The role of Emotional Intelligence and

the relationship between Leadership

Styles, Decision Making styles and
Organizational Performance: A Review

AndrBarbicasFerreira
andrebarbicas@icloud.com
B.A.InternationalRelations
M.A.Strategy

Abstract
This paper constructs a conceptual model to study the impact of emotional intelligence on the
relationship among leadership styles, decision making styles and organizational performance.
Study also give the brief review of emotional intelligence, leadership styles and the
relationship among leadership styles, emotional intelligence and other studied variables. The
paper has conceptual based theoretical evidences to support the model. Research findings of
the previous literature supports the idea that emotional intelligence moderates the relationship
among leadership styles and decision making styles as emotional intelligence strongly
associated with leadership styles and decision making styles. Emotional intelligence also
moderates the relationship between leadership styles and organizational performance. Study
further founds that decision making styles have an effect on organizational performance.
Keywords: Emotional Intelligence, Leadership styles, Decision making styles,
Organizational performance

1. Introduction
Leader is a personality who has the capability to influence others and the leadership is what
leaders do to influence group to achieve some defined goals. To successfully perform the
activities, leaders have to make decisions at every step to achieve the desired results. Thus,
effective decision making is one of the attribute of an efficient leader (Tatum, Eberlin, &
Kottraba, 2003). The fortune of every business relies upon the decision making capacity of
business leadership. Every decision by the management of a business influences the overall
business performance. Therefore, decision making process can be considered as think tank of
any business. Past researchers found that emotional intelligent is an essential part of an
effective leadership and have a strong association with decision making and organizational
performance. One of the study by Abraham (2000) determines that an emotionally intelligent
person have high organization commitment, and use positive emotions to boost their decision
making competence. Holt and Jones (2005) found that emotional intelligence influences
organizational performance. Based on the these findings, the present study propose the
conceptual model by defining the relationship among emotional intelligence, leadership
styles, decision making styles and organizational performance based on theoretical evidences
from the previous research findings.
The paper consists of four sections which deal in turn with introduction of the study, literature
review and methodology. The paper rounds off by discussing and concluding the major
findings of the study supported by literature.
2. Literature Review

2.1 Emotional Intelligence

The definition of emotions and its measurement changes with the passage of time. Salovey
and Meyer (1990) define emotions as an organized response which crosses the many
psychological subsystems such as psychological, experimental, cognitive and motivational
subsystems. At earlier stages, intelligence researcher measures emotions with respect to
various subsystems such as occasionally emotions and social emotions (Gardner, 1983), and
consider emotional intelligence as a part of social intelligence (Salovey & Meyer, 1990).
Salovay and Meyer (1990) are the first who uses term emotional intelligence and define it
as the ability to monitor ones own and others feelings and emotions to discriminate among
them and to use this information to guide ones thinking and actions. Author further
elaborate the concept of emotional intelligence by explaining it through three dimensions of
adaptive abilities; appraisal and expressing the emotions, utilizing and regulating the
emotions in solving problems. Later on, Goleman (1995) expanded the construct of emotional
intelligence by adding specific social and communication skills which influence by
understanding and expression of emotions. Salovey and Mayer (1997) give the revised model
of emotional intelligence by focusing more on the cognitive components of emotional
intelligence. The revised model composed of four categories of emotional intelligence:
perception appraisal and expression of emotions; employing and analyzing emotional
information; emotional facilitation of thoughts and regulation of emotions for further
emotional growth. Later on many researcher defines and measures emotional intelligence
according to the scope of their studies such as GENOS EI Inventory which is specifically
designed for workplace emotional intelligence, Bar-On emotional quotient inventory which
deeply measures the emotional intelligence construct (Bar-On, 1996) and Bernet (1996)
developed the Perception of Affect scale based on the premise that being able to attend
rapidly, appropriately and effortlessly to feelings is the cornerstone of emotional intelligence.
However, Saloney and Meyer (1990) definition of emotional intelligence provides the
foundation of this conceptual model.

2.2 Leadership Styles

Transformational and transactional leadership are the most widely studied leadership styles in
behavioral sciences. The evolution of transformational leadership can be traced from the
developing theory of transformational leadership in 1978 and concept enriched with different
aspect with the passage of time. Burns theory of transformational leadership argued that
transformational leader has high moral qualities and leader prefer group interest over his own
interest (Burns, 1978). Tichy and Devanna (1986) determine the characteristics of
transformational leadership which includes courage, values, openness, visionary and showing
off learning behavior on the part of transformational leaders. Bass and Avolio (2000) explain
transformational leadership style by five aspects that is (1) Idealized Influence (Attributed)
attributed by communicating and imparting the sense of mission in the followers. (2)
Idealized Influence (Behavior) the leader act as a role model towards the followers. (3)
Inspirational motivation The leader simplify the paths for the followers by eliminating
problems. (4) Intellectual Simulation leader encourage rational reasoning, creativity and
encourage the followers to solve traditional problems in a new way. (5) Individualized
Consideration leader considers individuals needs of the followers and truly affiliate with
them and give them care and respect.
Krishnan (2004) argues that transformational leader is the leaders ability to motivate
followers in achieving more than they planned. .Many researchers (Bass and Riggio, 2006;
Baldoni, 2005) agree that transformational leadership has four elements including idealized
influence, inspirational motivation, intellectual stimulation and individualized consideration.
Simic (1998) argue transformational leadership qualities is an important determinant for
management success. Burns (1978), a pioneer of transactional leadership defines transactional
leadership as development of relationship between leader and followers. The main focus of
the transactional leadership is to know about the needs of the followers and clarifies role for
them to meet organizational goals. Bass (1985) defines transactional leadership as one who
builds leader-member exchange relationship, fulfills their needs in exchange of followers
performance and has ability to build confidence in subordinates. Bass and Stogdills (1990);
and Avolio et al. (2004) describe the qualities of the transactional leadership in two ways;
contingent rewards and management by exception. Hellriegel and Slocum (2006) define
transactional leadership by dividing management by exception in two facets; active and
passive management by exception and by contingent rewards. Author define active
management by exception as leader monitor the follower performance and guide them to
achieve the goal while passive management by exception includes leaders involvement when
followers give unexpected performance. Transactional leader provides rewards for the
achievement of goals while no penalties for the failure in achieving the goals.
3. Methodology
The aim of this paper is to provide the conceptual understanding of the proposed model
through literature reviews. The core concept of the study is to determine the relationship
among emotional intelligence, leadership styles, decision making styles and organizational
performance. After defining the main variables of this study; the following part of the study
explains the relationship among studied variables and provides theoretical evidences that
emotional intelligence moderates the relationship between leadership styles, decision making
styles and organizational performance. Paper also provides link between decision making
styles and organizational performance from the literature.

3.1 Leadership styles and decision making Styles

Decision making is one of the most important aspects of the leadership. Scott and Bruce
(1995) define that an individual can involve in decision making process by adopting any of
the five decision making styles (DMS). (1) Rational DMS. (2) Intuitive DMS. (3) Dependent
DMS. (4) Avoidant DMS. and (5) Spontaneous DMS. Based on the leadership styles it is
logical to ask whether these leadership styles have different decision making styles or not?
Drive and Brousseau (1990) determine that people have different decision making styles and
these decision making styles differ with respect to number of alternatives used, amount of
information and the extent they coordinate different resources of input. Kedia and Nordtvedt
(2002) founds that there is a relation exist between leadership styles and decision making
styles and argue that transformational leaders use more comprehensive style (high number of
alternatives used, large amount of information and high coordination of different resources of
input) of decision making while transactional leaders use less comprehensive styles as
compared to transformational leadership. Researchers further found that transformational
leaders are the rational decision makers (Tambe & krishan, 2000) and dont avoid decisions
(Steplen & Roberts, 2004).Spice and Sadler (2005) conclude that rational decision cannot be
taken in haste and require time which determine that transformational leaders are unrelated to
spontaneous decision making style. Based on this review of literature, we can say that
leadership styles have an impact on decision making styles.
3.2 Leadership Styles and Organizational Performance
Leadership styles have been studies against numerous variables such as organization
commitment, perceived performance and satisfaction. Many researchers reported a
relationship between transformational leadership and higher levels of follower effort,
satisfaction with the job and leader, and perceived performance which ultimately affect
organizational performance. (Bass, 1985; Bass, 1990; Yammarino & Bass, 1990; Yukl,
1994). In organizations, transformational leadership is considered a more effective leadership
style and is constantly found to promote organizational performance (Lowe and Kroeck,
1996). Compelling vision of the future, defining and communicating high level of
performance expectations, acting as role model, and displaying a sense of confidence in
followers ability to meet expected goals, transformational leaders have been found to
positively influence performance of the followers and consequently, the organizational
performance (Shea, 1999; Waldman & Yammarino, 1999). Elenkov (2002) founds that
transformational leadership directly and positively predicted organizational performance.
Author further argues that managers who displayed more transactional-leadership behaviors
also made a positive contribution to the achievement of organizational goals. Researcher
founds that contingent reward leadership (a part of transactional leadership) was positively
related to follower performance and job satisfaction which ultimately effect organizational
performance (Podsakoff, Todor, Grover & Huber, 1984). On the basis of these research
findings, we found that leadership styles have an impact on organizational performance.
3.3 Emotional Intelligence, Leadership Styles and Decision Making
Barling et al. (2000) studied the relationship between the transformational/transactional
leadership and emotional intelligence. Authors argue that emotional intelligence prompt
leaders to use transformational behaviors. Barling et al. (2000) founds that emotional
intelligence is positively related to the transformational leadership and contingent reward (a
component of transactional leadership). Later on, Palmer et al. (2001) concludes that
emotional intelligence is strongly correlated with transformational leadership style. Abraham
(2000) founds that an emotionally intelligent individuals have high organization commitment,
high success rate (Miller, 1999), and use positive emotions to enhance their decision making
capability. George (as cited in Gardner and Stough, 2001) argues that emotional intelligence

enhances leaders ability to get solutions for the problems and to tackle issues and
opportunities facing by them and by their organizations as well. Leaders within this context,
are able to enhance decision making capability through their knowledge and management of
emotions, and the leaders who are able to correctly recognize emotions are more able to
decide whether the emotion is attached to opportunities or problems and therefore use those
emotions in the procedure of decision making. Based on these literature findings, we can say
that emotional intelligence has an impact on the relationship between leadership styles and
decision making styles.
3.4 Emotional Intelligence, Organizational performance and Decision Making
Holt and Jones (2005) concluded that emotional intelligence has an impact on organizational
performance. Druskut, Sala, & Mount (2006) studied the various ways through which
emotional intelligence affects organizational performance. Authors concluded that emotional
intelligence have an impact on performance, helps in developing international business
capabilities, and affects many business outcomes. Melita, Ceasar, Gerald, Anthony and
Ronald (2003) founds that emotional intelligence training is an evolutionary means of
organizational performance. Jordan & Troth (2002) founds that emotional intelligence
influence the employee preferred style of conflict resolution which contributes towards the
understanding of organizational performance and its determinants.
In relation to the decision making and organizational performance; Allen, Amason, David &
Schweiger (1994) founds that strategic decision making influence organizational
performance. Amason (1996) founds that top management teams make decisions which
influence the organizational performance. Irene, Abdul and Rasheed (1997) further found that
rational decision making have a positive association with organizational performance.On the
basis of this literature review we can say that emotional intelligence have an impact on the
relationship between leadership styles and organizational performance and decision making
styles affects organizational performance.
In nutshell, based on the above literature reviews and research findings, we can conclude that
1) Emotional intelligence will moderate the relationship between leadership styles
and decision making styles.
2. 2) Emotional intelligence will moderate the relationship between leadership styles
and organizational performance.
3. 3) Decision making styles influence the organizational performance.
1.

Fig.1LeadershipStyles

In this proposed model as depicted in Figure 1, transformational and transactional leadership

styles are taken as independent variables while decision making styles and organizational
performance act as dependant variables. Emotional intelligence is taken as moderating
variable which influence (moderates) the relationship among independent and dependant
variables.
4. Discussion and Conclusion
The present study examines the relationship among emotional intelligence, leadership styles,
decision making styles and organizational performance. Efficiency of the organization
depends on the leadership styles and decision making behavior prevailing in the organization
through proper communication of the policies and plans, rules and regulations, allowing
incentives, co-operation and build effective work environment which encourage the
employees in a positive way. This can only be done through effective leadership and by
adopting rational decision making processes. A study by George (as cited in Gardner and
Stough, 2001) argues that emotional intelligence enhances leaders ability to solve problems
and to address issues and opportunities facing them and by their organizations. Leaders within
this context are able to enhance decision making capability through their knowledge and
management of emotions, and use those emotions in the procedure of decision making. The
present study found that emotional intelligence moderates the relationship between leadership
styles and decision making styles. Many researchers (Melitaet al., 2003; Holt & Jones, 2005;
Druskut et al., 2006) found that emotional intelligence have a positive influence on
organizational performance. This study found that emotional intelligence moderates the
relationship between leadership styles and organizational performance and decision making
styles have an impact on organizational performance (Schweiger, 1994; Amason, 1996).

5. Limitations and Recommendation for Future Research

The present study is based on the theoretical evidences from the literature to supports the
conceptual model while not on the qualitative or quantitative evidences. The validity and
accuracy of the conceptual model is restricted to the variables defined in the conceptual
model. The future studies can be conducted to empirically test the proposed relationships in
the conceptual model.

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