Crucibles of Leadership - Essay Example

Transactional leadership styles are mostly concerned with the normal flow of operations and these leaders use the array of incentives and disciplinary power to motivate employees to offer the best performance in their task. The type of this leadership motivates by exchanging a reward for performance. Transactional leader majorly centers their concentration on the smooth running of the organization and does not strategically guide the organization to attain the objectives. These kinds of leaders reward employees for their hard work through bonuses, salaries, and other incentives. On the other hand, if the employees fail to meet the expectation and goals of the leader, they are threatened with punishment and demotion or even termination of employment. Some of the leaders that practiced this kind of leadership included McCarthy and de Gaulle.

Transformational leadership

On the contrary, transformational leaders use different methods in motivating their followers. They use a shared vision and charisma to inspire the followers to forego their personal interests for the interests of the organization. The leaders transform and create dedication, confidence, and creative ways of solving the problem. This kind of leadership has been effective especially when the organization is undergoing challenges and problems. A transformational leader is not only the manager of day-day operations but also takes the work team to the next level of success and performance.  The leaders set targets and incentives to push their employees to a higher level of performance, as they create opportunities for the personal and professional growth of employees. Some of the leaders who practiced such kind of leadership include Moses and F Kennedy.  The advantage of this kind of leadership is that it brings faster development of small businesses since the leaders try to shoot ambitious goals which are achieved later through team building and the vision of the leader.

Crucibles of Leadership

According to the author, a crucible refers to an experience that transforms and toughens people thus giving them a new sense of motivation, purpose, and identity. As it is mentioned, crucibles are like tests or trials that corner individuals and force them to answer questions about their identity and what is vital to them. Even though the experience is important, what matters the most is how and what we learn from the experience. Most of the greatest leaders are the greatest learners since they know their motivations and aspirations. Great leaders have the characteristics of having the capacity to adapt and engage others through shared integrity.

According to Bennis & Thomas, adaptive capacity is the ability to learn, adjust and change. The base of adaptive capacity is creativity, resilience, willingness to learn, openness to a new form of experience, and strong observational skills. In order to determine the capacity to adapt, one has to ask whether they are constantly looking for ways to improve the performance and one has gained knowledge about the different aspects of the organization. When it comes to engaging others, an interactive leader commands and enlists the team members. They exhibit the attributes of having emotional intelligence and communicate the sense of purpose

According to Masi (2000), transformational leaders have some impacts on the motivation of employees and the performance of the entire organization. It has an impact on the commitment and creation of a sense of vision and creates some mutual interest of leaders and followers.

In reference to the article of Kamalanabhan and Sunder, it is generally believed that most managers take more risks than others. Several types of research have indicated that managers are both risk-seekers and risk-avoiders. In this article, Managers are mostly insensitive in the estimation of the probabilities of the outcomes; some of their decisions are mainly affected by the way they focus on the targeted performance, and they make a quick distinction between gambling and taking risks. These disparities, together with related observations derived from other studies of organizational and individual choice show that the behavioral occurrence of risk-taking in the setting of an organization will not be perfectly comprehended within a classical conception of risk-taking. According to me, the study makes sense since it is the duty of every manager to make decisions based on risk-taking (Bass & Berson 2003)

Covariance

It is a way of measuring the extent to which two variables move together. It is mostly used by financial analysts in determining the degree to which two securities are related. When there is a high covariance, it shows there is a similar movement and there is no diversification. It measures the degree to which the returns of two different risky projects move in a cycle. Positive covariance indicates that the returns on the assets move together. A negative covariance shows that the returns are moving inversely. One of the methods of calculating covariance is looking at the deviations that are expected from the returns. Another method is by multiplying the correlation between the variables with the standard deviation of each of the variables. For instance, if stock X’s return is high every time Y’s returns are also high and the same is said to have low returns, the stock is considered as having a positive covariance. If a shareholder needs a portfolio with diversified assets earning, s/he should consider picking an asset that has low covariance to each other.