Role of Leadership in Enhancing the Effectiveness of Training Practices: Case of Indian Information Technology Sector Organizations

Abstract

In the current digital era, data-driven business activities are increasingly becoming more important and effective. In such an augmented scenario, the researchers are inquisitive about how new leaders should handle the primary organizational inputs like training. Training is obviously required for getting the optimal benefits of digital transformation. These activities have become an indispensable strategic tool for enhancing the performances and efficiency of the employees and the overall effectiveness of the organization. Existing literature shows that the effective utilization and continuance of training practices largely depends upon the leadership styles of the organization. In light of the above, our present study focuses to assess the role of leadership in terms of transformational and transactional, in enhancing the overall effectiveness of training practices, particularly in the Indian IT sector organizations. The present study covered five Indian IT sector organizations and came up with conclusions that training does not directly enhance the innovation activities of an organization but has a strong positive bearing on employee efficiency. The study further reveals that the training activities under the transactional leadership pay off at the operational level while under the transformational leadership, it pays off at the strategic level.

Keywords

Digitization effectiveness of training practices IT sector organization leadership style training practices

List of Abbreviations Used in This Article

AVE: Average Variance Explained, CFA: Confirmatory Factor Analysis, CR: Composite Reliability, CRW: Contingent Rewards, DV: Discriminant Validity, EE: Employee Efficiency; IC: Individual Consideration; IIB: Idealized Influence Behaviours; IM: Inspirational Motivation; IN: Innovation, IS: Intellectual Stimulation; KME: Knowledge Management Effectiveness, MBE: Management By Exception, PCA: Principal Component Analysis, TFL: Transformational Leadership, TRG: Training; TRL: Transactional Leadership.

Introduction

In the contemporary economy, the performance, competitiveness, and innovativeness of an organization largely depend upon the knowledge, skills and competence of its workforce (Lawler, 2005; Wong & Aspinwall, 2005). These days, knowledge is believed to be one of the most strategic resources that need to be exploited and managed well in every organization to facilitate the sustenance of their business value (Alavi & Leidner, 2001; Davenport & Prusak, 1998; Lindner & Wald, 2011). The appropriate management of knowledge would lead an organization to gain a competitive edge over the others as it is difficult to replicate (Conner & Prahald, 1996; Tyre & von Hippel, 1997). As a consequence, organizational learning and continuous improvement are now considered as indispensable tools for an organization to remain competitive (Salas & Cannon-Bowers, 2001).

Training is one of the most significant organizational interventions to foster the individual as well as organizational learning process (Swieringa & Wierdsma, 1992). It has become essential for an organization to invest in the training activities and upgrade the skills of their workforce in order to deal with the rapidly changing environment. One of the most significant influencers in this regard is leadership or managerial support. It is essential for the leaders to cultivate an organizational climate that is conducive to sustain the training initiatives, learning, and support professional development.

The IT organizations are increasingly using the various data-intensive technologies due to the recent setting up of digitization (McKinsey Global Institute report, May 2011)¹. These organizations are trying hard to gain a competitive edge and it is difficult to achieve this without improving upon the employees’ knowledge, skills, competencies, etc. through adequate and suitable training programmes. Thus, in order to optimally utilize their workforce towards attainment of the organizational goals, the IT organizations need regular, systematic, latest and advanced training programmes.

Literature Review

Training

Employees are a crucial asset of any organization. Today even in the era of digitization, the survival of any organization primarily lies in its capability to train its employees to be ingenious and adaptive, which would consistently improve their performances and provide them a competitive edge over the others (Lynton & Pareek, 2000; Vemić, 2007). Training is used to transfer and share the relevant skills, knowledge and competence among the employees, team members, and across the organization to improve employees’ performance on their current jobs as well as future assignments (Katou & Budhwar, 2006). Training helps in enhancing the knowledge, skills, and competence levels of the employees that eventually enables them to improve upon their ability to perform well and an inefficient manner (Palo & Padhi, 2003). Training plays an imperative role in enhancing the efficacy of an organization as well (Devi & Shaik, 2012; Goldstein & Ford, 2002). Training unlocks the opportunities towards potential growth and development leading the organizations to accomplish their mission and gain a competitive edge over the others. The absence of suitable training programmes may make it difficult to add value to any organizational business processes which may eventually make it obsolete (Becerra-Fernandez & Leidner, 2009).

Leadership

Leadership is a process of societal influence. It engages shaping the group or organization’s goals, encouraging behaviour to accomplish such objectives, and influencing the maintenance of group and culture (Portugal & Yukl, 1994). Leadership in knowledge organizations is mainly relevant when the followers perceive their leaders to be aggressively engaged and committed towards knowledge and learning activities (DeTienne et al., 2004). According to Ribiere and Sitar (2003), leaders in knowledge-intensive organizations must guide employees to learn and apply knowledge. Leaders may also help to encourage and facilitate the process of collective learning, knowledge dissemination, and the application of innovative ideas in the organization (Senge, 1990; Vera & Crossan, 2004).

The present transformation and modernization of the organizations have raised immense concern (Bass, Jung, Avolio, & Berson, 2003; Coad & Berry, 1998). Leaders are making frenetic attempts such as innovation, re-engineering, re-structuring, refocusing, etc., to adapt to the changing scenario. These efforts require strong and dynamic leadership. Consequently, leadership approach has gradually changed from knowledge gatekeeping to knowledge creation and knowledge dissemination for all employees (Politis, 2002). The effectiveness of leadership, however, depends upon the characteristics of the leader, attitude of the employees (followers) and the nature of interactions between the leader and the followers.

There are several theories on leadership such as trait theories, behavioural theories, and contingency theories, etc., which have contributed a lot to an understanding of leadership. The traits theory has attempted to identify the specific characters (physical, mental, personality) connected with leadership success; based on the research that various traits lead to success criteria (Northouse, 2001; Yukl & van Fleet, 1992). Trait theories presume that successful leaders are ‘born’ and they have some inherent qualities which discriminate them from the non-leaders (Stodgill, 1948). The biggest limitation of this approach is that most studies did not consider the impact of the situational aspects. Behavioural theorists have stressed on developing a better view of what leaders do in reality and how such behaviours are associated with the competence levels of the leaders. The limitation of this approach is that it has not satisfactorily established how a leaders’ behaviour is linked with the various performance outcomes such as morale, job satisfaction, and efficiency (Bryman, 1996; Yukl, 2006).

The thought that leadership style or behaviour should get modified as per the specific requirement of particular circumstances has led to the development of Situational or Contingency theories. The fundamental hypothesis of these approaches is that no particular method will always be the best method. The leadership style may get continuously changed on the basis of the various situational aspects such as personalities of the leaders, power of the leaders, level of acceptance of the leader by their followers, knowledge and skill of the followers, the job to be done, the urgency and/or importance of the job, etc.

The two most well-known leadership theories are Transformational and Transactional leadership theories. These theories are an integral part of the Full Range Leadership Model focusing on the behaviour of leaders towards the employees in different job conditions (Bass & Avolio, 1991). Transactional leaders are acknowledged as very instrumental and are found to have an exchange relationship with their followers (Bass & Avolio, 1993). On the contrary, the transformational leaders are known to be visionary and passionate and have an innate capability to positively stimulate their followers (Bycio et al., 1995; Howell & Avolio, 1993).

Transformational leadership approach includes leadership skills such as idealized influence behaviour (leaders make the followers visualize the goals and the mission of the organization, instils pride, and earns respect and confidence); inspirational motivation (the huge expectations and the important intentions of the leaders are communicated in a very easy manner to the followers); intellectual stimulation (leader’s ability to encourage intelligence, prudence and new ways of approaching and solving problems) and individual consideration (treating every person separately, paying attention to his or her problems, coaching and advising personally) (Bass, 1985, 1999; Bass & Avolio, 1993, 1994, 1995; Bass et al., 1987; Conger et al., 2000; Judge & Bono, 2000; Pounder, 2001; Sosik et al., 1998; Yammarino et al., 1993). Transformational leadership approach is more commonly exhibited among the top ranks of an organization (Avolio et al., 1991). The supremacy of this leadership lies in envisioning the opportunities and threats for the organization. They attempt to transform the organization by identifying and explaining the need for change, articulating the vision, convincing the followers about the feasibility of the vision, and expressing confidence in their capability to accomplish that vision (Bass & Avolio, 1993; Tichy & Devanna, 1986). Such a leadership approach expresses concern towards the growth of creativity, and innovativeness of their followers (Bass & Avolio, 1993; Howell & Avolio, 1993).

Alternatively, Transactional leadership is based on exchange relationship. It is either displayed in the form of contingent rewards in which the followers are made to perform certain tasks against some ‘rewards or punishments’ or is displayed in the form of management-by-exception, in which either the follower’s performances are regularly monitored and suitable corrective actions are taken or no interference is made until the problems arise (Bass, 1985, 1998, 1999; Bass & Avolio, 1994; Burns, 1978; Northouse, 2001; Yammarino et al., 1993). Most of the existing theories on leadership, such as the Ohio State studies, Fielder’s model, etc. opine that leaders behave in a transactional way with their team members (Bass, 1985, 1990; Robbins, 2001). Effective transactional leaders are observed to often accomplish the expectations of their followers (Kuhnert & Lewis, 1987). Transactional leaders are found to provide organizational members with certain official systems and training programmes that help in disseminating the existing knowledge to guide future events and decisions (Vera & Crossan, 2004).

Overview of the Sector

Indian IT sector organizations are betting big on digitization and automation. Digitization, internet of things, machine learning, artificial intelligence, etc., will continue to dominate the industry in future (NASSCOM, 2011)². Digitalization has increased the demand of information management specialists leading to a widening skill gap. The companies and policymakers are facing a huge scarcity of the analytical and managerial talent essential to reap the optimal benefits of digital transformation. To train the manpower and adopt the new-age technologies such as artificial intelligence, block-chain, cyber-security, machine learning, etc. remains the greatest challenge for the Indian IT organizations (CEO, Tech Mahindra, 2018)³. Other challenges consist of the need to ensure the availability of appropriate infrastructure, the right culture, incentives, and competition to promote continued innovation, to provide economic benefits to the organization and the clients. Indian software companies are facing a massive challenge to align the rapidly evolving technologies with their business objectives. Thus, the organizations and policymakers need to address the various organizational inputs especially the training activities, if they want to capture and utilize the full potential of digital business.

Research Gap

The above review of the literature reveals that the digital transformation has led to a considerable skill gap among the employees of the Indian IT sector organizations and that this skill gap needs to abridged by implementing some adequate and suitable interventions such as training programmes. Additionally, though the existing literature demonstrates that the leadership behaviours are widely held to be a major influencer to training activities, but very limited empirical study has been done so far to assess the role of transactional and transformational styles in enhancing the overall effectiveness of training practices. Thus, the present study attempts to assess the role of two specific leadership styles namely transactional and transformational, in enhancing the overall effectiveness of training practices in the Indian IT sector organizations especially in the context of the present digital transformation.

Objectives of the Study

The objectives of the present study are:

To assess the existing dominating leadership style in terms of transactional and transformational approach for the leaders of the Indian IT sector organizations under study.

To assess the effectiveness of the training practices of the organizations under study in terms of employee efficiency.

To assess the effectiveness of the training practices of the organizations under study in terms of innovation.

To separately assess the role of transformational and transactional leadership approaches in training practices.

To find out the relationship among training practices, the effectiveness of the training practices and leadership styles in the context of Indian IT sector organizations.

Important Research Hypotheses

The following set of hypotheses were developed to address the above research gap:

H₁: Transformational Leadership behaviours have a positive impact on the training practices in an organization.

H₂: Transactional Leadership behaviours have a positive impact on the training practices in an organization.

H₃: Training practices enhance the employee efficiency.

H₄: Training practices enhances the innovation.

H₅: Training mediates the relation between the predictor variable Transformational Leadership and outcome variable Employee Efficiency.

H₆: Training mediates the relation between the predictor variable Transformational Leadership and outcome variable Innovation.

H₇: Training mediates the relation between the predictor variable Transactional Leadership and outcome variable Employee Efficiency.

H₈: Training mediates the relation between the predictor variable Transactional Leadership and outcome variable Innovation.

Research Methodology

The present study focuses on the existing training practices of the selected Indian IT organizations under study and its role in improving the overall employee efficiency and innovation of the organization. We would also like to assess the role of leadership in terms of transformational and transactional, in enhancing the effectiveness of the training practices. In the present study, three dimensions were identified for measurement purposes. All these were the perceived values of the employees, currently working in IT organizations. The perceptions of ongoing training practices, leadership styles, and outcomes from the training were the subjects of measurement. The existing scales of measurement namely Multifactor Leadership Questionnaire (MLQ—5X Short Form) (Bass & Avolio, 1997) was used for collecting information on leadership style in terms of transactional and transformational approaches for the organizational leaders under study.

The outcome parameters were identified with the help of a small focused group interview including 12 experts from the IT sector. After a long brainstorming session, two outcome parameters were finally identified namely Employee efficiency and Innovation. Also, a short questionnaire with 5-point Likert scale on the frequency of training and the outcome parameters (Employee efficiency and Innovation) was developed in discussion with the experts from the IT sector. Further, the questionnaires were administered to nearly 600 respondents of five IT organizations and around 393 filled up questionnaires were received. The respondents taken for this study are the middle- and senior-level managers, executives and the person working in technical positions as they have good knowledge about the organizational members, leadership styles, training practices within the organizations and also have a holistic view of the entire organization.

After a successful data collection phase, the validation of the data has been done. Then, several statistical exercises were performed to gain insight into the data sets. These include the distribution of individual variables, correlation between variables, and principal component analysis for the dimension reduction of the data. A major part of the analysis includes regressions, CFA and SEM using PASW and AMOS software. The scale reliability for each construct was measured using ‘Cronbach’s alpha’, which indicated the consistency of the responses across the items within the scale (Table 1).

Table 1.

Reliability Measure of the Constructs

	Construct’s Measurement Scale	Cronbach’s Alpha (No. of Cases: 393)	No. of Items
KM practice	Training	0.842	3
KM effectiveness	Employee efficiency	0.903	4
KM effectiveness	Innovation	0.873	3
Transformational leadership	Intellectual stimulation	0.859	3
	Inspirational motivation	0.889	3
	Individual consideration	0.941	5
Transactional leadership	Contingent rewards	0.881	3
Transactional leadership	Management by exception	0.900	3

Source: Survey data.

Findings of the Present Study

Validation of the Individual Measurement Models

The validation of the individual measurement models of Effectiveness of training practices; Transformational leadership and Transactional leadership were done using confirmatory factor analysis (Figures 1, 2 and 3). The values of the model fit summary of the respective individual measurement models suggest that the models have a good level of fit (Table 2). The values of the construct validity (AVE and CR) suggest adequate convergence and good reliability among the constructs of each individual measurement models (Tables 3). Also, the convergence and discriminant validity matrices (Tables 4 –6) indicates that the items within the same constructs have high correlations, whereas the correlations with the items of the other constructs are poor, indicating that the constructs of the respective individual measurement models of Effectiveness of training practices, Transformational leadership, and Transactional leadership have unique properties and that there exists a good level of internal consistency within the items of the constructs of the respective individual models. Thus, it can be concluded that all the individual measurement models considered in this study are quite robust.

Table 2.

Model Fit Summary of the Constructs^*

Constructs	CMIN/DF	AGFI	CFI	NFI	RMSEA
Training effectiveness	3.115	0.937	0.985	0.978	0.073
Transactional leadership	2.129	0.963	0.994	0.989	0.054
Transformational leadership	2.337	0.932	0.986	0.975	0.058

Note: ^*Training is not included as it is an isolated construct.

Source: Survey data.

Table 3.

Construct Validity*

	Constructs	AVE	CR
KM effectiveness	Employee efficiency	0.705	0.91
KM effectiveness	Innovation	0.706	0.88
Transformational leadership	Individual consideration	0.769	0.94
	Intellectual stimulation	0.985	0.89
	Inspirational motivation	0.734	0.89
Transactional leadership	Contingent rewards	0.715	0.88
Transactional leadership	Management by exception	0.764	0.91

Note: ^*Training is not included as it is an isolated construct.

Source: Survey data.

Table 4.

DV Matrix for Training Effectiveness

	EE1	EE2	EE3	EE4	IN1	IN2	IN3
EE1	1
EE2	0.633 ^**	1
EE3	0.653 ^**	0.742 ^**	1
EE4	0.590 ^**	0.690 ^**	0.882 ^**	1
IN1	0.242^**	0.181^**	0.185^**	0.173^**	1
IN2	0.216^**	0.186^**	0.195^**	0.193^**	0.661 ^**	1
IN3	0.173^**	0.145^**	0.142^**	0.137^**	0.679 ^**	0.766 ^**	1

Note: **Correlation is significant at the 0.01 level (2-tailed). *Correlation is significant at the 0.05 level (2-tailed).

Source: Survey data.

Table 5.

DV Matrix for Transactional Leadership

	CRW1	CRW2	CRW3	MBE1	MBE2	MBE3
CRW1	1
CRW2	0.751 ^**	1
CRW3	0.657 ^**	0.726 ^**	1
MBE1	0.073	0.083	−0.005	1
MBE2	0.129^*	0.142^**	0.142^**	0.690 ^**	1
MBE3	0.149^**	0.155^**	0.149^**	0.675 ^**	0.883 ^**	1

Note: **Correlation is significant at the 0.01 level (2-tailed). *Correlation is significant at the 0.05 level (2-tailed).

Source: Survey data.

Table 6.

DV Matrix for Transformational Leadership

	IS1	IS2	IS3	IM1	IM2	IM3	IC1	IC2	IC3	IC4	IC5
IS1	1
IS2	0.584 ^**	1
IS3	0.572 ^**	0.850 ^**	1
IM1	0.094	0.194^**	0.213^**	1
IM2	0.065	0.216^**	0.245^**	0.780 ^**	1
IM3	0.112^*	0.194^**	0.221^**	0.720 ^**	0.687 ^**	1
IC1	0.112^*	0.229^**	0.292^**	0.207^**	0.269^**	0.245^**	1
IC2	0.097	0.234^**	0.298^**	0.204^**	0.270^**	0.266^**	0.968 ^**	1
IC3	0.115^*	0.157^**	0.245^**	0.157^**	0.224^**	0.219^**	0.833 ^**	0.861 ^**	1
IC4	0.139^**	0.115^*	0.192^**	0.149^**	0.204^**	0.202^**	0.653 ^**	0.655 ^**	0.616 ^**	1
IC5	0.113^*	0.225^**	0.270^**	0.224^**	0.309^**	0.271^**	0.819 ^**	0.843 ^**	0.760 ^**	0.628 ^**	1

Note: **Correlation is significant at the 0.01 level (2-tailed). *Correlation is significant at the 0.05 level (2-tailed).

Source: Survey data.

Figure 1.

Source: Survey data.

Figure 2.

Source: Survey data.

Figure 3.

Source: Survey data.

Relationship Identification

The value of Pearson correlation r between training and employee efficiency was 0.945, and training and innovation was 0.029, reflecting a strong and positive association between training practices and employee efficiency and a very week association between training and innovation (Table 7). The values of Pearson correlation r between leadership and training practices suggest that there is a significant positive correlation between IM and training, CRW and training, IS and training (Table 8).

The detailed picture of the relationships between training and employee efficiency was revealed by the findings of regression analyses as summarized in Table 9. The value of adjusted R² is 0.892. It indicated that 89.2 per cent of the variance of employee efficiency was explained by training. Thus, training is a significantly strong predictor and has a positive influence on employee efficiency. The value of adjusted R² is −0.002 (Table 10) for the regression of training on innovation, indicating that training has no direct influence on innovation.

The detailed picture of the relationships between Transformational Leadership and Training practices was revealed by the findings of regression analyses as summarized in Table 11. The value of adjusted R² is 0.585, indicating that 58.5 per cent of the variance of training practices was explained by the transformational leadership approach. The inspection of standardized coefficients (Beta) values further revealed that IM and IS are the significantly strong predictor and have a positive influence on the training practices; no statistically significant predicting power was found with the other component of transformational leadership. Furthermore, the value of adjusted R² is 0.026 (Table 12) for the regression of transactional leadership on the training practices. This indicates that transactional leadership approach has no statistically significant influence on the training practices.

The findings of regression analysis of transformational leadership on employee efficiency with ‘training’ as mediator reveal that the intervening variable ‘training’ has a mediating effect on the ‘Intellectual stimulation’ component (Table 13). This implies that training activities at the strategic levels are mainly influenced by the component ‘Intellectual stimulation’ of transformational leadership and have a considerable impact on employee efficiency. Further, it has been observed that in case of its effect on innovation, the intervening variable ‘training’ has a mediating effect on the ‘Inspirational Motivation’ component thought training itself has a negative contribution towards innovation (Table 14). This implies that though training does not have any direct influence on innovation but the transformational leaders indirectly do so by motivating the employees towards taking up innovative activities, out of box thinking, brainstorming, etc.

Table 7.

Correlations Between Training Practices and Effectiveness of Training Practices

	EE	IN
TRG	0.945 ^**	0.029

Source: Survey data.

Table 8.

Correlations Between Leadership and Training Practices

	IC	IM	IS	MBE	CRW
TRG	0.036	0.757 ^**	0.115 ^*	0.035	0.173 ^**

Source: Survey data.

Table 9.

Regression of Training on Employee Efficiency

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
Employee efficiency	(Constant)		0.000	1.000	0.892
Employee efficiency	TRG	0.945	56.944	0.000	0.892

Source: Survey data.

Table 10.

Regression of Training on Innovation

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
Innovation	(Constant)		0.000	1.000	−0.002
Innovation	TRG	0.029	0.575	0.565	−0.002

Source: Survey data.

Table 11.

Regression of Transformational Leadership on Training Practices

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
Training	(Constant)		0.000	1.000	0.585
	IC	0.036	1.117	0.265
	IM	0.757	23.278	0.000
	IS	0.115	3.550	0.000

Source: Survey data.

Table 12.

Regression of Transactional Leadership on Training Practices

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
Training	(Constant)		0.000	1.000	0.026
	MBE	0.035	0.697	0.486
	CRW	0.173	3.481	.001

Source: Survey data.

Table 13.

Regression of Transformational Leadership on Employee Efficiency (Training as Mediator)

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
EE	(Constant)		0.000	1.000	0.613
	IC	0.043	1.355	0.176
	IM	0.775	24.652	0.000
	IS	0.120	3.807	0.000
	(Constant)		0.000	1.000	0.900
	IC	0.012	0.773	0.440
	IM	0.144	5.842	0.000
	IS	0.023	1.450	0.148
	TRG	0.832	33.479	0.000

Source: Survey data.

Table 14.

Regression of Transformational Leadership on Innovation (Training as Mediator)

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
IN	(Constant)		0.000	1.000	0.634
	IC	0.050	1.632	0.103
	IM	0.049	1.602	0.110
	IS	0.795	25.998	0.000
	(Constant)		0.000	1.000	0.658
	IC	0.059	1.990	0.047
	IM	0.236	5.163	0.000
	IS	0.823	27.433	0.000
	TRG	−0.247	−5.362	0.000

Source: Survey data.

Table 15.

Regression of Transactional Leadership on Employee Efficiency (Training as Mediator)

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
EE	(Constant)		0.000	1.000	0.026
	MBE	0.008	0.169	0.866
	CRW	0.176	3.526	0.000
	(Constant)		0.000	1.000	0.892
	MBE	−0.024	−1.469	0.143
	CRW	0.012	0.718	0.473
	TRG	0.943	56.020	0.000

Source: Survey data.

Table 16.

Regression of Transactional Leadership on Innovation (Training as Mediator)

Dependent Variables	Predictors	Standardized Coefficients (Beta)	t	Sig.	Adjusted R²
IN	(Constant)		0.000	1.000	0.011
	MBE	−0.074	−1.475	0.141
	CRW	0.101	2.009	0.045
	(Constant)		0.000	1.000	0.008
	MBE	−0.075	−1.482	0.139
	CRW	0.098	1.927	0.055
	TRG	0.015	0.286	0.775

Source: Survey data.

Further, the findings of regression analysis of transactional leadership on employee efficiency with ‘training’ as mediator reveal that the intervening variable training has a mediating effect on the ‘contingent rewards’ (Table 15). This implies that transactional leaders use the ‘contingent rewards or punishments’ to maintain the training activities at the operational levels. Further, the regression analysis also reveals that the intervening variable ‘training’ does not statistically significantly mediate the relationship between the predictor variable transactional leadership and the outcome variable innovation (Table 16).

Interpretations and Conclusions

In the present era of digital transformation, sustainable competitive advantages can only be gained by effectively managing and creating new organizational knowledge (Boisot, 1998; Teece, 1998). Organizational leaders play a central role in the process of creating the environment, systems, and structures that foster the creation, maintenance, and sharing of knowledge ultimately leading to innovation and employee efficiency. The results of the regression analysis show that the leaders of the Indian IT organizations under study are quite efficient and are observed to effectively maintain the training practices in their organizations.

The leaders belonging to the IT organizations under study are found to adopt both transformational and transactional approaches as per the situation. They mostly adopt the transactional approach at the operational level to influence the employees by setting objectives, explaining desired outcomes, providing feedback, and exchanging rewards for accomplishments. They also adopt the transformational approach at the strategic level, to provide the strategic visions to the employees. Transformational leaders arouse inspirational motivation and intellectual stimulation among the employees which provide them the needed confidence and expertise to perform beyond the expectations and generate the high levels of performance.

It can be concluded from the present study, that the transformational leadership approach is found to have a significant positive influence on the training activities of the IT organizations. Investigation into the regression model shows that transformational leaders are found to motivate and intellectually stimulate the employees towards the training activities. Also, the ‘Contingent Rewards’ component of the transactional leadership approach has a weak but positive influence on the training practices. This implies that the training activities under transactional leadership pay off at the operational level when it comes to rewards and punishment. The leader either offers rewards (or threatens punishments) to the concerned employees for the maintenance and completion of training activities. The analysis also clarifies that the ‘management by exception’ component of the transactional leadership does not influence the training activities of the organization. This implies that the training activities require the active involvement of the leaders. The present study further reveals that the training practices have a direct and positive influence on enhancing employee efficiency but has no direct association with the innovation activities.

The intervening variable Training is found to mediate the relationship between the ‘Contingent Reward’ component of the predictor variable transactional leadership and the outcome variable employee efficiency (Table 16). This implies that the transactional leaders mainly maintain the routine training activities at the operational level using the ‘rewards and punishment approach’ and thus helps in improving the employee efficiency. The intervening variable Training is not found to mediate the relationship between the predictor variable transactional leadership and the outcome variable innovation (Table 13). This implies that transactional leaders do not control the training activities and in turn do not influence the innovation activities of an organization.

The intervening variable Training is found to mediate the relationship between the ‘Intellectual Stimulation’ component of the predictor variable transformational leadership and the outcome variable employee efficiency (Table 14). This implies that transformational leaders have a significant positive influence on the training activities of an organization. These leaders are further able to generate and promote intelligence, rationality, and creative problem solving among the employees and thereby improve the efficiency and productivity levels of the employees. The intervening variable Training is found to mediate the relationship between the ‘Inspirational Motivation’ component of the predictor variable Transformational leadership and the outcome variable innovation (Table 17). This implies that the transformational leaders significantly influence the innovation activities of an organization through inspirational motivation. These leaders communicate their high expectations and express vital intentions in a very easy and lucid way to the employees. This inspires the employees to take up the challenge and lead them towards innovation.

Thus, the results of the present study support and establish the set of hypotheses H¹ and H², that is, both the transformational and transactional leadership behaviours have a positive impact on the training practices. The results also support the hypothesis H³, that is, training enhances the employee efficiency. The results, however, do not support hypothesis H⁴, that is, training directly enhances the innovation. The results further support and establish the set of hypotheses H⁵ and H⁶, that is, training mediates the relation between the predictor variable transformational leadership, and both the outcome variable employee efficiency and innovation. The results also support the hypothesis H⁷, that is, training mediates the relation between the predictor variable transactional leadership and the outcome variable employee efficiency but does not support the hypothesis H⁸, that is, training mediates the relation between the predictor variable transactional leadership and the outcome variable innovation.

Theoretical Contributions of the Study

The present study has looked into the intervention of training programmes to improve upon the employee efficiency and innovation specifically in the Indian IT sector organizations. So far, the research literature talked about the various aspects of training interventions but this study included the dimension of leadership styles mainly transformational and transactional in the aspect of organizational training. The key competitive advantage in this particular sector can be gained from innovation and problem solving. So, generating new ideas, learning new knowledge and skills, new ways of approaching and solving problems, etc., are needed to continuously add value to these organizations in this era of digital transformation.

In order to smoothly sail through this wave of digital transformation, the Indian IT sector organizations are highly focusing on internet of things, design thinking, machine learning, artificial intelligence, block-chain, etc. All these calls for advanced training programmes which can help the employees to learn and adopt this digital transformation and become high-end knowledge workers. Also, the employees need to understand and adopt the concepts of continuous learning and self- learning in order to improve upon their efficiency levels and also to develop out of box thinking and innovative ideas. Moreover, the smooth implementation of training intervention requires the support of leaders.

In the present study, transformational leaders are perceived to play a more significant role in the execution of the training programmes. This implies that conducting advanced training programmes require a transformational leadership approach as against the transactional leadership approach which usually takes take care of the regular training programmes (Tables 11 and 12).

The training intervention is found to leverage the impact of transactional leadership on enhancing employee efficiency (Table 15). Transactional leaders are found to maintain the training activities at the operational level using the ‘rewards and punishment approach’ thereby improving employee efficiency. It has also been observed that the transactional leaders are unable to leverage the innovation activities (Table 16). The training intervention is further found to leverage the impact of transformational leadership on both improving employee efficiency as well as innovation (Tables 13 and 14). Transformational leaders are found to generate and improve intellect, rational thought process and creative problem solving among the employees and thereby improve the efficiency and productivity levels of the employees. These leaders encourage the employees to take up the challenge and lead them towards innovation. This study revealed that the leaders need to learn and develop the art of ‘intellectual stimulation’ and ‘inspirational motivation’ in order to make this training intervention successful especially in this present era of digital transformation.

Managerial Implications

The present study concludes that with the fact that as the future business ambience will be more and more challenging, Indian IT organization needs continuous innovations and out of box strategies, which may not be satisfied by using only training interventions but would require ample out of box activities like design thinking, brainstorming sessions, creative thinking, etc. An efficient organization always needs a strong backend to support the operational activities in line with the organization’s strategy. These skills under the transactional leadership may be enhanced at the operational level primarily through training along with rewards and incentives. The transformational leaders inspire the employees to raise their capabilities for success, develop innovative problem-solving skills, and thus to go beyond the defined boundary to deliver exceptional performance. Thus, it can be concluded that managers can enhance the effectiveness of training practices by using an appropriate blend of transformational and transactional leadership behaviours.

It can further be concluded that innovation cannot take place in a very structured environment. The creative thinkers and innovators always look for ample free space for their design thinking, out of box thinking and innovative ideas. It has also been experienced that innovative minds are a little different from people at large. Thus, a training set up cannot directly be helpful for innovation purposes which have been rightly unveiled in our study (Tables 14 and 16). Though, the training activities help in sharpening the thinking ability and creativity of the employees that help them in taking up the innovation activities. The maintenance of continuous training activities in an organization guarantees accesses to pioneering knowledge thereby increasing an organization’s inclination to innovate (Bauernschuster, Falck, & Heblich, 2009).

Also, the employees are the most valuable asset of any organization and are often responsible for the quality of products and events, customer satisfaction, and ultimately an organization’s success. The training programmes help in enhancing the abilities and competencies of the employees that are needed at the workplace (Shen & Darby, 2006). In our study too, training is observed to have a strong and affirmative influence on enhancing employee efficiency (Table 15). Training is found to help the employees to learn the requisite knowledge and skills and to upgrade their performances. Additionally, training is found to assist in building self-efficacy of the employees resulting in superior job performance. Thus, it can be concluded that the training is enabling the employees to meet up with the technological changes and is preparing them to face the competition.

Limitations and Future Scope of the Study

In this present study, we have collected data from several individual organizations from the IT sector and aggregations of these were assumed to be the characteristic of the sector. There will be scope for the future researchers to validate these assumptions by conducting an in-depth study of the individual IT organizations in the light of the leadership style.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

Notes

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Role of Leadership in Enhancing the Effectiveness of Training Practices: Case of Indian Information Technology Sector Organizations

Abstract

Keywords

List of Abbreviations Used in This Article

Introduction

Literature Review

Training

Leadership

Overview of the Sector

Research Gap

Objectives of the Study

Important Research Hypotheses

Research Methodology

Reliability Measure of the Constructs

Findings of the Present Study

Validation of the Individual Measurement Models

Model Fit Summary of the Constructs*

Construct Validity*

DV Matrix for Training Effectiveness

DV Matrix for Transactional Leadership

DV Matrix for Transformational Leadership

Relationship Identification

Correlations Between Training Practices and Effectiveness of Training Practices

Correlations Between Leadership and Training Practices

Regression of Training on Employee Efficiency

Regression of Training on Innovation

Regression of Transformational Leadership on Training Practices

Regression of Transactional Leadership on Training Practices

Regression of Transformational Leadership on Employee Efficiency (Training as Mediator)

Regression of Transformational Leadership on Innovation (Training as Mediator)

Regression of Transactional Leadership on Employee Efficiency (Training as Mediator)

Regression of Transactional Leadership on Innovation (Training as Mediator)

Interpretations and Conclusions

Theoretical Contributions of the Study

Managerial Implications

Limitations and Future Scope of the Study

Footnotes

Declaration of Conflicting Interests

Funding

Notes

References

Model Fit Summary of the Constructs^*