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Leadership Impact on Empowerment and Organisation
Performance in Malaysia: Conceptual Paper
Yusri Hazrol Yusoff1, Faiz Zainal Abidin2, Muhammad Faiz Mohd Zabidi3, Muhammad Zarief Aiman
Muliadee4, Wan Fadhilah Wan Hitam5
1Faculty of Accountancy, Universiti Teknologi MARA, 42300 Bandar Puncak Alam Selangor, Malaysia,
2,3TNB Power Generation Sdn. Bhd., No. 129, Jalan Bangsar, 59200 Kuala Lumpur, Malaysia,
4Deloitte Business Advisory Sdn Bhd, Menara LGB, 1, Jalan Wan Kadir, TTDI, Kuala Lumpur, Malaysia,
5Politeknik Nilai, Kompleks Pendidikan Bandar Enstek, 71760, Bandar Enstek, Seremban, Negeri
Sembilan, Malaysia.
ABSTRACT
The success and effectiveness of leadership are crucial as its impact are verily connected is the elements of
empowerment and performance of an organisation in Malaysia. This study aims to propose a conceptual
framework on what are the desired effects for organisations to look out for adopting the concept of
leadership empowerment to their organisation. In essence, this conceptual framework is ideally intended
to provide some base guidance for organisations that is in the process of adopting the leadership
empowerment concept for their company. In the process of adopting this conceptual framework, the
organisation would be able to have the optimism of improving their organisations performance and the
elements of outcomes to be expected throughout the adoption process. Fundamentally, leadership that
promotes the element of empowerment to others fosters psychological empowerment. The study
revealed that employees that feel psychologically empowered believe they can influence their workplace
and that their efforts are appreciated. The study also provides criticisms of leadership style by
management in an organisation that is impacting employee empowerment and organisation performance.
Keywords: Leadership, Impact, Empowerment, Organisation Performance, Effectiveness, Malaysia.
1 Introduction
In the context of businesses nowadays, leadership is essentially the action traits of leading a group of
people or an organisation with a powerful connection in which the leader influence and encourages others to move
or change to achieve dedicated goals (Northouse, 2018). Academic research environments define leadership as a
process of social influence in which a person can enlist the aid and support of others with the idea of common
accomplishment (Chemers, 1997). The success of an organisation’s performance is often related to having a good
leader that could chart a clear path for the company in terms of business strategy, together leading the team
continuously, providing guidance on execution of the charted work streams ensuring targeted organisation goals can
be met. Few of the main characteristics of a well-performing organisations can be distinguished compared to the
unsuccessful ones, among others by having the presence of a dynamic and capable leadership in the organisation
(Druskat and Wheeler, 2003).
Elaborating further, empowerment on the other hand entails the capacity of individuals or groups of
employees to take control of their company affairs. This includes exercising power to achieve their own goals, and
the process by which individual and the business collectively, able to work cooperatively to maximize the quality of
their works (Adam, 2008). In a simpler approach, Rappaport’s (1984) described empowerment as a process of which
individuals, groups, and communities take control of their lives.
Fundamentally, marrying the concepts of leadership and empowerment together would have various
effects to an organisation performance. These effects would vary and highly dependent on how the organisations
identify their leaders that have the capabilities to carry the entrusted leading role combined with the empowerment
mandated by the management and to ensure successful delivery of the desired outcomes. As rightfully said by
Kelloway et al (2012), leadership success and effectiveness are important because they are linked to organisational
outcomes.
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In a nutshell, leadership and empowerment should not be seen as a delegating process, it is rather the
leaders' ability to delegate authority, encourage accountability and promotes for self-directed decision-making that
enhance the development of employees (Hakimi et al., 2010).
2 Background of Study
Despite the fact that leadership empowerment in companies of different business segments or even
different countries may not be identical or comparable, there is clear indication of successful organisations having
very much similar leadership empowerment effects.
The effectiveness of management of the company is primarily determined through the effectiveness of its
human resources, where leaders must pay focus on employees' attitudes, behaviours, aspirations, and needs so that
employees can always be motivated to improve their performance, and an organisation must empower these
individuals to the greatest extent possible in order to create and raise performance and commitment (Gede et al.,
2022). This is to ensure that the organisation is stable and efficient.
To put things into perspectives, this study aims to propose a conceptual framework on what are the
desired effects for organisations to look-out for in adopting the concept of leadership empowerment to their
organisation. In essence, this conceptual framework is ideally intended to provide some base guidance for
organisations that is in the process of adopting leadership empowerment concept for their company with the
optimism of improving organisations performance and what are the elements of outcomes to expect in the adoption
process.
3 Problem Statement
Organisations often neglect the power of instilling leadership qualities and the empowerment elements to their
employees, resulting to the employees being less efficient, zero creativity and most of the time, a feeling of self-
demotivation, of which the end results of this continuous negativity can be catastrophic to the organisation
performance. To relate, this has been noted by Gregory et al (2010) there are numerous leadership behaviours been
documented academically, but the value of empowering leadership has been evident to be as the most visible
towards organisations performance. To ensure the gap between leadership empowerment and its impact on
organisations performance can be minimized, organisations must establish a strategy that requires them the ability to
be more flexible and more open towards instilling direct empowerment to the employees with full trust throughout
the whole process. This would ensure positive practices in terms of organisational effectiveness. Fundamentally,
there is a core conviction that empowering action in leaders promotes psychological empowerment (Raub and
Robert, 2010). To further support this, Gregory et al (2010) study findings have revealed that workers who feel
psychologically empowered believe their contributions are valuable and have the power to change their workplace.
4 The Gap in Research
There are numerous academic research and findings detailing on the leadership and empowerment impact
towards organisation performance. Majority of the findings noted that the impacts of leadership empowerment
towards organisation performance will results to the improvement of performance, both to employees and to the
organisation as a whole. Hatta et al (2018), in its research findings noted that empowerment initiatives improve
employee performance, well-being, and positive attitudes.
There is a limitation of this research paper where there is a reliance on individual-level data.
With the above in place, this study is structured to focus on an intention to understand impact of leadership and
empowerment have a significance influence that is attributable to an impact towards organisational performance.
5 Literature Review
According to Sanda and Arthur (2016), leadership can be classified into two types: transformational leadership
and transactional leadership. Transformational leaders are endowed with charisma. They inspire subordinates and
connect to their principles and moral values by envisioning and representing an inspiring future. This style of
leadership involves the creation of an emotional bond between leaders and employees. Transformational leaders
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truly care about their employees' well-being. This is being supported by Hatta et al (2018) study findings where
transformational leader behaves at each stage of the transformation process can transform the condition of his
organisation. Transformational leadership has the ability to lead an organisation to a better direction. On the other
hand, transactional leadership is a two-way street. Employees are contingently motivated based on their
performance. Focusing on instrumental economic transactions, it encourages subordinates by appealing to their
personal desires. Transactional leaders often maintain control through organisational bureaucracy, policy, power,
and authority; this type of leadership is sometimes referred to as authoritative. As noted by Sanda and Arthur (2016),
Transactional leadership emphasises the interaction that occurs between leaders and their followers. This interaction
is based on the leader engaging with others what is necessary and outlining the conditions and incentives that
followers will get if those requirements are met. Thus, transactional leaders delegate what has to be done and
provide rewards in exchange for successfully accomplishing the task.
Transactional and transformational leadership are universally recognised to be non-exclusive. A competent
leader should be able to transition between transformational and transactional leadership styles according to the
circumstances. However, transformational leadership has garnered increased scholarly attention across disciplines in
the last decade due to the fact that its relationship-oriented nature and the abundance of empirical evidence on its
positive influence on employee attitudes and behaviours Sanda and Arthur (2016), A competent or good leader will
have their own followers. As mentioned by Gede et al. (2021), Transformational leadership is an attitude that a
leader has in order to build loyalty and commitment without much regard for their own interests, and it also guides
followers in identifying them. This can eventually inspire employees to look far above their personal interests and
have a significant and remarkable impact on employee performance. Moreover, Leadership determines whether or
not an organisation achieves its objectives. The success of a person in leading an organisation is the success of
influencing others to implement or carry out his vision Hatta et al (2018).
Employee productivity is essential to the success and growth of any organisation. More specifically for service
organisations, where employee performance is a determining factor for higher growth, as consumer perceptions of
service quality are believed to be influenced by their interaction with employees. According to Demirci and Erbas
(2010), and Hatta et al (2018), employees have been observed that they are unable to perform their best unless they
have complete control or autonomy over their jobs. Too much adherence to rules and regulations has an adverse
effect on employee service quality. Empowerment has a significant effect on employee performance. Employee
empowerment has been shown in numerous studies to boost job satisfaction, organisational dedication,
innovativeness, and performance. Almost all previous empirical studies examined the direct effects of employee
empowerment on these outcome variables. An employee empowerment approach that includes practises aimed at
sharing information, incentives, employment expertise, and responsibility with employees is expected to increase
their performance. The intention is to enables them to adapt to unforeseen circumstances, improve the quality of
interactions and make more efficient use of their time Demirci and Erbas (2010).
Based on (Biemann et al., 2015) and Demirci and Erbas (2010), Maintaining the following four conditions is
essential for successful employee empowerment implementation in the organisation:
Shared Vision
The leaders of the organisation's vision may also include top strategic objectives such as financial solvency,
enhanced reporting processes, and boosting the degree of customer satisfaction. Thus, unless the same goal is
shared by the leaders, adopting employee empowerment would be extremely difficult, if not impossible. A common
goal with the director is vital, and empowering endeavours can get traction, set their own goals, and then build their
own procedure to accomplish those goals. To begin, the department or organisation would provide the
empowerment team with the opportunity to train selected individuals to develop their leadership capabilities.
Organisational Support
Getting supervisors and managers to attend training courses would be nearly impossible without the
director's direct support. Aside from that, planning staff meetings is unlikely to be successful as well. As a result, the
top director has a key impact and involvement (whether directly or indirectly) in the organisation's empowerment
project's to be successfully executed.
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Knowledge and Learning
Following the successful completion of the empowerment project, the team members are anticipated to
improve their project management and team development skills, which will be useful for future initiatives.
Furthermore, skills such as brainstorming, time management, enhanced discussion, consensus-based decision
making, and problem-solving techniques for managers and supervisors, as well as leadership development and
customer service training for employees could be maintained.
Institutional Recognition
To ensure the successful implementation of an empowerment project, team members must be broadly
appreciated and recognised for their abilities in their efforts. As a result, the reputation of an empowerment team
and its members might have a direct impact towards the acceptance of the director and department managers,
supervisors, and front-line staff.
Although organizations cannot guarantee everlasting employment, they must ensure that a talented and
versatile employee is retained, particularly in crucial roles within the organization. Employee satisfaction and loyalty
may be increased by using an empowering leadership style. Any changes at the top of the leadership may also create
an uncomfortable atmosphere across the office. This may promote sentiments of competitiveness, instability, and
uncertainty in leader-employee interactions, which may affect work satisfaction. To mitigate the adverse
implications, leaders can establish clear development goals and identify prospective career paths for subordinates
within the organization. They might also express clear criteria for determining the extent to which they would
demonstrate empowering leadership behaviors toward followers. These measures may assist to minimize career
insecurities and individuals' turnover intentions (Biemann et al., 2015).
According to Gu et al (2022), employees are generally influenced by their leaders' behaviors and
interactions with them. A high trust level indicates high-quality exchange relationships between the empowered
leader and subordinates. A series of empowering leadership actions, such as promoting cooperative decision-making
and delegation, demonstrates leaders' confidence and trust in their subordinates to accomplish required tasks. As a
result, empowered leaders is more likely to encourage a positive relationship between leaders and employees.
Empowered members with high authority are more inclined to promote their own opinions and relationships with
team leaders or supervisors, and those who perceive they are overqualified could be motivated to use their excess
skills and experience to better accomplish their duties.
Increased employee autonomy as a result of empowering leadership may also raise employee strain,
undermining the positive impacts of empowering leadership on work-related outcomes. Furthermore, obtaining
additional assignments and obligations from leaders interferes with previously constructed individuals' role
conceptions, raising individuals' role stress. Thus, employees’ role stress, which may be triggered by their leader's
empowering conduct, may lead to job-induced tension, reducing their ability to efficiently utilize the positive effects
of empowering leadership on work-related outcomes (Cheong et al., 2016).
Work morale, discipline, and performance all indicate job satisfaction. Job satisfaction levels might have an
asymmetrical influence. Job happiness has an impact on the fulfillment of successful organisational goals. A low
degree of work satisfaction, on the other hand, will be a risk that can lead to the organization's demise or setbacks,
both swiftly and slowly (Hatta et al., 2018). This is supported by Demirci & Erbas (2010), employees are motivated
and given the opportunity to make the greatest use of the opportunities that are provided to them when they are
empowered. The workplace will provide them with freedom and enjoyment, and employees will enjoy the
satisfaction of knowing that they have contributed to the success of the company.
6 The Proposed Conceptual Framework to Leadership Empowerment and its Effect
Towards Organisation Performance
For the benefits of this paper, the conceptual framework (refer below, Figure 1) has been developed to illustrate
on how leadership and empowerment take effects to organisations performance. To reiterate, the below conceptual
framework is intended to provide some base guidance for organisations that is in the process of instilling leadership
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empowerment concept within their organisations. The ultimate goals are to enhance the organisation performance at
the same time to pre-amp the organisation on the elements of outcomes to expect throughout the adoption process.
Figure 1: Leadership and Empowerment effects towards organisation performance
As illustrated in Figure 1, it briefly portrays the mechanics of how the process of leadership and
empowerment works hand-in-hand to boost the organisation performance. With a diligent adoption of leadership
and empowerment within an organisation, there will be outcomes to be expected such as having the flexibility in
delegation of authority (Hakimi et al, 2010) , higher accountability in works deliverables (Konczak et al., 2000),
growing sense of self-motivation (Kelloway et al., 2012), continuous skills enhancement among the employees
(Pearce and Sims, 2002) , and finally instilling the sense of psychological empowerment (Raub and Robert, 2010).
From the above identified expected outcomes, it is visibly clear that the proposed conceptual framework can be
beneficial in giving positive impact at the same time to serve as a guide for the organisations that has the ultimate
goals is to enhance the organisation performance.
7 Criticisms on Leadership Style by Management in an Organisation Impacting
Employee Empowerment and Organisation Performance
Organisational culture, organisational behavioural practises, and the organisational programme are all included in
environment empowerment (Ripley and Ripley, 1990). The framework for which each employee and team operates
is the empowering environment. It promotes the desired behavioural traits in both individuals and teams. As an
element of the organisational programme, it recognises and rewards empowering behaviour. Making empowerment
and quality a part of the organisational programme offers a methodical technique to ensure that organised activities
take place exactly as planned. Such a management project emphasizes the behaviours, attitudes, and procedures that
make preventive possible in order to stop problems before they start.
8 Organisation Quality
Quality becomes ingrained in the culture of the company. Dedication, patience, and time are necessary for high-
quality goods and services. As quoted from Ripley and Ripley (1990), “How can businesses afford more time to do
something over again if they simply cannot manage to do it well the first time?” Doing things correctly the first time
is always less expensive. The cost of poor quality is the cost of making mistakes. This is among the causes for
empowerment and the emphasis on high-quality goods and services with a view to ongoing development and
customer satisfaction. Three factors make up the cost of quality: failure, appraisal, and prevention (Ripley and
Ripley, 1990). Both the total cost of quality and the current state of a particular product or method compliance
should be determined through measurement.
9 Organisations that Display Empowering Behaviour
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When it comes to behaviour, empowerment differs beyond often what managers are used to. It is no longer
effective for managers to instruct staff members on what to do while also evaluating their performance. A shift into
a more strategic human resource management approach to labour seems to be consistent with quality empowered
management. In many cases, individuals with advanced degrees or specific technical skills know further about their
fields of specialty than their immediate supervisors do. These folks benefit from empowerment the most right away.
Employees does not always make the best decisions. The overwhelming success of unrestricted economies has
taught organisations that, nonetheless, people are most motivated and make the wisest judgements when they are
allowed to pursue their own interests, at least in terms of their personal workspace or surroundings. Where
businesses have dared to encourage self-management, productivity has increased by between 40% and 50% (Ripley
and Ripley, 1990).
Figure 2: The Innovative Organisation – The Inverted Model by Ripley and Ripley (1990)
10 Getting Past Empowerment Resistance
Employee resistance to empowerment has a variety of causes, including worrying over heavier workloads.
Therefore, management must identify their own aversion to change, share their views with individuals who are likely
to do so, and acknowledge that empowering an organisation involves more than just a philosophical commitment.
Management needs to strengthen their interpersonal abilities as well as their knowledge of human motives and
behaviour (Ripley and Ripley, 1990). Therefore, among the cornerstones to empowerment is to alter the type of
discussions managers have had with their employees in order to get them to be receptive to new and better ways of
designing the working environment. For a manager to genuinely understand their associates, employees, and clients,
verbal response techniques are a must-have talent. In order for self-managing team members to operate at their
highest levels of productivity and quality, managers must transition from their conventional roles as supervisors and
information keepers to that of facilitators, coaches, and mentors of a working environment.
Customer Customer Customer
President-CEO
Upper Management
Middle Management
Self-managing Workforce
Teams (Individual Worker)
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11 Conclusion
In summary, as more leadership and decision-making authority is decentralised and shared through
empowerment, employees need to be given more freedom to make their own decisions. Without a doubt,
empowerment is achieved through structural and objective organisational changes that provide people more
freedom to decide and influence how their work is done (Demirci and Erbas, 2010). Employee perceptions of self-
efficacy are increased as a result of a successful empowerment initiative, which addresses a significant organisational
obstacle. By offering role definition, job enrichment, and appropriate training, it also accomplishes job mastery
(Demirci and Erbas, 2010).
Through career planning, rewards, and welfare, as well as by using counselling, motivation, and appraisal
techniques, social persuasion, and other techniques, Empowerment also supports the progress of its personnel
(Demirci and Erbas, 2010). When empowerment strategies are used, employees gradually begin to feel appreciated,
competent, and that the work they are doing has a significant significance and influence. As mentioned by Demirci
and Erbas (2010), when genuinely empowered, employees continue to feel as though they have a huge number of
possibilities to put their skills to use. In exchange, employees are anticipated to alter their behaviour in order to
better utilise their abilities at work. These employee-driven changes are anticipated to contribute to the productivity
and performance of the company.
The promise of improved financial and operational results as an outcome of a boost in overall employee
engagement, involvement, and work happiness is what drives businesses to apply the empowerment process.
Furthermore, empowerment and the methods for putting it into practise are far from being a straightforward "quick
fix"; It actually includes a continual process that is extremely complicated and multifaceted (Appelbaum et al., 1999).
One of the main tenets of performance management is that success and competition in business depend on
employee empowerment. Germany and Japan have both successfully used empowerment in their own particular
ways (Ripley and Ripley, 1990). Malaysia must design and execute its own empowerment strategy that embraces and
celebrates the country's diversity which in return would benefits the organisation performance.
Recommendation
Thus, in order to encourage employee creativity and improve performance, management should consider
the following:
Employee Retention
The organisation’s human resources department should strongly be advised implementing reward schemes
in order to inspire workers and increase their output at work (Setiawan et al., 2020). This method will be up workers’
motivation and give a positive impact on productivity and performance.
Proper Resource Allocation
A significant cause of employee annoyance and discouragement is a lack of suitable resources. The void
left by upper management's ongoing incapacity to create a viable plan for the company can be filled by an assertive
middle management (Ripley and Ripley, 1990). Therefore, organisations should too careful with allocating resources
because it will be affected to performance.
Bonafede Training Plan
A comprehensive training programme is necessary for empowerment, starting with top management and
ending with front-line employees (Ripley and Ripley, 1990). Planning for empowerment training must be
synchronised and discussed with higher management. The purpose of training is to advance and promote the
organisation’s goals, mission, and objectives. Assigning, directing, or adding more policies and procedures would not
be enough to sustain the active human process of empowerment.
Accustomed Self-managing Teams Empowerment
One of the main strategies in the Creative Organisation for resolving complicated issues, boosting output,
and enhancing innovation is the use of self-managing teams; Self-managing teams have a proven track record of
increasing productivity in practically all organisational levels of the workplace (Ripley and Ripley, 1990). Most of
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these employees end up knowing much more than their superiors do about their specific field of work. Highly
adaptable self-managing work group structures are essential for maximum utilisation of workforce, particularly
motivating and retaining their highest levels of productivity and effectiveness.
Acknowledgments
The authors would like to express their gratitude to the Faculty of Accountancy, Universiti Teknologi
MARA, Malaysia, for funding and facilitating this research project.
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