Transformational Leadership and Organisational Change - Coursework Example

TRANSFORMATIONAL LEADERSHIP AND ORGANISATIONAL CHANGE By (Student’s Name) The Name of the Class (Course) Professor (Tutor) Name of the School (University) The City and State where it is located The Date Transformational Leadership and Organisational Change Introduction Leadership, especially transformational leadership, is one of the most influential factors that determine the levels of an organisations innovation and success in the current competitive business environment. Consequently, the main aim of the essay is to deliberate on the connection between transformational leadership and innovation, and the ultimate success of the organisation. Transformational leadership directly promotes innovation in organisations, as it has been observed in companies such as Google, Apple, Intel, and Southwest Airlines, which greatly embrace the management style. Consequently, it suffices to say that transformational leaders with inspirational motivation, charisma, individualised consideration, and intellectual stimulation, are able to enhance organisational innovation and success. In order to capture the main aspects of transformational leadership and its contribution to business innovation and success, the essay is divided into various sections, which include the definition of transformational leadership, strengths and weaknesses of this style of leadership, definition of organisational change, the factors influencing organisational change, how transformational leaders transform organisations, examples of transformational leaders, and what happens when leaders fail to change organisations. Definition of Transformational Leadership Firstly, transformational leaders are people with great intellectual stimulation, which helps them to enhance their ability to encourage their employees to become independent thinkers and good mediators (Bass & Giggio 2008, p. 32). Transformational leaders can use their intellectual stimulation to enhance independent thinking among their followers by providing them with challenging assignments that boost their problem-solving skills (Pless & Maak 2011, p. 39). Secondly, transformational leaders are known to be highly charismatic and strive to create innovative situations that challenge the status quo. Such leaders are innovative reformers and most organisations trust them to make the right decisions. Since they normally make the correct decisions and do the right thing, transformational leaders are perceived to be visionary individuals with strong character traits (Pless & Maak 2011, p. 40). Individualised consideration is another quality of transformational leaders that enables them to relate well with their followers. Transformational leaders, by being considerate towards other individuals, recognise that employees are human beings whose performance in the organisation is affected by a number of factors, which need to be made favourable to enhance their productivity (Williams 2012, p. 424). Lastly, transformational leaders are visionary people who effectively use inspirational talks and visions to motivate their followers to see beyond the roles they are assigned to perform in the organisation (Bass & Giggio 2008, p. 33). The link between an employee’s current job and their glorious future ahead is the thing that provides meaning to their role in the organisation (Williams 2012, p. 425). Strengths and Weaknesses of Transformational Leadership Transformational leadership makes a significant contribution to the organisation’s innovation and success. Firstly, these leaders have the ability to formulate an effective vision for improvement after assessing the organisation’s current situation (Shelton 2012, p. 5). The ability to inspire and motivate employees to achieve the vision of the organisation is another positive quality of transformational leaders. They can inspire and mobilise employees to optimise their performance, which definitely enhances the overall productivity of the organisation (Hawkings 2011, p. 27). Transformational leaders also have the ability to create and maintain personal contact with each employee. Such personal contact with employees is also fundamental in reaching those among them who have no interest in the company’s vision, as it motivates them to work toward ensuring its success (Shelton 2012, p. 5). Although transformational leadership is seen as greatly beneficial to organisations, it has a few weaknesses. Firstly, this kind of leadership style can lead to over-reliance on leaders by the workers. Transformational leaders are supposed to motivate, inspire, and encourage employees to do their best in their different capacities. This is dangerous as these leaders may not have all the relevant skills needed to impart proper values to the employees (Carmichael 2011, p. 127). Transformational leadership may also be prone to abuse since a lot of emphasis is laid on the leadership style as opposed to the individual’s character or integrity. A leader without integrity and who lacks good character is more likely to make wrong decisions and use their power inappropriately (Carmichael 2011, p. 128). Defining Organisational Change Organisational change refers to the review and modification of the business processes and management structures that affect organisational performance and productivity. Through organisational change, small organisations can effectively adapt and compete favourably with their large counterparts. Companies need to find ways of carrying out their operations more efficiently without incurring unnecessary costs. For that reason, every organisation should embrace change even as it lays effective foundations and processes to ensure success (Boonstra 2005, p. 25). Organisational change takes place in three main stages: identifying the need, implementing it, and monitoring it. In order to institute a need for change, the management personnel should start by articulating where they want to see the company after a given period of time, say 5 or 10 years (Lewis 2011, p. 21). The management then takes to change the organisation’s structures and processes, which may include combining business units, reducing the number of employees and management layers, and giving itself more power to make decisions on how the company should be run. Monitoring is the last stage in organisational change and it entails monitoring the results of the change and making the necessary adjustments (Boonstra 2005, p. 26). Organisational change has a great significance on the management and success of companies, as organisations that refuse to embrace such change often get wiped out of existence due to stiff competition. Some employees working for the organisation may also be sceptical of the changes proposed to be made on its management. In such cases, it is up to the top management personnel to use their transformational leadership skills to convince such hesitant employees to accept the proposed changes (Lewis 2011, p. 23). Factors that Cause Organisations to Change There are several factors that influence organisational change and determine how companies carry out their businesses. The main drivers of organisational change include technology, competition, the desire for growth and the need to improve processes, and government policy actions. For instance, technological innovation has completely transformed how businesses conduct their operations through information technology and other advancements. Through technologies such as the Internet and high-speed communications, organisations can effectively adopt new business models such as virtual collaboration and outsourcing. Technological innovations force organisations to make necessary changes to remain relevant in today’s competitive business environment (Myers, Hulks & Wiggins 2012, p. 15). Competition also causes organisations to make changes that enable them remain operative in the market. For instance, most organisations are forced to change their marketing tactics when a new competitor enters the market. Competition can force a company to abandon price tactics and look for strategies such as advertisements to outwit its competitors. The new changes that an organisation makes in its strategies to beat the competition depend on the tactics used by its rivals (Myers, Hulks, & Wiggins 2012, p. 16). The desire for growth and the need to improve processes are other factors that cause organisations to change. Business organisations that want to achieve a certain level of growth may need to change their operational methods, such as the training they give to their employees, through the introduction of new technologies. The desire for growth is closely linked to the need to improve processes, which may compel a company to implement new, but efficient, processes to eliminate waste and optimise costs (Paton & McCalman 2008, p. 10). Lastly, government policy actions might also affect the way organisations carry out their businesses. For instance, a manufacturing company would be forced to change its production processes to ensure a safer work environment for its employees if the government decided to introduce new mandated safety regulations. Most government policy actions are mandatory and organisations must make the necessary adjustments to ensure that they do not violate the law (Paton & McCalman 2008, p. 13). How Transformational Leaders Implement Organisational Change Transformational leaders work in various ways to bring changes in organisations. Firstly, they bring up the changes by strengthening organisational health. Organisational health is concerned with the ability of an organisation to align, execute, and transform itself as fast as possible to remain relevant in the stiff competition within the industry it operates (Burke & Cooper 2006, p. 46). Transformational leaders focus on putting the necessary strategies in place to ensure that their organisations are able to beat their competitors. Competition is one of the main factors that make weak organisations withdraw from the market or become bankrupt. Consequently, transformational leaders ensure the continuity of their organisations by putting the competition in check (Hacker & Tammy 2004, p. 23). Secondly, transformational leaders shape organisational culture by transforming employee behaviour within their companies. The leaders set and achieve sustained performance improvement by going beyond organisations’ processes, systems and structures to address both individual and collective behaviour that affect employees within their organisations. The behaviours that these leaders modify include team and group dynamics, mind-sets, and organisational culture. The leaders work with other management personnel and employees of all ranks to design and implement strategies to develop other leaders, shift mind-sets, and build and manage skills and talents to enhance the organisation’s performance and overall productivity (Burke & Cooper 2006, p. 48). Lastly, transformational leaders bring changes to companies by acting as role models to employees, as they inspire and motivate them to embrace and support the proposed changes in their organisations. The leaders ensure that every employee understands the reasons for bringing up the changes and how they will affect them and the company. Normally, changes are never effective if employees fail to support them. For that reason, transformational leaders carry out a very important role in inspiring employees to support the changes that are instituted into their companies (Hacker & Tammy 2004, p. 31). Examples of Famous Transformational Leaders There are several famous transformational leaders in the business sector who have transformed the fields of technology, financial services, and diversified businesses among others. For example, there are numerous transformational leaders behind the innovation of the computing technology in 1970s and 1980s who worked for Microsoft, IBM, Apple, Intel and other companies in the industry. A good example of such leaders is Steve Jobs: the Apple co-founder who brought about transformation of business processes through high-speed microprocessors and software applications. Apple has continued with its transformational leadership even in its smart mobile phone products and applications. Other examples of transformational leaders behind the various technological innovations are Google’s Larry Page and Sergey Brin who pioneered e-commerce and Internet roadmaps through their popular search engine (Basu 2013, p. 1). Diversified businesses are another area in business where examples of transformational leaders can be found. An example of such a leader in these businesses is Warren Buffett, who is known for transforming the Berkshire Hathaway Incorporated from the small clothing factory it used to be to a large holding company. Another example is Jack Welch, who joined General Electric in the early 1980s and transformed the company into a lean and active powerhouse (Basu 2013, p. 1). Transformational leaders in the financial services include Fidelity’s founder Edward Johnson and Peter Lynch, the star portfolio manager. Fidelity Firm is known as one of the leading organisations in mutual funds. Another example in this category is John Bogle, the founder of Vanguard, a market leader in index funds. The two funds provide diversification and money management services at relatively low charges (Basu 2013, p. 1). What Happens When Leaders Fail to Change Organisations There are a number of consequences that organisations may face if their leaders fail to enact the necessary changes. Firstly, organisations that do not embrace change are likely to suffer from lack of technological advancements. Without technology, organisations waste a lot of time carrying out most of their operations manually. This is likely to increase the production costs of the organisations, as they are forced to hire more employees to do the work manually. Lack of innovation can also make the company less competitive and force it to leave the industry (Schyns & Hansbrough 2010, p. 149). Secondly, organisations whose leaders do not bring up the relevant changes are likely to experience poor management of crises whenever they come up. Without the necessary changes, an organisation may be unable to rectify the systems or processes that are less efficient. Consequently, such organisations are unable to withstand turbulent times and high competition. Lack of proper strategies for managing crises can also result in extra expenses and adversely affect the profitability of the organisation (Hoverstadt 2008, p. 23). Lastly, lack of implementation of the necessary changes may result in a poor organisational culture. Companies, which do not constantly change their organisational culture, are more likely to suffer from problems, such as decreased productivity and inefficiency, poor customer satisfaction, and lower employee retention rates. Poor organisational culture is also likely to result in poor relations between the management and employees, a shortcoming that can easily ruin the company’s image (Helms-Mills 2012, p. 117). Conclusion Transformational leadership is the core factor in organisational change; most organisations rely on such leaders to help them incorporate the necessary changes into their processes, systems and management styles to ensure that they remain competitive. Implementation of the changes also enhances the organisation’s performance and productivity. Transformational leaders do a lot to ensure that their organisations prosper. The leaders bring about individual employee growth and development, organisational development and change, and improvement of performance in their organisations. Companies, such as Apple, IBM, and Intel, owe their desirable performance and production to their transformational leaders. It is evident that companies whose leaders cannot design and implement necessary changes face serious problems, such as poor crisis management and poor growth and development. Organisations that wish to remain productive and profitable amidst challenges, such as competition, must utilise the services of transformational leaders. References Bass, BM, &Giggio, RE 2008, Transformational leadership, Psychology Press, London. Basu, C 2013, Transformational leadership examples in business [Online] Available at: [Accessed 11 Oct. 2013]. Boonstra, J 2005, Dynamic of organisational change and learning, John Wiley and Sons, Chichester. Burke, RJ, & Cooper, CL 2006, Inspiring leaders, Routledge, New York, NY. Carmichael, J 2011, Leadership and management development, Oxford University Press, New York, NY. Hacker, S, & Tammy, R 2004, Transformational leadership: creating organisations of meaning, ASQ Quality Press, Milwaukee, WI. Hawkings, P 2011, Leadership team coaching: developing collective transformational leadership, Kogan Page, Philadelphia, PA. Helms-Mills, J 2012, Making sense of organisational change, Routledge, London. Hoverstadt, P 2008, The fractal organisation: creating sustainable organisations with the viable system model, John Wiley and Sons, Hoboken, NJ. Lewis, LK 2011, Organisational change: creating change through strategic communication, Wiley-Blackwell, West Sussex. Myers, P, Hulks, S, & Wiggins, L 2012, Organisational change: perspectives on theory and practice, Oxford University Press, Oxford. Paton, RA, &McCalman, J 2008, Change management: a guide to effective implementation, Sage Publications, London. Pless, NM, &Maak, T 2011, Responsible leadership, Springer, Berlin. Schyns, B, &Hansbrough, T 2010, When leadership goes wrong: destructive leadership, mistakes, and ethical failures, Information Age Pub., Charlotte, NC. Shelton, EJ 2012, Transformational leadership: trust, motivation and engagement, Trafford Publishing, Bloomington, IN. Williams, C 2012, Effective management: a multimedia approach, Cengage Learning, Mason, OH. Read More