• Impactof transformational leadership on organisational strategy

•Transformational leadership guides and motivates a commonvision of the organization. It motivates workers to create and share knowledge, generating knowledge slack.Knowledge slack isessential to facilitating personal and professional growth, organizational learning and innovation. Transformational leaders foster absorptive capacity among the organization’s members by encouraging employee empowerment and autonomy. They provide information, responsibilities, skillsand competences to the organization’s agents, who may then use it to acquire, implement, transform and usea new practice and improve internal communication by reducing barriers to sharing knowledge, thereby increasing the efficiency of the absorption process (GarcíaMorales, Lloréns-Montesand Verdú-Jover, 2008).

•Transformational leaders enable the search for new opportunities, creation of a common vision, and motivation and guidance of employees. Thesearch for new opportunities encourages greater responsibility in employees and greater exploitation of tacit knowledge at work (Bass, 1999). The transformational leader can also generate a shared vision through which all of the organization’s members learn, using both explicit and tacit knowledge. The leader knows that the organization’s members possess significant intellectual capacity and tacit knowledge, which shouldbe used at work. Transformational leaders guide others’ professional trajectories, giving them greater liberty in their tasks by allowing them to make greater intellectual decisionsbased on tacit knowledge (García-Morales, LlorénsMontesand Verdú-Jover, 2008).

Transformationa l Leadership

Employee engagement

Mission, vision and values Organisational Goals

Organisational Strategy

Organisational Objectives

Sets high standards

A broader conceptualization of business performance would emphasize indicators of operational performance (e.g. market share, product quality) as well as those of financial performance. Finally, organizational effectiveness takes into account other agents involved in the firm, measuring for example personnel satisfaction in the organization. Given the important role of business performance, we encourage future research to devote closer attention to measuring business performance from a multidimensional perspective. Development of a collaborative scheme between academics and practitioners could generate an organizational strategy around the concept of ‘transformational leadership’, permitting further study of the processes, means and mechanisms by which to transform this kind of leadership into sustainable competitive advantage. Future studies should be based on larger samples, preferably in more than one country. It would also be interesting to study similar characteristics with data provided by lower levelsof management and employees in the firm.