Effects of transformational and shared leadership styles on employees’ perception of team effectiveness

Using 3 sets of multiple regression models, we examined the effectiveness of transformational and shared leadership styles in relation to team effectiveness, based on the perceptions of 424 employees of Korean financial and insurance firms. Transformational leadership is a vertical leadership style emanating from the formal leader of a team, whereas shared leadership is a distributed leadership style that emanates from the team members. We found that transformational leadership contributed to team output effectiveness, whereas shared leadership improved the team’s organizing and planning effectiveness. These findings imply that different styles of leadership contribute to different aspects of team effectiveness. We suggest that managers should collaborate more with team members and should pay attention to the fit between the leader’s behavior and the characteristics of the team output in order to promote overall team effectiveness.