 
Para preguntas sobre el programa y su participación, por favor póngase en contacto con a  Julia 
Solano en su mail jsolano@hlingenieros.com 
126 
 
Appendix F: Demographic information 
Age – translation to Spanish 
Edad
Menos de 20 años
20 a 29
30 a 39
40 a 49
50 a 59
60 años o mas
Prefiere no responder  
Gender – Translation to Spanish 
Sexo
Femenino
Masculino
Prefiere no responder  
Education – Translation to Spanish  
Educación (indique el nivel más alto alcanzado)
Secundaria
Algun estudio universitario
Titulo técnico / de asociado
Título universitario
Algún estudio de licenciatura
Maestría
Doctorado
Otro
Prefiere no responder  
Years with organization – Translation to Spanish 
Años en la organización
Menos de 6 meses
6 meses a 1 año
1 a 2 años
2 a 4 años
4 a 6 años
6 a 10 años
10 a 15 años
Más de 15 años
Prefiere no responder  
 
127 
 
Organizational Level-Translation to Spanish 
Nivel organizacional
Presidente
Vicepresidente
Director
Coordinador
Analista
Asistente
Gerente de proyecto
Ingeniero profesional de proyecto
Supervisor de proyecto
Almacenista  
Work Area – Translation to Spanish 
Area de trabajo
Gestión humana
Innovación y gestión del conocimiento
Financiera
Operaciones
Desarrollo de negocios
Presidencia  
Country – Translation to Spanish 
País
Argentina
Bolivia
Chile
Colombia
Costa Rica
Cuba
Ecuador
El Salvador
Guatemala
Honduras
Mexico
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
Republica Dominicana
Uruguay
Venezuela
Prefers not to respond