Why leadership style matters: a closer look at transformational leadership and internal marketing

Purpose The main purpose of this study is to evaluate the relationship between transformational leadership (TL) and internal marketing which is underscored by the centrality of human resources in satisfying employee’s needs and how internal marketing, as a moderator and mediator, can facilitate the effects of transformational leadership on social capital and employee loyalty. Design/methodology/approach This study develops a model and a number of propositions based on preceding literature on transformational leadership and internal marketing on social capital and employee loyalty. Findings The model proposes that transformational leadership can play a vital role in codification of human resources variables such as internal marketing, which is founded upon the principle of paying greater attention to employees. Moreover, despite the research gap on the relationship between social capital and employee loyalty, it can be concluded that social capital can increase the level of employee loyalty to organization. Research limitations/implications The proposed model has a number of academic and managerial contributions. This study contributes the knowledge by examining the relationship between transformational leadership and internal marketing. Managerially, this study helps managers to emphasize the centrality of human resources in satisfying employees and increase their loyalty toward the company. In addition, guarantees management effectiveness and organizational success in reaching their intended goals. Originality/value Despite the growing acknowledgment the importance of transformational leadership as a process in which leaders and followers upgrade each other’s level of ethic and motivation. However, there are few studies on the role and importance of transformational leadership on developing and reinforcing the internal marketing.