The Impact of Transactional Leadership on the Marketing Creativity in Jordan Commercial Banks

Transcription

1 See discussions, stats, and author profiles for this publication at: The Impact of Transactional Leadership on the Marketing Creativity in Jordan Commercial Banks Article February 2013 READS 5 1 author: Tareq Hashem Isra University, Jordan 17 PUBLICATIONS 1 CITATION SEE PROFILE Available from: Tareq Hashem Retrieved on: 18 May 2016

2 The impact of Transactional leadership on the marketing creativity in Jordan commercial banks Dr. Tareq N. Hashem 1, Wedad Abdel Azeez Al- Aqrabawi 2 1 Associate Professor Marketing Department Philadelphia University Amman- Jordan Mobile: Tel: tareqhashem1975@yahoo.com P.O. Box: 1505 Postal Code: Jordan 2 Lecturer in Business Administration Philadelphia University Amman- Jordan

3 Abstract: The study aims to investigate the impact of Transactional leadership on marketing creativity in Jordan commercial banks. The study sample consisted of 395 respondents from different commercial banks in Jordan.A questionnaire was designed and distributed over the targeted sample. All collected date were analyzed through using SPSS The study results indicated that : There is an impact of (transactional leadership, conditional bonus, active management by exception, and (static) management by exception on marketing creativity in Jordanian commercial banks. Keywords: Transactional leadership, marketing creativity Introduction: Leadership is the core of the managerial process; its importance is due to its effective role in all sides of managerial process in order to make it more effective to achieve its goals. Leadership is the most important aspects of social interaction, it is based on the fact that leader is the person who influences others and works to satisfy their need in order to accomplish the intended objectives. Leadership became a changing and developing factor for workers and their performance, as a science that has its own philosophy, basics, approaches and ways, therefore, organization success in performing its functions and tasks is based on leadership in order to accomplish its objective as a result to employees satisfaction and their attraction to their leader decisions which will be positively reflected on performance, in case of satisfaction and negatively in case of non satisfaction. During the last two decades of the twentieth century business organizations environment dealt with influential and successive scientific and economic aspects, the most prominent were: openness, globalization, the accelerated direction towards knowledge economies, knowledge revolution and technological development (Saif, 2011, p2). Leadership is responsible for success or failure of any organization, it has the core role in settling matters, and achieving objectives that each society aspire to achieve, such success is due to the ability of specialized administrators who manage the official organizations regarding the appropriate use of human and material resources (Abu Al-Assal, 1993). 1

4 Creativity is considered one of important issues for all organizations that face competitive and changeable environment. Nowadays encouraging creativity became the forst objective of many organizations. Creativity importance increased due to intensive competitive between organizations, and international competition which increased organization's need for creativity in order to avoid the risk of retaliation and vanishing (Al-Omian, 2005, P. 389). If bank is an organization that aims at satisfying needs and desires of its customers, and its sustainability against severe competition in banking market force these organizations to develop their business and to be creative in marketing. This leads in to study the influence of transactional leadership on marketing creativity in Jordanian commercial banks. Therefore study importance stems from the following: 1- The study illustrates the important role of the transactional leadership that play in marketing creativity in Jordanian commercial banks. 2- It handles a vital and very important sector in national economy, that is the banking sector. 3- This study will contribute in developing Jordanian commercial banks' capability to use the transactional leadership in order to improve marketing creativity and to enforce its competitive advantage in order that banks face the competition. The Theoretical background: The transactional leadership Transactional leadership is the process that influence behavior of subordinates to urge them to work with the existence of a desire to accomplish the specified objectives (Schermerhorn, 2002, p 336). Transactional leadership is a leadership form that helps organizations to accomplish their objectives effectively through linking functional performance with rewards that have value, through leaders usage of active and static management by exception (Mari, 2008, p7). Bass, (1985, p33) identified transactional as a leadership form based on idea that leader's relationship with subordinates is based on a chain of transactions or an implicit character. (Boehnke & Distefano, 1997, p.102)mentioned a range of positive characteristics and qualities of Transactional leadership, namely: 2

5 1. The Transactional leadership provides bonuses when the staff achieved the required standards. 2. Creating high competition among employees to achieve organizational goals and even dedication in achieving the highest levels of performance in order to get and win rewards. For the purposes of this study, measurement of transactional leadership will be through conditional reward, active and static management by exception. The conditional bonus: i.e, the leader exchange benefit between subordinates, by rewarding subordinates for good performance by using positive enforcement such as wage increase, promotion or granting additional benefits (Mari, 2008, P 7). The (active) management by exception: refers to leader controls and tests to predict the prospective problems, procedure during their occurrence (Al-Hilali, 2001, p18). The (static) management: refers to leader avoiding intervention unless the results are appeared, and discovers that they are not in conformity with procedures or standards, and some procedures are taken against subordinates such as transform and firing (Mari, 2008, P9). Many studies have tackled transactional leadership, such as (Al-Aqrabawi,( 2011) who investigated the impact of transactional leadership styles (Conditional bonus, Management by exception (active and static) on development of human capital in the Philadelphia university. The results showed that there is an endorsement of Transactional leadership styles by the leaders in the Philadelphia University, and that there is a middle-way direct relationship between Transactional leadership and human capital development. Results also showed the existence of a clear impact of active management on active human resource development, followed by the conditional reward. But static management does not have any effect because few leaders use this style. The results of the study also showed that there is no impact for the differences that relate to the characteristics of leaders on the development of human capital Al-Mutairi,( 2011) indicated that there is an impact of transactional management on accomplishing strategic objectives in oil industries in state of Kuwait. He added that there is an impact of conditional bonus and (active) management by exception on achieving strategic 3

6 objectives. In the same tome the anther indicated that there is no impact of (static) leadership by exception on achieving strategic objectives. While Mari,( 2008), reported (active) management by exception positively impact human resources performance in its various dimensions. Moreover the study indicated that there is no statistical significance relationship between static leadership by exception and human resources performance, and also between non-interference leadership and human resources performance. Bruch & Walter, (2007), study concluded that leaders focus most of their behaviors on ideal impact and inspirational motivation of management top level. All of which, together with intellectual imitation influence job satisfaction in top managerial levels more than middle managerial levels. The research also concluded that interest and respect of subordinates influence job satisfaction. Roth,( 2002), stated that there is a statistical significant correlation of positive transactional leadership style with teacher openness. (Al-qaq, 2005), studied the impact of the leadership style of divisions heads on creative behavior of subordinates in private commercial banking sector in Jordan, in addition to handling the impact of other leadership styles such as Permissive leadership style, middle leadership style, and team management style. All of which showed an impact on creative behavior. While, Abu-Tayeh (2003), concluded a relationship between collective leader's power resources and individual creative behavior for subordinates, and that most of the relationship between the leader power resources and individual creative behavior is explained by leader' charming personality power, and knowledge power used by leader. The marketing creativity: Some authors defined creativity as finding, accepting and executing new ideas, processes and products.. Creativity is defined as finding, accepting and executing new ideas, processes and products (Al -Sarhan. 2005). Salem et al,( 2011) demonstrated the role of marketing creativity and technology in achieving competitive advantage for operating banks in Gaza governorates and the extent of its importance in achieving competitive advantage, in addition to that banks follow marketing creativity in a good manner, which leads to achieving competitive advantage for the bank. 4

7 Taher, (2006) Study concluded that there is a strong statistical significance relationship between creativity in marketing context and organization success and superiority in the industry market,. The study suggested that there is a necessity to focus on customer's satisfaction philosophy in order to specify his needs and expectations and to meet the same through creative and effective organization role in its marketing program. While Al-Sarhan study, (2005) indicated that there is a strong relationship statistical importance between creativity role and marketing creativity in banking services and products and achieving competitive advantage of the Jordanian commercial banks. Robert and Amit ( 2003) reported that there is an increase and continuity in creative activities of Australian commercial banks in addition to a renewal in creative activities, in order to comply with changes that occur due to continuous technological development. While Al-Jaiashi(2003), study illustrated that organization's performance is strongly influenced by marketing creativity state used in organization, which leads to some results, such as: organization's performance is strongly influenced by marketing creativity state used in the organization, and leads to improve such performance, the results also emphasized that marketing creativity in the context of sale and distribution is the most effective element at individual companies of the sample, more than other marketing activities. Study objectives: The study seeks to achieve the following objectives: 1. To investigate the impact of Transactional leadership on marketing creativity in Jordan commercial banks. 2. To find out the most effective type of transactional leadership on marketing creativity in Jordan commercial banks. Study Questions: The study aims to answer the following questions: 1. What is the impact of Transactional leadership on marketing creativity in Jordanian commercial banks? 2. Which type of transactional leadership has the highest impact level on marketing creativity in Jordan commercial banks? 5

8 Study hypotheses: Main hypothesis: - Ho: There is no statistical significant impact of transactional leadership on marketing creativity in the Jordanian commercial banks. This hypothesis is subdivided into the following three sub-hypothesis: The first sub-hypothesis: - Ho1: There is no statistical significant impact of conditional bonus in achieving marketing creativity in Jordanian commercial banks. The second sub-hypothesis: - Ho2: There is no statistical significant impact of (active) management by exception in achieving marketing creativity in Jordanian commercial banks. The Third sub-hypothesis: Ho3: There is no statistical significant impact of (static) management by exception in achieving marketing creativity in Jordanian commercial banks. Population and Sampling The study population includes Jordanian commercial banks employees. The study convenience sample consisted of 500 employees, 395 questionnaires were returned, which represent (79%) of the total sample Questionnaire Design The questionnaire is consisted of two main parts :the first includes participants' demographic variables (Age, gender, and experience), while the second part includes information regarding transactional leadership variable (1-15) and Marketing Creativity variable (16-21). 5-points (Likert) scale was used as follows: strongly agree= (5) points, agree,= (4) points neutral= (3) points, disagree= (2) points, strongly disagrees= (1) point. Reliability Test: Cronbach Alpha test was used to find out instrument reliability. The value was = 90.6% for the entire questionnaire. While reliability values of transactional leadership variable was 88.5%, and Marketing Creativity variable was 86%. All values are acceptable since their values are more than 60%. (Malhotra, 2004, p.268) 6

9 Statistical techniques : SPSS was used in order to analyze the collected data through the questioner. The following statistical techniques were used: 1- Frequencies and percentages. 2- Means and standard deviations. 3- Multiple and Simple regression tests. Analysis and discussion Frequency and percentages were computed for sample's characteristics Table (1) Sample's Distribution According to Demographic Information Category Frequency Percentage% Gender Male Female Total Age 25- less than 30 years less than 40 years less than 50 years years or more Total Experience Less than less than less than 15 years years of more Total The above table shows that males were (216) subjects that is (54.7%), females were (179) subjects, that is (45.3%) percent. The majority is between 30- less than 40 years,.with (50.9%) percent of (5- to less than 10 years). Table (2) Means and Standard Deviations for sample's responses toward transactional leadership Number The statements Mean 1- The conditional bonus: the manager performs the following activities. S. Deviation 7

10 Number The statements Mean 1- Motivating employee when he achieves more than the expected. 2- Motivating employee to see things in new an rational manner. 3- Rewarding employee for excellent performance. 4- Praising employee for correcting his work mistakes quickly 5- Praising employee for using new and creative methods at work. 2- The (active) management by exception, the manager performs the following activities. 6- Following all mistakes that affect fulfillment of expected objectives. 7- The management expresses its trust in employee to achieve the objectives. 8- The management is keen to provide employee with feedback for his performance. 9- All necessary elements are presented to employee in order to accomplish the objectives. 10- Deviations are corrected gradually. S. Deviation The (Static) management by exception: The manager performs the following activities: 11- The Manager does not interfere unless the problems became serious He doesn't take any action as long as things are going in a good manner He focuses on dealing with the exceptional mistakes and complaints and treating them He focuses on setting up studied and realistic work standards He avoids interference when important issues appear Table (2) above indicates that means of sample's responses are more than the virtual mean (3), this means that sample's respondents agrees on all statements regarding the transactional leadership. The total mean also reflects that there are positive attitudes toward transactional leadership Thirdly: The marketing creativity (The dependent variable). Table (3) Means and Standard Deviations for sample's responses toward marketing creativity Number The statements Mean 1- The bank develops its banking products according to the needs and desires of its customers. 8 S. Deviation

11 Number The statements Mean S. Deviation 2- There is an interest in diversification of the banking loans presented to the customers The bank focuses on the creativity in the promotional methods for its banking products The bank focuses on the creativity in its prices of the banking services, presented in the form that attracts the customers. 5- The banks is creative in the promotional methods that are used to persuade the customers to deal with it. 6- The bank creates the necessary technological methods for distributing and presenting banking services to his customers Table (3) above indicates that means of sample's responses are more than the virtual mean (3), this means that sample's respondents agrees on all statements regarding the marketing Creativity. The total mean also reflects that there are positive attitudes toward marketing Creativity HYPOTHESIS TEST Ho: There is no statistical significant impact of transactional leadership on marketing creativity in Jordanian commercial banks. Table (4) Testing the main Hypothesis R R Square F Sig..474 a a Multiple Regression was used to test the hypothesis. Table 4 indicates that F calculated value is significant at (0.01) level. This means that null hypothesis is rejected and the alternative hypothesis is accepted, therefore, there is a statistical significant impact of transactional leadership on marketing creativity in Jordanian commercial banks with moderate Pearson correlation By using Stepwise regression it was found that (active) management by exception has the highest impact on the marketing creativity The first sub-hypothesis: - Ho1: There is no statistical significant impact of conditional bonus in achieving marketing creativity in Jordanian commercial banks. Table (5) Testing the first sub-hypothesis 9

12 R R Square F Sig..306 a a Simple Regression was used to test this hypothesis. Table 5 indicates that F calculated value is significant at (0.01) level. This means that null hypothesis is rejected and the alternative hypothesis is accepted, therefore, there is an statistical significant impact of conditional bonus in achieving marketing creativity in Jordanian commercial banks with moderate correlation The second sub-hypothesis: - Ho2: There is no statistical significant impact of (active) management by exception in achieving marketing creativity in Jordanian commercial banks. Table (6) Testing the second sub-hypothesis R R Square F Sig..472 a a Simple Regression was used to test this hypothesis. Table 6 indicates that F calculated value is significant at (0.01) level. This means that null hypothesis is rejected and the alternative hypothesis is accepted, therefore, there is a statistical significant impact of (active) management by exception in achieving marketing creativity in Jordanian commercial banks with moderate Pearson correlation The Third sub-hypothesis: Ho3: There is no statistical significant impact of (static) management by exception in achieving marketing creativity in Jordanian commercial banks. Table (7) Testing the third sub-hypothesis R R Square F Sig..285 a a Simple Regression was used to test the hypothesis. Table indicates that F calculated value is significant at (0.01) level. This means that null hypothesis is rejected and the alternative hypothesis is accepted, therefore, there is a statistical significant impact of 10

13 (static) management by exception in achieving marketing creativity in Jordanian commercial banks with weak Pearson correlation Conclusions Upon the above analysis the following results are concluded: 1) There is an impact of transactional leadership on marketing creativity in Jordanian commercial banks. 2) There is an impact of conditional bonus in achieving marketing creativity in Jordanian commercial banks. 3) There is an impact of (active) management by exception in achieving marketing creativity in Jordanian commercial banks. 4) There is an impact of (static) management by exception in achieving marketing creativity in Jordanian commercial banks. 5) Active management by exception has the highest impact on marketing creativity Recommendations 1. To provide rewards and incentives rewarding financially and morally with superior performance from employees through adoption of performance. 2. Encourage female element and take advantage of its potential to participate in leadership events where proven that women in many areas and significantly, especially with high scientific and practical qualifications. 3. Enable young people to exercise leadership roles, and invest their skills and abilities to achieve high performance levels while at the same time to give them more opportunities to get the experience required for such important roles. 4. The need to develop training programs for leaders and staff based on the results of the performance evaluation. 5. Further studies on application study subject on other economic sectors References 1- Abu El-Assal, A., (1993), Job satisfaction among administrators working in education directorates in the Hashemite Kingdom of Jordan, Master thesis, University of Jordan, Amman, Jordan 2- Abu-Tayeh, S. (2003), The relationship between the leadership style and the individual creative behavior, a field study for the Jordanian managers at the greatest industrial companies, Administrative sciences studies, volume 30, Number Al -Sarhan. A. (2005), The role of innovation and creativity catalog in achieving competitive advantage in the Jordanian commercial banks, Ph.D. thesis, Amman Arab University for Graduate Studies 11

14 4- Al-Aqrabawi, W. (2011), The impact of Transactional leadership on human capital Development in the University of Philadelphia, Master thesis, Balqa Applied University, Amman - Jordan. 5- Al-Hilali, H.,(2001), using theories of transformational leadership and procedural leadership in some university faculties, the future of the Arab Education magazine, Cairo, Volume VII, Issue (21), 6- Al-Jaiashi, A. (2003)."The impact of the case of innovation in the organization on marketing innovation and its implications, a field study of Jordanian IT companies", Jordan Journal of Applied Sciences, Volume 6, Issue 2Al-qaq, T., (2005), Impact of the leadership style on the Heads of Division on the creative beha of Subordinates in the private commercial banking sector in the Hashimit Kingdom of Jordan, A master dissertation, Amman Arabic University for higher studies, Jordan. 7- Al-Mutairi, A. (2011), Impact of interactive leadership in achieving the strategic objectives of the oil industry in the State of Kuwait, Master Thesis, University of the Middle East Graduate Studies, Amman - Jordan 8- Al-Omian,M. (2005), organizational behavior in business organizations, Dar Wael for printing and publishing, Amman, Jordan 9- Bass, B. M. (1985). Leadership and Performance beyond Expectations. New York. The Fee Press, A division of Mcmillan, Inc. 10- Boehnke, Karen & Distefano, Andrea (1997) "Leadership for extraordinary performance". Business Quarterly, V. 61. p Bruch, H. and Walter, F. (2007). Leadership in context : Investigating hierarchical impacts on transformational leadership. Leadership and. Organization Development Journal. Vol. 28, No.8, Malhotra, N. K. (2004), Marketing research, New Jersey: Prentice Hall. 13- Mari, K.( 2008), Impact of transformational leadership and reciprocity on the performance of human resources in the Jordanian pharmaceutical companies.phd thesis, Amman Arab University for Graduate Studies, Amman, Jordan 14- Roberts, P. and Amit, R. (2003). "The dynamics of innovation activity and competitive advantage, The case of Australian Retail Banking, 1981 to 1995". Organization Science, Vol. 14, Issue 2. 12

15 15- Roth, William Barry (2002). The effect of principal's leadership style on school council members perceptions of empowerment, DAI-A. 16- Saif, N., (2011), the impact of the application of total quality management standards in the Jordanian government hospitals from the point of view of doctors and nurses, Ph.D. thesis in the Department, Amman Arab University for Graduate Studies, Amman Jordan 17- Salem, et al, (2011), The role of marketing innovation and technology in achieving the competitive advantage of banks operating in Gaza governorates from clients' point of view, Journal of Al-Azhar University in Gaza, a series Humanities, Volume 13, Issue 2, pp Schermerhorn, (2002). Management. ih ed. New York: John Wiley & Sons Inc. 19- Tahir, N. (2006).The impact of innovation in marketing excellence, a case study at the medal for dairy products and foodstuffs ", Karbala, a Master of Business Administration, University of Kufa, Faculty of Management and Economics 13