LEADING THE CHANGE: EXPLORING THE ROLE OF TRANSFORMATIONAL LEADERSHIP IN STRATEGIC DECISION-MAKING IN NEPALESE MICROFINANCE INSTITUTIONS

Abstract

This paper discusses the influence of transformational leadership on strategic decision effectiveness (SDE) within Nepal based microfinance institutions. The study was conducted by use of descriptive research design and causal-comparative research design to determine the relationship between the four dimensions of transformational leadership, namely; Idealized Influence (II), Inspirational Motivation (IM), Intellectual Stimulation (IS) and Individualized Consideration (IC) with SDE. Information was gathered among the workers of different authorized micro finance organizations in Nepal. The correlation and regression analysis indicated that all the four dimensions of leadership exhibited important positive relationships with SDE. The group with the strongest effects included Individualized Consideration and Idealized Influence. The results confirm that transformational leadership is important in improving strategic decision making. The insights have practical implications on leadership development in the microfinance industry and indicate that transformational leadership features should be inculcated among leaders in an organization to enhance organizational performance. It is recommended that future studies may adjust the moderating variables and utilize large sample sizes and consider SDE as one of the mediating factors in order to prove their validity further and enhance their scope.