Hospital healthcare leaders need seamless lateral communication allowing employees to share knowledge thereby improving organizational operations and patient care. Hospital healthcare leader’s use of transformational leadership style and lateral communication style allow leadership the ability to accomplish goals meeting organizational objectives. This quantitative correlational study sampled 101 emergency room registered nurses at Harris County Hospital District with two Likert-type instruments and one demographic survey. The objective of the study was to determine whether a correlation existed between employee perceptions of transformational leadership and lateral communication within a multi-hospital organization. A Pearson Product Moment correlation indicated the five independent variables of leadership style was positively correlated to the dependent variable communication. Statistical analysis determined positive correlations exist between some demographics, transformational leadership, and lateral communication. A preliminary analyses determined ethnicity had a significant effect on quality of lateral communication. The benefits of the study can assist healthcare leaders implement the best leadership style that will improve lateral communication. The improved leadership style and communication practices can create an environment of interdepartmental and intradepartmental knowledge sharing resulting in reduced medical errors and improved employee ownership. The goal of this research study was to assist healthcare administrators in developing programs that will increase organizational effectiveness through effective communication within healthcare organizations.