Even though it is hard to define and explain, the term leadership is easy to recognize (Ricketts, 2011:5). It is familiar with us like the words democracy, love, and peace. Each of us knows what we mean by such words, but the words can have different meanings for different people because of the growing global influences and generational differences (Northouse, 2016:2-5).
Some authors have tried to make sense of the apparent confusion. Fore instance, (Yukul, 2013:4-5) make analysis on the definitions used by different researchers and distinguish the common features that leadership is about an influencing process over other people to guide, structure, and facilitate activities in groups or organizations. In addition, (Northouse, 2016:3) conceptualized leadership as a process whereby an individual influences a group of individuals to achieve a common goal by identifying components central to the phenomenon leadership.
The modern scientific study of leadership dates only from the turn of the twentieth century (Yukul, 2013:2). However, scholars’ interest in leadership starts from its earliest writing. The nineteenth century was dominated by the concept of ‘great man’ theory (Wart, 2012:9). Particular great men move history forward due to their exceptional characteristics as leaders.
The scientific mood of the early twentieth century fostered the development of a more focused search for the basis of leadership (Wart, 2012:10). What traits and characteristics do leaders seem to share in common (Rainey, 2014:337)? Researchers developed personality tests and compared the results of average individuals with those perceived to be leaders (Wart, 2012:4).
Until 1978, the focus of the majority literature on leadership was derived from the concern in organizational makeup to understand the impact of leadership styles in small group behavior and outcomes with similar variable models (Storey, 2005:13), while attention to leadership on entire organization were largely ignored.
Burn’s Book on leadership dramatically changed that interest by introducing the notion transformational leadership and this has shifted attention to leadership of entire organizations rather than the leadership of small groups(Wart, 2012:4-5). Leadership is such broadly used concept that it can be ambiguous if not defined narrowly. For example one way to define types of leadership is by the kind of followers being led, and another is by the nature of the work that is the primary focus of the leader (Yukul , 2013:2-3).
According to (Northouse, 2007:2), leadership is defined as “a process whereby an individual influences a group of individuals to achieve a common goal.” Leadership is about how well leaders manage themselves and others but not all about intellectual ability or technical expertise (Mitchel, 2013:11).
The expected outcome for all public, private, or non-profit organizations is the achievement of operational and strategic objectives with more committed employees (Rainey, 2014:151). Getting extraordinary achievements in organizations through ordinary people remains the objective and the challenge (Kouzes & Posner, 2007: 25). In line with this general definition, scholars conceptualized more specific leadership styles, but the researcher will only focus on the transformational leadership.
Transformational leadership has speedily occupies central place in leadership research and application of leadership theory (Northouse, 2016:161). This is because transformational leadership gives emphasis on intrinsic motivation and follower development, which fits the needs of today’s complex work groups, who want to be inspired and empowered in order to achieve their goal in times of uncertainty(Bass & Riggio, 2006:xi)
According to Burn (1978), transformational leaders are leaders who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity (Bass.& Riggio, 2006:3). Transformational leaders helps follower to grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the group, and the larger organization (ibid).
Organizations have an important functioning in our daily lives. Therefore, effective organizations are crucial for developing nations including Ethiopia as it is the determinant factors in the economic, social and political progress of the countries. Though the concept of organizational performance is very common in the academic literature, its definition is difficult because of its many meanings.
That is why there isn’t commonly accepted definition of this concept. For example to Lebans & Euske (2006: 71), performance is a set of financial and nonfinancial indicators which offer information on the degree of achievement of goals.
While for Jung (2011: 195) & Rainey (2014:149), performance is the actual achievements of a unit relative to its intended to attain, such as the attainment of goals and objectives which reflects effectiveness of the organizations. Organization is successful if it accomplishes its goals (effectiveness) using a minimum of resources (efficiency) (Corina,. Livia & Roxana, 2011:287).
An increasing public demands made all public organizations to improve their performance. According to Arslan & Staub(2013:109), if organizations wants to fit and continue to exist, they must increase their performance. The role of leadership is critically important for achieving the performance of organizations (Peterson ,Smith, Martorana, and Ownes, 2003:795).
Recently Transformational leadership style, among any other style, has rapidly become the style of leadership chosen for application in transforming the performance of organizations (Walker, 2007:154-155). This is because of transformational leadership, can create a difference and bring a change or a transformation in many ways (Bass & Riggio, 2006:53-55).
However, the process of transforming leadership is the major challenges of all public sectors in the world, and the problems related to organizational performance is highly related to lack of effective public sector leadership (Tesfaye & zeerihun, 2014:10)