Transformational leadership

Definitions

According to Bass, transformational leadership encompasses several different aspects, including:

• Emphasizing intrinsic motivation and positive development of followers
• Raising awareness of moral standards
• Highlighting important priorities
• Fostering higher moral maturity in followers
• Creating an ethical climate (shared values, high ethical standards)
• Encouraging followers to look beyond self-interests to the common good
• Promoting cooperation and harmony
• Using authentic, consistent means
• Using persuasive appeals based on reason
• Providing individual coaching and mentoring for followers
• Appealing to the ideals of followers
• Allowing freedom of choice for followers

Transformational leadership is when leaders inspire and motivate employees to surpass performance goals and create a positive long-term change. As a result, they inspire, empower, and stimulate followers to exceed normal performance levels. Transformational leaders also care about their followers' needs and development. Transformational leaders fit well in leading and working with complex work groups and organizations, where beyond seeking an inspirational leader to help guide them through an uncertain environment, followers are also challenged and feel empowered; this nurtures them into becoming loyal, high performers.

The four I's

There are four components to transformational leadership, sometimes referred to as The 4 I's:

• Idealized Influence (II): Transformational leaders serve as ideal role models and examples to followers; the leader "walks the talk" and is admired for this. They embody qualities their followers want in their team. In this case, the followers see the leader as a model to emulate. For the followers, it is easy to believe and trust in a transformational leader. This is also referred to as charisma and showing a charismatic personality influences the followers to become more like their leader.
• Inspirational Motivation (IM): Transformational leaders have the ability to inspire and motivate followers through having a vision and presenting that vision. Combined, these first two I's constitute the transformational leader's productivity. A transformational leader manages to inspire the followers easily with clarity. The transformational leader convinces the followers with simple and easy-to-understand words, as well as with their own image.
• Individualized Consideration (IC): Transformational leaders demonstrate concern for the needs and feelings of followers and help them self-actualize. They establish a strong relationship with their followers and act as a supportive resource. The personal attention to each follower assists in developing trust among the organization's members and their authority figure(s). Personally attending to each follower has the ability to develop trust among other members within the organization.
• Intellectual Stimulation (IS): Transformational leaders challenge followers to be innovative, creative, and open to new ideas. They encourage their followers to challenge the status quo and improve within the organization. A common misunderstanding is that transformational leaders are "soft," but they constantly challenge followers to higher levels of performance and create learning opportunities.

Transformational leaders do one thing transactional leaders don't, which is going beyond self-actualization. The importance of transcending self-interests is something lost sight of by those who see that the ultimate maturity of development is self-actualization.

Leader personalities

The appeal of, or preference to engage in, transformational leadership may be influenced by leaders' personalities. The assertive-directing personality type, as measured by the Strength Deployment Inventory, shows a moderate positive correlation with transformational leadership at 0.438. While leaders with different types showed correlations with other leadership styles. The altruistic-nurturing type correlated with servant leadership, analytic-autonomizing leaders correlated with transactional leadership, and those with a flexible-cohering type correlated with situational leadership.

Five major personality traits have been identified as factors contributing to the likelihood of an individual displaying the characteristics of a transformational leader. Different emphasis on different elements of these traits points to an inclination in personality to inspirational leadership, transactional leadership, and transformational leadership. These five traits are as follows.

Extraversion

The two main characteristics of extraverts are affiliation and agency, which relate to the social and leadership aspects of their personality, respectively. Extraversion is generally seen as an inspirational trait usually exhibited in transformational leadership.

Neuroticism

Neuroticism generally gives an individual anxiety related to productivity which, in a group setting, can be debilitating to a degree where they are unlikely to position themselves in a role of transformational leadership due to lower self-esteem and a tendency to shirk from leadership responsibilities. When neuroticism is reverse-scored, it reflects emotional stability, which would yield a positive correlation to transformational leadership.

Openness to experience

Creative expression and emotional responsiveness have been linked to a general tendency of openness to experience. This trait is also seen as a component of transformational leadership as it relates to the ability to give big-picture visionary leadership for an organization.

Agreeableness

Although it is not a trait that specifically points to transformational leadership, in general, leaders possess an agreeable nature stemming from a natural concern for others and high levels of individual consideration. Productivity and idealized influence is an ability of individuals who possess agreeability.

Conscientiousness

A strong sense of direction and the ability to put large amounts of productive work into tasks is the by-product of conscientious leaders. This trait is more linked to a transactional form of leadership, given the management-based abilities of such individuals and the detail oriented nature of their personalities. Results suggest that transformational leaders might give greater importance to values pertaining to others than to values concerning only themselves.

Studies have shown that subordinates' and leaders' ratings of transformational leadership may not converge. According to leaders' self‐ratings, the extraverted, intuitive and perceiving preferences favor transformational leadership. On the contrary, subordinates' ratings indicated that leaders with sensing preference are associated with transformational leadership.

Measurement

One of the ways in which transformational leadership is measured is through the use of the Multifactor Leadership Questionnaire (MLQ), a survey that identifies different leadership characteristics based on examples and provides a basis for leadership training. Early development was limited because the knowledge in this area was primitive and, as such, finding good examples for the items in the questionnaire was difficult. Subsequent development on the MLQ led to the current version of the survey, the MLQ5X.

The current version of the MLQ5X includes 36 items that are broken down into nine scales with four items measuring each scale. Subsequent validation work by John Antonakis and his colleagues provided strong evidence supporting the validity and reliability of the MLQ5X. Indeed, Antonakis went on to confirm the viability of the proposed nine-factor MLQ model, using two very large samples. Although other researchers have still been critical of the MLQ model, since 2003, no one has been able to provide dis-confirming evidence of the theorized nine-factor model with such large sample sizes as those published by Antonakis.

In regards to transformational leadership, the first 5 components – Idealized Attributes, Idealized Behaviors, Inspirational Motivation, Intellectual Stimulation, and Individualized Consideration – are considered to be transformational leadership behaviors.

Effectiveness as compared to other leadership styles

Studies have shown that transformational leadership styles are associated with positive outcomes in relation to other leadership styles. It is suggested that transformational leadership augments transactional in predicating effects on follower satisfaction and performance. According to studies performed by Lowe, Kroeck, and Sivasubramaniam, productivity (or Idealized Influence) was found to be a variable that was most strongly related to leader effectiveness among MLQ scales. Other studies show that transformational leadership is positively associated with employee outcomes including commitment, role clarity, and well-being. However, the effectiveness of transformational leadership varies by the situational contexts. For example, it can be more effective when applied to smaller, privately held firms than complex organizations based on its outreach effect with members of the organization. However, it can be concluded that transformational leadership has a positive effect on organizational effectiveness. This is because transformational leaders can encourage and facilitate change in their subordinates and encourage their development and creativity.

Difference between a manager and a leader

Managers are the doers within an organization, group, or community. They are tasked with executing the vision by assigning roles and responsibilities to others. They track progress, assess current states, and identify what it takes to achieve the desired outcome. Leaders are not managers by default. Leaders are usually visionaries who have identified a need to change and are committed to see changes implemented to fruition. What truly sets leaders apart is their ability to inspire voluntary followership.

Transactional leadership

In contrast to transformational leadership, transactional leadership styles focus on the use of rewards and punishments in order to achieve compliance from followers. According to Burns, the transforming approach creates significant change in the life of people and organizations. It redesigns perceptions and values, and changes expectations and aspirations of employees. Unlike in the transactional approach, it is not based on a "give and take" relationship, but on the leader's personality, ability to make a change through example, and articulation of an energizing vision and challenging goals.

Transformational leaders look towards changing the future to inspire followers and accomplish goals, whereas transactional leaders seek to maintain the status quo, not aiming for progress. Transactional leaders frequently get results from employees by using authority, while transformational leaders have a true vision for their company, are able to inspire people, and are entirely committed to their work. In summary, transformational leaders focus on vision, use charisma and enthusiasm for motivation, and are proactive in nature. On the other hand, transactional leaders focus on goals, use rewards and punishments for motivation, and are reactive in nature.

The MLQ does test for some transactional leadership elements – Contingent Reward and Management-by-Exception – and the results for these elements are often compared to those for the transformational elements tested by the MLQ. Studies have shown transformational leadership practices lead to higher satisfaction with a leader among followers and greater leader effectiveness, while one transactional practice (contingent reward) leads to higher follower job satisfaction and leader job performance.

Laissez-faire leadership

In a laissez-faire leadership style, a person may be given a leadership position without providing leadership, which leaves followers to fend for themselves. This leads to subordinates having a free hand in deciding policies and methods. Studies have shown that while transformational leadership styles are associated with positive outcomes, laissez-faire leadership is associated with negative outcomes, especially in terms of follower satisfaction with leader and leader effectiveness. Laissez-faire leadership should not be confused with delegation of responsibilities, which is often associated with positive leadership; the main distinction of the laissez-faire style is an abdication of responsibility for the outcome when decisions are made by subordinates in the absence of managerial oversight. Also, other studies comparing the leadership styles of genders have shown that female leaders tend to be more transformational, whereas laissez-faire leadership is more prevalent in male leaders.

Comparison of styles among public and private companies

Lowe, Kroeck, and Sivasubramaniam (1996) conducted a meta-analysis combining data from studies in both the private and public sector. The results indicated a hierarchy of leadership styles and related subcomponents. Transformational Leadership characteristics were the most effective; in the following order of effectiveness from most to least: productive-inspiration, intellectual stimulation, and individual consideration. Transactional Leadership was the next most effective; in the following order of effectiveness from most to least: contingent reward and managing-by-exception. Laissez Faire leadership does not intentionally intervene, and as such, is not measured, and has no effectiveness score.

Table 2.3

Correlations With Effectiveness in Public and Private Organizations

Results of a meta-analysis of effectiveness of as adapted by Bass (2006) in Transformational Leadership.

Factors affecting use

Phipps suggests that the individual personality of a leader heavily affects their leadership style, specifically with regard to the following components of the Five-factor model of personality: openness to experience, conscientiousness, extraversion/introversion, agreeableness, and neuroticism/emotional stability (OCEAN).

Phipps also proposed that all the Big Five dimensions would be positively related to transformational leadership. Openness to experience allows the leader to be more accepting of novel ideas and more likely to stimulate the follower intellectually. Conscientious leaders are achievement oriented and thus more likely to motivate their followers to achieve organizational goals. Extraverted and agreeable individuals are more outgoing and pleasant, respectively, and more likely to have successful interpersonal relationships. They are more likely to influence their followers and to be considerate towards them. Emotionally stable leaders would be better able to influence their followers because their stability would enable them to be better role models to followers and to thoroughly engage them in the goal fulfillment process.

A specific example of cultural background affecting the effectiveness of transformational leadership would be Indian culture, where a nurturant-task style of leadership has been shown to be an effective leadership style. Singh and Bhandarker (1990) demonstrated that effective transformational leaders in India are like heads of Indian families taking personal interest in the welfare of their followers. Leaders in Indian organizations are therefore more likely to exhibit transformational behaviors if their followers are more self-effacing in approaching the leaders. It is also hypothesized in general that subordinates’ being socialized to be less assertive, self-confident, and independent would enhance superiors’ exhibition of transformational leadership.

Evidence suggests that the above sets of factors act, in essence, as both inhibitors of and substitutes for transformational leadership. As inhibitors, the presence of any of these factors—either independently or especially collectively—could make the presence of a transformational leader “redundant” since followers’ positive behavior would instead be sparked by their own motivations or perceptions. On the other hand, when these factors are not present (e.g., employees in a work group do not see their leader as “one of us”), then transformational leadership is likely to have a much greater impact on subordinates. When such “favorable conditions” are not present, managers—and the organizations they work for—should see a better return on investment from transformational leadership.

Leader continuity was shown to enhance the effect of transformational leadership on role clarity and commitment, indicating that it takes time before transformational leaders actually have an effect on employees. Furthermore, co-worker support enhanced the effect on commitment, reflecting the role of followers in the transformational leadership process. However, there are factors that would serve to balance the exhibition of transformational leadership, including the organizational structure, ongoing change, the leaders’ working conditions, and the leaders' elevated commitment of organizational value.

Outcomes

In Leadership and Performance Beyond Expectations, Bernard Bass states some leaders are only able to extract competent effort from their employees, while others inspire extraordinary effort. Transformational leadership is the key (Bass, 1985). Implementing transformational leadership has many positive outcomes not only in the workplace but in other situations as well. Evidence shows that each of the previously talked about four components of transformational leadership are significantly associated with positive emotions and outcomes in the workplace as well as in team projects performed online. These four components are significantly associated with higher job satisfaction and the effectiveness of the employees. Both intellectual stimulation and inspirational motivation are associated with a higher degree of positive emotions such as enthusiasm, happiness, and a sense of pride in the follower's life and work.

A transformational leader inspires and follows the employee's self-interests, while a transactional leader manages and reinforces generally without employee consideration. Aligning the organization with transformational leaders by committing, being involved, and developing with the employees can lead to higher job satisfaction and motivation.

When transformational leadership was used in a nursing environment, researchers found that it led to an increase in organizational commitment. A separate study examined that way that transformational leadership and transactional leadership compare when implemented into an online class. The results of this study indicate that transformational leadership increases cognitive effort while transactional leadership decreases it.

Future

The evolution of transformational leadership in the digital age is tied to the development of organizational leadership in an academic setting. As organizations move from position-based responsibilities to task-based responsibilities, transformational leadership is redefined to continue to develop individual commitment to organizational goals by aligning these goals with the interests of their leadership community. The academic community is a front-runner in this sense of redefining transformational leadership to suit these changes in job definition.

The future of transformational leadership is also related to political globalization and a more homogenous spectrum of economic systems under which organizations find themselves operating. Cultural and geographical dimensions of transformational leadership become blurred as globalization renders ethnically specific collectivist and individualistic effects of organizational behavior obsolete in a more diversified workplace.

The concept of transformational leadership needs further clarification, especially when a leader is labelled as a transformational or transactional leader. While discussing Jinnah's leadership style, Yousaf (2015) argued that it is not the number of followers, but the nature of the change that indicates whether a leader is transformational or transactional.