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1. Introduction
The corporate world at present is full of challenges and competition, and most organizations are facing a lot of threats and hurdles. These organizations are finding it difficult to maintain their competitive edge and sustaining their well-being (Anand and Udaya-Suriyan, 2010). Companies are striving to recruit and retain good quality leaders capable to create a positive organizational climate (OC). These leaders are expected to have emotional intelligence (EI) traits that allow them to better handle themselves and their team members. In a positive OC, individuals are motivated, satisfied, have high expectations and are committed towards their company and its mission. OC is about how employees perceive their work environment and how the latter makes them feel (Randhawa and Kaur, 2015; Litwin and Stringer, 1968). A good OC has a positive effect on financial results such as revenue growth, profits and return on sales of the organization (Goleman, 2000).
As OC has such an important role in organizational success and effectiveness, it is important that we explore the factors that influence it, with the aim of identifying those that can create added value for managerial decision maker. Momeni (2009) reports that it is mostly the leader’s emotional behaviour and style that affects the OC. In Goleman et al. (2002) postulated that the emotional state of the leader is a significant factor in creating a positive OC. This is why it is important to study the effect of EI on leadership style and OC. The concept of EI is becoming very important and popular, especially in the present corporate world (Majdalani and Maamari, 2016; Goleman, 1995). EI is about how people understand, express and manage their own and other people’s emotions (Cherniss, 2004). Moreover, many studies link EI to leadership effectiveness (Boyatzis et al., 2009; Kerr et al., 2006; Goleman, 2004), with differences reported among age-groups of respondents.
This research paper examines whether leadership style mediates the relationship between EI and OC. It looks at whether OC in turn leads to better financial results for the company due to the better performance of its employees. In this context, the demographic variables of age and gender are used in this study due to their reported meaningfulness in other studies as along with leadership variants.