University educational system plays an important role for the development of any country. Most industries normally rely on highly educated people with different skills and the universities are also responsible for training leading edge technology skills. During the past few years, there have been tremendous efforts to empower Vietnamese universities and to put more efforts to increase their ranking internationally. The purpose of this study is to determine the appropriate leadership style on higher education institutions and the role of the leader in promoting academic research at Vietnamese universities. Excellent and effective leadership is needed to develop employees as a sustainable competitive advantage. The leaders of organizations normally have difficulty in speeding up the performance of their followers. Individual performance is studied and evaluated in both scholarly and practical literature. Employee engagement is not only a moderator concept established in organizational theory, but it also offers a variety of views and theories. This paper designs a questionnaire and distributes it among 232 students to measure the effect of transformational leadership in higher educational organizations. Regression analysis is used to measure the effects of different components of transformational leadership on the performance of organizations. The survey results indicate that the Transformational leadership could actually be effective when they are allowed autonomy in organizations, especially on the budget. In summary, the results of the investigation clarify the role and importance of transformational leadership in organizations.