Journal of Business Research 55 (2002) 467 – 480

Effects of leadership on organizational performance in

Russian companies
Detelin S. Elenkov*
School of Management, New York Institute of Technology, 1855 Broadway, New York, NY 10023, USA
Received 1 February 2000; accepted 1 July 2000

Abstract

This study investigated concurrently the main effects of the transformational- and transactional-leadership behaviors on organizational
performance of Russian companies, the moderating effects of support for innovation on the relationship between the transformational-
leadership behaviors and organizational performance, and the impact of group cohesiveness on transformational-leadership behaviors in a
Russian context. The results demonstrated that transformational leadership directly and positively predicted organizational performance of
Russian companies over and beyond the impact of transactional leadership; Russian managers who displayed more transactional-leadership
behaviors also made a positive contribution to the achievement of organizational goals; support for innovation significantly moderated the
relationship between transformational leadership and organizational performance; and group cohesiveness was positively related to the
ratings of transformational leadership. These research findings were, then, used to draw conclusions concerning finding new effective ways to
promote organization development (OD) and to achieve better organizational performance results in Russia. The potential benefits for
Russian companies of Full Range of Leadership Development Modules, process consultation (PC), sensitivity training, and other OD
techniques were discussed. D 2002 Elsevier Science Inc. All rights reserved.

Keywords: Leadership; Organizational performance; Russia

For almost 10 years now, Russia has been undergoing a
transformation from a centrally planned economy to a mar-
ket-oriented one. Accordingly, the Russian government has
introduced a series of sweeping economic reforms, including
the use of freely fluctuating market prices, the initiation of a
process that will ultimately break down economic monopo-
lies, the creation of conditions for the establishment of a
private sector in many areas of economic activity, the
elimination of most food subsidies, and the reduction of
subsidies for fuel and most other basic commodities.
However, there is a wide range of statistical evidence that
indicates that the state of the Russian economy has been
deteriorating sharply since the end of the cold war. Russian
gross domestic product fell about 45% from 1989 to 1997.
Real capital investment plunged by 92% over the same period.
Moreover, net productive investment has turned negative as
aging equipment has become unusable. The output of the oil
industry — one of Russia’s main sources of export revenue
— has dropped by about 50% (Koretz, 1998).
* Tel.: +1-261-1602; fax: +1-261-1593.
E-mail address: delenkov@nyit.edu (D.S. Elenkov).
Many business scholars, political economists, business
executives, and politicians agree that economic problems in
Russia have a lot to do with the style of management at
various levels in that country. Statistical evidence has
demonstrated that economic inefficiency in Russia has been
a long-lasting problem. Paradoxically, Russia would earn
twice as much as its present total GDP, if all the raw
materials that the country produce were sold abroad. In
other words, Russian companies have appeared to subtract,
not add, value to the raw materials they consume. By this
measure, ‘‘Russia would be better off if every industrial
worker stopped working.’’ (The Economist, Dec. 5, 1992:
p. S10). Although business experts may find some faults
with the above-mentioned measure of economic (in)effi-
ciency, macro-economic policies, as well as company man-
agement in Russia, are clearly in a desperate need for radical
improvements in order to reverse the negative trends of the
recent past and to achieve positive economic results in a not-
very-distant future.
One possible way of achieving the hoped-for improve-
ments is to make appropriate changes in Russian companies
by creatively taking advantage of the best modern theories of

0148-2963/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved.
PII: S 0 1 4 8 - 2 9 6 3 ( 0 0 ) 0 0 1 7 4 - 0
468 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
management and organizational behavior has to offer. These
theories have been credited for helping managers in the
United States, Japan, and other countries in finding adequate
solutions to the most fundamental problems facing their
companies (e.g., Pfeffer, 1995; Hackman and Wageman,
1995). It has already been recognized that studies testing
management and organizational behavior theories, which
have originated in the West, in a Russian context may be
of particular value to achieve organizational improvements in
Russian companies and international joint ventures in that
country (Welsh et al., 1993; Buchko et al., 1998). Besides,
such studies can give management scholars an opportunity to
re-evaluate the applicability of conceptualizations and mea-
surement techniques that have been developed and employed
in studies conducted in the West in a new cultural context
(Banai and Teng, 1996; Elenkov, 1998). Unfortunately,
research efforts in this area have been mostly sporadic and
the used measurement techniques have seldomly been
adapted to the specificity of cognitive abilities of Russian
managers. This is not to say that we know absolutely nothing
about the potential applicability of Western schools’ manage-
ment and organizational behavior theories in Russia, as some
significant results have already been obtained by a number of
researchers (Welsh et al., 1993; Luthans, 1993; Holt et al.,
1994; Puffer et al., 1994, 1997; Veiga et al., 1995; Banai and
Teng, 1996; Gurkov, 1996; Filatochev et al., 1996; Ralston
et al., 1997; Arino et al., 1997; Stewart and May, 1997;
Elenkov, 1998; Buchko et al., 1998; May et al., 1998;
Randall and Coakley, 1998; Luthans et al., 1998a,b; Bradley,
1999; Fey and Beamish, 1999).
For example, Welsh et al. (1993) highlighted both some
potential benefits and likely problems of transporting US-
based human resource management theories and techniques
to Russia. The findings of their research indicated that
extrinsic rewards and behavioral management interventions
had a positive impact on the performance of Russian textile
workers, while a participative intervention did not result in
improved individual performance. Using organizational
behavior techniques, developed in the West, Holt et al.
(1994) revealed that Russian workers felt uncertain about
the benefits of adjusting to a market economy, and that
social infrastructure in Russia was inadequate to cope with
the new expectations for self-direction and individual
responsibilities in Russian companies. Puffer et al. (1997)
examined the beliefs about work of 292 Russian managers
who were surveyed using Buchholz’s 45-item instrument
depicting six major belief clusters. The researchers found
important differences in some beliefs among managerial
groups depending upon managerial level, age, and gender.
In another recent study, Buchko et al. (1998) found that US-
based theories regarding antecedents, correlates, and con-
sequences of organizational commitment were generally
applicable to Russian companies. Luthans et al. (1998b)
made, in turn, a case for the use of behavioral management
as a pragmatic and effective way to help Russian managers
improve individual on-the-job performance. The five-step
Organizational Behavior Model was presented. The success-
ful use of the Organizational Behavior Model in a Russian
factory was, then, given a detailed attention. The researchers
stressed the importance of contingently administered social
reinforcers to increase employee performance at little or
no cost.
Relatively few management and organizational behavior
studies have, however, explored leadership behaviors in
Russia. Early research on that topic (e.g., Blazyca, 1987;
Aage, 1991; Laszlo, 1992) essentially argued that leadership
studies on that country should shift focus from recommend-
ing changes at the government level to finding appropriate
ways to achieve effective decision making in the private
sector. Accordingly, Collop (1986) suggested that business
leaders in Russia should be offered multi-stage training
programs emphasizing flexibility and founded on the belief
that leaders should not be expected to be effective unless
they could draw on specific knowledge and information on
which to base their decision making. McColl (1991) added
that an effective leader in the economies in transition should
develop and/or refine his or her expertise in six fundamental
areas: a powerful business vision; a workable plan; the
ability to set goals; tenacity and perseverance; the power
to mold cooperative teams; and strong values and ethics. In
another early study on leadership in Russia, Puffer et al.
(1994) presented a set of leadership traits of Russian
managers in ‘‘the traditional Russian society,’’ during the
communist regime, and in the beginning of 1990s. The
researchers focused the discussion in their article mainly on
four leadership traits: leadership motivation, drive, honesty
and integrity, and self-confidence. In a more recent article,
Luthans et al. (1998a) argued that a better understanding and
analysis of the so-called ‘‘dark side’’ of leadership appeared
to be necessary, taking into account the continuing crises
facing transforming former communist countries to some
form of capitalism. Luthans et al. examined the character-
istics and reasons for the potential of this negative side of
leadership. Moreover, they made a case in favor of the use
of more democratic leadership approaches in Russia and
other post-communist countries. However, Luthans et al.
(1998a) recommended against the application of transfor-
mational leadership in Russian companies.
Most of the prior research on leadership in Russia,
suffered, however, from the common mistake of accepting
certain stereotypical views of enterprise management in that
country, instead of truly analyzing the transformation taking
place in companies there (see Liuhto, 1999a for a compre-
hensive review of that topic). Besides, it has recently been
emphasized that post-Soviet management has less experi-
ence in managing organization-cultural change than in
executing concrete measures within an enterprise, due to
the fact that a Soviet manager’s duties excluded that of
learning change (Liuhto, 1999b). Therefore, learning orga-
nization development (OD) and change techniques origi-
nated in the West appears to be a critically important task
facing Russian leaders.
 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
Evidently, there is a great need for further empirical
research, as well as for using more rigorous methodology
to investigate the dynamic changes taking place in Russian
companies and to find effective ways to promote their
organizational development. As it has already been demon-
strated that leadership research holds a great promise to
bridge the gap between the postulates of Western manage-
ment and organizational behavior theories and the require-
ments of business practice in Russia, further empirical tests
of Western leadership concepts and the use of measurement
techniques, which take into consideration the specificity of
cognitive abilities of Russian managers appear to offer an
opportunity to find effective ways to improve organizational
performance of Russian companies.
1. Leadership styles
Transactional leadership has dominated leadership re-
search since World War II. It is embodied in the path-goal
model (House, 1971) that attempts to explain why and when
leadership-by-contingent-reward works. According to Burns
(1978), transactional leadership behaviors are founded on an
exchange process in which the leader provides rewards in
return for the subordinate’s effort. In essence, leader –
follower relationships are believed to be based on a series
of transactions or bargains between leaders and followers. In
addition, transactional leadership is assumed to critically
depend on contingent reinforcement, either positive or
negative. Transactional leaders clarify how a follower’s
needs will be met in exchange for enactment of the
follower’s role; or the leader may react only if followers
fail to meet their role requirements. Thus, transactional
leaders have been presumed to take advantage of contingent
reward and active/passive management-by-exception leader-
ship approaches (e.g., Bass, 1985, 1997; Hater and Bass,
1988; Howell and Avolio, 1993; Sosik et al. 1997). The
distinction between active and passive management-by-
exception primarily depends on the timing of the leader’s
intervention. In the active form of management-by-excep-
tion, the leader continuously monitors performance out-
comes to take corrective action before omissions or mistakes
become a serious problem. The leader actively searches for
deviations from what is expected. In passive management-
by-exception, the leader takes corrective action only after a
significant problem has emerged. The leader waits until the
task is completed before determining that a problem exists
and then intervenes with criticism or takes more serious
punitive measures.
More recently, several new leadership theories variously
labeled transformational, charismatic, or inspirational have
been proposed (House, 1977; Burns, 1978; Bass, 1985;
Tichy and DeVanna, 1986; Conger and Kanungo, 1987;
Shamir et al., 1993; Yammarino, 1994). Research on trans-
formational leadership theory has expanded the range of
leadership characteristics being systematically examined
469
beyond the boundaries of transactional theories. Instead
of simply catering to the immediate self-interests of fol-
lowers, the transformational leader has been conceived to
broaden followers’ views towards transcending self-inter-
ests for the good of the group, increasing awareness about
the issues of consequence, and increasing the need for
growth and self-actualization (Yukl, 1994; Bass, 1997;
Northouse, 1997; Waldman and Yammarino, 1999). Such
behaviors broaden the range of leadership beyond simply
focusing on constructive or corrective transactions. Exam-
ples of this new focus on leadership include the work of
House (1977), Bass (1985), Bennis and Nanus (1985),
Tichy and DeVanna (1986), Conger and Kanungo (1987),
Boal and Bryson (1988), Howell and Frost (1989), Shamir
et al. (1993, 1998), Yammarino (1994), Podsakoff et al.
(1996), Pawar and Eastman (1997), Wofford et al. (1998),
Pillai and Williams (1998), Waldman and Yammarino
(1999), and Avolio (1999). All of these approaches share
the common perspective that effective leaders transform or
change the basic values, beliefs, and attitudes of followers
so that they are willing to perform beyond the minimum
levels specified by the organization. Transformational lea-
dership fits very well into a strategy oriented towards
massive changes.
Some of the transformational leadership research (e.g.,
House, 1977; Bass, 1985; Bennis and Nanus, 1985; Conger
and Kanungo, 1987; Howell and Frost 1989; Shamir et al.,
1993; Pawar and Eastman, 1997; Waldman and Yammarino,
1999) have been primarily conceptual in nature, focusing on
the identification of the key transformational behaviors, and
the development of theories of their antecedents and con-
sequences. Another part of this research has focused on
empirically testing these conceptual frameworks (e.g.,
Waldman et al., 1987; Yammarino and Bass, 1990; Podsak-
off et al., 1990; Sosik et al., 1997; Yammarino et al., 1998).
Generally speaking, the empirical results have verified the
impact of transformational leader behaviors on employee
attitudes, effort, and job performance. In particular, leader-
ship researchers found that transformational behaviors are
not uncommon in different organizational settings, nor are
they limited to executives and world-class leaders. Some
degree of transformational leadership is being practiced at
the most senior levels down to the first level of management
in industrial settings, among students, and among military
officers of various ranks (e.g., Bass, 1985; Avolio et al.,
1988; Yammarino and Bass, 1990; Pillai and Williams,
1998). In addition, transformational leadership has been
positively correlated with how effective the leader is per-
ceived by subordinates, how much effort subordinates say
they will expend for the leader, how satisfied the subordi-
nates are with the leader, and how well subordinates
performed as rated by the leader (e.g., Hater and Bass,
1988; Podsakoff et al., 1990; Pillai and Williams, 1998;
Shamir et al., 1998; Avolio, 1999; Yorges et al., 1999).
The contrast between transactional leadership with trans-
formation leadership has not been postulated to mean the
470 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
models are unrelated. The models differ with regard to the
process by which the leader motivates subordinates, as well
as in the types of goals set. While conceptually distinct,
transactional and transformational leadership may both be
practiced to some degree by the same individual manager.
Prior empirical research has indicated that transformational-
and transactional-leadership behaviors can be displayed by
the same leader in different amounts and intensities while
also complementing each other (Bass, 1985, 1997; Bass and
Avolio, 1990; Howell and Avolio, 1993; Wofford et al.,
1998; Yammarino et al., 1998). Many transformational
leaders reportedly engage in transactional behaviors, but,
more importantly, they often supplement those behaviors
with some elements of transformational leadership.
2. Research objectives
It is important to note that leadership research has mostly
focused on the impact of leader behaviors on the follower’s
individual performance and satisfaction, rather than organi-
zational performance. While the effects of leader behaviors
on employee individual performance are interesting, they
do not capture the most important effects of these
behaviors. In particular, the most important effects of
transformational-leader behavior appear to be on superior
organizational performance, rather than improved indivi-
dual job performance.
In an attempt to address the above-mentioned concern
and to bridge the gap between the postulates of management
and organizational behavior theories, which originated in
the West, and the requirements of business practice in
Russia, this study has examined whether transformational-
and transactional-leadership behaviors predict organiza-
tional performance of Russian companies over a 6-month
period while considering contextual factors, such as support
for innovation and group cohesiveness, as moderators. It
should be noted that little research has examined how these
contextual variables moderate leadership behaviors in pre-
dicting performance over an extended period of time
(Howell and Avolio, 1993). Moreover, because Bass and
colleagues (e.g., Bass, 1985, 1997; Yammarino and Bass,
1990; Bass and Avolio, 1994) argue that the effects of
transformational leadership behaviors augment or supple-
ment the effects of transactional leadership behaviors, the
effects of the transformational behaviors have been exam-
ined in the empirical context of the effects of the transac-
tional leader behaviors.
In brief, the study has been designed to investigate: (a)
the main effects of the transformational- and transactional-
leadership behaviors on organizational performance of Rus-
sian companies; (b) the moderating effects of support for
innovation on the relationship between the transformational
leadership behaviors and organizational performance; and
(c) the impact of group cohesiveness on transformational
leader behaviors in a Russian context. As a whole, this
suggests that leadership behaviors may have a number of
important effects on organizational performance of Russian
companies. Therefore, another key objective of this study
has been (d) to investigate possible ways to use the findings
of leadership research in order to improve organizational
performance in Russia.
3. Hypotheses
3.1. Leadership and performance
Generally, transformational and transactional leadership
have been postulated to have different effects on subordinate
performance. In an earlier article, which served as a source
of valuable ideas for the current study, Howell and Avolio
(1993) used measures of leadership, locus of control, and
support for innovation to predict the consolidated-unit
performance of 78 managers in a large Canadian financial
institution. Results revealed that three transformational-
leadership measures were associated with a higher internal
locus of control and significantly and positively predicted
business-unit performance over a 1-year period. Transac-
tional measures of leadership, including contingent reward
and management by exception (active and passive), were
each negatively related to business-unit performance. Causal
relationships between the transformational-leadership beha-
viors and unit performance were also moderated by the level
of support for innovation at the business-unit level.
In addition, motivational potential of transformational
leadership reportedly surpasses that of leadership models
characterized by leader – follower exchanges or transactions
(e.g., Bass, 1985, 1997; Podsakoff et al., 1990). The real
essence of transformational leadership is that these leaders
are believed to lift ordinary people to extraordinary heights
(Boal and Bryson, 1988), cause followers to do more than
they are expected to do (Yukl, 1994), and motivate them to
perform beyond the level of expectations (Bass, 1985,
1997). Managers who are transforming leaders are assumed
to pay more attention to the individual subordinate, sharing
his or her concerns and development needs and treating each
employee with respect. By appealing to the self-interests of
followers, as well as their shared values, transformational
leaders can help their followers collectively maximize
performance (Howell and Avolio, 1993).
Moreover, substantial evidence now exists indicating
that transformational-leadership factors will positively
influence organizational performance (e.g., Yammarino
and Bass, 1990; Bass and Yammarino, 1991; Keller,
1992; Bass and Avolio, 1994; Avolio, 1999). Furthermore,
House et al. (1991), Howell and Avolio (1993), Bass and
Avolio (1994), Podsakoff et al. (1996), Waldman and
Yammarino (1999), and others have recently begun to
isolate some of the specific attributes and behaviors that
are believed to make charismatic and transformational
leaders particularly effective at achieving superior indivi-
 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
dual or group performance. Because of the extent to which
transformational-leadership behaviors have been found
to augment the impact of transactional-leader behaviors
on criterion variables, it could be hypothesized that, as
compared with transactional leadership, transformational
leadership would be more highly related to organizational
performance outcomes.
Hypothesis 1: Transformational-leadership behaviors
would be more highly associated with organizational
performance than would transactional behaviors in
Russian companies.
On the basis of a series of investigations, Bass (1985)
proposed three leadership factors describing transformation-
al leaders. These factors were labeled charisma, individu-
alized consideration and intellectual stimulation. Charisma
has been defined as a factor characterizing the leader’s abi-
lity to instill pride, faith, and respect. A charismatic leader is
believed to have a gift for seeing what is really important,
and to be capable of transmitting a sense of mission to the
followers. Individualized consideration has been defined as
behavior on the part of the leader that indicates that he/
she respects followers and is concerned about their person-
al feelings and needs. The leader is supposed to provide
coaching and teaching, and to treat each follower as an in-
dividual. Intellectual stimulation has been viewed as a lead-
ership behavior that challenges followers to re-examine
some of their assumptions about their work and rethink
how it can be performed. The leader is supposed to arouse
followers to search for new ideas, to emphasize creative
problem solving, and to encourage the use of reasoning be-
fore taking action.
Hypothesis 2a, b, and c: Charismatic leadership, leader-
ship based on individualized consideration and, leader-
ship based on intellectual stimulation will each positively
predict organizational performance of Russian compa-
nies over a 6-month period of time.
Transactional leadership (Contingent Reward and Man-
agement-by-Exception) has also been correlated with per-
formance outcomes. By clarifying subordinate work goals
and associated rewards, the transactional leader brings forth
the expected effort and performance to achieve those goals.
Transactional leadership based on contingent reward is
believed to result in followers achieving the negotiated
outcomes. Rewards are then provided consistent with
satisfactory completion of the agreement. As long as the
leader and follower find the exchange mutually rewarding,
the relationship is likely to continue and expected perfor-
mance will be achieved. Previous research has generally
shown that contingent-reward leadership behavior can
positively affect followers’ job satisfaction and individual
or group performance (Klimoski and Hayes, 1980; Podsak-
off and Schriesheim, 1985; Podsakoff et al., 1982),
although in other circumstances, the impact was negative
(Yammarino and Bass, 1990; Howell and Avolio, 1993).
This research has also shown that contingent reward leader-
471
ship was positively related to the follower’s job involve-
ment (Podsakoff et al., 1982, 1984). Considering the im-
portance of employees’ job satisfaction, job involvement,
and other similar correlates of organizational commitment
for performance results of Russian companies (Buchko
et al., 1998), it could be hypothesized that contingent-
reward leadership would positively relate to organizational
performance in Russia.
Hypothesis 3: Contingent reward leadership will posi-
tively predict organizational performance of Russian
companies over a 6-month period of time.
Contingent reprimand or disapproval, as exemplified by
management-by-exception, has generally been presumed to
have a negative impact on the job performance of followers,
particularly if the leader passively waits for problems to
arise before setting standards or taking any necessary action
(Hater and Bass, 1988; Bass and Yammarino, 1991; Yam-
marino and Bass, 1990). Leadership researchers has re-
ported a negative relationship (Bass et al., 1987; Hater
and Bass, 1988; Bass and Avolio, 1990; Howell and Avolio,
1993) and no relationship (Hunt and Schuler, 1976; Podsak-
off et al., 1982, 1984) between leaders’ contingent sanction-
ing behavior and followers’ performance. In particular,
Podsakoff et al. (1984) have argued that, if leaders criticize
followers after the fact or do not specify the behaviors to be
performed to avoid punishment, then such behavior is likely
to have a negative impact on the follower’s on-the-job effort
and performance.
Hypothesis 4a and b: Management-by-exception leader-
ship that is active or passive will negatively predict
organizational performance of Russian companies over a
6-month period of time.
3.2. Leader context
As it has already been mentioned, previous research on
transactional and transformational leadership has primarily
been concentrated on comparing the effects of transactional
and transformational leadership on employee attitudes,
effort, and job performance. Less attention has been paid
to evaluating other key factors that may also directly influ-
ence performance or moderate the impact of transformational
and transactional leadership on criterion variables, including
the context within which the leader and his or her followers
operate (Howell and Avolio, 1993; Podsakoff et al., 1996;
Pawar and Eastman, 1997; Sosik et al., 1997; Shamir et al.,
1998). As a result, our ability to predict the specific condi-
tions under which various types of leadership behaviors will
effectively influence performance criterion variables has
remained somewhat deficient (Podsakoff et al., 1996).
However, some recent theoretical conceptualizations and
empirical findings have suggested that certain contextual
factors may moderate the impact of transformational leader-
ship on group effectiveness and organizational performance
(e.g., Howell and Avolio, 1993; Pawar and Eastman, 1997;
472 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480

Sosik et al., 1997; Pillai and Meindl, 1998). Based on 4. Method

findings of prior research on Russia, two of those contextual
factors — support for innovation and group cohesiveness
— appear to be epistemologically adequate for the study of
the effects of transformational- and transactional-leadership
behaviors on organizational performance of Russian compa-
nies. In particular, leadership researchers have contended
that transformational leaders are likely to find more ready
acceptance in organizations that are open to creative sugges-
tions, innovation, and risk taking. In contrast, in organiza-
tions bound by rigid rules and punitive actions, leaders who
openly seek improvement in the ways to perform the job may
be viewed as too unsettling and, therefore, inappropriate for
the stability and continuity of the existing structure (Bass and
Avolio, 1990; Howell and Avolio, 1993). Thus, organiza-
tions in which there is a stronger support for innovation and
risk taking may be more conducive to transformational
leadership and they could show better performance results
than organizations that are too orderly and rigidly structured.
In an earlier article, Elenkov (1995) highlighted the impor-
tance of support for innovation for strategic performance of
Russian aerospace companies. Those companies’ strategic
approaches and performance results were also greatly differ-
ent from the misguided managerial efforts and dismal
performance outcomes generally demonstrated in other sec-
tors of the Russian economy.
Hypothesis 5: Support for innovation will moderate the
relationship between transformational-leadership beha-
viors and organizational performance of Russian com-
panies, as transformational-leadership behaviors will
result in higher performance when support for innovation
is high rather than low.
In addition, it has been suggested that the extent of
transformational leadership may be influenced by group
cohesiveness, because group members could set different
expectations for appropriate behavior, and possibly even
have different beliefs than that of the leader (Podsakoff
et al., 1996). Cohesiveness is considered important because
it has been found to be related to the group’s productivity
(Mullen and Cooper, 1995). Members of highly cohesive
groups also experience satisfaction from interpersonal rela-
tionships. This way, group members may be more likely to
reinforce their leader’s transformational-oriented behaviors,
especially if they are united behind their leader’s vision, and
if they jointly embrace his or her performance objectives. It
should also be noted that group cohesiveness is intuitively
related to collectivism, one of the most important values of
the Russian managerial culture (Holt et al., 1994; Puffer
et al., 1994; Elenkov, 1998).
4.1. Sample
Using data from the 1998 Directory of the State Institute
for Statistics of Russia, a stratified random sample was
drawn from the pool of more than 50,000 private companies
included in that information source. The stratification was
based on geographical location and industry. This way, 350
small single-business private companies, located in five
regions surrounding major industrial centers in the European
part of Russia, were selected. Those industrial centers were
Moscow, Suzdal, St. Petersburg, Novgorod, and Petroza-
vodsk. In an attempt to increase the variability of the
measures, the sample also included managers representing
companies doing business in a wide range of industries
(information services, automotive parts, food, textile and
clothing, financial services, pulp and paper, home appli-
ances, chemical, pharmaceutical, computer services, elec-
trical equipment, and electronics industries). While the
industries in which these organizations operate vary, all of
these companies are comparable in that they are all small,
privately owned firms, consisting primarily of well-edu-
cated, professional employees.
The focus of this study was set on small single-business
companies, that is, companies employing 50 people or less
and offering products and/or services in a single industry
sector, for two main reasons: First, such companies have
generally short histories, and the influence of organizational
factors on perceptions of leadership behaviors (potentially, a
threat to construct validity) may be considered to be rela-
tively low in those cases; Second, managers in each one
of those companies face similar environmental pressures
and/or opportunities. Therefore, the respondents’ percep-
tions concerning leadership behaviors would be relatively
less contaminated by environmental influences, which in a
country such as Russia may be a crucial factor (e.g., Holt
Table 1
Distribution of the Russian companies (n = 350)
By industry
Information and Computer Services 56
Financial Services 21
Electronics and Electrical Equipment 52
Home Appliances 44
Automotive Parts 27
Food 59
Textile and Clothing 42
Pulp and Paper 23
Chemical and Pharmaceutical Products 26

Hypothesis 6: There will be a positive relationship By geographic region

between group cohesiveness and transformational-lea- Moscow 99
dership behaviors in Russian companies, as stronger Suzdal 65
group cohesiveness will be associated with a higher St. Petersburg 80
degree of transformational-leadership behavior than will Novgorod 52
weaker group cohesiveness. Petrozavodsk 54
 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
et al., 1994). Table 1 provides information about the Russian
companies included in the study.
Each one of the selected private companies was ap-
proached with a request to identify a top manager willing
to participate. That request was made in a letter signed by
one of the Vice Presidents of the Russian Chamber for
Commerce and Industry. Upon agreement to participate, up
to three of the top manager’s immediate subordinates were
also identified. This way, 950 Russian managers were
contacted to fill in the research questionnaires. Due to the
involvement of an influential government official in the
implementation of the sampling plan, 751 respondents (253
senior managers and 498 immediate subordinates) returned
completed and usable questionnaires. Thus, the overall
response rates were 84% (n = 253) for senior managers
and 77% (n = 498) for followers. Those participants were
either CEOs, corporate managers responsible for different
functional areas, business-unit directors, or deputy directors.
Managers ranged in age from 27 years to 65 years, with the
average age being 45.5 years. More than 90% (91.8%) of
the respondents had obtained a college degree, with ap-
proximately one-third of those holding advanced degrees
(comparable to Master’s or PhD degrees in the United
States). Professionalism was generally high in the sample,
with almost two-thirds (66%) of the respondents indicating
that they belonged to a professional organization.
4.2. Procedure
Data collection was done by using two questionnaires.
Both questionnaires were translated into Russian and back-
translated into English until there was an agreement among
translators that the English and Russian versions were
compatible. Participants were told that there were no right
or wrong answers, but that their opinions mattered. Thus,
the subjects were encouraged to provide their responses by
saying how they truly felt about each item.
The first questionnaire was designed to obtain structured
data about organizational performance (OPQ). It was sent to
the executives identified as contact managers (i.e., the lea-
ders). The second questionnaire consisted of four parts seek-
ing information about demographic characteristics, leadership
behaviors, support for innovation, and group cohesiveness. It
was sent to the identified subordinates of the contact man-
agers. This way, data were gathered from both top managers
and their immediate subordinates, i.e., the followers.
The survey questionnaires were administered to the
respondents in their work settings during normal working
hours. Included with each packet was a letter indicating the
general nature of the research project and assuring all
respondents that their individual responses would remain
anonymous. The second questionnaire was sent first. Six
months later, the identified leaders were asked to complete
the OPQ, in order to collect information about organiza-
tional performance. By using this procedure, the problem of
common-method bias was minimized. In addition, the
473
hypothesized relationships were examined over an extended
period of time, and this can also be considered an improve-
ment over most of the previous leadership research. Com-
pleted surveys were mailed directly by the respondents in
pre-addressed stamped envelopes.
4.3. Measures
A great deal of effort was made in this study to select or
develop measurement instruments, which took into account
the specificity of cognitive abilities of Russian managers,
and which would greatly minimize common-method biases.
4.3.1. Leadership behavior
Leadership behavior was measured with Bass and Avo-
lio’s (1990) Multifactor Leadership Questionnaire (MLQ)-
Form 10, which became a part of the second questionnaire
in this study. The original version of MLQ was developed
by Bass (1985) who generated a total of 142 items of
leadership behavior by a literature search and in an open-
ended survey of 70 senior executives. A response allocation
analysis pared the 142-item list down to 73 items. Principal
components factor analyses of the 73 items resulted in three
transformational and two transactional factors providing
scales with acceptable reliability.
Previous research using the original version of MLQ has
been criticized on the grounds that both leadership beha-
viors and effects were assessed in the same measure (e.g.,
Howell and Avolio, 1993). As subordinates provided both
the transformational leadership ratings and the criterion
ratings, the results could have been potentially biased by
same-source data. Therefore, a decision was made to follow
the approach of Howell and Avolio (1993) and to use Bass
and Avolio’s (1990) MLQ-Form 10, which included only
items measuring leadership behaviors.
The three scales used to measure transformational leader-
ship were (a) charisma (sample item: ‘‘he/she makes me go
beyond my self-interests for the good of the group’’), (b)
intellectual stimulation (sample item: ‘‘provides reasons to
change my way of thinking about problems’’), and (c)
individualized consideration (sample item: ‘‘spends time
coaching me’’).
The scales measuring transactional leadership were (a)
contingent reward (sample item: ‘‘gives me special recogni-
tion when my work is very good’’), (b) active management
by exception (sample item: ‘‘is alert for failure to meet
standards’’), and (c) passive management by exception
(sample item: ‘‘things have to go wrong for him or her to
take action’’). Participants in the study were asked to judge
how frequently their manager engaged in specific leadership
behaviors. Each behavior was rated on a five-point Likert
scale ranging from not at all (0) to frequent if not always (4).
4.3.2. Support for innovation
In order to measure the degree of support for innovation
in the participating Russian companies, items originally
474 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
developed by Siegel and Kaemmerer (1978) were used.
Based on data collected during a pilot study involving 15
Russian students at a major US university, principal com-
ponents analysis of Siegel and Kaemmerer’s items, yielded
one factor, labeled organizational support for innovation,
which accounted for 85% of the common variance. Each
item was rated on a four-point scale ranging from strongly
disagree (0) to strongly agree (3).
4.3.3. Group cohesiveness
Group cohesiveness was assessed by using a scale which
included five items originally proposed by Kerr and Jermier
(1978). Kerr and Jermier offered six items that could
measure the degree to which work groups were closely knit
and cohesive. Taking advantage of data provided by the
above-mentioned group of Russian students, it was found
that one of Kerr and Jermier’s original items had a very low
item –total correlation. That item was accordingly excluded
from the research instrument.
4.3.4. Organizational performance
The measure of organizational performance represented
the degree to which a company achieved its business
objectives. In order to develop an adequate measure of
organizational performance of Russian companies, a second
pilot study was conducted. A group of 38 Russian business
executives enrolled in a management seminar were asked to
identify business objectives common for most Russian
companies irrespective of their industry. A list of 29 ob-
jectives was prepared. A response allocation analysis aimed
at identifying the most essential business objectives of
Russian companies pared the 29-item list down to seven
items. This way, the Organizational Performance Question-
naire (OPQ) was constructed incorporating seven items
designed to assess the degree to which each one of the
seven business objectives identified through the response
allocation analysis was achieved.
4.4. Statistical analysis
A hierarchical regression analysis was used to test the
first hypothesis. The hierarchical multiple regression model
is very useful to assess the effect of some major set of
variables after a prior set of variables has been held constant
(e.g., Tabachnick and Fidel, 1983). This way, we could enter
variables of major importance on later steps, with lesser
variables given highest priority for entry. This technique
allows to evaluate the major set for what it adds to the
prediction of the criterion variable over and above the lesser
set — a methodological feature of critical importance for
testing Hypothesis 1.
Partial least squares (PLS) model was used to conduct
statistical data analysis for testing 2a – c, 3, 4a and b, 5, and
6. It has been regarded as a powerful multivariate analysis
technique that is ideal for testing structural models with
latent variables (Wold, 1985; Howell and Avolio, 1993).
Besides, PLS has been praised as a technique that belongs to
the second generation of multivariate data analysis techni-
ques (Fornell, 1982). In essence, PLS maximizes variance
explained in either the measurement model, the structural
model, or both, depending on the decision made with
respect to the epistemic relationships between constructs
and measures (Fornell and Bookstein, 1982). PLS has also
been found to be a highly effective procedure for first
establishing the construct validity of the research instrument
and then determining how well each of the independent
variables and covariates predicted performance outcomes
(Howell and Avolio, 1993).
4.5. Results
Construct validity of all measurement instruments was
actively sought. As the content validity of a set of measure-
ment operations refers to the degree to which those opera-
tions measure the characteristics that are necessary to
measure, as judged from the appropriateness of the content
of those operations, the aid of the group of 15 Russian
students used during the development of the Support for
Innovation scale together with the help of 15 US business
students enrolled in a major US university was solicited
prior to the actual data collection. All measurement instru-
ments were thoroughly examined and, then, their validity
assured, based on the general expertise of the 30 participants
in this pilot study.
Psychometric analysis revealed that the MLQ’s scales
had Cronbach’s alphas ranging from 0.78 (for charisma) to
0.71 (for intellectual stimulation) and an average item – total
correlation of 0.68. Cronbach’s alpha for the Support for
Innovation Scale was 0.91, and the average item – total
correlation was 0.69. The reliability of the Support for
Innovation Scale was also assured by employing the
‘‘split-half’’ method (Zikmund, 1994). Cronbach’s alpha
for the adapted Group Cohesiveness Scale was 0.71, and
the average item – total correlation was 0.60. The reliability
Table 2
Correlation between transformational and transactional leadership factor
scores (n = 498) and organizational performance ratings (n = 253)
Transformational
Charisma .80**
Individualized consideration .71**
Intellectual stimulation .61**
R .81
Transactional
Contingent reward .30**
Passive management by exception .21*
Active management by exception .27*
R .47
Transformational + transactional .85
F 101.62
* P < .05.
** P < .005.
 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480 475

Table 3 Table 3 displays the results of testing 2a– c, 3, and 4a and

Partial least squares analysis of the relationship between leadership
(n = 498) and organizational performance (n = 253)
Standardized
Hypothesis and proposed path path
Hypothesis 2a: Charisma ! performance 0.28
Hypothesis 2b: Individualized 0.16
consideration! performance
Hypothesis 2c: Intellectual stimulation 0.15
! performance
Hypothesis 3: Contingent reward 0.19
! performance
Hypothesis 4a: Passive management by 0.11
exception ! performance
Hypothesis 4b: Active management by 0.12
exception ! performance
** P < .005.
of the Organizational Performance Scale was also found to
be satisfactory, as the Cronbach alpha for that scale was
0.73, and the average item – total correlation was 0.61.
Table 2 shows the correlations between transformational
and transactional-leadership behaviors and organizational
performance ratings. As it can be seen, correlations between
the transformational-leadership factors and organizational
performance ratings were high (0.80 to 0.61, P < .01),
whereas correlations between the transactional-leadership
behaviors and organizational performance were relatively
low (0.30 to 0.21, P < .01). The multiple correlation for the
transformational variables predicting performance (0.81) was
significantly higher than the multiple correlation for the
transactional factors (0.47). A hierarchical regression analy-
sis was used to test Hypothesis 1. Transactional factors were
entered first into the regression equation, transformational
factors were entered second, and an F test was computed to
determine whether the transformational factors added sig-
nificantly to the prediction of the criterion. The F ratio of
101.62 (df = 3, 246; P < .01) supported the first hypothesis.
b by using PLS analysis of the unmoderated model. As it
was predicted, there were positive and significant paths
t(252)
from charisma, individualized consideration, and intellec-
tual stimulation to organizational performance. Thus, Hy-
15.89**
6.81**
pothesis 2a –c were all supported. In line with the prediction
of Hypothesis 3, contingent reward was significantly and
6.69** positively related to organizational performance. Contrary to
Hypothesis 4a and b, there were significant positive rela-
9.28** tionships between both active and passive management by
5.98**
exception and organizational performance. Consequently,
those two hypothesis were rejected. The total variance
6.05** explained in organizational performance by contingent
reward, active management-by-exception, passive manage-
ment-by-exception, charisma, individualized consideration,
and intellectual stimulation was 41%.
Hypothesis 5 predicted that support for innovation would
moderate the relationship between charisma, individualized
consideration, intellectual stimulation, and organizational
performance. This hypothesis was supported by data pre-
sented in Table 4. The charisma –performance relationship
was positive for both high and low support for innovation.
As it was hypothesized, the relationship was significantly
stronger under high support for innovation as opposed to
low support for innovation, t = 16.63, P < .01. Similarly, the
path between individualized consideration and performance
was positive for both high support for innovation and low
support for innovation. In line with the prediction of
Hypothesis 5, the path under high support for innovation
was significantly stronger than the path under low support
for innovation, t = 10.29, P < .01. There was a positive
relationship between intellectual stimulation and perfor-
mance under high support for innovation, while there was
a negative relationship between these variables under low
support for innovation. Besides, this difference in path
coefficients was significant, t = 19.87, P < .01.

Table 4
PLS analysis of the moderated model (n = 160)
High SFI Low SFI
Hypothesis and proposed path standardized path t(79) standardized path t(79)
Contingent reward ! performance 0.20 5.01** 0.11 3.89 *
Passive management by exception 0.05 1.02 0.12 3.98 *
! performance
Active management by exception 0.07 1.57 0.13 4.10 *
! performance
Hypothesis 5: Charisma ! performance 0.49a 6.27** 0.31 5.68**
Hypothesis 5: Individualized consideration 0.28a 5.30** 0.15 4.29**
! performance
Hypothesis 5: Intellectual stimulation 0.30a 5.48**  0.02  0.09
! performance
Hypothesis 6: Group cohesiveness 0.03 0.17 0.05 1.03
! charisma
Individualized consideration 0.38a 5.78** 0.20 5.02**
Intellectual stimulation 0.29a 5.41** 0.11 3.91**
a
The difference in path coefficients was significant at P < .05.
* P < .05.
** P < .005.
476 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
As can be seen from the data displayed in Table 4,
Hypothesis 6 was generally supported. In the moderated
model, the paths from group cohesiveness to individualized
consideration and intellectual stimulation were positive and
significant. Moreover, the paths under high support for
innovation were stronger than the paths under low support
for innovation and the differences in path coefficients were
significant at P < .01. The group cohesiveness – charisma
relationship was positive for both high and low support
for innovation. However, the path from group cohesiveness
to charisma was stronger under low support for innovation
than under high support for innovation (although those
results failed to reach statistical significance at P < .05). In
the moderated model, the total variance explained in orga-
nizational performance by contingent reward, active man-
agement-by-exception, passive management-by-exception,
charisma, individualized consideration, and intellectual sti-
mulation was 69%. The variance explained in charisma,
individualized consideration, and intellectual stimulation by
group cohesiveness was 0.01, 0.18, and 0.15, respectively,
in the low moderated model, and 0.00, 0.27, and 0.20,
respectively, in the high moderated model.
5. Discussion
This study has been the first one to empirically test
whether transformational- and transactional-leadership
behaviors predicted organizational performance at the com-
pany level in Russia over an extended period while con-
sidering key contextual factors as moderators. Hence, one
advantage of this research project is that it investigated
concurrently the main effects of the transformational- and
transactional-leadership behaviors on organizational perfor-
mance of Russian companies; the moderating effects of
support for innovation on the relationship between the
transformational-leadership behaviors and organizational
performance; and the impact of group cohesiveness on
transformational-leadership behaviors in a Russian context.
Another advantage of this study is that survey data were
collected 6 months before the collection of criterion data,
rather than simultaneously or retrospectively. Furthermore,
it should be noted that the study was concentrated on the
effects of transactional leadership, transformational leader-
ship, support for innovation, and group cohesiveness at the
organizational level, rather than the level of the individual.
An additional advantage of the current study was that the
criterion which was used to measure organizational perfor-
mance included the potential for companies to exceed
expected levels of performance. This methodological
approach enhanced the degree to which measures of trans-
formational leadership could predict organizational perfor-
mance. The data collection approach implemented in this
study also minimized the possible biasing effects on results
associated with collecting all the data from a single source,
and the measurement instruments used in the study were
selected or developed with due account of the specificity of
cognitive abilities of Russian managers. Consequently, the
results presented in this manuscript represented the predic-
tion of organizational performance over an extended period
of time, and they were obtained by using innovative
methodological approaches. Thus, these results can be used
to draw conclusions concerning finding new effective ways
to promote OD in Russia.
It is worth mentioning that the empirical test conducted
in this study demonstrated that transformational leadership
directly and positively predicted organizational performance
of Russian companies over and beyond the impact of
transactional leadership. Moreover, transformational beha-
viors proved to be more effective than exchange-oriented
leadership behaviors for enhancing organizational perfor-
mance of those companies. In addition, the research project
indicated that Russian leaders who displayed more char-
isma, individualized consideration, and intellectual sti-
mulation positively contributed to the achievement of
organizational goals. Given the predominantly collectivist
nature of the Russian culture (e.g., Puffer et al., 1994;
Elenkov, 1998), the weakness of market signals, and the
environment of uncertainty in today’s Russia, one could
understand why, in particular, charismatic leadership proved
to be effective in that country. Most importantly, these
results suggest that Russian managers need to develop
transformational-leadership behaviors for a more effective
leadership profile and for achieving a higher level of orga-
nizational performance.
In a prior study, Luthans et al. (1998a) used a meta-
analysis and generalized observations to present an argu-
ment, however, against the application of transformational
leadership in Russian companies. One could possibly
explain this difference in leadership research findings by
taking into account the great difference in methodological
approaches that were implemented in the two studies.
Besides, the empirical evidence provided by the present
study showed that transformational- and transactional-lea-
dership behaviors could be displayed by the same Russian
manager in different amounts and intensities while also
complementing each other. That is, the present research
was not exclusively concentrated on the impact of transfor-
mational-leadership behaviors on organizational perfor-
mance, and it further emphasized the importance of the
effects of transactional leadership behaviors, support for
innovation, and group cohesiveness on organizational per-
formance of Russian companies.
In particular, the results of the present study indicated
that Russian managers who displayed more contingent-
reward leadership and management-by-exception behaviors
also made a positive contribution to the achievement of
organizational goals. One could understand those results by
referring to the likely behavioral consequences of the years
of authoritarian rule in Russia. History and traditions could
have influenced present-day Russian managers to willingly
endorse transactional styles of leadership alongside trans-
 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
formational-leadership approaches. In addition, the research
findings showed that support for innovation significantly
moderated the relationship between transformational leader-
ship and performance. Group cohesiveness proved, in turn,
to be positively related to the ratings of transformational
leadership. Thus, it has appeared that OD approaches that
provide for a strong support for innovation and which
enhance group cohesiveness may, all other things being
equal, contribute to improving organizational performance
of Russian companies.
Because most of prior research generally showed a
negative relationship between management-by-exception
leadership and performance, it was somewhat surprising to
obtain a positive relationship in this study. The present study
was not, however, the first one to find a positive relationship
between the above-mentioned two variables. In an earlier
article, Podsakoff et al. (1984) suggested that leaders who
used contingent negative, or aversive, reinforcement, which
represented the more active form of management-by-excep-
tion, could enhance follower performance if their criticism
was perceived as fair, if it clarified performance standards,
or modified poor performance in an acceptable way to avoid
aversive consequences.
As it has already been mentioned, the results of this study
also demonstrated that the relationship between transforma-
tional leadership and organizational performance was mod-
erated by support for innovation. Notably, each one of the
three transformational leadership behaviors was associated
with a higher level of performance when support for
innovation was also stronger. Therefore, Russian companies
should be able to achieve some important strategic syner-
gies, as well as much more significant improvements in
organizational performance, by combining policies designed
to provide a stronger support for innovation with OD
techniques designed to encourage transformational-leader-
ship behaviors.
These empirical results can further be taken into
account to suggest new effective ways for Russian com-
panies to make positive changes in their organizational
systems in search for better performance results. For this
purpose, OD, or the application of behavioral science
knowledge in a systematic and long-range effort to
improve organizational effectiveness (e.g., French and Bell,
1995) can clearly benefit Russian companies. In particular,
OD techniques could be helpful to Russian organizations
in coping with environmental constraints while simulta-
neously enhancing their own internal problem-solving
capabilities. Due to the great advances that have been
made in OD theory and practice in the West, Russian
companies can now select from a wide variety of OD
techniques. The outcome goals of these techniques would
focus on better organizational performance, whereas the
process goals of these techniques would focus on impro-
ving the way people work together, including making
appropriate changes in leadership behaviors, stimulating
innovation, and enhancing group cohesiveness.
477
Various OD programs developed and originally applied in
the West such as those of Conger and Kanungo’s (1988)
Training in Charismatic Competencies Program, or Avolio
and Bass’ (1991) Full Range of Leadership Development
Modules can be used to train Russian managers in the
transformational – transactional-leadership paradigm. These
programs could promote self-understanding, awareness, and
appreciation of the range of potential leadership behaviors
used by both effective transformational and transactional
managers (Bass, 1997). For example, Conger and Kanungo’s
(1988) program could help Russian leaders develop and learn
five critical competencies: critical evaluation and problem
detection; envisioning; communication skills for conveying a
vision; impression management; and knowing how and when
to empower followers. In particular, employee empowerment
can be enhanced, if Russian managers develop and learn the
competence of knowing how to improve participation in
decision making; set meaningful goals; communicate high
performance expectations; remove bureaucratic constraints;
and apply appropriate systems of reward.
Full Range of Leadership Development Modules (Avolio
and Bass, 1991; Bass, 1997) could provide vital knowledge
concerning transformational and transactional leadership
conceptualizations along with target-skill training to Rus-
sian managers. The modules focus on the philosophy of
transformational and transactional leadership; learning about
alternatives that are conducive to improving oneself, as well
as one’s followers; action learning through simulations and
exercises dealing with real issues, dilemmas, and problems
encountered by the trainees back home; and adapting,
adopting, and internalizing the new ways of thinking and
acting. This training program, in essence, stresses that there
are numerous ways to be a transformational and transac-
tional leader, and that one must be both. The ultimate goal
is, however, to reduce one’s management-by-exception and
to increase components of one’s transformational leadership.
Process consultation (PC), another OD technique origi-
nated in the West, could also be useful to Russian managers
in developing and learning transformational-leadership
skills. The main purpose of PC is for the outside consultant
to assist the manager to perceive, understand, and act upon
process events (Schein, 1969). PC expert could work with
Russian leaders in jointly diagnosing what processes need
improvement. It is worth mentioning that the process con-
sultant need not be an expert in solving the particular
problem that is identified. Her or his expertise lies in
diagnosis and developing a helping relationship. If a given
problem requires technical knowledge outside the leader’s
and consultant’s expertise, the consultant usually helps
locate such an expert and then provides detailed instructions
about how to get the most out of this expert resource
(Robbins, 1998).
Furthermore, Russian companies could, benefit from
some other modern OD approaches designed to promote
positive changes in leadership behaviors and interpersonal
communications. With regard to this, it should be noted that
478 D.S. Elenkov / Journal of Business Research 55 (2002) 467–480
sensitivity training, or T-groups, has been recognized as an
effective method of changing behavior through unstruc-
tured group interaction. The objectives of the T-groups are
to provide the trainees with increased awareness of their
own behavior and how others perceive them, greater
sensitivity to the behavior of others, and increased under-
standing of group processes. For this purpose, Russian
trainees could be brought together in a free and open
environment in which they could express their leadership
ideas, beliefs, and attitudes. Specific results that may be
obtained by Russian managers would include improved
listening skills; greater openness; increased tolerance of
individual differences; and improved conflict resolution
skills. Moreover, sensitivity training would lead to greater
group cohesiveness, which, as the empirical tests indicated,
could further promote transformational leadership behaviors
in Russian companies.
Team building and intergroup training approaches could
also be helpful to Russian companies in their OD efforts.
Team building has recently gained popularity in the West as
an effective method of improving relationships within work
groups. Team building could possibly result in enhanced
group cohesiveness and a higher organizational capacity to
achieve process gains. Intergroup training takes team build-
ing one step further and uses it to improve the ways different
functions or project teams work together.
There are many approaches that could be used to conduct
team building and intergroup training in Russian companies.
For example, Russian trainees may be involved in a discus-
sion mediated by an expert group facilitator on the quality of
the interpersonal relationships among team members and
between the members and their leader. On the other hand,
Russian companies could try to improve the effectiveness of
interdependent functions through reengineering and reorga-
nizing the way people from those different functions work
together. Concurrent engineering may, in turn, stimulate
innovation, as new ideas will be given the chance to obtain
a faster organizational approval. This way, Russian compa-
nies could achieve significant gains in organizational per-
formance, as the hoped-for positive changes in leadership
behaviors, support for innovation, and group cohesiveness
could result in important intraorganizational synergies.
Some of the limitations of the study are those commonly
associated with field research, particularly in Russia. For
example, one of the limitations of the study is the self-
selection of geographical regions of the European part of
that country into a purposive sample. In addition, the
outcomes of the project depended upon top executives’
reports identifying their immediate subordinates. The results
of the study might also be influenced by the followers’
reports concerning their perceptions of their leaders’ beha-
viors. It is a common knowledge that individual perceptions
can be greatly affected by a host of variables at industry,
organizational, and individual levels, but data concerning
those variables were either unavailable or prohibitively
costly to obtain. To be sure, every effort has been made
to assure content validity of the measurement instruments
(see Results).
Another limitation of the current study concerns the
assumption about the transferability of Western manage-
ment and organizational techniques to Russia. According to
Holt et al. (1994), the Russians are not willing to directly
and unconditionally adopt Western managerial systems and
approaches. Therefore, further research is necessary to
determine which OD techniques will show an adequate
degree of compatibility with the dominant values of the
Russian managerial culture. More attention should also be
paid to the ways through which the targeted OD techniques
may be adapted to fit the requirements of the Russian
business environment.
Leadership research on Russia should also reveal whe-
ther there are other important moderators of the relationship
of leadership behaviors to organizational performance, or
whether there are other organizational and/or individual
characteristics which, if changed, could influence the adop-
tion and internalization of transformational-leadership beha-
viors. Clearly, additional research into the dynamics of the
leadership behaviors – contextual factors – organizational
performance is needed in the future. Further research is also
necessary to test whether the results of the current study
generalize to other cultures.
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