Transformational Leadership

In recent years transformational leadership has been advocated by a number of commentators as a way of improving organisational performance,Describe what is meant by transformational leadership and contrast with transactional leadership, In what ways would be the adoption of transformational leadership by the chief executive of a small manufacturing company be likely to influence the motivation of employees. Leaders are individuals who guide and inspire others. The performance of a company is greatly influenced by such leaders.

As stipulated by Brooks I (1999, 2006) "Leaders aim to influence and guide others into pursuing particular objectives or visions of the future and to stimulate them into wanting to follow".

Brooks I. , (2006), pg. 152. Leadership is seen as ones ability to influence the others. Leadership bears its origin from ancient times. We have leaders in all aspects of life, who decide for a whole group. For instance, a coach in a football team often decides the placements of players. The role of a leader can be studied through various theories but only two have been discussed below:

Theories of Leadership:- There are basically two theories of Leadership and they are distinguished from each other on the basis of qualities they posses.

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Transformational Leadership:- "A leader who treats relationships with followers in terms of motivation and commitment, influencing and inspiring followers to give more than mere compliance to improve organisational performance. " Huczynski. A and Buchanan. D (2007), pg. 718. Transformational Leaders are charismatic in nature and this quality does not go unnoticed.

Such leaders inspire their followers, motivate them to achieve their goals in a way which benefits the organisation.

They often help others identify their hidden qualities. They also come up with innovative solutions to solve complex problems. Transformational leadership involves and encourages a lot of creative ideas; there is no criticism of individual mistakes. Such leaders also remember previous conversations of individuals and help them sort out things treating them as individuals and not just employees.

Transformational Leaders are often transparent by nature thus they work efficiently in leading a group. In case any situation has to be changed they transform it accordingly but in a way that no one is offended. They often aid employee satisfaction and reduce stress. To conclude Transormational leadership includes the 4 I's, viz. Intellectual Stimulation, Idealised Influence, Individualised Consideration, Inspirational Motivation. Huczynski. A and Buchanan. D (2007) pg 718.

Transactional Leadership mainly refers to a "leader who treats relationships with followers in terms of an exchange, giving followers what they want in return for what the leader desires, following prescribed tasks to pursue established goals" Huczynski. A and Buchanan. D (2007) pg 718. The relation between a Leader and his followers is more contractual in nature. This makes it more of a give and take relation. Here if the followers of such leaders comply with the directions of the leaders they achieve rewards and materialistic outcomes.

However a transformational leader and his followers share a non contractual relation. The transactional leader persuades his followers with rewards; he is concerned only with the outcome and not the interest of follower. They just set goals, lay down rules and regulations and if goals are achieved, they give rewards. While on the other hand the transformational leader builds trust and respect in his followers and sets high expectations in them helping them achieve their goals. Transactional leaders try to escape problematic situations and leave the finding of the solution entirely to the follower.

In transformational leadership leaders often help their followers resolve their problems and give personal attention to each one of them. An example of transformational Leadership is observed in Tata Industry, India, the leader being Ratan Tata, fulfils all the qualities of a transformational leader. He encourages his employees and makes the work environment very comfortable for them. Whereas transactional leadership is observed in chains like McDonalds, Burger King, wherein the boss and the employee are bound by a contract.