The Effect Of Transactional And Transformational Leadership On Employee Loyalty In The Medical Sector - A Case Study In Ho Chi Minh City

Abstract

While the medical sector has been developing in all aspects over the past 10-20 years, many other previous studies have investigated the effect of leadership on Employee Satisfaction and Employee Motivation or on Employee Loyalty. However, not many people have come up with a complete research model for the medical sector, specifically the effect of transactional and transformational leadership. Therefore, this research proposes a more comprehensive model, including the main factors affecting Employee Loyalty, specifically the characteristics of transactional and transformational leadership (Idealized Influences - Attributes, Idealized Influences - Behavior, Intellectual Stimulation, Inspiration Motivation, Individualized Consideration, Contingent Rewards, Management by Exception - Active, Management by Exception - Passive, Laissez-Faire), Employee Motivation and Employee Satisfaction. The present study had the initial objective of understanding the influencing elements, direction, and level of effect of transactional and transformational leadership on Employee Motivation, Satisfaction, and Loyalty in the medical sector. Research has first attempted to apply frameworks from other studies and theories and then the proposed frameworks are examined for the medical sector in Vietnam. Using quantitative research methodology, a sample of 938 surveys were taken by a convenient, non-probability method with testing and evaluating hypotheses by PLS - SEM software. The study's findings indicate that there are 6 factors of transactional and transformational leadership that positively affect Employee Motivation, Satisfaction and Loyalty in hospitals, in decreasing order gradually as follows: Intellectual Stimulation > Contingent Reward > Inspirational Motivation > Idealized Influences - Behavior > Management by Exception - Active > Idealized Influences - Attributes. There are 2 factors that negatively affect Employee Motivation and Satisfaction: Laissez-faire, Idealized Influences - Behavior, Idealized Influences - Attributes and Individualized Consideration. The research also finds that Employee Motivation has a considerable positive influence on Employee Satisfaction and Loyalty, as well as the effect of transactional and transformational leadership on Employee Loyalty may also be demonstrated via the mediation of Employee Motivation and Satisfaction.