Transformational management practices and organizational impact

Transformational Management

Transformational Leadership

The success of companies in the international business environment is influenced by numerous factors. An important factor of great influence is represented by leadership. In other words, the leadership style in most companies is likely to significantly influence the performance of these companies. In addition to this, the leadership style orients the activity of employees towards the strategies that companies intend to address.

Specialists in the field really try to stress out the differences between leadership and management. In their opinion, management refers to organizing the activity of the company and employees, and maximizing profits. Leadership is not limited to these issues. Leaders inspire their subordinates and work towards reaching the company's objectives, but also those of employees.

Leadership Styles

There are several styles of leadership (Chapman, 2009). The most important leadership styles are represented by the autocratic or authoritarian style, the participative or democratic style, the laissez-faire, charismatic, transformational, and transactional style. The autocratic style is characterized by a centralized decision making process. In this case, most decisions are made by the leader, and subordinates' opinions are not taken into consideration. These decisions are communicated to employees that must apply them.

The participative style is somewhat the opposite of the autocratic style. In this case, team members are involved in the decision making process. Democratic leaders want their subordinates to express their opinions and to improve their ability of making decisions. They are encouraged to participate in this process (Bass & Riggio, 2006). The laissez-faire style is the type of leadership that most encourages employees to make decisions and to determine what tasks and activities they must address. However, this leadership style is not considered the most successful because of the increased level of decentralization that can influence the performance of the company. The charismatic style is one of the most interesting types of leadership.

Transformational Leadership

Transformational leaders focus on determining different changes in individuals and in social systems. These changes are intended to improve individuals' situation and performance. The objective of this type of leadership is represented by transforming subordinates into leaders. The most important issues that transformational leadership intends to influence are represented by motivation, morale, and performance of employees.

The concept of transformational leadership was developed by James MacGregor Burns referring to political leaders. The concept was extended to the organizational field. This theory also explains the differences between managers and leaders. In specialists' opinion, these differences refer to characteristics and behaviors. Burns has also developed theories referring to transactional leadership. The transactional approach is based on certain exchanges between the leader and his subordinates. In this case, transactional leaders do not intend to determine different changes.

There are several mechanisms that can be used in order to measure how transformational certain leaders are. In order to reach this objective, specialists in the field orient towards the influence these leaders have on others. The subordinates of these leaders develop trust and admiration regarding their leaders. This situation determines them to work harder than expected. This objective can be reached by leaders by inspiring their subordinates, involving them in the mission and vision of the company. There are several elements that transformational leadership refers to. These elements are represented by individualized consideration, intellectual stimulation, inspirational motivation, idealized influence.

Individualized consideration

This element refers to the level of implication of the leader in subordinates' needs. This refers to the leader's interest in subordinates' needs, in identifying these needs, but also on developing strategies intended to satisfy these needs. This is because such actions have great impact on employees. If they see that their needs represent an issue of interest for their leader and that they are taken into consideration, they are likely to develop a sense of adhesion towards their leader and their company. This helps them feel more comfortable with their workplace environment and improve their performance.

However, this is a difficult objective to reach. This is because this strategy requires great support from the leader. In addition to this, there can be situations where subordinates' needs are too large to be successfully addressed by the leader. The communication process is very important in this case. It is the leader's job to ensure that communication between employees and the company is correct. Communication problems must be addressed by the leader in order to counteract their effects.

In addition to this, the leader must provide challenges for his subordinates. Each person responds to different challenges. Therefore, the leader must analyze his employees and determine which challenge should be addressed to each employee. Transformational leaders greatly value respect towards their subordinates. This determines the respect of subordinates towards the leader and the company. Individual contribution is another factor that is taken into consideration by transformational leaders. These leaders also understand the need for personal development of their employees. Therefore, they must reveal their interest in subordinates' professional development and collaborate with them in providing strategies that can be addressed in order to reach this objective.

Intellectual stimulation

This is another important element that transformational leadership refers to. It is important that leaders understand the need for intellectual stimulation expressed by their subordinates. This determines leaders to encourage employees to express their opinions, and address their ideas when developing the decision making process. This makes employees feel important for the company and their leader. This is intended to help them improve their performance. In order to reach this objective, it is important that the leader provides learning opportunities.

The reason behind this strategy is represented by stimulating creativity in the leader's subordinates. The current business environment determines companies to increase their efforts regarding innovation in order to create competitive advantage. The success of this strategy relies on the creativity of these companies' employees. Therefore, it is important that leaders encourage employees to express their creativity. In addition to this, another objective regarding this element is represented by determining employees to think of developing better ways of accomplishing their tasks.

Inspirational motivation

This is one of the most important elements that can influence the success of leaders and their teams. It has been observed that motivation is one of the most important factors that influence the performance of employees. Therefore, it is important that leaders take this factor into consideration (Hacker & Roberts, 2004). There are several types of motivation. It is the leader's job to determine which type of motivation is best to be applied in the case of each employee.

However, this issue must be established in accordance with the resources of the company. In certain situations, the company cannot satisfy the needs expressed by leaders regarding the motivation of employees. These are challenging situations that leaders must deal with. Leaders that focus on providing inspirational motivation determine their subordinates to reach higher standards regarding their work and performance. In addition to this, such leaders transmit optimism to their employees. This significantly influences their level of performance. In addition to this, motivation is influenced by the pleader's communication skills (Lang, 2010).

Idealized influence

This element refers to leaders being considered role models by their subordinates. They inspire their employees to reach higher ethical and moral standards. They also determine them to follow their example.

Problem focused coping strategies for individuals

Coca Cola is one of the most well-known companies in the world. The company produces non-alcoholic beverages. The success of the company on international level can also be attributed to the leadership style in this company. The approach addressed by the leaders in this company is based on developing strategies intended to help employees cope with different situations (Bass & Avolio, 1994).

The highly competitive environment in which the company develops its activity determines a high level of stress that employees are confronted with. This situation creates a series of problem that managers and employees must address. Although it is the leaders' job to develop strategies intended to address these problems, the leaders in this company are trying to help employees develop their own strategies for coping with these problems.

The objective of this strategy is represented by increasing the decentralization level within the company. This leads to an increased level of performance of the company's employees. However, it is important that leaders in this company understand the seriousness of each problem and address with the required attention. By increasing the level of decentralization, the company's leaders intend to develop transformational strategies regarding their employees. In other words, they are trying to determine employees to find better strategies for addressing such problems and for performing their tasks. This leads to increased innovation within the company and to an increased level of motivation of these employees. The company's success on the market reveals the fact that its leaders have understood this issue and have developed strategies that employees can use in problem focused approaches.

Self-managed teams

L'Oreal is another company with great success on international level. The company is one of the leaders in the cosmetics industry. Its portfolio has significantly increased with the acquisition of numerous well-known cosmetics producers. The success of the company also relies on the leadership style within the company. This leadership style is oriented towards developing self-managed teams. This is another strategy used by companies in order to increase their decentralization level. This helps them increase the flexibility of the company. Flexible companies are more successful because their organizational structure allows them to easier identify environmental factors that are likely to affect their activity, and to counteract their effects.

Transformational leadership

Another interesting company is represented by Ford motor company. The competitive environment in the automotive industry has determined the company's managers to develop innovative strategies that helped Ford create competitive advantage. The company's CEO is Alan Mulally, one of the most visionary leaders in the world. Ford had to deal with numerous problems determined by environmental factors. But Mulally managed to develop strategies that made Ford one of the most attractive car makers on international level.

The clothing producer Zara is one of the most important players in this industry. Same as in the case of other companies, Zara benefitted from the support of innovative leaders that significantly influenced its success. In order to improve the company's situation on the market, its managers have developed a system where they identify and analyze customers' needs and preferences regarding clothes, and produce clothes based on these needs, in comparison with competitors that prefer to develop other trends.