Transformational Style of Leadership - Case Study Example

Leadership Executive Summary: Transformational leaders are characterized as those leaders who are capable of inspiring their followers. They are visionary transcendental leaders. However transactional leaders are more preoccupied with power and position and the need to get the job done. Within the organizational content, transformational leaders are able to achieve extra role achievements, while transactional leaders tend to make performance contingent upon rewards and to adopt a management by exception approach. While the ability of transformational leadership to boost innovation and creativity is acknowledged, the contingent reward system on which transactional leadership is based is under question. Transformational leadership: A transformational leader is a charismatic and visionary person. He/she is able to inspire his/her followers in a manner that extends far beyond rewards (Howell and Forst 1989). Transformational leadership is more effective in the context of a close supervisory relationship between the leader and the follower, such as that of parent and child or care provider and patient or teacher and student. Transformational leadership transcends daily mundane affairs and works by enhancing the motivation of the follower (Gardner and Avolio 1998) and by impressing upon such a follower the value and meaning of the leader’s goals (Bass 1985). The followers of a transformational leader are expected to think in innovative ways and focus upon upholding certain human values and principles. The transformational leadership style is one that focuses on innovation and creativity and encourages followers to find fresh and new perspectives on things. Transformational leadership is recognized as being especially significant where there is a question of promoting innovation and creative performance. Hence, they have been especially effective in organizations when research and innovation are involved. For example, a positive correlation has been found to exist between transformational leadership and the performance of the organization (Lowe et al, 1996). Transformational leaders are very effective within an organizational context because they are able to inspire their followers to achieve superlative outcomes by providing them with meaning and understanding of what they do, apart from providing them cherished and time honored ideals to follow and espouse. They also provide support, mentoring and coaching for their followers, to infuse them with their own enthusiasm and energy. Bass (1985) has identified four specific traits that are possessed by transformational leaders: (a) Idealized influence The transformational leader is admired and respected for the person that he or she is. He is able to gain the respect, trust and admiration of his followers because he often places their needs above his own and is able to inspire them as well to work in a completely unselfish manner, with their goal being the benefit of mankind. The leader functions as a role model for his followers, he is able to share risks with his followers and he exhorts them to conduct themselves in an ethical, principled manner. (b) Inspirational motivation: The transformational leader has the ability to inspire and motivate his followers. He provides meaning and challenge to the work his followers do and encourages them to think of the future and envision attractive states, as a result of which their team spirit is aroused, due to the enthusiasm and confidence of their leader. (c) Intellectual stimulation: Transformational leaders are able to encourage their followers to think better by questioning their assumptions, rephrasing old problems and encouraging their students to approach old situations with a fresh new perspective. Moreover, a transformational leader does not publicly ridicule or criticize a follower’s mistakes. (d) Individualized consideration: A transformational leader functions as a coach or mentor to each of his followers, and successfully develops the inherent potential that they have. The transformational leader also takes into account the differences between individual followers and adopts different learning approaches for them as may be desirable. Therefore the basis of the relationship between a transformational leader and his followers is a social exchange that also stimulates Citizenship Behavior within an organization. He is able to align individual goals such that they are in line with organizational goals. Another important aspect of transformational leadership is emotional intelligence. Barbuto and Burbach (2006) conducted a study of 80 elected public officials in the United States and for each leader, 3 to 6 direct staff members who worked for them. The objective of the study was to explore the relationship between emotional intelligence and transformational leadership. The results of the study showed that the emotional intelligence of a leader depended upon the self perception of the leader and also impacted upon the way in which his staff rated him or her. This study was undertaken because while there is a significant body of research that supports the effectiveness of the transformational leadership style, there is more that is known about its outcomes rather than about its antecedents. How can the potential for transformational leadership be recognized? Barbuto and Burbach’s study aimed to gain some insight into whether emotional intelligence was one of the factors that could be classed under the antecedents to transformational leadership. In examining the existing literature eon emotional intelligence, they point out several characteristics that transformational leaders have, which support the hypothesis that such leaders have a high degree of emotional intelligence. Some of these features are (a) empathetic response: this is the ability of transformational leaders to understand the feelings, emotions and thoughts of their followers and to be able to understand their point of view. This also makes them effective in an organizational set up, where they are able to align individual goals with organizational goals. In order to bring about significant changes, transformational leaders need to engage and connect with their followers and this is possible only through a high level of emotional intelligence which allows them to empathize with their followers. (b) Mood regulation: Transformational leaders have the power to direct their own feelings inward and this seems to work very well in making people aware of their inner states and reduces negative feelings so that their judgment is improved. Transformational leaders are able to increase the impact of their followers’ thoughts and improve their attention to tasks because they help them with achieving self determination. Since leaders are able to manage their own moods, they are better able to deal with stressful situations and cope well, helping to reduce personal distress in emotional situations. Barbuto and Burbach (2006) have also summarized research which shows that a high level of emotional intelligence is associated with positive dispositions and such people are able to help others by enabling them to cooperate in a group through the spread of positive feelings. Moreover, since transformational leaders are self motivated, they are able to motivate others. Since they themselves have a high degree of self awareness, they are able to use this awareness to accurately assess emotions in others. The researchers have also highlighted other studies that have established a positive correlation between emotional intelligence and transformational leadership. Their study also concluded that there is a definite positive correlation that can be found between emotional intelligence and transformational leadership. Their study also showed that high levels of empathy were precursors for a transformational leadership style. One discrepancy that was revealed in the study by Barbuto and Burbach(2006) was in the area of mood regulation. Their study showed that leaders who were less prone to regulating their moods demonstrated higher degrees of transformational leadership, however this is in contravention of other studies which have found that self regulation of moods is a factor in transformational leadership, since those who can regulate their own moods well make good transformational leaders. While this study suggests several areas whether further study is necessary, it serves as a good basis to establish the connection that exists between emotional intelligence and transformational leadership. Transactional Leadership: Transactional leadership differs from the transformational in that the leaders are preoccupied with daily affairs and are less bothered with deeper meanings and overarching principles. Transactional leadership tends to be more practical and less idealistic as compared to the transformational. While transformational leadership is based upon a system of social exchange, the system of exchanges and rewards between the transactional leader and follower is based on economic exchanges, where the leader makes promises of certain rewards in return for certain levels of performance and this serves as the motivating factor for the followers, rather than the cherished values of the leader himself (Pillai et al, 1999). Therefore, this is a more practical kind of leadership pattern and a good transactional leader recognizes the qualities in his followers and rewards them for good performance. Followers comply with the wishes of a transactional leader, either in the anticipation of rewards, resources or out of the desire not to experience punitive action. Transactional leaders make their rewards contingent upon performance, and clearly specify the goals that must be reached before rewards are announced. Furthermore, transactional leaders generally manage by exception – they intervene only in exceptional cases and the rest of the time, confine themselves to a supervisory, monitoring role (Avilio and Bass 2002). Therefore this approach of transactional leaders within an organization differs from that of transformational leaders who adopt a more active role and interact individually with each of their followers, modifying their approach where necessary to suit individual differences. On the contrary, transactional leaders, by adopting a management by exception approach adopt a more passive role, by intervening only in instance where such intervention is required. While transformational leaders are able to inspire their followers by appealing to their higher ideals and encouraging them to visualize a bright future, transactional leaders on the other hand motivate through the prospect of forthcoming reward or punishment, which is a purely economic exchange. Transformational leaders “stimulate followers to perform beyond the level of expectations.” (Bass, 1985:32). Therefore, within the context of an organization, most employees function according to established group practices prevailing within that particular firm. A transformational leader can encourage individual members of the group to break out of that group norm and to achieve extraordinary heights. However, with the passive approach that is adopted by transactional leaders, it is unlikely that any ground breaking achievements occur from any of the members of organizational groups. Transactional leadership therefore does not stimulate extra role behavior, rather it tends to encourage and promote in-role behavior, however with general standards of behavior being eligible for a reward if higher than optimum expected levels. As pointed out by Pillai et al (1999), since the relationship between a transactional leader and his followers is purely an economic exchange, doing more than what is expected or achieving extraordinary things are not likely to be appreciated. As a result, organizational behavior with a transactional leader is such that only so much is input as what is required in order to garner the rewards. It may not work as well in the research and development wing of an organization for example, where means have to be found to motivate team members to work hard and achieve extraordinary results. Shivers-Blackwell (2004) has pointed out that managers behave differently in similar organizations and in similar jobs. She proposes that organizational context may play a role in determining leadership roles and the kind of leadership patterns that are likely to evolve. For example, an organizational culture that would foster the transformational type of leader would be one that has a general sense of purpose and where there is a feeling of being close knit like a family. There is close interaction and communication among employees, with supervisors serving as mentors and coaches. There is much talk within the organization about vision, purposes and meeting challenges. However, an organizational culture that favors the evolution of a transactional style of leadership may be more impersonal, where roles may be clearly defined without much cross communication and interaction and where rewards may be contingent upon performance. Therefore from a manager’s point of view, the question of whether he will adopt a transformational or transactional style of leadership will largely depend upon what kind of organizational culture he perceives. There is some external locus of control that may function in these situations and even managers who are high self motivators may have to moderate their impulses and visions in a non supportive impersonal organizational environment that fosters a more transactional style of leadership. Bryant(2003) has taken up an exhaustive review of how leadership styles may influence the creation, sharing and exploitation of organizational knowledge. Leaders are crucial to the process of managing knowledge effective and the management of knowledge involves three major aspects: creating, sharing and exploiting knowledge. He concludes that since transformational leadership is more of a one on one style of leadership, it may be more effective in the creation and sharing of knowledge at individual and group levels, while transactional knowledge is more likely to be effective in exploiting knowledge at the organizational level, since it is better equipped for dealing with larger groups of people. Case studies: Nir and Kranot (2006) conducted a study to evaluate the impact of a principal’s leadership style on improving teacher efficacy. A couple of studies that had been done earlier had arrived at the conclusion that a school principal’s leadership style and personal teacher efficacy are directly linked. As a result of these studies, the researchers had concluded that a transformational leadership style of the principal had the power to enhance personal teacher efficacy. However. Nir and Kranot (2006) point out the limitations of the studies that have reached such conclusions, i.e, the studies were conducted using very small samples and only one style of leadership was examined, rather than a wide range of leadership styles. Moreover the studies did not take into account variables such as role satisfaction, stress and autonomy which may also play a role in personal teacher efficacy. Therefore their study has attempted to re-examine the relationship between leadership style of principals and personal teacher efficacy by using much larger samples and a different kind of research design that also controls for role variables across leadership styles. The findings in the study by Nir and Kranot (2006) support the conclusion that the principal’s leadership style does not impact upon the general efficacy of teachers. While they found some correlation between a principal’s leadership styles and personal teacher efficacy, this could not be separated out as the sole factor impacting upon personal teacher efficacy. Their study supports the conclusion that when teachers generally have job satisfaction, then there is added scope for transformational leadership to work in enhancing their self efficacy by stimulating challenges and supporting their initiatives, thereby leading to enhanced satisfaction. Transformational leaders are more likely to create the kind of circumstances where individual satisfaction has a chance to develop. Spinelli (2006) however conducted a study within a hospital to evaluate how effective leadership roles were in influencing perceived outcomes by subordinate managers, through an examination of all the different types of leadership including transformational and transactional leadership styles. Within the hospital environment, there is a need for effective leadership in order to achieve improvements in health care, since health care as such is not merely limited to financial and material issues. Since human resources also play an important role, the ability to use them well is a characteristic of great leaders. The purpose of Spinelli’s study was to evaluate the effect of leadership styles on the perceptions among subordinate managers in the health care environment. The results of his study showed that it is transformational factors that correlated positively with the outcome variable. The more the transformational traits in the leader, the more positively the subordinate viewed him or her and the more effort the subordinate was willing to put in. However, where transactional leadership was concerned, Spinelli found that the notion of contingent reward did not correlate as positively with outcomes as did the transformational model. In so far as management by exception and the adoption of the passive approach, which is a part of the transactional style was concerned, Spinelli found that there was in fact a negative correlation with perceived outcomes. This provides an indication that the transactional leadership system that is contingent upon rewards may not be as effective as a transformational style. Kohn (1999) has offered a strong and convincing argument against the system of giving rewards, arguing that it is actually counter productive. He offers a cogent and convincing argument to support the position that making performance contingent on reward may have a beneficial effect initially in getting employees to adhere to performance standards. However on a long term basis, the employee loses his or her inherent motivation to perform well and begins to perform only to the level that is required to receive rewards. Or worse still, the employee may perform well only when rewards are provided and in the absence of rewards, performance may actually deteriorate in the absence of the inner motivation that is needed. An employee’s inherent enjoyment in the work may be destroyed. However a transformational leadership style focuses upon inspiring and motivating individuals by appealing to their intrinsic motivation, so this may serve to explain why a transformational leadership was seen to generate better outcomes in Spinelli’s study. Conclusions: From the foregoing, it may be noted that a transformational style of leadership is an inspirational one that works best in a one on one setting. It is helpful to introduce vision, purpose and zeal within a follower and to inspire him or her to emulate the high ideals and enthusiasm of the leader. Within an organizational set up, transformational leadership works best in departments such as the Research and Development, or where individuals need to be highly motivated and innately inspired to achieve great outcomes. In general positive correlations have been shown in studies between transformational leadership and positive outcomes in terms of subordinate perception. Transactional leadership on the other hand is not so concerned with high ideals and there is a greater concern with practical daily tasks. The Transactional leader adopts an approach whereby reward is contingent upon follower performance and where the style adopted is one of management by exception, whereby he interferes only when it is necessary. In terms of knowledge sharing therefore, while a transformation leadership style may favor the creation and sharing of knowledge, the exploiting of knowledge within a large organizational set up will be better achieved through a transactional leadership which is more suited to a larger organizational set up. The factors that may influence the development of transformational leadership qualities within a person is a high level of emotional intelligence, for which there appears to be a positive correlation existing, as demonstrated in several studies. While there have been several studies that have corroborated the beneficial effects of transformational leadership, the transactional style which makes rewards contingent upon performance may not be as effective, as shown by Kohn’s work which is the result of a considerable amount of research. Therefore from the point of view of improving organizational performance, a transformational approach may work better because it is able to build upon the inherent motivation of people and to inspire them at a deeper level, rather than through purely external reward systems. The transformational leader is self motivated and has learnt to cope with his own moods so that he has learnt a positive attitude. He also empathizes more with other people and therefore, he is able to understand them and empathize with their feelings. This provides a transformational leader with the means to understand how to motivate others in such a way that it is a self sustaining process, rather than being contingent upon external reward systems. References * Avolio, B. J., & Bass, B. M, 2002. “Manual for the Multifactor Leadership Questionnaire (Form 5X”). Redwood City, CA: Mindgarden. * Barbuto, Jr, John E and Burbach, Mark E, 2006. “The emotional intelligence of transformational leaders: A field study of elected officials.” The Journal of Social Psychology, 146(1): 51-65 * Bass, B. M., 1985. “Leadership and performance beyond expectations”. New York: Free Press. * Bryant, Scott E, 2003. “The role of transformational and transactional leadership in creating, sharing and exploiting organizational knowledge.” Journal of Organizational and Leadership Studies, 9(4): 32 * Gardner WL, Avolio BJ, 1998. The charismatic relationship: a dramaturgical perspective. Academy of Management Review, 23:32-58 * Howell JM, Frost PJ, 1989: “A laboratory study of charismatic leadership”. Organizational Behavior and Human Decision Processes, 43:243-269 * Hollander E, 1978. “Leadership Dynamics” New York, Free Press * House RJ, 1971. “A path-goal theory of leadership effectiveness”. Administrative Science Quarterly 16:321-328 * Lowe, K. B., Kroeck, K. G. and Sivasubramaniam, N, 1996. “Effectiveness correlates of transformational and transactional leadership: A meta-analytic review of the MLQ literature.” The Leadership Quarterly, 7(3), 385-425. * Kohn, Alfie, 1999. “Punished by rewards: The trouble with Gold stars, incentive stars, Incentive plans, A’s, Praise and other brides.” Mariner Books * Nir, Adam E and Kranot, Nati, 2006. “School Principal’s leadership style and teachers’ self efficacy.” Planning and Changing, 37 (3/4):205-219 * Pillai, R., Schriesheim, C. A. and Williams, E., 1999. “Fairness perceptions and trust as mediators for transformational and transactional leadership: A two-sample study.” Journal of Management, 25(6), 897-934. * Shivers-Blackwell, Sheryl L, 2004. “Using role theory to examine determinants of transformational and transactional leader behavior.” Journal of Leadership and organizational Studies, 10(3): 41-51 * Spinelli, Robert J, 2006. “The applicability of Boss’ model of Transformational, Transactional and Laissez faire leadership in the hospital administrative environment.” Hospital Topics, 84(2): 11-19 Read More