An examination of the relationships between leadership style, quality, and employee satisfaction in R&D versus administrative environments

Academics and executives argue that effective leadership is a key predictor of R&D success as well as quality management. Recent research highlights transformational leadership as a highly effective style shown to predict performance in organizations. However, no study examined the role of transformational and transactional leadership in building quality climate in R&D versus non‐R&D settings. We examined the relationship between leadership style and the establishment of a quality environment in an R&D setting based on an empirical study of 511 research engineers and scientists. It is found that both transformational leadership and transactional contingent‐reward leadership are related to the establishment of a quality environment in the R&D part of a telecommunications firm. However, the impact of transactional contingent‐reward leadership ceases to be significant once both leadership styles are considered simultaneously using structural equations. A transformational leadership style was also found to be related to employee satisfaction.