Organizational Outcomes of Transformational Leadership - Literature review Example

Running Head: Transformational Leadership Transformational Leadership Name Course Lecture Date Introduction Transformational leadership is defined as a leadership style that aims at inspiring positive change in the follower. Transformational leaders are distinguished from other by their energy, enthusiasm and passion (Krishnan, 2005). Transformational leaders go further than just directing subordinates; they are involved in follower’s work and thus are respected, trusted and admired by their followers. Boerner, Eisenbeiss and Griesser (2007) define transformational leaders as leaders who inspire and stimulate extraordinary commitment in their followers while developing their own leadership capacity. This literature review discusses the influence of transformational leadership style on various organizational and personal outcomes. The paper first discusses organizational outcomes such Organizational Citizenship behaviour, Culture and vision which can be impacted by transformational leadership. Secondly, the review investigates how transformational leadership influences job satisfaction, employee empowerment and organizational commitment. Thirdly, the paper analyzes the factors that increase the need for transformational leadership in contemporary organizations. The paper also discusses situational leadership as an alternative to transformational leadership and the advantages this style of leadership posses over transformational leadership Who is transformational Leader? According to Bass (1998), transformational leadership comprises of three components. First, Transformational leaders are interested in stimulating their followers intellectually. These leaders want their followers to challenge the status quo and become more creative in their work. Transformational leaders are constantly looking for innovative ways of doing things or seeking new opportunities. Secondly, Transformational leaders give individualized consideration to their followers. This leadership style involves support and encouragement at the individual level (Masi and Cooke, 2000). They encourage open communication with followers to ensure ideas are shared and follower’s individual contribution is recognized. Transformational leaders ensure that the effort of every individual is appreciated. Bass (1998) refers to the third component of transformational leadership is inspirational motivation. According to Nguni, Sleegers and Denessen (2006), transformational leaders are able to articulate a clear vision for the organization. Therefore, the followers are able to share the leader’s passion in achieving the organization’s goals. Finally, transformational leadership comprises of idealized influence. Idealized influence is concerned with being a role model for followers. Transformational leaders exhibit admirable traits that follower aim to emulate. Through trust and respect a transformational leader is able to gain idealized influence with their followers. Organizational Culture Organizational culture influences such outcomes as performance, commitment, ethical behaviour, employee satisfaction, commitment and productivity (Yukl, 2002). Organizational culture can be defined as a set of beliefs and norms that are distinct to a particular organization. Like OCB, Transformational leadership style significantly affects the development of organizational culture. In the views of Nguni, Sleegers and Denessen (2006), the values, beliefs and assumptions of a leader shape the culture of the organization he is leading. Transformational leaders are able to embed their desired culture in the organization by mentoring and coaching, acting as role models and direct teaching. Employee exhibits the influence of the leader’s leadership style on organizational culture. Transformational leaders assist followers discover their potential and their role in achieving organizational objectives (Nguni, Sleegers and Denessen, 2006). Helping employee realize their potential leads to the development of a high-level commitment culture. By encouraging innovation and creativity among employee transformational leaders also help to foster the development of an innovative culture in the organizations they lead. In constantly changing business environment, adopting to change becomes critical to organizations. Transformational leaders indicate the need for change of organizational culture in the face of dynamic business environments. Transformational leaders remain supportive to employees as they go through changes in organizational culture. According to Nguni, Sleegers and Denessen (2006), organizations led by transformational leaders are faster at adapting their culture to fast changing business environment. Therefore, it can be argued Transformational leaders contribute profoundly to the development of strong organizational culture. Organizational outcomes: of Transformational leadership Organizational Citizenship Behavior According to Ackfeldt and Leonard (2005), transformational leadership has a profound impact on organizational citizenship behaviour (OCB). OCB is defined as voluntary behaviour by employees to exceed the organizational expectation. OCB is developed from a sense of ownership of the organization and is not linked to the organizational incentive system. Ackfeldt and Leonard (2005), link OCB to improved performance in organizations. Most organizations desire to develop OCB in their employee as this means they are automatically committed to the organizational goals (Schlechter and Engelbrecht, 2006). Nguni, Sleegers and Denessen (2006) say employee who exhibit OCB give selflessly to the organization without expecting to receive anything for their contribution. MacKenzie, Podsakoff, & Rich (2001) demonstrate the positive impact of transformational leaders on OCB. The intellectual stimulation component of transformational leadership plays a large role in the development of OCB in organizations. Transformational leaders challenge employee to perform above expectations (Luthans, 2002). Transformational leaders inspire their followers to improve the quality and quantity of their performance. The courtesy, concern and virtues shown by transformational leaders have been associated with development of OCB (MacKenzie et al., 2001). Furthermore, transformational leaders give their followers more decision making powers making, therefore developing a sense of ownership among followers. The perception of organizational ownership is critical in the development of OCB. The Zellars, Tepper, & Duffy (2002), and Schlechter and Engelbrecht (2006) studies established a clear positive link between transformational leadership and organizational citizenship behaviour. Organizational Vision Transformational leadership has been strongly linked with the existences of clear organizational visions (Ackfeldt and Leonard, 2005). Transformational leaders are good at developing a vision for the future and garnering mutual support from followers. Through the components of Idealized influence and inspirational motivation, transformational leaders are able to share and get the commitment of followers to the organizational vision (Dionne et al, 2004). Transformational leaders have an ability to compel followers to see their vision of the future (Tucker and Russell, 2004). Transformational leaders also inspire followers to commit to the vision as they are always guided by a sense of purpose. Transformational leaders are able to make followers focus on the company long-term vision and lift their sight away from their daily routines. Most organizations want their followers to share their vision of new and exciting possibilities. Transformational leaders step in to provide the energy and vision needed to achieve the organization’s goals. Personal Outcomes Organizational Commitment Transformational leaders are able to gain the trust and loyalty of their followers by respecting them and being confident in their ability (Nguni, Sleegers and Denessen, 2006). Loyal and trusting employees feel the need to identify with the leader and the organizations. Loyal employees are able to stick and support the organizations even through very difficult conditions. Some of the personal outcomes impacted by transformational leader include: job satisfaction, motivation, trust and self-efficacy (Masi and Cooke, 2000). Empowerment According to Masi and Cooke (2000), one of the aims of transformational leadership is to empower followers. This is achieved by articulating a vision and signalling to the employees they are confident of their ability to achieve the vision. According to Arnold, Barling and Kelloway (2001), transformational leaders create a participatory environment that empowers followers to respond rapidly to the changing business environment. Transformational leadership emphasizes the independence and autonomy of followers (Bass, 1998). Highly-talented employees consider job autonomy and independence critical to their perception of empowerment in the organization. Transformational leaders advocate for departure from archaic operating rules and procedures. Instead they call for independent and fresh thinking on how to solve problem. They encourage their followers to come up with solutions on their own. In the words of Givens (2008), transformational leadership is aimed at developing follower self-development and self-management. The self-efficacy of employees under transformational leadership also positively impact employee empowerment. Empowerment Transformational leadership has been found to influence a number of personal outcomes among followers (Dumdum, Lowe, & Avolio, 2002). Bass (1998) shows the effect of transformational leadership on employee satisfaction and work commitment. Transformational leadership get their followers to overlook self-interest and work towards the success of the organization. By opening up communications transformational leaders can recognize and appreciate the contribution of every member (Givens, 2008). Since, transformational leaders emphasize on creativity and critical thinking in solving problem, employees become more committed to finding solutions for the organizations problems. Offering challenging work to followers has been linked with increased job satisfaction and organizational commitment. Dvir, Eden, Avolio, and Shamir (2002) provide empirical evidence that shows transformational leaders positively impact employee’s morality, motivation and empowerment. Job Satisfaction Transformational leadership can also be linked to higher levels of job satisfaction among employees. Givens (2008) defines job satisfaction as a pleasurable state resulting from ones job experiences or job. A Job satisfaction is also the perception among employees that they are obtaining something of value from the organization (Nguni, Sleegers and Denessen, 2006). Dionne et al (2004) claims that job satisfaction is based on the job itself, work environment, supervisor relationship, future opportunity, management belief, remuneration and benefits, and co-worker relationships. The intellectual stimulation imparted by transformational leadership affects the future opportunity factor of job satisfaction. The employee gains the perception that the organization is preparing him for better future job opportunities. Supervisor relationship are better than average as transformational leaders focus on guiding and supporting employee rather than supervising them. Since, Transformational leaders allow employee more autonomy over their work, accomplishment of tasks result in greater sense of accomplishment and satisfaction (Emery & Barker, 2007). Furthermore, transformational leaders show a higher degree of concern with their follower’s welfare. Employees are satisfied in a job where they feel valued by the management. Commitment Emery and Barker (2007) define commitment as the individual willingness to identify with the organization, exert effort to assist the organization achieve its objective and remain with the organization. Yukl (2002) defines commitment and as the enthusiasm employee carry while doing task for the organization. Commitment can also be defined as the attachment of loyalty that an employee feels to the organization (Bass, 1998). By influencing job satisfaction and the job environment, transformational leadership results in higher levels of organizational commitment among employees. Why do organizations need transformational leaders? According to Yukl (2002), the changes in nature of work, organizational structure and the attitudes of employee increase the need of transformational leaders in the workplace. The old tall hierarchical organizational structure has been abandoned in favour of a flatter organization. The former structure allowed leaders to direct employees to complete task. In contrast, the new structure needs employee behaviour to be inspired rather than directed. According to Yukl (2002), the need for transformational leadership is also enhanced by the changing nature of work. Organizations are now changing to a more project-oriented mode of operation. This mode of operation means people have to work in teams that may be sometimes drawn across departments. Leaders in organizations therefore find themselves managing teams instead on managing subordinates. Leaders must therefore adapt to managing people who may not be necessarily their subordinates. Furthermore, there is an emerging employee generation which does not like being supervised. Generation-Y employees are more concerned with job autonomy, personal development and self-expression. In a business environment where talent is fiercely competed over, transformational leaders assist organization attract and retain talented generation-Y employees. Yukl (2002) credit competitive pressure, customer demands, advances in technology, globalization of operation and downsizing as the main factors leading to these changes in nature of work. According to Yukl (2002), situational leadership is an equally or more effective leadership style in comparison to transformational leadership. Situational leadership is based on the principle of adopting leadership style to the prevailing situation. The main advantage of situational is exhibited when leaders come up against strong organizational culture. In contrast to transformational leadership, situational leaders adapt to the organizational culture and therefore avoid resistance to their leadership (Yukl, 20020. Furthermore, some employees need to be coerced to perform. Situational leaders can use coercion if they deem it fit, while transformational leaders have to stick with softer incentives even if they are ineffective. Conclusion Transformational leaders can transform many aspects of an organization profoundly. First, transformational leadership leads to the development of organizational citizenship behaviour, which see employee, contribute the organization exceptionally. Secondly, transformational leadership lead to the development of strong organizational culture that forms the foundation of better performance by the organization. With well articulated visions, transformational leaders are able to gain support for the organizations objective from their followers. Transformational leadership also influence a range of personal outcomes in the organizations. These include job satisfaction, employee empowerment and organizational commitment. The impacts on these outcomes raise the need for transformational leadership in organizations to critical importance. Changing nature of work, workforce generational changes and flattening organizational structure also make transformational leadership relevant to contemporary organizations more than ever before. References Ackfeldt, A. L., & Leonard, V. C. (2005). A study of organizational citizenship behaviors in a retail setting. Journal of Business Research, 58, 151-159. Arnold, K. A., Barling, J., & Kelloway, E. 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