leadership – Research Hub https://research.alexanderchekanov.com Management Sciences Research Sun, 09 Dec 2012 23:46:21 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.10 Transactional and Transformational Leadership https://research.alexanderchekanov.com/2012/12/10/transactional-and-transformational-leadership/ https://research.alexanderchekanov.com/2012/12/10/transactional-and-transformational-leadership/#respond Sun, 09 Dec 2012 23:46:21 +0000 http://www.iwpro21.com/blog/?p=155 To understanding the meaning of “leadership” we can define it as the ability to influence a group toward the achievement of a vision or a set of goals. All managers lead but not all leaders are managers and there are different theories that attempt to explain leadership, but those that receive more attention are those that refer to the transactional and transformational leadership.

What traits and behavior characterize leaders?

Extroversion, conscientiousness, and openness to experience are some of the personal traits that are positively correlated with followers’ leadership perceptions, while there is also some evidence of a positive relationship between leadership and emotional intelligence. We can also refer to some personal traits, like core-self evaluations, to find from there a connection to both, transactional and transformational leadership.
Regarding the way the leaders tend to behave, we can differentiate them by those who have task orientation or are transactional leaders, and those who have a relationship orientation or consideration or are transformational leaders. A recent review of 160 studies done by scholars found that followers of leaders that are high in consideration (transformational leaders) were more satisfied with their jobs, were more motivated, and had more respect for their leader. On the other hand, transactional leaders were more connected with productivity of their followers.

Task oriented, transactional leader

If a leader is high in terms of task orientation, he will tend to define results that must be achieved (objectives), organize tasks (who will do what), give precise instructions (what must be done and how to do it), follow up on the work that is being done and provide feedback, and intervene when there are problems while showing how to face them.

Relationship oriented, transformational leader

A leader who has relationship orientation will tend to explain why something needs to be done, show interest in employees’ opinions, incentivize that employees take responsibility of their own work by encouraging them to make their own decisions, encourage employees to assess their performance and think of ways to improve, support and “cheer up” employees, give praise when the job is well done, and show interest in employees’ welfare.

Situational leadership theory

According to Hersey and Blanchard, the right type of leadership will depend on the person or group being led.

  • If the person/group does not know, and not willing –> Coaching leadership.
  • If the person/group does not know, but is willing –> Directive leadership.
  • If the person/group knows, but is not willing –> Supportive leadership.
  • If the person/group knows, and is willing –> Delegating leadership.

Authoritarian decision making

Authoritarian decision making appears in those situations when there is urgency and the decision must be made immediately, there is a high degree of uncertainty (lack of experience or ability) and the employees are confused, there is a lack of willingness  or interest on behalf of employees in taking more responsibility for the decision, or there is likely to be a conflict among team members for determining what solution is the best one.

Participative decision making

Participative decision making tends to appear in those situations when the employees accept or share the objective that needs to be achieved, the decision quality is key and employees have the needed experience or knowledge to make the best decision, or when it is very important that employees accept the decision and it is unlikely that they do if they do not intervene in the decision making process.

Transactional leadership

The main traits of the transactional type of leadership, apart from being task oriented, is that transactional leaders are those that guide or motivate their followers in the direction of established goals by clarifying role and task requirements, recognize needs and wants, and see how they will be satisfied. This type of leadership is based on the exchange and mutual benefit and is aimed at improving the efficacy and efficiency of the organization or business unit, while the vision tends to be taken-for-granted.
Transactional leadership is also directed towards contingent rewards through contracts that exchange rewards for effort, promise rewards for good performance and recognize accomplishments. The management by exception can be “active“, when the leader proactively watches and searches for deviations from rules and standards and takes correct action, or “passive“, when the leader intervenes only if standards are not met. Overall, transactional leadership can also be characterized by a “laissez-faire” approach.

Transformational leadership

A transformational style of leadership tend to support the qualitative change of the organization or business unit. The transformational leadership also tends to be based on commitment through intrinsic motives, tend to inspire followers to transcend their own self-interests and is capable of having a profound and extraordinary effect on followers.
Transformational leaders rely on inspirational motivation, idealized influence, individual consideration and intellectual stimulation.
Transformational leaders tend to motivate us to do more than we originally expected by raising our level of consciousness about the importance and value of designated outcomes, by getting us transcend our own self-interests, and by getting at higher order needs beyond security or affiliation, such as recognition, self-esteem, and self-actualization. Transformation leaders also tend to exert idealized influence by providing a role model for high ethical behavior, instilling pride, and gaining respect and trust. Transformational leaders also exert inspirational motivation by articulating a vision that is inspiring for the followers, communicating high expectations, using symbols to focus efforts, and expressing important purposes in simple ways. Transformational leaders also offer individualized consideration as they stop treating all subordinates alike, set examples and assign tasks on an individual basis to followers to help significantly improve their abilities and motivations and act as coach and advisor while keeping their team members always “in the loop”.
In terms of ethics, transformational leaders are more likely to emerge in times of crisis and uncertainty. Given that transformational leaders can provide followers with a vision for the future, transformational leaders also tend to be moral leaders. Nevertheless, transformational leaders can be immoral when they provide visions not backed by reality, which create false hopes and expectations on followers.

Intellectual stimulation in transactional and transformational leadership

The transformational leader may be less willing to accept the status quo and more likely to seek new ways of doing things while taking maximum advantage of opportunities. On the other hand, transactional leaders will focus on what can clearly work, will keep time constraints in mind, and will do what seems to be most efficient and free of risk. Overall, transformational leaders are more proactive, more creative, innovative, and less inhibited in their search for solutions, while transactional leaders although being equally bright, will rather focus on how best to keep running the system for which they are responsible.

Conclusion

Transactional and transformational leadership styles are hard to isolate from each other as they tend to be present at least in some degree in any leader. It is neither possible to judge what type of leadership is better because that will depend on the characteristics and circumstances of each organization, the type of “followers” and the goals of the organization. Nevertheless, understanding transactional and transformational leadership allows us to be more aware of our own behavior and guides us with some hints towards the right type of leadership depending on what challenge we have to face.

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Does CEO charisma matter? https://research.alexanderchekanov.com/2012/12/06/does-ceo-charisma-matter/ https://research.alexanderchekanov.com/2012/12/06/does-ceo-charisma-matter/#respond Thu, 06 Dec 2012 18:48:24 +0000 http://www.iwpro21.com/blog/?p=58 Does CEO charisma matter? Such question might rise controversial opinions. Intuitively we might believe that the charisma of the CEO is crucial for the company to succeed and achieve great performance, measured by a set of financial performance indicators. Nevertheless, the answer might not be that straightforward.
Background
In order to provide some background, Bradley R. Agle, Nandu J. Nagarajan, Jeffrey A. Sonnenfeld and Dhinu Srinivasan (scholars from the university of Pittsburg and the university of Yale) in their work “Does CEO charisma matter? An empirical analysis of the relationships among organizational performance, environmental uncertainty, and top management team perceptions of CEO charisma” (2006) present a research that explores the relationship, between strategic charismatic leadership, organizational performance, and environmental uncertainty.
The authors suggest that the observed measure of organizational performance is associated with the perceptions of CEO charisma and that some objective measures of organizational performance are also significantly linked with this perception. On the other hand, the authors also found evidence that organizational performance is not associated with charisma and neither with the interaction between charisma and uncertainty.
Agle, Nagarajan, Sonnenfeld and Srinivasan conclude that there is evidence of a relationship between perceptions of CEO charisma and perceived measures of prior organizational performance, a relationship between some objective measures of prior organizational performance and CEO charisma, and no relationship between subsequent objective measures of organizational performance with charisma.
So, does CEO charisma matter?
By now, it seems clear that there is still room for further research in order to find more evidence and measure the impact of CEO’s charisma on the performance of a company. We should not neglect the fact that although charismatic leaders could tend to be more effective, there is also the “dark side” of it, as narcissism could also start to appear (in some cases) leading to a negative effect on the company.
We’ll keep this question open and looking forward to bring further discussion on this topic in the future.

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