Transformational and transactional leadership in the 21st century

Management is a Diverse Role in the 21st Century

Given how turbulent global economies have become, the daily lives of workers in all developed nations are more uncertain, stressful and filled with distrust than ever before. It is the challenge before leaders as the 21st century accelerates into its second decade to accept these highly uncertain conditions and create leadership strategies that both make the most of their teams' strengths while at the same time attaining goals in a difficult environment (Davidson, 2006). The intent of this paper is to evaluate how leaders must move beyond the tradition model of planning, organizing, leading and controlling to embrace a more transformational model that leads to trust being created and sustained over time. Combined, the factors of globalization, domestic competition, government regulation, shareholder pressure and rapid and unpredictable change in the environment serve to make a manager's role in an organization exceptionally challenging yet critical for attaining goals.

Trust is the Catalyst of Effective Leadership

The paradox of transaction leadership is that it quickly generates results, yet does not lead to lasting change (Mancheno-Smoak, Potak, Athanasaw, 2009). Leadership strategies that seek to capture the most positive aspects of transactional leadership and combine transformational leadership skills are the most effective in bringing long-term change to any organization (Williams, Parker, Turner, 2010). In short, the short-term reward-based strategies of transactional leadership need to be situationally-based while transformational leadership is used to define the overarching vision, objectives and goals an organization is attempting to accomplish (Jones, George, 2006). Given how uncertain global economic environments are, this essential leadership balance must be achieved. To rely on one exclusively will miss the opportunities to reinforce accomplishment and goal attainment on the other. An example of how leaders can successfully accomplish organizational objectives while still creating urgency of results through transactional leadership is Apple Computer's Steve Jobs (Jones, George, 2006). Mr. Jobs defines a compelling vision of leadership in one of the most competitive industries there are yet also gets exceptional results in the short-term. This balance is achieved from a combination of transformational leadership vision and transactional leadership skill (Jones, George, 2006).

In addition to the hybrid nature of leadership needing to be transactional for immediate rewards of tasks accomplished and long-term in scope with transformational leadership, there is also the need for clearly, consistently and honestly defining the current state of a company and its markets and what is needed to turn the situation around. In these turbulent times the greatest attribute of a transformational leader is authenticity and honesty. Given the skeptical and even cynical outlook of many employees today the need for leaders to concentrate not on tactical plans or strategies but on defining a broader vision and objectives that give employees responsibility for doing their part. The self-efficacy therefore of excellent leaders is badly needed in this turbulent economic environment, as that skill set of imparting ownership of the learning process is critical for employees to learn how to grow on their own as well (Liu, Siu, Shi, 2010). Transformational leadership can serve as the catalyst of self-efficacy and job ownership that can over time transform an entire organization as well. This ability to get employees motivated to continually learn about their roles including how they can significantly improve them over time, all tied back to a transformation vision of a company, is the best assurance any organization can have in turbulent, difficult economic conditions. For many managers and senior executives this is quite a departure from the authoritarian models of leadership so heavily taught in the late 20th century and the strict command-and-control structures of organizations. As the readings and analysis for the course and this paper have shown, the area of work is much more focused on results and less on the rigidity of organizational structures (Hayward, 2010).

Conclusion

Leadership in the 21st century needs to be more about an approach to leadership that is agile enough to anticipate and respond to risks yet stable enough to provide a consistent vision of where an organization needs to go. The concept of a hybrid model of leadership that combines transaction leadership to ensure short-term objectives are met while at the same time concentrating on the longer-term vision is critical. Blending transactional and transformational leadership is essential for any organization to stay focused. Most important of all however is the trait of trust in leaders, and that must be present if any organization is going to survive these turbulent times.