Transactional Leadership and Transformational Leadership, Their Impacts on Job Satisfaction: Islamic Banking in South Sumatra

Abstract

This study focuses on examining the direct effects of transactional leadership and transformational leadership on job satisfaction by choosing Islamic banking in South Sumatra as object. Five hundred front and back office employees who work at seven Islamic banks from four different locations are selected randomly as respondents, and as many as four hundred and eighty-seven questionnaires are returned in fully filled status. The multiple regression analysis is used to analyze the model in explaining the causal relationship among the three variables, and all items in the questionnaires are first tested for validity and reliability. The results show that all items, 8 items of transactional leadership, 12 items of transformational leadership, and 5 items of job satisfaction are valid and reliable. Hypothesis test results show that transactional leadership and transformational leadership simultaneously influence job satisfaction and there are no partial effects of the two leaderships, transactional or transformational styles on job satisfaction. These support previous studies which stated that transactional leadership and transformational leadership are complementary and interrelated. In addition, the results indicate that the leadership styles have a role in creating job satisfaction directly without any combination of other variables.