High growth technology companies are fertile organizations for the conflicts of leadership styles. The incessant need for accelerating new product development and staying in step with customer needs on the one hand and the pressure to reduce costs often lead high tech firms to adopt transactional leadership mindsets (Eppard, 2004). This gets amplified in Asian cultures where time is a very limited resource and large-scale organizations including OSIM International have a myriad of conflicting priorities (Beugr, Acar, Braun, 2006). Defining a management style that is agile enough to respond to these many challenges while at the same time concentrating on attaining cost targets is essential for survival in highly competitive industries (Pieterse, van Knippenberg, Schippers, Stam, 2010). Ron Sim, CEO of OSIM, must balance these many requirements while engraining a high level of accountability and ownership throughout the global operations of OSIM International. Balancing transactional and transformational leadership styles and skills is critically important for Mr. Sim to continually guide the company successfully. The time, cost and resource constraints that face high growth businesses amplify and accentuate the inherent conflicts between transactional and transformational leadership (Eppard, 2004). This is precisely why Rom Sim needs to continually concentrate on creating a very high level of transformational leadership while relying on transactionally-based skill sets to get work done. He must balance a compelling vision with realistic goals and plans to ensure the business succeeds over time.
Managing a high growth business requires a leader to fluidly move between a transaction and transformational skill sets using emotional intelligence to read situations and respond. Leaders who excel at orchestrating these three skill sets often are successful launching and leading companies to well over $100M, and often can scale a business successfully over time (Pieterse, van Knippenberg, Schippers, Stam, 2010). The issue of balancing transactional and transformational leadership in high growth international businesses also requires an exceptional grasp of cultural variation across nations. This requirement is shown in the 28 different nations that OSIM International Limited operates in. The critical discussion centers on the reliance leaders in turbulent industries have on emotional intelligence (EI) as a stabilizing aspect of their leadership styles (Price, 2003). Using EI-based skill sets to navigate the uncertain nature of highly turbulent and growing businesses is a critical success factor for leaders who can grow with their companies over time (Judge, Joyce, 2000). This analysis evaluates how Ron Sim has successfully used these skills to manage the growth of OSIM International Limited over time. In conjunction with the need for exceptionally strong EI skills, employees often evaluate the authenticity and ethicacy of a leader to determine if they can be trusted or not (Price, 2003).
Paradoxically the most valuable traits and attributes of a leader take the most time to develop and require the most authentic, consistent level of performance. The central catalyst of excellent leadership is trust, and the many decisions of a leader either contribute or detract from it over time (Beugr, Acar, Braun, 2006). The continual conflict between transactional and transformational leadership is apparent when a vision needs to be turned into a series of plans and steps for its attainment. Often a visionary, transformational leader will need to have an excellent operations staff who can interpret and take the many factors that fuel the vision and organize them into a workable framework. The challenges of translating a compelling vision of an organization into plans and steps for their attainment often require multiple iterations to ensure alignment with the organizations' culture as well (Eppard, 2004).
Second, transactional leaders often have a distinctly different perspective of their role in an organization and often see time itself as far more limited. Transformational leaders see time as a long-term resource and one that must be used for orchestrating a vision into reality. It is often the fit of a transformational leader's skill set, their perception of resources and their perception of time as a resource that must align with the organizations they join and run (Guay, 2013). Conversely, transactionally-driven leaders, who many times are in managerial roles, see time as very limited and often will have an accelerate sense of urgency as a result. This intensified level of urgency, so common in inexperienced transactional managers, needs to be managed by leaders to ensure employees still have a sense of ownership and purpose in their roles (Judge, Joyce, 2000).
Third, too often emotional intelligence (EI) is not taken into account as a unifying aspect of a manager's progression into a leadership role. The intermediating effects of EI as a means for driving greater levels of transformational leadership-based skill sets and direction is essential in the development of any leader over time (Pieterse, van Knippenberg, Schippers, Stam, 2010). High levels of EI for example will also dictate to a leader when the time is right for making sacrifices for their vision, and making a statement through their actions that they are completely committed to the vision being promoted and pursued (Singh, Krishnan, 2008). EI skills are also essential for managing the overall growth of leaders toward the goal of knowing when to use each aspect of transformational leadership when (Eppard, 2004). Studies have shown that having a purely transactionally-driven mindset will often blind managers from the nuances of situations when they need to transition into a greater strategic, vision-driven role (Price, 2003).
The most effective visionary leaders have the ability to unify the four factors of transformational leadership very effectively, using EI as a means to fluidly move between each dominant aspect of this leadership style. Theorists often define EI as a foundational element in successful transformational leadership programs and initiatives (Eppard, 2004). These four elements of transformational leadership are individualized consideration, intellectual stimulation, inspirational motivation and idealized influence (Beugr, Acar, Braun, 2006). Using EI skills as a means to select which of these skills fits a specific situation or need is a challenging trait to find in any leader as it cannot be quantified or measured; it is situational and must be observed and experienced over time (Judge, Piccolo, 2004). Balancing these four attributes of individualized consideration, intellectual stimulation, inspirational motivation and idealized influence, exceptional transformational leaders create a culture of employees seeking to excel and help the business grow (Deluga, 1988). Combining EI and these four attributes often leads to an entirely different outcome for leaders when faced with uncertainty or turbulent economic conditions. Transactional leaders who don't have EI skill sets will also resort to short-term rewards and also seek to influence through authority or several different forms of legitimate and referent power (Eppard, 2004). This often leads to immediate gains yet doesn't advance the vision or cause employees to identify, internalize and see how their contributions matter. Transactional leaders drive conformity and often rely on external methods of motivation as a result (Judge, Joyce, 2000). Transformational leaders on the other hand rely on defining a compelling vision everyone can identify and commit to (Pieterse, van Knippenberg, Schippers, Stam, 2010).
Based on the analysis completed and presented in the critical discussion regarding the essential role of transformational leaders on the one hand, and the rapid global growth of OSIM International Limited on the other, Rom Sim needs to develop more transformational leaders to guide his business. Right now, he is managing a multinational organization growing rapidly in a highly turbulent market by himself. While it can be inferred from his success that he has exceptional levels of EI and strong transformational skills, he will need to grow a team of transformational leaders for the company to continue to grow over the long-term. The recommendation is for Ron Sim to actively define and lead a management training program that seeks to find the highest potential leaders in the company and begin to develop their EI skills, transformational leadership attributes, and begin to set the foundation for future growth. It is often said a manager is what one does and a leader is who one is (Judge, Joyce, 2000), Mr. Sim needs to begin investing in a team of visionaries who can continually fuel his company with new ideas while inspiring and leading employees to higher achievements over time and great ownership.
The continual conflict between the need for transactional leadership and transformational vision often leads organizations to create management and leadership development programs. Transactional leadership is inherently short-term in nature while transformational leaders take a very long-term view. This conflict between the short-term achievements necessary to grow a business and the development and sustained growth of its vision is not an easy problem to solve. Too much reliance on transactional leadership and business becomes exceptionally effective and efficient, yet lacks the broader vision of how to attain objectives that matter over time. Context gets lost when transactional leadership dominates decision making. What is needed instead is a balance of transactional and transformational leadership, supported with a strong base of EI skills. The greater the speed and turbulence of a given market…