Analysis of Leadership Style and Behavior of Bill Gates - Literature review Example

? Analysis of leadership style and behavior Executive Summary Transactional and transformative leadership markedly offer different approaches to leadership styles and leadership behaviors. Transactional leadership uses rewards and incentives to get their objectives done. Management-by-exception and contingent rewards are two approaches are employed by transactional leaders. The transformative or transformational leaders enhance ethical values and standards followed and implemented by the followers. Moral standards are the key themes adopted by the transformational leaders. Bill Gates owns transformational leadership and employs the participative leadership style and behavior to convince his subordinate in the most appropriate way. Bill Gates uses its legitimate power to exercise his control over the management of the Microsoft. Table of Contents Content page Introduction 4 Background 4 Analysis of leadership style 4 Analysis of leadership behavior 5 Discussion: Transformative or Transactional leader 6 Discussion: Power sources 8 Legitimate power 8 Coercive power 9 Reward power 9 Information power 9 Expert power 9 Referent power 10 Conclusion 10 References 12 Introduction Transactional leadership provides incentives to followers to carry out certain actions; rewards and incentives are used to attract or motivate followers to carry out such activities. If Bill Gates had transactional leadership traits, it would have not been possible to convert a small innovation company into the empire of Microsoft Company, which has generated revenue of $ 69,943 m in the fiscal year of 2011; the net income reaching the mark of $ 23, 150 m in the same year. Background Bill Gates was born on October 28, 1955 and grew up in Seattle with his father William H. Gates II who is a Seattle attorney (News Centre, 2012). Gates mother, Mary Gates was a school teacher in University of Washington regent and chairwoman of United Way International. Bill Gates received elementary school and the private Lakeside School. There, Bill Gates found his interest in software and commenced programming computers at the age of 13. Subsequent to that, in 1973, Gates entered Harvard University but he was unable to continue further his studies and after leaving Harvard, he utilized his energy and efforts to Microsoft, which began in 1975 with Paul Allen, a childhood friend of Bill Gates. Under the leadership of Bill Gates, Microsoft mission has been to continually improve software technology along with making it cost effective and more enjoyable for computer users. Leadership style and behavior Analysis Analysis of leadership style Transformational leadership occurs when individuals engage with each other in a way that the follower and the leader raise one another to higher status of motivation and morality. Effective transformational leaders may represent transactional behaviors or traits. But their leadership style also consists of one or more of the characteristics including inspirational motivation, intellectual stimulation, individualized consideration and idealized vision (Bass 1985). Participative and delegative leadership style is considerably adopted by Bill Gates. By employing both leadership styles, Bill Gates optimally uses his workforce. He wants them to provide their contribution and participation in the work. And at the same time, he expects them to develop a feeling that they are the significant part of the Microsoft. The advantages of this approach are that the employees would remain motivated and give their best efforts in order to entertain the work related goals and objectives. However, some critics contend that Bill Gates uses autocratic approach and prefers to attain his corporate objectives as wants to; Bill Gates adopts bureaucratic management style to achieve the commercial objectives (Management paradise, n.d.). Analysis of leadership behavior Transformational leadership supports behaviors attached with inspirational motivations (e.g., expressing a vision that followers find meaningful but challenging), intellectual stimulation (e.g., motivating followers to question presumptions and consider ‘out of the box’), attributed charisma (e.g., role-modeling behaviors recognizing administration and trust) and individualized consideration (e.g., supporting, empowering, and paying attention to needs of followers) (Whittington et al. 2009). Riggio et al. (2003) state that these behaviors describe leaders having strong social skills and leaders are capable enough to communicate effectively in order to arouse, inspire and motivate their followers. Despite transformational leaders’ primary emphasis on an overall “vision”, however, they also have cognitive repertoire elements relating to transactional leadership behavior (Wofford and Goodwin 1994). That can be comprehended as individuals who are able to engage in transformational leadership behavior may return back to the more solid level of quid pro quo agreements and engage in transactional leadership behavior as required. Bill Gates is definitely a traformational leader (Lussier and Achua 2010, p.349). Leadership behavior of Bill Gate has been visionary. He prefers to plan for the long term instead of focusing on the short term issues. He believes that the short term approaches only cultivate and bring short term benefits and the similar expectations can be made from the long term planning if long term planning is envisioned. It was his vision that enabled him to dream about computers for every home, organization when he was in his college days. Discussion: Transformative or Transactional leader Leadership is a broad term. Burns (1978) defines leadership as leaders inducing followers to act for achieving particular goals representing the motivations and the wants and values, the expectations and the aspirations of both the followers and the leaders. Both transactional leadership and transformational leadership do not share many similarities in their practical demeanor. Whittington et al. (2009) define transactional leadership occurs when a leader exchanges something pertaining to economic, political or psychological value with a follower or subordinate. Such exchanges are fundamentally based on the leader identifying performance requirements and essentials and demystifying the conditions under which rewards are provided for meeting these requirements. The objective is that a situation facilitating a provision of mutually beneficial exchange but not necessarily to construct, develop or maintain permanent relationship. Although a leadership act takes place, it is not binding leader and follower together in a continuing and mutual pursuit of a higher goal. Both leadership types are comprised of understandable differences. Bass’s (1985) conception of transactional leadership highlights two factors: management-by-exception and contingent rewards. Management-by-exception is particularly less functional approach to leadership that fundamentally aware followers of job expectations, but does not encourage or facilitate further involvement with the followers unless the followers own and actual performance differ substantially from the expectations. Contingent reward denotes the efforts contributed and maintained by the leader to demystify job expectations so that followers will comprehend what they are expected to do in order to receive rewards. Transformational leaders raise the ethical level by appealing to the higher standards of values and ideas of followers (Howell & Avolio 1992). Whilst authenticating the validity of this perception, Lewis (2000) opines that transformational leaders construct, develop and model moral standards and codes and they themselves employ their charisma in a way to create a moral contagion process attracting followers to model those same moral standards and moral codes. Sosik (2006) describes that the content of their moral standards often denote the display of character strengths denoting the best in humanity such as a concern for justice, humanity, transcendence ,temperance, and the moral virtues of wisdom and courage. In contrast, transactional leaders tend to rely on formal organizational systems and structures affecting employees in organizations (Zhu et al. 2011). It has been contended that organizational punishments and rewards affect and influence individual behaviors and attitudes (Brown et al. 2005; Nill & Schibrowsky 2005). Moreover, organization structures, such as reward systems, performance evaluation and decision making rights and responsibilities, could extend to ethical criteria necessary to construct and develop organizational members’ ethical decision making (Metzger, Dalton & Hill 1993; Trevino & Nelson 1995). However, Avolio (2005) highlights that the management-by-exception type of transactional leadership has been found to be a less effective type of leadership than both transformational leadership and contingent reward form of transactional leadership. Bill Gates represents transformative leadership rather than transactional leadership. “Transformational leaders include such individuals as Bill Gates of Microsoft and Late Dhirbbhai Ambani, founder of the Reliance group of industries” (Robins et al. (n.d), p.241). Bill Gates says that as we look ahead into the next century, leaders will be those who empower others. The transformative or transformational leadership always believe in the empowerment of followers so that they become able to entertain their objectives. The transformational leadership enables the followers to develop a vision and mission in a way to achieve their individual and team goals and objectives. Keeping this view in mind, the personality of Bill Gates does not represent the transactional leadership as it is more related to the monetary goals and objectives. Discussion: Power sources Definition of power source Power is the capacity to influence the behaviors of others. A leader drives power from position, and what they know and able to do something; their individual skills and knowledge. French & Raven (1959) have highlighted six major power types and sources: Legitimate power is facilitated by the authority provided by a position in the organizational hierarchy. Generally, we consider these positions and directions as legitimate as they come from people holding authority positions. Bill Gates uses the legitimate power to delegate tasks and authority to higher-level managers. In order to delegate authority and powers, Bill Gates uses rational persuasion along with logical arguments supported by factual evidence. Moreover, Bill Gates employs its power to interact with the workforce working under his supervision. Furthermore, Bill Gates, as the founder of Microsoft, has charismatic power not just because of his obvious referent power but because as the company’s largest shareholder, he has a huge amount of legitimate power (Jones 2007, p. 179) Coercive power relies on the ability to punish others if they fail or do not display the behaviors and performance desired. Punishments comprise of suspension, criticism, reprimands, warning letters for a personnel file, demotions, negative performance appraisals, terminations and withheld pay rises. Bill Gates never believes using this power to gain submission of the employees rather he believes logical and informal ways to obtain their reasonable understanding for particular employment objectives. Reward power is based on the ability to control and extend valuable or valued rewards to others. In various organizations, incentives and rewards remain under control of managers; they are authorized to provide bonuses, pay rises, promotion recommendations, interesting projects, time offer and positive or negative feedback etc. Bill Gates is a staunch supporter of talent valuation and strongly believes that talented employees can only be retained if they are given attractive employment benefits and incentives. Microsoft is known for extending substantial employment benefits and remuneration packages. A significant part of reward power is attained through control over resources and Bill Gates has full control over inspecting and evaluating employee performance and determines promotions and rewards accordingly. Bill Gates’ position gives him the authority to have reward power (Zweifel and Raskin 2008, p. 19). Information power is provided by access to and is extended by control over information distribution about future plans and organizational operations. There is no doubt that Bill Gates uses information power as he innovate different software programs. He considerably used this power and translated it into building a successful Microsoft organization. “Knowledge power catapulted Bill Gates to the forefront of his industry and made Maya Angelou one of the most admired people in her profession” (Bacon 2011, p.3). Expert power is extended by possessing expertise valued by others. Managers often have knowledge, technical experience and skills essential for success of their subordinates. Bill Gates possesses a sound expertise in his subject, skills and knowledge. It is the use of his expert power that enabled him to not only incorporate Microsoft but also retain the highly talented workforce in the organization. Bill Gates has considerable expert power because he has expertise in systems and computers (Lundy and Janes 2001, p.179). Referent power comes from being appreciated, likely by others, or personally identified with. When we appreciate people and want to be like them and feel friendship towards them. This creates a situation in which we want to follow their directions more willingly and become loyal to them. But with Bill Gates it remains more of loyalty due his leadership behavior towards the employees working in the Microsoft. Conclusion Bill Gates owns a transformational leadership. Transformational leadership raises ethical level by appealing to the higher standards of values, ethics and ideas to be followed by followers. They construct, develop and maintain higher moral standards and values with their charismatic personality depiction. And their moral standards represent characteristics such as concern for justice, temperance and wisdom and courage. Aggregately, they want to empower their followers with above mentioned traits and qualities. For this purpose, Bill Gates says that as we look ahead into the next centre, leaders will be those who empower others. This statement represents that Bill Gates believes and promote the characteristics relevant to the transformative or transformational leadership. On the other hand, transactional leadership occurs when a leader bargains or exchanges something related to economic or political value with a follower or subordinate. Transactional leaders employ two factors such as management-by-exception and contingent reward approach. There are six power sources including legitimate power, coercive power, reward power, information power, expert power and referent power. Bill Gates uses his legitimate power to delegate tasks to his subordinates and uses his authority to ensure implementation of the tasks. Being owner of transformational leadership, Bill Gates uses participative management style to achieve the objectives. References Avolio, B J 2005, Leadership development in balance: Made/ born, Lawrence Erlbaum, New Jersey Bacon, TR 2011, The Elements of Power: Lessons on Leadership and Influence, AMACOM, New York Bass, B1985, Leadership and performance beyond expectations, Free Press, New York Brown, M E, Trevino, L K, & Harrison, DA2005, Ethical leadership: A social learning perspective for construct development and testing, Organizational Behavior and Human Decision Processes, 97, 117-134. 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