Transformational leadership

Executive Summary

Transformational leadership has rapidly become the approach of choice for much of the research and application of leadership theory. In many ways, transformational leadership has captured the imagination of scholars, of noted practitioners, and of students of leadership. Research on transformational leadership and related charismatic approaches has grown exponentially.

Why such interest in transformational leadership? Perhaps it is because transformational leadership, with its emphasis on intrinsic motivation and on the positive development of followers, represents a more appealing view of leadership compared to the seemingly “cold,” social exchange process of transactional leadership. Perhaps it is because transformational leadership provides a better fit for leading today's complex work groups and organizations, where followers not only seek an inspirational leader to help guide them through an uncertain environment but where to followers also want to be challenged and to feel empowered, if they are to be loyal, high performers.

The purpose of this report is to explore transformational leadership critically and how an organization is enhanced by understanding and practicing transformational leadership. First, this study addresses the history of theories of leadership and how modern leadership theory has evolved, nothing in particular the progression from trait theories which suggest that leaders possess particular traits which facilitate their development and also the beliefs of style theorists, most of whom advocate more democratic approach to leadership rather than what they term an autocratic style. This study then reference the Transformational Leadership construct as developed by Burns (1978) and extended by Bass (1985). The context in which this leadership paradigm has evolved is examined to determine relevant socio-cultural factors which may facilitate the development of this type of leadership.

1. Introduction

A new paradigm of leadership has captured widespread attention. James MacGregor Burns (1978) conceptualized leadership as either transactional or transformational. Transactional leaders are those who lead through social exchange. As Burns (1978) notes, politicians, for example, led by “exchanging one thing for another: jobs for votes, or subsidies for campaign contributions” (p.4). In the same way, transactional business leaders offer financial rewards for productivity or deny rewards for lack of productivity. Transformational leaders, on the other hand, are those who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leader help followers grow and develop into leaders by responding to individual followers needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organization. More evidence has accumulated to demonstrate that transformational leadership can move followers to exceed performance, as well as lead to high levels of follower satisfaction and commitment to the group and organization (Bass, 1985, 1998a).

Transformational leadership has been popular research topic for the last two decades. Research on this topic has produced ample evidence that transformational leadership enhances employee attitudes and performance (Bass, 1999, Lowe et al., 1996). Studies on transformational leadership have, however, focused on objective performance measures such as sales volume, profit margin, and stock product performance (Geyer and Steyer, 1998; Howell and Avolio, 1993), in addition to employees satisfaction and commitment to their organizations (Hater and Bass; Barling et al. 2000). There is no study that addressed transformational leadership with regard to service quality.

2. Literature Review

2.1 Historical Background of Transformational Leadership

Historians, political scientists and sociologists have long recognized leadership that went beyond the notion of a social exchange between the leader and followers. Weber's (1924/1947) examination of charisma epitomized such study. However, both psychology and economics supported contingent reinforcement-offering a reward or compensation for a desired behaviour-as the underlying concept for the study of leadership. Leadership was seen primarily as an exchange relationship (e.g., Homans, 1950). Research exemplified by Podsakoff and Schirescheim (1985), as well as much of the research with the Full Range of Leadership (FRL) model (Avolio & Bass, 1991) to be described subsequently, indicated that contingent reward is reasonably effective under most circumstances. In addition, active management-by-exception (corrective leadership for failure of a follower to comply) is more varied in effects, and passive management-by-exception (“if it isn't broke, don't fix it”) is contraindicated as an effective act of leadership, for, as Levinson (1980) suggested, if you limit of a follower to rewards with carrots for compliance or punishment with a stick for failure to comply with agreed-on work to be done by the follower, the follower will continue to feel like a jackass. Leadership must also address the follower's sense of self-worth to engage the follower in true commitment and involvement in the effort at hand. This is what transformational leadership adds to the transactional exchange.

In recent years, the transformational leadership construct has become a popular topic in leadership literature (AVolio and Howell, 1992; Bass, 1985; Hater and Bass, 1988). The original transformational leadership notion is presented below (Den Hartog et al., 1997; Hinkin and Tracey, 1999):

* Idealized influence or charisma:

The leader provides vision and a sense of mission, instils, pride, gains respect, trust and increases optimism. Such a leader excites and inspires subordinates. This dimension is a measure of the extent of follower's admirations and respect for the leader.

* Inspirational motivation:

The leader acts as a model for subordinates, communicates a vision and uses symbols to focus efforts. The dimension is a measure of the leader's ability to engender confidence in the leader's vision and values.

* Individual consideration:

The leader coaches and mentors, provides continuous feedback and links organizational members needs to the organizations mission. Individual consideration is a measure of the extent to which the leader cares about the individual followers concerns and developmental needs.

* Intellectual stimulation:

the leader stimulates followers to rethink old ways of doing things and to reassess their old values and beliefs. This dimension is concerned with the degree to which followers are provided with interesting and challenging tasks and encouraged to solve problems in their own way.

Transformational leadership has much in common with charismatic leadership, but charisma is only part of transformational leadership. More modern conceptions of charismatic leadership take a much broader perspective (e.g., conger & Kanungo, 1998; House & Shamir, 1993), however, and have much in common with transformational leadership.

2.2 Transformational Leadership

According to Bass (1985), transformation leaders are those leaders who elicit “superior performance”, or performance “beyond normal exceptions”, from those they lead (as cited in Krishnan, 2001, p.126). Bass (1985) proposed four factors characteristic of transformational leaders. Idealised influence reflects the leader's ability to engender the trust and respect of their followers. Through idealised influence, transformational leaders become role models for their subordinates, and provide both vision and a sense of mission to the group (Humphreys and Einstein, 2003). Through inspirational motivation, the transformational leader inspires subordinates to “try harder” for the benefit of the organisation (Kelloway and Barling, 2000, p. 358).

Most leaders profile includes both transformational and transactional leadership. The attitudes and behaviour of Otto von Bismarck, whose efforts led to the unification of Germany in 1871, illustrate how transformational and transactional leadership can be directive or participative, democratic or authoritative (Avolio & Bass, 1991).

Strong assertions have been made in leadership literature regarding the beneficial effect of transformational leadership on subordinates. A number of studies have suggested that transformational leadership has a profound positive influence on subordinates effort and satisfaction (Bass and Avolio, 1990; Bycio et al., 1995; Howell and Frost, 1989; Kirkpatrick and Locke, 1996; Parry, 2000). This positive influence has been observed in a variety of contexts including that of health care (Gellis, 2001), commerce (Podsakoff et al., 1990), military (Yammarino and Bass, 1990), and education (Hoover, 1991).

From a subordinate development point of view, the intellectual stimulation dimension of transformational leadership in particular has been associated with challenging subordinates to be creative, think critically and independently and find novel ways of solving problems while seeking a wide range of opinions before deciding upon solutions (Bass, 1998). Further, individualized consideration has been viewed as a vehicle for developing subordinates confidence to tackle problems (Bass, 1985).

2.3 Pseudo Leaders

Transformational leadership may be socialized or personalized. Socialized leadership is based on egalitarian behaviour, serves collective interests, and develops and empowers other. Socialized leaders tend to be altruistic and to use legitimate established channels of authority (Howell & House, 1992; McClelland, 1975). Eleanor Roosevelt was the epitome of socialized leadership. Personalized leadership is based on personal dominance and authoritarian behaviour, is self-aggrandizing, serves the self-interest, and is exploitative of others (McClelland, 1975). Personalized leaders rely heavily on manipulation, threat, and punishment, and show disregard for both the established institutional procedures and for the rights and the feelings of others. They are impulsively aggressive, narcissistic, and impetuous (Howell & House, 1992). Personalized leaders rely heavily on manipulation, threat, and punishment, and show disregard for both the established institutional procedures and for the rights and the feelings of others. They are impulsively aggressive, narcissistic, and impetuous (Howell & House, 1992). Adolf Hitler and Joseph Stalin were such leaders.

The dynamics of transformational leadership may look the same whether beneficial or harmful to followers (Bass, 1985), but the truly transformational leader is socialized in orientation and values as well as morally uplifting. By contrast, the pseudo-transformational leader is personalized in orientation and values, and caters in the long run to his or her self-interests. Generally, such leaders leave behind a legacy of destruction, as opposed to a stronger community to build future success.

Truly transformational leaders transcend their own self-interests for one of two reasons: utilitarian or moral principles. If utilitarian, their objective is to (a) benefit the organization, society, the group, the attachment to the social group of which one is a member, the collective of individual members, and/or (b) to meet the challenges of the task or mission. If a matter of moral principles, the objective is to do the right thing – to do what fits principles of morality, responsibility, sense of discipline, and/or respect for authority, customs, rules, and traditions of a society. There is belief in the social responsibility of the leader and the organization.

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