This research study examines how organisational leadership affects organisational orientation in the short and long run. More specifically, it investigates the impact of Transactional Leadership (TAL) and Transformational Leadership (TFL) approaches on a
firm’s efforts to attain and maintain excellence in its current operations, commonly referred to as the ‘Organisational Exploitation’ as well as introducing future-oriented novel and strategic changes, also known as the ‘Organisational Exploration’. Additionally, the study
analyses the causal relationship between combined, so-called the ‘Ambidextrous’ leadership on the Organisational Ambidexterity – superiority both in the Organisational Exploitation and the Organisational Exploration. Furthermore, the impact of various forms
of competition on the leadership-ambidexterity relationship is assessed. The study uses the data collected from 394 observations in 99 dyads from 92 small and medium-sized enterprises (SMEs) operating in Azerbaijan to test these propositions. Two separate
questionnaires were designed. The first questionnaire contained questions relating to the Organisational Exploration, the Organisational Exploitation, competition, and other firm level variables and was addressed to key decision makers (mostly CEOs) of Azerbaijani SMEs. The second questionnaire consisted of questions relating to Transformational and Transactional Leadership practices, which were answered by the subordinates of the respondents of the first questionnaire. Multifactor Leadership Questionnaire questions (Bass and Avolio, 1995) were adopted for this purpose. Data was collected via the means of physical vis-à-vis interviews with the respondents in two visits to minimise the Common Method Bias (CMB) (Podsakoff, 2012). Collected data were analysed using Confirmatory Factor Analysis (CFA) and multiple variations of regression analyses to study the relationship between the examined variables and to test the above hypotheses using the emerged constructs.

The analysis identified statistically significant positive impact of the Transactional Leadership on the Organisational Exploitation as well as statistically significant positive impact of the TFL on the Organisational Exploitation. This finding suggests that companies led by people who practice TAL are better managed in terms of optimisation of available resources, introducing innovation to present operations, and maximising the use of available talents and abilities. On the other hand, Transformational Leaders were found
to better prepare the firms to achieve long-term results, to explore new opportunities, products, and markets. The study also documents a positive relationship between the Ambidextrous Leadership and firms’ combined accomplishment in the Organisational
Exploration and the Organisational Exploitation practices. This indicates that firms led by leaders who successfully apply TAL and TFL in their management stimulate organisational effectiveness both in short and long-run. Finally, the analysis has shown statistically significant positive impact of international competition on the relationship between the TFL and the Organisational Exploration. This finding suggests that the relationship between these variables becomes even stronger as the competition with the foreign companies rises. It also suggests that the Transformational leaders of Azerbaijani SMEs will promote the Organisational Exploration practices even more when they compete with the international firms.

Findings of this study contribute to the relatively novel literature on ambidexterity, while providing new insights for practitioners designed to be of relevance for their leadership practices. Specifically, the study findings help to differentiate between the leadership
approaches in terms of how they relate to the Organisational Exploitation and the Organisational Exploration. This allows to derive meaningful conclusions and predictions relating to the focus of the innovation and sustainability of the organisational competences
in a firm depending on the leadership approaches of its key decision makers. Business practitioners will also benefit from these research findings in terms of improved understanding of the implications of their leadership behaviour on organisational
development in the exploitative short term and exploratory long-term futures. This research suggests that companies that aim to be successful in their current operation and remain competitive in the future should adopt a leadership approach that successfully combines both Transactional and Transformational Leadership practices. Additionally, practitioners can benefit from this study as it improves understanding of the role and the types of competition and its impact on the link between leadership approaches and the
organisational practices.