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Transactional Vs. Transformational Leadership Essay

2185 words - 9 pages

Transactional vs. Transformational Leadership
Leadership plays an important role in the organization. While with the development of the society, more and more managers pay attention to their leadership and relationship with employees. James McGregor Burns in his book Leadership (1978) introduces the notion of transactional and transformational leadership, which have remained one of the most popular leadership models. But there are differences with each. The distinction between transactional and transformational leadership was first made by Downton (Barnett, McCormick & Conners, 2001) but the idea gained little currency until James McGregor Burns’ (1978) work on political leaders was ...view middle of the document...

According to Burns (1978), transformational leadership can be seen when “leaders and followers make each other to advance to a higher level of moral and motivation”. Through the strength of their vision and personality, transformational leaders are able to inspire followers to change expectations, perceptions and motivations to work towards common goals. Later, researcher Bernard M. Bass expanded upon Burns original ideas to develop what is today referred to as Bass’ Transformational Leadership Theory (leadership and performance, 1985). According to Bass (1985), transformational leadership can be defined based on the impact that it has on followers. Bass suggested that transformational leaders should garner trust, respect and admiration from their followers.
There are four dimensions for transformational leadership. The first one is intellectual stimulation, these leaders encourage followers to innovatively handle the problems and encourage subordinates to be innovative and creative. These leaders support followers as they challenge the deeply held beliefs and values of their leaders, their organization, and themselves (Yukl, 2006). The second one is individualized consideration, this refers to the care that the leaders are very supportive and take great care to listen to and understand their followers’ needs. In order to foster supportive relationships, transformational leaders keep lines of communication open so that followers feel free to share ideas and so that leaders can offer direct recognition of each follower’s unique contributions. The third one is inspirational motivation, the leaders have a clear vision that they are able to articulate to followers. These leaders are also able to help followers experience the same passion and motivation to fulfill these goals. What is more, they prefer to increase team spirit through coaching, encouraging, and supporting follower. The last one is idealized influence, the leaders serve as role models for followers, they are admired, respected, and trusted and followers want to emulate them. And they demonstrate high standards of ethical and moral conduct.
There are many people who have characters of the transformational leadership in the business world. One of the transformational leaders is Lou Gerstner – retired Chairman and CEO of IBM. He turned IBM around from an $8.1 billion loss in 1993 after identifying part of the company’s problem as ‘success syndrome’. That is, having been one of the greatest commercial institutions on Earth from the 1960s-1980s, IBM had become insular and rigid (Sheppard, 2002). Gerstner completely transformed the culture of the organization through, he was modeling a desired behavior and abolishing IBM’s notorious dress code to reflect better the attire of their customers (Sheppard, 2002). Another example is Lee Iacocca, who is credited with saving the Chrysler Corporation. He took over Chrysler when it was on the brink of bankruptcy and set about transforming...

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