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1 Introduction

The concept of performance, which can be considered the degree to which organizations reach success, can be briefly defined as the contributions made to the objectives of the organization (Bass, 1985). Organizational performance is the ‘transformation of inputs into outputs by achieving certain outcomes . With regard to its content, performance informs about the relation between minimal and effective cost (economy), between effective cost and realized output (efficiency) and between output and achieved outcome (effectiveness )’ (Chen, 2002, as cited in Karamat, 2013). Daft and Marcic (2009) define organizational performance as the measure of when and how an organization determines its own objectives. The way an organization performs to reach these objectives is a determinant of the important role of managers in their display of leadership behaviors (Bass, 1985).

Although leadership is generally defined as the ‘art of ensuring others have the desire to strive to reach the common aims’ (Kouzes & Posner, 1995), leadership cannot be considered successful and is of no importance in the context of the organization if the results obtained are not congruent with the common aims (Koech & Namusonge, 2012). Leadership is the most important driving force to increase the performance of the organization (Karamat, 2013). In addition, Furnham (2002) maintains that leadership is the effectiveness attained by means of reaching the organizational outputs and objectives, which are indicators for the quality of the leadership . Ullah, Ullah and Durrani (2011) state that leadership is related to the performance of employees and the participation of employees is important for organizational development .

According to Obiwuru, Okwu, Akpa, and Nwankwere (2011), one of the reasons why there is a relationship between leadership style /approach and organizational performance is that it necessitates innovation-oriented competitiveness within today’s concentrated and dynamic market and the creative destruction of reduced profit and competencies (Santora, Seaton, & Sarros, 1999). Studies suggest that, in the face of such challenges, effective leadership can facilitate performance development (McGrath & MacMillan, 2000). In addition, to understand the effects of leadership on performance, it is important that leadership play a key role in developing the performance of the organization (Obiwuru et al., 2011). The improvement of organizational performance requires the development of management , and a sustainable competitive advantage requires leadership (Avolio, 1999; Rowe, 2001). In this light, the holistic review of studies on the effect of leadership on performance is important to be able to show the nature of the relationship between the two variables.

This study examined the effect of leadership on organizational performance . Furthermore, the moderators that were expected to moderate the effect sizes found in this study were identified as: (1) the leadership style /approach considered in the research, (2) the sample group /sector of the research studies, (3) the study’s publication type, and (4) the study’s publication year. All these variables, along with the results of previous research results, were used to test the following hypotheses:

H1 :

Leadership has a positive effect on organizational performance .

H2 :

Leadership style /approach is a moderator of the positive effect of leadership on organizational performance .

H3 :

The sample group /sector is a moderator of the positive effect of leadership on organizational performance .

H4 :

Publication type is a moderator of the positive effect of leadership on organizational performance .

H5 :

Publication year is a moderator of the positive effect of leadership on organizational performance .

2 Method

2.1 Study Design

In this study, the effect of leadership on organizational performance was tested with a meta-analysis design.

2.2 Review Strategy and Criteria for Inclusion/Exclusion

To determine the research studies to include in the meta-analysis, the Science-Direct , Proquest and Ebsco academic databases were used to conduct a literature review. For this process , the terms leadership , performance and organizational performance included in the titles of the studies were used to screen the research studies. The end date for the research studies included in the research was identified as March 2014, and the starting year was 2000. Doctoral dissertations and peer-reviewed journals were included in the study.

Many strategies were used to identify the research studies that were appropriate for the meta-analysis of the study. First, a research study pool (598 research studies) was established including all studies with leadership and performance or organizational performance in their titles. The abstracts of these studies were reviewed, and all were found to be appropriate to include in the study. In the second stage, all research studies in the pool were examined in detail; 270 of the research studies in the pool were appropriate, and 328 were not found to be suitable. The descriptive statistics of the 270 research studies to be included in the analysis are presented in Table 1.

Table 1 Characteristics of the studies included in the meta-analysis
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The criteria for inclusion of the research studies to the analysis study were identified as follows:

  • To have the statistical information necessary for correlational meta-analysis (n and r, or R 2 values)

  • To be a study measuring the correlation between leadership and organizational performance

Reasons for not including a research study in the meta-analysis:

  • Having no quantitative data (qualitative research)

  • Not having a correlation coefficient

  • Not focusing on organizational performance

  • Not focusing on leadership

2.3 Coding Process

The coding process is essentially a data sorting process used to ascertain which of the complex data in studies are clear and suitable for the study. In this scope, a coding form was developed before the statistical analysis was conducted, and the coding was conducted according to the form. The main aim was to develop a specific coding system that allowed the study to see the entirety of the research studies in general and that would not miss any characteristics of each individual research study. The coding form developed in the study was comprised of:

  • References for the research

  • Sample information

  • Sample group /sector

  • Leadership style /approach

  • Data collection tool(s)

  • Quantitative values

2.4 Statistical Processes

The effect size acquired in a meta-analysis is a standard measure value used in the determination of the strength and direction of the relationship in the study (Borenstein, Hedges, Higgins, & Rothstein, 2009). Pearson’s correlation coefficient (r) was determined to be the effect size in this study. Because the correlation coefficient has a value between +1 and −1, the r value calculated was evaluated by converting this value into the value as it appears in the z table (Hedges & Olkin, 1985). Provided that more than one correlation value is given between the same structure categories in correlational meta-analysis studies, two different approaches are used in the determination of the one to be used in the meta-analysis (Borenstein et al., 2009; Kulinskaya, Morgenthaler, & Staudte, 2008). For this study, (1) first, if the correlations were independent, all the related correlations were included in the analysis and were considered to be independent studies, and (2) if there were dependent correlations, then the conservative estimation value was accepted. A random effect model was used for the meta-analysis processes in this study. The Comprehensive Meta-Analysis program was used in the meta-analysis process .

2.5 Moderator Variables

To determine the statistical significance in the difference between the moderators of the study, only the Q b values were used. Four moderator variables that were expected to have a role in the effect size were identified in the study. The first of these considered a moderator of the relationship between leadership and organizational performance was leadership style /approach. The second, sample group /sector, was expected to moderate the average effect of leadership and organizational performance . The third moderator variable was the publication type, and the fourth was the publication year.

2.6 Publication Bias

A funnel plot for the research studies included in the meta-analysis of the study can be seen in Fig. 1. Evidence for the effect of publication bias in the research studies included in the meta-analysis can be seen in Fig. 1. A serious asymmetry would be expected in the funnel plot if there were a publication bias . The concentration of plots on one side, under the line of the average effect size and particularly in the bottom section of the funnel, suggests the probability of a publication bias . In this study, no evidence of the partiality of the publications was observed in any of the 270 data subjected to the meta-analysis.

Fig. 1
figure 1

Effect size funnel for publication bias

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Although no publication bias was observed in the funnel plot , the results of Duval and Tweedie’s trim and fill test, which was applied to determine the effect of publication bias acquired with the meta-analysis using the random effect model , are given in Table 2. As seen in Table 2, there is no difference between the effect observed and the artificial effect size created to fix the effect of the publication bias . The research on each side of the center line is symmetrical, and this is the indicator of non-difference. Because there is no evidence of lost data on either side of the center line, the difference between the fixed effect size and the observed effect size is zero.

Table 2 Duval Tweedie trim and fill test results
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3 Findings

Table 3 shows the results of the meta-analysis of leadership and organizational performance . The findings supported H1, which argued that there would be a positive relationship between leadership and organizational performance . The effect size of leadership on organizational performance was calculated to be 0.32. This value shows that leadership has a medium-level effect (see Cohen, 1988) on organizational performance .

Table 3 Findings of the correlations between leadership and organizational performance : results of meta-analysis
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Findings supported H2, which predicted that leadership style /approach would moderate the effect of leadership on organizational performance . The moderator analysis showed that the difference between the effect size of leadership styles was statistically significant (Q b  = 35.398, p < 0.05). In this scope, it was found in studies that safety [r = 0.72], ethical [r = 0.70] and shared [r = 0.51] leadership styles/approaches had a strong effect on organizational performance , whereas distributed [r = 0.38], other [r = 0.35], transactional [r = 0.34], spiritual [r = 0.34], leadership behaviors [r = 0.33], benevolent [r = 0.31], transformational [r = 0.31] and charismatic [r = 0.31] leadership styles/approaches had a medium-level effect, and visionary [r = 0.29], supportive [r = 0.28], servant [r = 0.27] and authentic [r = 0.26] leadership styles/approaches had a small effect. The leadership style /approach with the strongest effect was found to be safety and ethical leadership . In contrast, the effect of the moderator role of participative , democratic and empowering leadership styles on organizational performance was not statistically significant (p > 0.05).

The results of the moderator analysis showed that H3, which predicted that the sample group /sector would moderate the positive effect of leadership on organizational performance , was not supported. However, sample groups/sectors included in the meta-analysis, such as other [r = 0.45], athletes [r = 0.39], CEO [r = 0.38], service sector employees [r = 0.36], banking sector employees [r = 0.36], academic sector employees [r = 0.34] and health sector employees [r = 0.33] have a medium effect on leadership affecting organizational performance , whereas sample groups such as students [r = 0.29], education employees [r = 0.29], mixed [r = 0.28], soldiers [r = 0.22] and administrators [r = 0.22] were found to have a significant small effect. The strongest effect within sample group /sector was found to be other, comprised of samples that could not be grouped. Although the effect size on performance for different sample groups/sectors differed, the effect size of sample groups/sectors used to measure the performance was not found to be significant (Qb = 41.286, p > 0.05) in the moderator analysis examined through the random effects model.

The findings did not provide support for H4, which predicted that the publication type would moderate the effect that leadership has on organizational performance . Although the moderator analysis did not find a statistically significant difference in the effect size between the publication types (Qb = 1.016, p > 0.05), effect size of leadership on organizational performance is statistically significant for research studies [r = 0.33] and dissertations [r = 0.30], and these effects were found to be of a medium level.

The research found support for H5, where it was hypothesized that publication year would moderate the effect of leadership on organizational performance . The moderator analysis found a statistically significant difference in the effect size for the studies’ publication year (Q b  = 10.529, p < 0.05). In this scope, it was found that leadership has a medium effect on organizational performance in regard to publications dated 2010 and beyond [r = 0.37] and a small effect for publications from 2000 to 2009 [r = 0.27] for the studies included in the meta-analysis.

Conclusion

A total of 270 research studies, with 101,232 participants, were included in this study to examine the magnitude of the effect size of leadership on organizational performance . Leadership style /approach, sample group /sector, publication type and publication year were considered moderator variables in the study. The results of the meta-analysis found a medium positive effect of leadership on organizational performance . This finding is congruent with many other studies that found a positive relationship between leadership and organizational performance (Harrison, 2000; Jung & Avolio, 2000; Russ, McNeilly, & Comer, 1996; Sosik, 1997; Ullah, Ullah, & Durrani, 2011).

According to the results of the moderator variable analysis for leadership style /approach, leadership styles/approaches moderate the effect of leadership on organizational performance . Studies suggest that many factors of an organization affect organizational performance , including the preferred leadership style /approach (Bycio, Hackett, & Allen, 1995; Dutschke, 2003; Howell & Avolio, 1993; Yukl, 1998). When leadership styles were undertaken separately, the moderator variables that had the strongest effect were safety and ethical leadership styles/approaches . The finding that the safety leadership style /approach (Clarke, 2000; Wu, Chang, Shu, Chen & Wang, 2011; Clarke & Ward, 2006; Wu, Chen, & Li, 2008) and the ethical leadership style /approach (Becker & Huselid, 1998; Brown & Trevino, 2006; Piccolo, Greenbaum, Den Hartog, & Folger, 2010; Walumbwa et al., 2011) have an effect on organizational performance is in parallel with previous studies in the literature. Many studies predicted that organizational performance would be have the strongest relationship with transformational leadership , which is one of the leadership styles most researched in regard to its relationship with organizational performance (Barling, Weber, & Kelloway, 1996; Jung & Avolio, 2000; Tsaia, Chen, & Cheng, 2009). Other leadership styles also undertaken as a moderator variables in the study, such as shared (Olinger, 2010), distributed (Davis, 2009), transactional (Zhu, Chew, & Spangler, 2005), spiritual (Jeon, 2011), leadership behaviors (Hankinson, 2012), benevolent (Wu, 2012), transformational (Defee, Stank, & Esper, 2010), charismatic (Fleener, 2009), visionary (Wintering, 2008), supportive (Jung & Takeuchi, 2010), servant (Tourigny, 2001) and authentic (Leroy, Palanski, & Simons, 2012) leadership styles, were also supported by the literature in terms of their effect on organizational performance . Popa (2012) suggests that each leadership style /approach affects organizational performance in a different way: Whereas some increase the capacity of organizations and lead them to success, others hinder their development and create unhappiness and decrease motivation.

Statistically significant results were not found by the moderator variable analysis for sample group /sector used in studies in regard to the differences in the effects of different sample group /sectors. However, the largest effect among the sample groups/sectors was not under a particular sample group /sector but found for the ‘Other’ sample group . In addition to this group, the second largest effect sample groups/sectors were athletes, the service sector and the banking sector , whereas the smallest effect sample group /sectors were the soldier and administrator groups.

The moderator analysis conducted in regard to publication type showed that the effect size of leadership on organizational performance was not statistically significant for the types of publications. However, the examination of effect size according to the studies or dissertations’ publication type did not reveal a difference in the effect of organizational performance by means of leadership ; both types of publications were found to have a medium-level statistical significant in regard to effect size .

Another variable that was considered as a moderator variable in the study was the studies’ publication year. According to findings, the publication year was a significant moderator in the effect of leadership on organizational performance . Whereas the results of the study showed a medium effect of leadership on organizational performance in the publications of 2010, in the publications between 2000 and 2009, it was a small effect. As the world becomes globalized, it is necessary for leaders to continue their internal focus, to make sure the organization can adapt to the current changes and to ensure the organization can cope with the continuously changing environmental conditions (Alimo-Metcalfe, 1998; Koech & Namusonge, 2012). Thus, to ensure the development of organizational performance , as the indicator for the success of organizations, it is necessary to place adequate importance on leadership skills in light of the importance of the effect of leadership on organizational performance founded by recent studies conducted in this field. A general assessment of the findings concerning the effect of leadership on organizational performance is summarized below:

  • Leadership has a medium positive effect on organizational performance [r = 0.32].

  • Whereas moderator variables of the sample group /sector and publication type do not moderate the effect of leadership on organizational performance , leadership style /approach and publication year do.

The effect size of leadership style /approach on employees’ performance of employees was found to be medium in the study. In light of the study’s findings, it can be stated that leadership behaviors have a large effect on organizational performance , which is thought to play a critical role in sustaining the existence of the organization and for the organization to reach its long-term targets (Murphy, Dalenberg, & Daley, 1990).

Thus, leaders have an important responsibility to develop organizational performance , which, in turn, plays a critical role in ensuring the efficiency and sustainability of the organization. This meta-analysis is significant in that it reveals the need for in-depth investigations in research studies examining the relationship between leadership and organizational performance . It is recommended by this study to conduct comparative meta-analyses and qualitative research with the aim of investigating the effect of leadership on organizational performance .