The Relationship between Charismatic and Democratic Approach on Organizational Transparency of Islamic Insurance Institutions

Raja Rizal Iskandar Raja Hisham, Mohd Rizal Palil and Wan Aishah Wan Mohd Nowalid

This study was undertaken to examine the relationship between the charismatic and democratic style of leadership on organizational transparency evidenced from Islamic insurance organizations in Malaysia. This study aims to investigate the extent of transparency practices based on the adoption of certain leadership styles namely charismatic and democratic. 185 employees of the Islamic insurance companies participated in this study. For the analysis procedures, Smart-PLS version 3.1 was used to assess the instrument and test the research hypothesis. The results of path modelling analysis indicated that both charismatic and democratic approach have a significant effect on organizational transparency. It could be described that a leader with high level of charisma and democracy are likely to practice high level of transparency in his/her leadership in the organization. This study further suggest that this area to be extended in the context of Malaysia as it has yet been undertaken in the scope of leadership and governance specifically. This study contributes to the theoretical body of knowledge as it provides further empirical literature to the factors contributing to the improvement of transparency practice in an organization.

DOI : https://doi.org/10.21102/graf.2017.03.81.06