This view posits the use of power as the primary functioning aspect of leadership. This style of leadership involves aspects such as gaining trust, respect and confidence from employees and the setting of high standards of conduct, as well as motivating people to achieve their full potential.
In the transactional model the following aspects predominate in this leadership style.
Idealized Influence - Gaining trust, respect and confidence; setting high standards of conduct; a role model
Inspirational Motivation - Articulating the future desired state and a plan to achieve it; including 'vision'
Intellectual Stimulation - Questioning the status quo and continuously innovating, even at the peak of success
Individualized Consideration - Energizing people to develop and achieve their full potential and performance
(Parry, 1998, p. 82)
In the transformational model there is as greater emphasis on individuality and on the sharing of responsibilities; as well as on the important aspect of "performance beyond expectations." (Bass BM. 1985) It is also a much more informal style of leadership as it encourages the individuals in the organization or company to develop their needs and interests.
There is also the view that these two leadership styles are not necessarily diametrically opposed. This view is suggested by Yukl, (1989) who states that,
These transformational or charismatic behaviors are believed to augment the impact of transactional forms of leader behavior on employee outcome variables, because "followers feel trust and respect toward the leader and they are motivated to do more than they are expected to do."
(Yukl, 1989, p. 272)
However, there is stark difference in that the transformational style of leadership tends to be more people-orientated and seeks to motivate subordinates not by ordered tasks but rather be engaging them in the work process and making them feel part of the organizational structure and decision-making.
The four basic element of this type of leadership can be described as follows.
The leader should have charisma and supply a sense of mission, not dominant control.
The leader is inspirational and able to communicate vision and standards.
There is a focus on Individual attention and feedback as well as cognizance of the needs of individuals in the organization.
Intellectual challenge. The leader should produce challenging new ideas and 'out-of-the-box' methods of accomplishing tasks.
Assessment of Transformational Leadership
There are a number of studies and critical assessments that suggest that the transformative style of leadership is one that is extremely promising in terms of the interaction between employees and leadership. It is also seen as the theory which is the most successful in promoting intersections and motivations in the business environment which can lead to success. This is clear from there above review of the positive aspects of this kind of leadership. It is also important to note the emphasis that is placed on a holistic and less reductive approach to the relationship between leadership and staff.
Research has also found that this leadership paradigm has proven to be promising in the field. An example by Bryman (1992) states that "…various organizational studies demonstrating that transformational leader behaviors are positively related to employees' satisfaction, self-reported effort, and job performance (Podsakoff et al. 1996). Furthermore, in a study designed to examine the relative impact of directive or transactions leader behavior as opposed to charismatic leadership it was found that "…charismatic leader behavior produced higher performance, greater satisfaction, and greater role clarity, than directive leader behavior. ( Podsakoff et al. 1996)
On the other hand there is the view put forward by theorists that, "Various studies have also determined that a combination of transactional praxis as well as elements of the transformational styles of leadership often make for the best leadership model in terms of maintaining order and motivating employees. (Alimo-Metcalfe B, Alban-Metcalfe R. 2000) This would tend to suggest that, in the final analysis, and depending on the type of organization, a combination of the positive aspects of both transformational and transactional leadership may be required.
The transformational approach to leadership has also resulted in the formulation of new theories; such as the "substitutes for leadership" model. This model, put forward by Kerr and Jermier (1978), suggests that the "….the key to improving leadership effectiveness is to identify the situational variables that can either substitute for, neutralize, or enhance the effects of a leader's behavior." ( Podsakoff et al. 1996)
This they is based on the view that,
Unlike the transformational approach to leadership, which assumes that it is the leader's transformational behavior that is the key to improving leadership effectiveness, the substitutes for leadership approach assumes that the real key to leadership effectiveness is to identify those important situational or contextual variables that may "substitute" for the leader's behavior, so that the leader can adapt his or her behavior accordingly.
(Podsakoff et al. 1996)
This theory has received increasing research interest and it is essentially an extension of some of the main themes and aspects of transformational leadership theory.
The above overview of transformational theory, particularly with regard to its contrast with transactional theory, strongly suggests that this style of leadership is one that beings out the best in people. This is largely due to the fact that this form of leadership involves members of staff in the actual running and decision making process, as well as in the implementation of policy strategies. It is also a style of leadership that allows the individual to express his or her views and, most importantly, encourages the staff member to act "beyond expectation."
This can be contrasted to the transactional style of leadership where there is a less holistic and as more hierarchical approach. This style does not provide the same incentives and motivation to the employee or member of the organization.
However, many theorists are of the view that a clear demarcation between these two styles of leadership is not always realistic. This view asserts that of "In many organizations, both transactional and transformational leadership are needed. The transactional leaders (or managers) ensure that routine work is done reliably, while the transformational leaders look after initiatives that add value." (Leadership styles) Therefore, in the final analysis, the assessment of transformational leadership must take into account the particular needs of the business or organization that may require a combination of these two leadership styles.
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