How Transformational and Transactional Leadership Styles Affect an Organization
Introduction
Leadership is defined as the capability to direct a group or organization towards achieving a set goal. It is a process that involves achievements of goals by having a collective vision so as to achieve the goals that have been set with a purpose and by following a specified guideline that is satisfactory to both the leaders and the overall management of the organization as well as the rest of the employees. An individual with strong leadership is able to direct the rest of the employees towards the achievement of the company’s goal and mission. An individual with good leadership skills is also able to persuade and convince the rest of the employees to follow the path that he/she has chosen so as to lead the organization towards achieving success.
The increasingly changing world has made organizations to be faced with the challenge of being at par with the change while still remaining relevant in the market. In such as situation having an effective leadership will enable an organization ot effectively implement the appropriate changes that will ensure that the organization continues to thrive. An organization with poor/weak leadership will experience objection form the employees when they try to implement change as compared to an oranganisation /institution that has an effective leadership.
There are several new leadership approaches that can effectively be applied in an organization. This paper aims to discuss tow; transformational and transactional leadership.
Discussion
According to Bass (2006), transformational leadership entails the motivation of employees to focus on achieving the goals of the organization as a whole and view the change from a different perspective. With transformational leadership the leader urges the employees not to focus on achieving their own self interests only. A leader with transformational skills will therefore be in apposition to skillfully manage situations in the organizations such as change in market demand or an economic downturn. The leader will be able to apply the appropriate measure without affecting the running of the organization. A transformational leader is also a role model to the rest of the employees such that the employees easily emulate his actions and consequently respond positively to change without much friction. A transformational leader also has a vision towards the development and growth of the organization. It is also the responsibility of a transformational leader to make it clear to all the employees about the norms and values of the organizations. With this knowledge it will be easier for the employees to accept any changes in the running of the organizations in terms of establishing the way forward towards the growth of the company (Bass, & Riggio, 2006).
There are several categories of transformational leadership. One is the idealized influence attribute. This attribute is with reference to the personality of the leader. A leader with positive attributes such as confidence will be able to influence positively the employees of an organization to implement a change. A confident leader will remain strong and find lasting solutions in times of predicament and crisis. A leader with strong and powerful attributes will have a positive effect to wards the employees in the effort to implement changes that will enhance the achievement of the business goals and objectives.
The second category of a transformational leader is the one with idealized influence behavior. Such a leader is charismatic, hardworking and focused on attaining the vision, values and beliefs of the organizations. Such leader will be effective in an organization and through his/her hard work and good conduct will win the trust of the subordinates. In contrast a leader whose behavior is questionable will not be trusted by the employees when it comes to implementation of ideologies that aim to better the organization.
The third category is the inspirational motivation. A transformational leader with such traits inspirational traits will motivate the employees to be optimistic even in times of distress. For instance if a company is running at losses at it is faced with imminent closure, the inspirational leader will be in apposition to reassure the employees that they will come off the problem. Such a leader is also able to motivate the employees to work as a team (Burke, & Mattis, 2005). Team work is an essential part towards achieving the success of an organization. An effective transformational leader will be able to encourage the rest of the employees to work as one towards achieving a specific goal. Team work in an organization ensures the smooth running of the business activities as the company as the employees are able to work towards achieving one goal other than competing against each other.
Team work also promotes a sense of belonging as the employees are involved in the daily running and decision making of the company and as a result they feel as part and parcel pf the organization. With an inspirational motivation speaker, the employees are able to work within attainable and realistic goals in the organizations. A leader will set goals that he/she is consciously aware are achievable, and to effectively do this, he/she can involve the rest of the employees. Employers are usually motivated to work towards the attainment of goals that they personally assisted in setting (House, 2004).
The fourth category is the individualized categorization which refers to a leader who is keen to know the employees need so as to attain and achievement and growth. Such a leader is a mentor with positive attributes that the employees can look up to and aspire to be. The management of any organization should be keen to hire leaders who inspire the employees to work even harder. Such a leader will be able to create an appropriate environment to ensure that all the employees are able to reach their full potential while at the same time achieve the goals and objectives of the company.
The final category of transformational leaders is the intellectual stimulation. A leader with such a trait will encourage the rest of the employees to be innovative and creative with the aim of ensuring the growth of the organization. The freedom to be creative and innovative in an organization enables the employees to try out different ventures that will give the organization a competitive edge in the market. To foster innovations and creativity, the leader will focus on assumptions made and question them as well as review methods of approaching different situations in a business setup. These activities leave the employees to brainstorm on new ideas that are still applicable in the ever changing world of today (Northouse, 2004).
The second group of leadership style is the transactional leadership style which entails the use of rewards and promises as a form of motivation. For this type of leadership there exists some degree of mutual understanding where the leaders promise the employees of rewards if they are able to achieve certain work objectives and goals. An organization can set goals in short and long term with the promise that if the staffs are able to achieve the set goals they will be rewarded. Rewards are mainly in the form of monetary form such as bonuses and pay increments but they can also be in terms of promotions (Bass, & Riggio, 2006).
In transactional leadership there are three main sub scales: the first is the contingent rewards which refer to the ability of the leader to clarify the goals that must be achieved. To emphasize on the importance of achieving the set goals the leader will promise rewards for the attainment of results as per the set goals. The use of rewards is a great motivator to the employees to work hard to achieve the set goals and objectives for the organizations. Without incentives the employees will not be motivated to work as hard.
The second category is management by exception. This is the active participation of the leaders in ensuring that the standards of work done by the employees as per the requirements of the organization. Actively monitoring the work of the employees in an organization will have appositive effect in the organization in that the output and final result will always be as per the expectation if the company. However, continuous monitoring of staff in their lien of duty creates a tense atmosphere in the organization as the employees feel pressured to perform exemplarily. The presence of an authoritative figure constantly monitoring the activities of the employers can demoralize the employees who would instead prefer to be allowed some degree of freedom to work by themselves (Achua, & Lussier, 2009).
The third level is the passive management where the leadership of an organization uses hands off approach towards the daily operations of the business. Such a leader only intervenes if and only if a problem arises in the running of the business. This is a preferable method of conducting business and employees going about their responsibilities at work. This method is appropriate as the employees are given the opportunity to freely conduct their duties without intimidation. The employee is also free to venture into other fields and in the process enhance creativity and innovation. However the main disadvantage with this style of leadership is that the employees if left unsupervised might not focus on business related activities and the achievement of the business goals and in the process the business might not be productive and may ruin into losses (Kakabadse, &Vinnicombe, 2004).
Conclusion
Leadership is important for the effective running of an organization. The quality of the leaders in an organization will determine the proper functioning of an organization with respect to achieving of the company’s goals and objectives. Both transformational and transactional leadership styles have been found to be effective in an organization. If applied effectively, the two styles of leadership can be effective in increasing the productivity of the organization. For instance transformational leadership style can be used in determining the satisfaction of employees towards a specific leader in an organization as well as strengthen the employee’s sense of belonging. By leaders applying the transformational style the employees have the opportunity to grow and self actualize and subsequently increase the productivity of the organization. Transactional leadership skills also give the employees a sense of job satisfaction towards the work they have accomplished.
Reference
Achua, C. & Lussier, R. (2009). Leadership: Theory, Application, & Skill Development
Cengage Learning
Burke, R. & Mattis, M. (2005). Supporting women’s career advancement: challenges and
opportunities. Edward Elgar Publishing
Bass, B. & Riggio, R. (2006). Transformational leadership. Routledge
Hirtz, P. & Riordan, C (2007). The effects of leadership on quality. Engineering
Management Journal, 19(1), 22-27
House, R. et al (2004). Culture, leadership and organizations. Beverly Hills, CL: Sage
Publications Inc.
Kakabadse, A. &Vinnicombe, S. (2004).Working in organizations. Gower Publishing,
Ltd
Northouse, P. G. 2004. Leadership: Theory and practice. Thousand Oaks, CA: Sage.
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