The impact of leadership style and employee empowerment on perceived organizational reputation

Purpose: The purpose of the current study is to examine the impact of organizational leadership style and employee empowerment on employees' perception of organizational reputation by testing a hypothesized model. Design/methodology/approach: A quantitative on-line survey was conducted with 700 randomly selected employees from diverse work units of a Fortune 500 company in the United States in February 2011. Findings: The results showed that transformational leadership positively influences employees' perception of organizational reputation, not only directly but also indirectly, through empowering employees. Transactional leadership has a significant negative direct effect on employees' perception of organizational reputation. Employees who feel more empowered in terms of perceived competence and decision-making control have a more favorable evaluation of organizational reputation. Research limitations/implications: By building links between organizational reputation and the two internal antecedent factors, organizational leadership and employee empowerment, the current work extended the list of internal characteristics of excellent public relations, filled the research gap on leadership and empowerment study in public relations, and contributed to the increasing body of knowledge on internal communication. Practical implications: The findings suggest that what determines the employees' views toward the company is how they feel they are treated and whether they have enough say in decision-making. To build a favorable internal reputation, communication professionals should educate organizational leaders of all levels and engage them in strategic, interactive, empowering, democratic and relational-oriented transformational leadership communication behavior. Originality/value: This study was among the first empirical attempts to examine organizational leadership as an influencing factor for internal communication practice and outcomes.