Transformational And Transactional Leadership Types And Their Applications Management Essay

Transformational And Transactional Leadership Types And Their Applications Management Essay

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For many years, a lot of research has gone into the study of transformational and transactional theory. Burns (1978) was the first to introduce the concepts of transformational and transactional leadership in his treatment of political leadership. To Burns the difference between transformational and transactional leadership is in terms of what leaders and followers offer one another. Transformational leaders offer a purpose that transcends short-term goals and focuses on higher order intrinsic needs. Transactional leaders, in contrast, focus on the proper exchange of resources. If transformational leadership results in followers identifying with the needs of the leader, the transactional leader gives followers something they want in exchange for something the leader wants (Kuhnert & Lewis, 1987).

The Transactional form of leadership is characterized by leaders' engaging in an exchange process with followers whereby the leader rewards or punishes followers on the basis of follower performance. This exchange process can be both constructive and corrective. Corrective exchanges involve leader behaviour whereby leaders actively seek to correct mistakes before or after they occur. Constructive exchanges take the form of contingent rewards whereby leaders promise rewards for satisfactory performance and deliver the rewards when performance is achieved. The four dimensions of transformational leadership are charisma or idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Charisma, or idealized influence, is the degree to which the leader behaves in admirable ways that cause followers to identify with the leader. Charismatic leaders display conviction, take stands, and appeal to followers on an emotional level. Inspirational motivation is the degree to which the leader articulates a vision that is appealing and inspiring to followers. Leaders with inspirational motivation challenge followers with high standards, communicate optimism about future goal attainment, and provide meaning for the task at hand. Intellectual stimulation is the degree to which the leader challenges assumptions, takes risks, and solicits followers' ideas. Leaders with this trait stimulate and encourage creativity in their followers. Individualized consideration is the degree to which the leader attends to each follower's needs, acts as a mentor or coach to the follower, and listens to the follower's concerns and needs.

Transformational leadership behaviour represents the most active/effective form of leadership, a form in which leaders are closely engaged with followers, motivating them to perform beyond their transactional agreements. Podsakoff and colleagues extensively reviewed seven conceptualizations of transformational leadership behaviour and found that it included articulating a vision of the future, Fostering group-oriented work, setting high expectations, challenging followers' thinking, supporting followers' individual needs, and acting as a role model (Podsakoff, Mackenzie, Moorman, & Fetter, 1990). The three dimensions of transactional leadership are contingent reward, management by exception-active, and management by exception-passive. Contingent reward is the degree to which the leader sets up constructive transactions or exchanges with followers: The leader clarifies expectations and establishes the rewards for meeting these expectations. In general, management by exception is the degree to which the leader takes corrective action on the basis of results of leader-follower transactions. As noted by Howell and Avolio (1993), the difference between management by exception-active and management by exception-passive lies in the timing of the leader's intervention. Active leaders monitor follower behaviour, anticipate problems, and take corrective actions before the behaviour creates serious difficulties. Passive leaders wait until the behaviour has created problems before taking action.

Since their introduction and delineation, transformational and transactional leadership have been investigated in scores of research studies. Transformational leadership has proven to be particularly popular. Studies have been conducted in the lab (Jung & Avolio, 1999) and in the field (Yammarino, Dubinsky, Comer, & Jolson, 1997). There have been correlation (Hater & Bass, 1988) and experimental (Barling, Weber, & Kelloway, 1996) studies. Accordingly, the purpose of the present study was to test the validity of transformational and transactional leadership. Timothy A. Judge and Ronald F. Piccolo provide the most thorough and comprehensive meta-analysis of the transformational or charismatic, transactional, and laissez-faire leadership literatures that has been completed, relating these leadership behaviours to follower leader satisfaction, follower job satisfaction, follower motivation, rated leader effectiveness, leader job performance, and group or organization performance. But this Meta analytic test assessment of transformational and transactional leadership has come under lot of criticism because of the following reasons.

First, the effect sizes for transformational leadership in this meta-analytic review are not nearly as strong as those reported by Lowe et al. (1996). For example, the composite corrected correlation reported by Lowe et al. across three transformational leadership dimensions was .73, compared with .44 in the present review. Second, contingent reward leadership appeared to have validity levels comparable with those of transformational leadership. The difference in the overall validities (.39 vs. .44, respectively) was relatively small, and in the criteria analyses, contingent reward showed higher validity coefficients than did transformational leadership for half (3/6) of the criteria. On the one hand, this is troublesome as it clearly is not predicted by transformational- transactional leadership theory. A third area of concern is the high correlations between transformational leadership and several dimensions of transactional leadership. Specifically, transformational leadership correlated very highly with contingent reward leadership and also quite highly with laissez-faire leadership. A correlation of .80, although corrected, is as high as or higher than one expects for alternative measures of the same construct. The fourth concern is in predicting the outcomes, controlling for the other forms of leadership tended to substantially undermine the validities of transformational, transactional, and laissez-faire leadership.

Transformational leadership can lead to positive outcomes of leadership.

First, by providing a sense of direction (vision) and expressing high expectations and confidence in followers' ability to meet these expectations (Eden, 1992), transformational leaders increase follower Self-efficacy. There is mixed support for this idea. Kirkpatrick and Locke (1996) found that vision quality and vision implementation was related to follower self-efficacy, which in turn had a positive effect on performance, though these effects were not large. In contrast, Shamir and colleagues (1998) found a negative relationship between leader charisma and follower self-efficacy in a field study. Second, transformational leaders increase followers' social identification with their group. Social identification is the process by which individuals identify with a group, feel pride in belonging, and see membership in the group as an important aspect of their identities or self-concepts. This aspect of the self-concept-based theory also received mixed support in the Shamir et al. (1998) study.

Some leader behaviours (those targeted toward emphasizing a collective identity) were related to group culture (special slogans, songs, and rituals), but not to the groups' collective efficacy. Unexpectedly, leader behaviours focused on ideology were unrelated to group culture and negatively related to group potency. The third way that transformational leaders influence followers is through value internalization and "self-engagement" with work. When transformational leaders describe work in ideological terms, and focus on higher-order values (such as high achievement as a value in and of itself [Burns, 1978]), followers come to see their work as congruent with personally held values and thus as more meaningful. Burns (1978) noted that leaders who can activate intrinsic values may inculcate in followers a desire to follow the dictates of the values even in the absence of incentives or sanctions. With respect to commitment in this context, Shamir and his co-authors (1993) referred to an internalized personal or moral commitment. They suggested that such a commitment becomes possible when a role or course of action is consistent with and expressive of an individual's self-concept. Thus, work activities not only represent the job but the person doing the job. Furthermore, transformational leaders emphasize intrinsic rewards, such as self expression, self-consistency, and self-efficacy, rather than extrinsic rewards. Shamir and colleagues argued that doing so "increases the chances that followers will attribute their behaviour to internal self-related causes" (1993: 583), which adds to the followers' commitment to a course of action. Although the idea of self-engagement is central to self-concept-based theory, we are aware of no direct empirical test of these ideas.