The Importance of Transformational Leadership During a Company Crisis - Research Paper Example

Businesses strongly rely on developing and retaining leaders who are capable of actively involving themselves in professional leadership behaviors including the development of processes that will enable a more successful goal accomplishment, establishing an attainable goal, and creating trust as well as demonstrating concern among members.

A great deal of research on leadership has been carried out as such concept has been associated with a wide range of factors including the process of decision making, leader-follower interaction, and goal establishment and accomplishment, to name a few (Steane, Hua, and Teo, 2003). The notion that the concept of leadership can make a significant contribution to research and development has been widely acknowledged by academicians and organizational leaders alike. Due to the rapid changes in globalization and technological trends, there has also been an increase in the need and attempt of companies to place more efforts into retaining a strong workforce while addressing the complex demands and preferences of their customers (Nielsen, Randall, Yarker, and Brenner, 2008). Because of these concerns, organizations have identified the need to effectively implement leadership, especially as it has been frequently linked to favorable outcomes such as an increase in performance, effectiveness, and commitment as well as improved organizational success. Hence, effective leadership becomes a crucial necessity for any company.

            Innovation and creativity alone may not be sufficient enough to address both internal and external pressures while the implementation of various policies and practices does not always necessarily take effect unless effective leaders are made. Leaders must possess the values and objectives that are necessary to instigate any needed change while retaining an empowered workforce to help achieve success (Jung and Sosik, 2002). The vision that they establish and the values that they live out and demonstrate to their followers play a relevant role when such leaders make decisions that will impact the entire organization.

The majority of leadership studies have indicated that transformational leadership can be the most effective form of leadership to bring about change in any group of individuals by positively inspiring these people to create the necessary change for their success (Conger, 1999). Leaders who take the transformational approach are generally capable of motivating their followers to embrace such changes, improve their performance, and be prepared to open up to new practices, all for the better of the organization (Avolio, Zhu, Kho, and Bhatia, 2004).

Company Background and Description of the Crisis

            Sam Walton founded Wal-Mart Stores Inc. in 1962, with its first headquarters located in Bentonville, Arkansas. It was first known across the United States as the “largest grocery retailer” and has actually expanded to include a total of 8,500 in 15 countries, with the stores taking a different name. For instance, in the United Kingdom, the stores are known as Asda, while in Mexico, some stores are known as Walmex, while India has taken to the name Best Price (Buerkle, 1999). Among the crises plaguing Wal-Mart include a negative image with regards to how it pays its workers.