Transformational Leadership

TRANSFORMATIONAL LEADERSHIP - THE MANTRA FOR 21st CENTURY BUSINESS
TRANSFORMATIONAL LEADERSHIP
- THE MANTRA FOR 21ST CENTURY BUSINESS
KIRAN S. MORE
DPGD / JA12 / 0492
SPECIALISATION: OPERATIONS
WELINGKAR INSTITUTE OF MANAGEMENT

DEVELOPMENT & RESEARCH
Year of submission: December-2013
ACKNOWLEGEMENTS
I wish to express my sincere gratitude to Mr. Rajesh Aparnath of M/s.

WELINGKAR Institute of Management for providing me an opportunity to do my project
work on TRANSFORMATIONAL LEADERSHIP -THE MANTRA FOR 21ST CENTURY
BUSINESS .
This project bears on imprint of many peoples. My special thanks to Mrs.

Zenobia Sanjana, VP Advertising & HO Media Library of Prime Focus
Technologies Pvt Ltd,for her kind co-operation to the completion of my project work. I
also wish to express my gratitude to the officials and other staff members of Prime
Focus Technologies Pvt Ltd, who rendered their help during the period of my project
work.
Last but not least I wish to avail myself of this opportunity, express a sense of
gratitude and love to my friends for their manual support, strength, and help and for
everything.
(Kiran S. More)
Place: Mumbai
Date: 5th November, 2013
CERTIFICATE FROM THE GUIDE
This is to certify that the Project Work titled TRANSFORMATIONAL LEADERSHIP THE MANTRA FOR 21
ST
CENTURY BUSINESS is a confide work carried out by our employee
Mr.Kiran S. More, working as Operation Manager of Media Library Division for Prime Focus
Technologies Pvt Ltd,a candidate for the final year Post Graduate Diploma in Operations
(PGDBA - Operations)
examination
of
WELINGKAR INSTITUTE
OF
MANAGEMENT,
MUMBAI, Roll No.: DPGD/JA12/0492, under our guidance and direction.
Guide:
Mrs Zenobia Sanjana,

VP Advertising & HO
Prime Focus Technologies Pvt Ltd,
Date : 28th Oct2013

Place : Mumbai
INDEX
Introduction to Company - Prime Focus Technologies Pvt. Ltd.
Leadership
13
Transformational Leadership
23
Principles of Transformational Leadership
34
The qualities of transformational leadership
36
Transformational Leadership Vs. Transactional Leadership
42
Transformational Leadership Vs. Situational Leadership
47
Reaching New Levels of Performance
49
Three Levels of Leadership Model
55
10 Case Study
64
11 Transformational Leadership in the Indian Microfinance Organisation
67
12 Towards understanding Transformational Leadership in India
72
13 Bibliography
75
1. INTRODUCTION TO COMPANY PRIME FOCUS

1.1 Introduction of Prime Focus:
Prime Focus World is a global entertainment services company providing visual effects and
stereo 3D conversion to major studios and filmmakers around the world.
In addition to its 3D conversion, Prime Focus offers a full slate of world-class VFX services
through its various facilities, from some of the most creative and experienced talent in the world.
Prime Focus has created breath-taking visual effects for the Academy Award winning film
'Avatar'; for the blockbuster 'Harry Potter', 'Twilight Saga' and 'X-Men' franchises; and for global
releases including 'Tron: Legacy', 'The A-Team', 'Sucker Punch', 'Unknown' and the 2011 Palme
dOr winning 'Tree of Life'.
With its Global Corporate Headquarters in Los Angeles, Prime Focus is an integrated global
business comprising world-class facilities in the United States, Canada, the U.K., and India.
Prime Focus Global Digital Pipeline, a dynamic high-speed internal network, provides access
to nearly 3,000 artists and expert technicians working in four time zones on three continents.
This World sourcing model enables Prime Focus to deliver efficient service around the clock at
highly competitive prices to clients around the globe.
When George Lucas decided to re-release 'Star Wars: Episode One The Phantom Menace' in
3D, he turned to Prime Focus World, and the company has also brought its 3D conversion
expertise to many other top-tier Hollywood movies including 'Harry Potter and the Deathly
Hallows: Part 2', 'Narnia: The Voyage of the Dawn Trader', 'Shrek', 'Green Lantern', 'Immortals'
and 'Transformers: Dark of the Moon'.
From Hollywood to Bollywood and points in between, Prime Focus is recognized as a preeminent source of creative and technical services to the global entertainment industry. Top
moviemakers rely on Prime Focus to deliver the artistry, technology and global infrastructure
required to efficiently and cost-effectively convert 2D material into dazzling 3D.
Namit Malhotra doesnt run Hollywood, but the founder and managing director of Prime Focus, a
leading visual entertainment multinational based in Mumbai, holds far more clout in Hollywood
than many local post houses in Los Angeles, California.
Why? The global success and appeal of 3D has opened up a whole new genre of con-tent in
the visual entertainment space. The US new 3D release market alone is estimated to be about
$248297 million annually.
Moreover, after the successful release of 3D converted versions of Star Wars: Episode I and
Titanic, US studios are exploring the immediate payback on the cost of converting existing
back-catalogue titles, compelling them to visit their archives.
According to industry data, the US studios own at least 800 titles that have each grossed over
$100 million in worldwide box-office since 1995, and the estimated size of the US backcatalogue blockbuster film market ranges from $1.8 billion to $3.4 billion.
These figures make a strong case for Prime Focus, a market leader in 3D conversion, with an
estimated 38 per cent market share in 2011. Since the launch of View-D, its proprietary 2D to
3D conversion in 2009, the company has delivered 15 movies including prestigious projects
such as Avatar, Transformers: Dark of the Moon, Harry Potter and the Deathly Hallows Part 2,
The Chronicles of Narnia, and Star Wars: Episode I - The Phantom Menace.
In fact Prime Focus recently announced a partnership with Industrial Light & Magic (ILM) and
Lucas film for the 3D conversion of the Episode II and III of the epic movie Star Wars. The
projects are presently being converted and are scheduled for a back-to-back launch in
September and October this year.
Also very few companies can offer such a wide range of services under one roof. Prime Focus
offers end-to-end solution from pre-production to final delivery, including VFX, #D conversion,
video and audio post-production digital intermediate, versioning and adaption, and equipment
rental.
1.2 NamitMalhotras Leadership quality & Entrepreneurial Spark

Much of the global ambition of Prime Focus can be traced back to the formative years of Namit
Malhotra. His grandfather MN Malhotra was a renowned cinematographer who shot Indias first
color film Jhansi Ki Rani and several Hindi movies for legend-ary producer-director BR Chopra.
His father Naresh Malhotra produced Shahenshah, the 1988 Bollywood super hero film starring
Amitabh Bachchan.
As an 18-year-old, Namit went on a business trip to Hong Kong. His big idea: to set up backend
operations for Star TV in India. The year was 1994. Star TV was part of Hutchison Whampoa
group and had begun beaming programme feeds to India. The fact that the teenager had
sufficient contact to set up the best but no money to invest didnt cut much ice with the Star TV
executive. But on the transit to Hong Kong he met his fathers friend on flight who advised him
that the next big thing in Media business was computer graphics. Without blinking an eyelid,
Namit joined a computer graphics institute in South Mumbai for a six- months certificate course
that offered training in Corel Draw, Animation Pro, and 3D Studio Max.
While he had settled for much less, he took another shot at enterprise: setting up an editing
studio to cater to imminent TV boom in India. He knew he needed about Rs 10 lakh to start this
business, and a few good men to run his business. Namit raised about seven lakh rupees from
a bank and borrowed about three lakh rupees from his father.
Meanwhile, he approached his three instructors at the training institute to join him in business:
Prakash Kurup, MerzinTavaria and HuzefaLokhandwala. All three were basically college
students doing their summer jobs. In January 1995, Video Workshop (the original name of
Prime Focus) was set up in a garage adjoining Namits apartment. For the next two years, the
company picked up odd jobs such as editing small corporate film or low budget TV programmes
for small time producers. Immediately after finishing college in 1997, all four member started
working at full blast which included 100 episodes of the famed dance show Boogie Woogiefor
Sony and top music count-down show Colgate Top 10 for Zee. From simple editing of episodes,
the scope of work widened to high-end services such as creating title sequences, making
promos, and mastering the programs. While Prime Focus was digitally mastering Ramesh
Sippys serial Gathaafor Star TV, it was setting up a post-production studio for Channel V at
their Khar facility in Mumbai. In the next two years, the company was putting together 21 television shows a week. The success of Prime Focus can be primarily attributed to the fact that
every time it matured in a business, it would diversify for the next big opportunity. So instead of
scaling the broadcast business, Namit shifted focus to newer markets such as advertising and
music videos, which paid much more money than television for the same service. While on one
hand Prime Focus was working with top music video producers such as Sanjay Gupta, Anubhav
Sinha and KunalKohli, it was also servicing biggest advertising producers such as Sunil Man-
chanda of MAD Entertainment. By 1999, the turnover of the company had touched Rs 75 lakh
and its capital investment had gone up to two crore rupees.
1.3 Growth Philosophy under the Leadership of Namit Malhotra
MILESTONES
1997
PFL founded by Namit Malhotra in a garage in Mumbai PFL offerred

India's first high-ending finishing system.
2001
Offered India's first scanning and recording system
2003
Offered India's first DI system
2004
First visual effect company in India to operate a motion control-rig.
2006
Entry into UK market via acquisition of AIM listed company IPO of

Prime Focus Limited on BSE and NSE
2007
Entry into US through acquisition of Post Logic and Frantic Films
2009
Launch of View-D & CLEAR
2010
First company to convert an entire film - Clash Of the Titans - to 3D
2011
3D conversion of Star Wars: Episode I.
2012
Prime Focus Animation launched. CLEAR Digitises Associated Press

international archive.
1.4Inspiration & Motivation for Growth

The year 1999 was also the year when the company evolved from Video Works to Prime Focus.
The intent behind changing the name was purely in line with the company restructuring where
8
NamitMalhotras Video Workshop had to be merged with his father NareshMalhotras Video
Works, there was a strong people-centric philosophy to it. While most organised industries have
believed in hiring experienced people, here was a company that was started by youngsters and
run by youngsters. The necessary condition to join Prime Focus then wasnt really a
professional qualification; it was, as per Namits admission, the attitude towards ones job. In
one of the discussions with his core team, Namit announced that the prime focus of his
company has to be people. Prakash Kurup, one of the founders, latched onto the phrase and
thats how Prime Focus was born. Interestingly, the old logo of the company was that of a childs
impression of a man. Today the figure in the logo has evolved but people remain facility Centre
to the organisation. Such is the degree of people empowerment at Prime Focus that Stephen
Mascarenhas who joined the organisation as the executive assistant to the chairman has grown
up to become the senior vice president of View-D, one of the most lucrative divisions of Prime
Focus. Entertainment business is all about people and relationships. I can proudly say that
Amitabh Bachchan, even in the thick of his stardom, didnt charge me a dime during the making
of Shahenshah. Its a different thing that all of us made money after the film was released, says
Naresh Malhotra, chairman of Prime Focus.
With the advent of the new millennium, Prime Focus moved into films in a big way. In the span
of three years it started offering telecine, visual effects and finally digital intermediate (DI)
services. Prime Focus arguably set the first DI facility in India in 2003 and delivered its DI
project for Harry BawejasQayamat.
NUMBER OF PERSONNEL
2006
273
2009
709
2012
4200
FISCAL HIGHLIGHTS
Net Profit grew by

30.4%
Net Revenues grew by

53.5 %
EBITDA increased by
30.8%
to INR 992.5 million

compared to INR 760.9
million in 2010-11

from INR 5029.6 million
in the previous year

from INR 1670.8 million
in 2010-11
1.4 TECHNOLOGY ETHOS

Since the early days of company, there was always a financial limitation in buying high-end
technology. While the big daddies of business bought Avid for editing, Prime Focus had to settle
for Media 100 NLE sys-tem, which was one-third the cost. When the competition purchased
Quantel for high-end special effects, the company would settle for more economical Discreet
Logic (Now part of Autodesk).Our strategy was simple. We were always on the lookout for a
vendor who wanted to enter India and had creative financing options as well. So while we grew,
they grew, says Namit proudly about his longstanding partnership with Autodesk. Apparently,
every time Autodesk launched a product in India, Prime Focus was the first to get it deployed.
The frugal approach to technology ensured high capacity utilization, besides getting hands-on
with the technology. While most post companies preferred a simpler solution and proprietary
software, Prime Focus went ahead and adopted open source systems, which meant cheaper
applications but greater vulnerabilities to bugs. In effect, the core team had to get actively
involved in repairing the bugs and managing the tech support of all the technology the company
brought. In fact, there is a joke that runs within the inner circle on their frugal technology spends.
In 1999 Namit and a few members of his core team flew to the US to get trained in color
grading. They booked an Ursa Electrum telecine machine which was a huge investment at that
time. The joke is that there was only one telecine machine Ursa Electrum ever made and
Namitbought that one because it was the cheapest one available in the market. But it is this
10
cost-efficient approach that prompted to create great applications and platforms. Take for
instance the Prime Focus world-sourcing business model that allows it to operate in every
major market and be involved at every stage of a projects development. The platform has no
borders, time zones or limits on capacity and easily adapts to the constantly changing needs of
content creators worldwide. On similar lines, its global digital pipeline the company to spread
projects and integrate facilities across three continents and four time zones. This allows the
company to operate a network that combines global cost advantages, resources and talent pool
with deep understanding of the local markets it operates in. In the M&E business, content is
increasingly being created in a digital format.
Managing this vast amount of content and making it ready for delivery and consumption
across multiple media platforms, formats and devices requires a complex and highly
specialised technology to integrate the work-flow, supply chain logistics and interaction.
It needs to have dual capabilities of enterprise class technology to manage the business of
content, as well as seamless integration with Cloud based technology. In 2009, Prime Focus
Technologies, the technology arm of Prime Focus, created a cloud based technology platform
with unmatched content management capabilities, clear. Not only is it the first worlds first hybrid
cloud technology, it is also the worlds most established. The technology has been deployed by
major broadcasters and brands, and is already managing over 150,000 hours of content every
11
year, over 40,500 new episodes of TV content every year, besides facilitating syndication and
VoD fulfillment of 5 million files and providing 10,500 hours of subtitling for TV and film content
every year. The future is clearly technology, and at Prime Focus, technology is clearly the
future, says RamkiSankaranarayanan, managing director, Prime Focus India and president and
CEO of Prime Focus Technologies (PFT). In fact Ramki is the same person who sold the first
set of equipment to Namit way back in 1997. Then he was a manager with Tata Elxsi. PFTs
revenue has grown by over 200 per cent this year, and it has won marquee clients like
Associated Press, British Film Institute, Sony Music, Netflix, Viacom, and National Geographic
Channel. Clear has also success-fully taken Star TVs broadcast operations into the cloud,
creating a digital media supply chain for the broadcaster, enabling creativity, increasing
monetization of content and driving workflow efficiencies. Eighteen years ago, an 18-year-old
boy had travelled to Hong Kong with a desire to set up Star TVs operations in India.
Today that same guy not only handles Star TVs backend in India, but also set up its
broadcast operations on cloud. Walt Disney once said that all our dreams can come true,
if only we have the courage to pursue them. How true.
12
2. LEADERSHIP
2.1 Definitions & Meaning of Leadership

Leadership has been described as "a process of social influence in which one person can
enlist the aid and support of others in the accomplishment of a common task although
there are alternative definitions of leadership. For example, some understand aleader
simply as somebody whom people follow or as somebody who guides or directs others,
while others define leadership as "organizing a group of people to achieve a common
goal.
Studies of leadership have produced theories involving traits, situational interaction,
function, behaviour, power, vision and values, charisma, and intelligence, among leaders.
Leadership is something essential to any group or organization. What a leader does is
usually very difficult to describe in words. The definition of leadership seems so vague
because of the many responsibilities one holds. As difficult as it may seem, there are 3
quite famous ways in giving a definition of leadership, coming from different perspectives.
Leadership is accomplishing tasks through others

There are a lot of leaders that have been able to lead their groups towards great
accomplishments yet these milestones would not be achieved without the help of every
member of the team. It is just only fair to provide a definition of leadership that involves
those helping hands. This definition has been emphasized by most modern forms of
businesses that focus more on achieving results. Looking back to the past generations,
forms of leadership have been changing.
13
It is never a doubt that leaders of the past use hierarchy and issuance of orders to finish
a certain task. But leaders of the modern world have changed that type of leadership
and turned it into an investment of trust to their people, having skilled employees
coordinate with each other and work together in order to accomplish targets. In most
organizations, management styles are usually talked about rather than leadership styles.
Aside from this, associating leadership to this kind of style involves ruling out positionless leadership and welcomes the presence of an informal one. The only difference is
that in informal leadership, you do not have the conviction of claiming a certain power
over your people.
Leadership means having the dominating power over

your people
Even if we base the definition of leadership to other tribes and animal species, the
individual that stands out and is dominant is their leader. This definition simply implies
that the leader is meant to have a power over his people, holding the top position for a
certain period of time. It also shows that you can always be a leader even without
necessarily accomplishing tasks through others. This requires the groups commitment
that they will obey the rules of the leader. This kind of leadership does not necessarily
require someone to be a relational leader or a good motivator of people. Being a leader
just means you are on top.
Leadership is directed to change and a better journey

In most cases, it is an intuition that leaders do have the courage to stand up and let them
be heard. Even if it means great risk, they decide not to conform and promote change
instead. This definition of leadership challenges the status quo and gears towards a
better world. But the thing here is you dont have to hold a formal appointment to
become this type of a leader.
14
As long as you think that change is needed, then off you go to challenging the status
quo. This gives the employees the chance to become leaders even if they dont have the
right skills or the authority to take charge.
Let us not forget that leadership should also entail balance between your responsibilities
and handling your people for a better outcome.
2.2 The Leadership Challenge

James Kouzes and Barry Posner developed a survey (The Leadership Practices Inventory)
that asked people which, of a list of common characteristics of leaders, were, in their
experiences of being led by others, the seven top things they look for, admire and would
willingly follow. And over twenty years, they managed ask this of seventy five thousand
people.
The results of the study showed that people preferred the following characteristics, in order:
Honest
Forward-looking
Competent
Inspiring
Intelligent
Fair-minded
Broad-minded
Supportive
Straightforward
Dependable
Cooperative
Determined
Imaginative
Ambitious
Courageous
Caring
Mature
Loyal
Self-controlled
Independent
15
2.3 Action key for successful leadership:

The five actions that Kouzes and Posner identify as being key for successful leadership:
1. Model the way
Modelling means going first, living the behaviours you want others to adopt. This is leading
from the front. People will believe not what they hear leaders say but what they see leader
consistently do.
2. Inspire a shared vision
People are motivated most not by fear or reward, but by ideas that capture their imagination.
Note that this is not so much about having a vision, but communicating it so effectively that
others take it as their own.
3. Challenge the process
Leaders thrive on and learn from adversity and difficult situations. They are early adopters of
innovation.
4. Enable others to act
Encouragement and exhortation is not enough. People must feel able to act and then must
have the ability to put their ideas into action.
5. Encourage the heart
People act best of all when they are passionate about what they are doing. Leaders unleash
the enthusiasm of their followers this with stories and passions of their own.
16
2.4Leadership Styles - Choosing the Right Style for the Situation

From Mahatma Gandhi and Winston Churchill to Martin Luther King and Steve Jobs, there can
seem to be as many ways to lead people as there are leaders.
Fortunately, businesspeople and psychologists have developed useful, simple ways to describe
the main styles of leadership.
By understanding these styles and their impact, you can develop your own approach to
leadership and become a more effective leader.
We'll look at some common, well-known leadership styles in this article, and we'll explore
situations where these styles may be effective with your people.
Note:
The leadership styles in this article are based on several different approaches to
leadership. You can read more about these in our article on core leadership theories.
Also, there are a number of different leadership styles frameworks that you can use, and
these help you choose the best leadership style to use in a particular situation. Among
these are the Hersey-Blanchard Situational Leadership Theory , the Six Emotional
Leadership Styles , and Path Goal Theory . Spend some time exploring these.
Adapting Your Approach to Leadership

In business, a leadership style called "transformational leadership" is often the most effective
approach to use. Transformational leaders have integrity, they inspire people with a shared
vision of the future, they set clear goals, they motivate people towards these goals, they
manage delivery, and they communicate well with their teams. (You can find out more about
transformational leadership at the end of this article.)
However, leadership is not "one size fits all" thing; often, you must adapt your style to fit a
situation or a specific group. This is why it's useful to gain a thorough understanding of other
leadership styles; after all, the more approaches you're familiar with, the more you can shape
your approach to the situation.
Let's take a look at some of the leadership styles that you can use. (For ease of reference,
these are shown in alphabetical order.)
17
1. Autocratic Leadership
Autocratic leadership is an extreme form of transactional leadership, where leaders have a lot of
power over their people. Staff and team members have little opportunity to make suggestions,
even if these would be in the team's or the organization's best interest.
The benefit of autocratic leadership is that it's incredibly efficient. Decisions are made quickly,
and work gets done efficiently.
The downside is that most people resent being treated this way. Therefore, autocratic
leadership can often lead to high levels of absenteeism and high staff turnover. However, the
style can be effective for some routine and unskilled jobs: in these situations, the advantages of
control may outweigh the disadvantages.
Autocratic leadership is often best used in crises, when decisions must be made quickly and
without dissent. For instance, the military often uses an autocratic leadership style; top
commanders are responsible for quickly making complex decisions, which allows troops to
focus their attention and energy on performing their allotted tasks and missions.
2. Bureaucratic Leadership
Bureaucratic leaders work "by the book." They follow rules rigorously, and ensure that their
people follow procedures precisely.
This is an appropriate leadership style for work involving serious safety risks (such as working
with machinery, with toxic substances, or at dangerous heights) or where large sums of money
are involved. Bureaucratic leadership is also useful in organizations where employees do
routine tasks (as in manufacturing).
The downside of this leadership style is that it's ineffective in teams and organizations that rely
on flexibility, creativity, or innovation.
Much of the time, bureaucratic leaders achieve their position because of their ability to conform
to and uphold rules, not because of their qualifications or expertise. This can cause resentment
when team members don't value their expertise or advice.
3. Charismatic Leadership
A charismatic leadership style can resemble transformational leadership because these leaders
inspire enthusiasm in their teams and are energetic in motivating others to move forward. This
ability to create excitement and commitment is an enormous benefit.
18
The difference between charismatic leaders and transformational leaders lies in their intention.
Transformational leaders want to transform their teams and organizations. Charismatic leaders
are often focused on themselves, and may not want to change anything.
The downside to charismatic leaders is that they can believe more in themselves than in their
teams. This can create the risk that a project or even an entire organization might collapse if the
leader leaves. A charismatic leader might believe that she can do no wrong, even when others
are warning her about the path she's on; and this feeling of invincibility can ruin a team or an
organization.
Also, in the followers' eyes, success is directly connected to the presence of the charismatic
leader. As such, charismatic leadership carries great responsibility, and it needs a long-term
commitment from the leader.
4. Democratic/Participative Leadership
Democratic leaders make the final decisions, but they include team members in the decisionmaking process. They encourage creativity, and team members are often highly engaged in
projects and decisions.
There are many benefits of democratic leadership. Team members tend to have high job
satisfaction and are productive because they're more involved in decisions. This style also helps
develop people's skills. Team members feel in control of their destiny, so they're motivated to
work hard by more than just a financial reward.
Because participation takes time, this approach can slow decision-making, but the result is often
good. The approach can be most suitable when working as a team is essential, and when
quality is more important than efficiency or productivity.
The downside of democratic leadership is that it can often hinder situations where speed or
efficiency is essential. For instance, during a crisis, a team can waste valuable time gathering
people's input. Another downside is that some team members might not have the knowledge or
expertise to provide high quality input.
5. Laissez-Faire Leadership
This French phrase means "leave it be," and it describes leaders who allow their people to work
on their own. This type of leadership can also occur naturally, when managers don't have
sufficient control over their work and their people.
Laissez-faire leaders may give their teams complete freedom to do their work and set their own
deadlines. They provide team support with resources and advice, if needed, but otherwise don't
get involved.
19
This leadership style can be effective if the leader monitors performance and gives feedback to
team members regularly. It is most likely to be effective when individual team members are
experienced, skilled, self-starters.
The main benefit of laissez-faire leadership is that giving team members so much autonomy can
lead to high job satisfaction and increased productivity.
The downside is that it can be damaging if team members don't manage their time well or if they
don't have the knowledge, skills, or motivation to do their work effectively.
6. People-Oriented/Relations-Oriented Leadership
With people-oriented leadership, leaders are totally focused on organizing, supporting, and
developing the people on their teams. This is a participatory style and tends to encourage good
teamwork and creative collaboration. This is the opposite of task-oriented leadership.
People-oriented leaders treat everyone on the team equally. They're friendly and approachable,
they pay attention to the welfare of everyone in the group, and they make themselves available
whenever team members need help or advice.
The benefit of this leadership style is that people-oriented leaders create teams that everyone
wants to be part of. Team members are often more productive and willing to take risks, because
they know that the leader will provide support if they need it.
The downside is that some leaders can take this approach too far; they may put the
development of their team above tasks or project directives.
7. Servant Leadership
This term, created by Robert Greenleaf in the 1970s, describes a leader often not formally
recognized as such. When someone at any level within an organization leads simply by meeting
the needs of the team, he or she can be described as a "servant leader."
Servant leaders often lead by example. They have high integrity and lead with generosity .
In many ways, servant leadership is a form of democratic leadership because the whole team
tends to be involved in decision making. However, servants leaders often "lead from behind,"
preferring to stay out of the limelight and letting their team accept recognition for their hard work.
Supporters of the servant leadership model suggest that it's a good way to move ahead in a
world where values are increasingly important, and where servant leaders can achieve power
because of their values, ideals, and ethics . This is an approach that can help to create a
positive corporate culture and can lead to high morale among team members.
20
However, other people believe that in competitive leadership situations, people who practice
servant leadership can find themselves left behind by leaders using other leadership styles. This
leadership style also takes time to apply correctly: it's ill-suited in situations where you have to
make quick decisions or meet tight deadlines.
Although you can use servant leadership in many situations, it's often most practical in politics,
or in positions where leaders are elected to serve a team, committee, organization, or
community.
8. Task-Oriented Leadership
Task-oriented leaders focus only on getting the job done and can be autocratic. They actively
define the work and the roles required, put structures in place, and plan, organize, and monitor
work. These leaders also perform other key tasks, such as creating and maintaining standards
for performance.
The benefit of task-oriented leadership is that it ensures that deadlines are met, and it's
especially useful for team members who don't manage their time well.
However, because task-oriented leaders don't tend to think much about their team's well-being,
this approach can suffer many of the flaws of autocratic leadership, including causing motivation
and retention problems.
Tip:
In practice, most leaders use both task-oriented and people-oriented styles of leadership
together. Our article on the Blake Mouton Managerial Grid explains how you can do this.
9. Transactional Leadership
This leadership style starts with the idea that team members agree to obey their leader when
they accept a job. The "transaction" usually involves the organization paying team members in
return for their effort and compliance. The leader has a right to "punish" team members if their
work doesn't meet an appropriate standard.
Although this might sound controlling and paternalistic, transactional leadership offers some
benefits. For one, this leadership style clarifies everyone's roles and responsibilities. Another
benefit is that, because transactional leadership judges team members on performance, people
who are ambitious or who are motivated by external rewards including compensation often
thrive.
The downside of this leadership style is that team members can do little to improve their job
satisfaction. It can feel stifling, and it can lead to high staff turnover.
21
Transactional leadership is really a type of management, not a true leadership style, because
the focus is on short-term tasks. It has serious limitations for knowledge-based or creative work.
However, it can be effective in other situations.
10. Transformational Leadership

As we discussed earlier in this article, transformation leadership is often the best leadership
style to use in business situations.
Transformational leaders are inspiring because they expect the best from everyone on their
team as well as themselves. This leads to high productivity and engagement from everyone in
their team.
The downside of transformational leadership is that while the leader's enthusiasm is passed
onto the team, he or she can need to be supported by "detail people."
That's why, in many organizations, both transactional and transformational leadership styles are
useful. Transactional leaders (or managers) ensure that routine work is done reliably, while
transformational leaders look after initiatives that add new value.
It's also important to use other leadership styles when necessary this will depend on the
people you're leading and the situation that you're in.
2.5Key Points
In business, transformational leadership is often the best leadership style to use. However, no
one style of leadership fits all situations, so it helps to have an understanding of other styles.
Common leadership styles include:
1. Autocratic leadership.
2. Bureaucratic leadership.
3. Charismatic leadership.
4. Democratic/participative leadership.
5. Laissez-faire leadership.
6. People/relations-oriented leadership.
7. Servant leadership.
8. Task-oriented leadership.
9. Transactional leadership
10. Transformational leadership.
By learning about the pros and cons of each style, you can adapt your approach to your
situation.
22
3. TRANSFORMATIONAL LEADERSHIP
3.1 INTRODUCTION:
Have you ever been in a group where someone took control of the situation by conveying a
clear vision of the group's goals, a marked passion for the work, and an ability to make the rest
of the group feel recharged and energized? This person just might be what is called a
transformational leader.
Transformational leadership is a type of leadership style that can inspire positive changes in
those who follow. Transformational leaders are generally energetic, enthusiastic, and
passionate. Not only are these leaders concerned and involved in the process; they are also
focused on helping every member of the group succeed as well.
Transformational leadership enhances the motivation, morale, and performance of followers
through a variety of mechanisms. These include connecting the follower's sense of identity and
self to the project and the collective identity of the organization; being a role model for followers
that inspires them and makes them interested; challenging followers to take greater ownership
for their work, and understanding the strengths and weaknesses of followers, so the leader can
align followers with tasks that enhance their performance.
3.2 What is Transformational Leadership?
23
Transformational problems are the critical issues a company or organization faces. Most times
they relate to attitudes, behaviours and culture. They are rooted in the core and can be difficult
to pinpoint without deep analysis.
"Woodrow Wilson called for leaders who, by boldly interpreting the nation's conscience, could lift
a people out of their everyday selves. That people can be lifted into their better selves is the
secret of transforming leadership," - James MacGregor Burns.
James MacGregor Burns is credited with creating the concept of transformational leadership in
1978. He was a presidential biographer and a leadership expert who focused mainly on the
improvement of management principles and procedures.
Burns said that a transformational leader needs to have a solid understanding of the necessary
goals to be successful and be articulate in explaining those goals and the method to which they
are to be achieved.
"Change doesn't really happen at a company; it happens with people, so in order to lead change
you have to know how to lead people," says Pamela Rucker, chairwoman of the CIO Executive
Council's Executive Women in IT.
Transformational leaders are described as charismatic, enthusiastic, optimistic, passionate and
sometimes visionary, giving them the ability to change long-held perceptions and beliefs. Those
traits can spread like a wildfire; when they do, leaders and workers can engage more effectively
allowing real transformation to take place.
Transformational leadership is based on belief in others, that each member of the team has
valuable contributions to make. You must plan your strategy to empower each one of them.
Transformation means redefining the business culture, so consider what will work for your
employees. Reward your employees good ideas, and empower them to develop those ideas.
Post photos of the employee of the month, or show an employee that he is appreciated with a
certificate, written note and a gift card to a classy restaurant. Be sure to spread good feeling
around because if employees perceive that all the rewards are going to a few, they may be
resentful. To include everyone, combine the public recognition with one-on-one coaching to
those who can improve with additional attention.
3.3The History of Transformational Leadership & Development of

Concept:
J.M. Burns (1978) first introduced the concept of transforming leadership in his descriptive
research on political leaders, but this term is now used in organizational psychology as well
(Bass &Riggio, 2006). According to Burns, transforming leadership is a process in which
"leaders and followers help each other to advance to a higher level of morale and motivation".
24
Burns related to the difficulty in differentiation between management and leadership and
claimed that the differences are in characteristics and behaviors. He established two concepts:
"transforming leadership" and "transactional leadership". 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, traits and ability to make a change through example, articulation of an energizing
vision and challenging goals. Transforming leaders are idealized in the sense that they are a
moral exemplar of working towards the benefit of the team, organization and/or community.
Burns theorized that transforming and transactional leadership were mutually exclusive styles.
Bernard M. Bass (1985) extended the work of Burns (1978) by explaining the psychological
mechanisms that underlie transforming and transactional leadership. Bass introduced the term
"transformational" in place of "transforming." Bass added to the initial concepts of Burns (1978)
to help explain how transformational leadership could be measured, as well as how it impacts
follower motivation and performance. The extent to which a leader is transformational is
measured first, in terms of his influence on the followers. The followers of such a leader feel
trust, admiration, loyalty and respect for the leader and because of the qualities of the
transformational leader are willing to work harder than originally expected. These outcomes
occur because the transformational leader offers followers something more than just working for
self-gain; they provide followers with an inspiring mission and vision and give them an identity.
The leader transforms and motivates followers through his or her idealized influence (earlier
referred to as charisma), intellectual stimulation and individual consideration. In addition, this
leader encourages followers to come up with new and unique ways to challenge the status quo
and to alter the environment to support being successful. Finally, in contrast to Burns, Bass
suggested that leadership can simultaneously display both transformational and transactional
leadership.
Now 30 years of research and a number of meta-analyses have shown that transformational
and transactional leadership positively predicts a wide variety of performance outcomes
including individual, group and organizational level variables.
25
3.4The Components of Transformational Leadership

Bass also suggested that there were four different components of transformational leadership.
1. Intellectual Stimulation Transformational leaders not only challenge the status quo;
they also encourage creativity among followers. The leader encourages followers to
explore new ways of doing things and new opportunities to learn.
By rocking the boat and asking questions, transformational leaders are always
challenging the status quo and aren't afraid of failure. They foster an environment where
it's safe to have conversations, be creative and voice ideas, a place where all team
members feel valued. They challenge cultural norms and work to inspire passion with
their teams and peers. As Rucker puts it, they are adept at, "turning me moments into
we moments."
Shipley says that managers who have a command-and-control style of leadership can
get a lot accomplished, but, he says, _they achieve short-term. You can have great
success but you can't maintain long-term success that way."
A better approach, Shipley says, is to guide your team, but let them solve the problem
on their own.
26
2. Individualized Consideration Transformational leadership also involves offering

support and encouragement to individual followers. 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 the
unique contributions of each follower.
Is the golden rule flawed? Maybe not but consider this: Don't treat people how you want
to be treated, treat them the way they want to be treated. People are different and what
motivates and excites you is different from your peers and co-workers. "You have to
learn to adapt your style to accommodate the skills and people on your team," says
Rucker.
3. Inspirational Motivation Know where you want to go and create a vision or strategy
to get there and then articulate, with optimism and passion, your vision to show them
how all this matters in the big picture. "It's really the meaning behind why you're doing
the job you're doing that's so important to communicate to people. I take great pride in
understanding my employees and what motivates them," says Shipley. He offers this
analogy:
Two guys are digging a ditch, so I asked one of them, "What are you doing?" He says
digging a ditch, what's it look like I'm doing? I asked the other guy the same question
and he says, "I'm building a hospital."
It's getting into the minds of the people so that they understand that whatever task
they're doing, they're not doing that task, they're a part of something larger "They aren't
digging a ditch or writing that code; they are transforming the way healthcare is delivered
in this country," says Shipley.
Transformational 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 fulfil these goals.
4. Idealized Influence "Divorced from ethics, leadership is reduced to management and

politics to mere technique," writes Burns.
Transformational leadership requires decision-making that works towards the greater
good. You need to be a mentor of sorts and lead by example. "Values-based leadership
is necessary for driving sustainable change as this ensures that the results achieved are
underpinned with a strong moral and ethical foundation, thus they can also stand up to
any scrutiny or resistance to change," says Stewart.
The transformational leader serve as a role model for followers. Because followers trust
and respect the leader, they emulate this individual and internalize his or her ideals.x`
27
5. Perseverance through Conflict

Experts agree that transformational change will create conflict. You're going to have
people fight and/or ignore you. "You have to master the role by figuring out how you're
going to get all these people to work with you. Doing that will change the position you
have into the power you need to change the company," says Rucker.
Are you ready to take up the mantle of the transformational leader? You don't have to be
the boss to do so. "Anyone can be a transformational leader, it's all contextual and it's all
driven by scale," says Ford.
3.5 What Embodies a Transformational Leader?
What qualities should a transformational leader possess? Here are thoughts from experts on the
topic.
"If you want to transform something, you have to know what it is and not just the technology that
supports it. You need to have a vision of where you want to go and be able to communicate it,"
says Rucker.
28
In order to be transformative, according to Rucker, you need to have diversity of thought. You
have to make sure that all the key stakeholders are represented in any decision that you make.
You shouldn't just have your own team coming up with ideas on what they think they know
about the projects, the company or the industry. You have to honestly care about what these
people [peers and stakeholders]S want and need in order to make sure those needs are
adequately represented and that every solution you provide has been vetted.
You need purposefully find good people with different perspectives who will shake things up and
bring in new ideas. You can't come up with all the ideas yourself. Find a way to look for experts
in whatever you are trying to achieve, you have to challenge long-term assumptions people may
have," says Rucker.
"A transformational leader has to be strategic from a planning and objective setting perspective,
a strong communicator that can be trusted so that by extension people are willing to 'get on the
bus', and both be passionate & focused in order to drive change from inception to a successful
conclusion, "says Greg Stewart, vice president and CIO of Enerflex.
"Some people see a transformational leader as someone who comes in and radically changes
everything and I don't see it that way," says Jeffrey S. Shipley, vice president and CIO at Blue
Cross and Blue Shield of Kansas City.
"I see it as more of a mentoring or coaching role. It's about motivation, empowerment and
morale of the employees. You have to take the time to individualize, be the role model and
understand people and how they think. You need to challenge long-term assumptions and
beliefs and think about things a different way," Shipley says.
"Transformational leadership, as we understand it, is mobilizing people to the common good.

The ability to create a safe place to have conversations and voice ideas is very important.
Ethics, morality and integrity are a huge part of transformational leadership, even if it's not in the
best interest of self. The transformational leader needs to build trust and that can't be done in
the short-term, it can only be done in the long-term. Anyone can be a transformational leader;
it's all contextual and it's all driven by scale," says Ford.
29
3.6 How to Apply Transformational Leadership at Your Company

Transformational leadership is only one style of management, but it has the potential to
empower your workforce to do more than you thought possible.
To be a leader and manager you need to have a solid understanding of things such as project
management, organizational skills, managing employees and monitoring their performance, but
even masters of these skills aren't necessarily transformational leaders. These skills are simply
the foundation on which a transformational leader is most effective.
Some people are just born with leaderships skills and the rest of us have to work at it. You've
seen them before--the charismatic leaders who have a way of motivating the people around
them. They instil a feeling that we are all accountable and that if one of us fails, we all fail.
These leaders are on a mission to effect positive change for both the organization and the
people they work with, and their energy and passion help fuel cohesion among peers and team
members, allowing them to larger than the sum of their parts. They challenge long-held
assumptions and don't accept answers like, "because this is the way we've always done it."
30
3.7Observations
In their classic text, Transformational Leadership, authors Bass and Riggio explained:
"Transformational leaders...are those who stimulate and inspire followers to both achieve
extraordinary outcomes and, in the process, develop their own leadership capacity.
Transformational leaders help followers grow and develop into leaders by responding to
individual followers' needs by empowering them and by aligning the objectives and goals of the
individual followers, the leader, the group, and the larger organization."
Researchers have found that this style of leadership can have a positive effect on the group.
"Research evidence clearly shows that groups led by transformational leaders have higher
levels of performance and satisfaction than groups led by other types of leaders," explained
psychologist and leadership expert Ronald E. Riggioin an article appearing on the Psychology
Today website. The reason, he suggests, is that transformational leaders believe that their
followers can do their best, leading members of the group to feel inspired and empowered.
3.8Assumptions
People will follow a person who inspires them.
A person with vision and passion can achieve great things.
The way to get things done is by injecting enthusiasm and energy.
3.9 Stages of Transformational Leadership

(1) Developing the vision
Transformational Leadership starts with the development of a vision, a view of the future that
will excite and convert potential followers. This vision may be developed by the leader, by the
senior team or may emerge from a broad series of discussions. The important factor is the
leader buys into it, hook, line and sinker.
(2) Selling the vision

The next step, which in fact never stops, is to constantly sell the vision. This takes energy and
commitment, as few people will immediately buy into a radical vision, and some will join the
show much more slowly than others. The Transformational Leader thus takes every
opportunity and will use whatever works to convince others to climb on board the bandwagon.
31
In order to create followers, the Transformational Leader has to be very careful in creating
trust, and their personal integrity is a critical part of the package that they are selling. In effect,
they are selling themselves as well as the vision.
(3) Finding the way forwards

In parallel with the selling activity is seeking the way forward. Some Transformational Leaders
know the way, and simply want others to follow them. Others do not have a ready strategy,
but will happily lead the exploration of possible routes to the Promised Land.
The route forwards may not be obvious and may not be plotted in details, but with a clear
vision, the direction will always be known. Thus finding the way forward can be an on-going
process of course correction and the Transformational Leader will accept that there will be
failures and blind canyons along the way. As long as they feel progress is being made, they
will be happy.
(4) Leading the charge

The final stage is to remain up-front and central during the action. Transformational Leaders
are always visible and will stand up to be counted rather than hide behind their troops. They
show by their attitudes and actions how everyone else should behave. They also make
continued efforts to motivate and rally their followers, constantly doing the rounds, listening,
soothing and enthusing.
It is their unswerving commitment as much as anything else that keeps people going,
particularly through the darker times when some may question whether the vision can ever be
achieved. If the people do not believe that they can succeed, then their efforts will flag. The
Transformational Leader seeks to infect and re-infect their followers with a high level of
commitment to the vision.
One of the methods the Transformational Leader uses to sustain motivation is in the use of
ceremonies, rituals and other cultural symbolism. Small changes get big hurrahs, pumping up
their significance as indicators of real progress.
Overall, they balance their attention between action that creates progress and the mental
state of their followers. Perhaps more than other approaches, they are people-oriented and
believe that success comes first and last through deep and sustained commitment.
32
3.10Discussion
Whilst the Transformational Leader seeks overtly to transform the organization, there is also a
tacit promise to followers that they also will be transformed in some way, perhaps to be more
like this amazing leader. In some respects, then, the followers are the product of the
transformation.
Transformational Leaders are often charismatic, but are not as narcissistic as pure
Charismatic Leaders, who succeed through a belief in themselves rather than a belief in
others.
One of the traps of Transformational Leadership is that passion and confidence can easily be
mistaken for truth and reality. Whilst it is true that great things have been achieved through
enthusiastic leadership, it is also true that many passionate people have led the charge right
over the cliff and into a bottomless chasm. Just because someone believes they are right, it
does not mean they are right.
Paradoxically, the energy that gets people going can also cause them to give up.
Transformational Leaders often have large amounts of enthusiasm which, if relentlessly
applied, can wear out their followers.
Transformational Leaders also tend to see the big picture, but not the details, where the devil
often lurks. If they do not have people to take care of this level of information, then they are
usually doomed to fail.
Finally, Transformational Leaders, by definition, seek to transform. When the organization
does not need transforming and people are happy as they are, then such a leader will be
frustrated. Like wartime leaders, however, given the right situation they come into their own
and can be personally responsible for saving entire companies
33
4. PRINCIPLES OF TRANSFORMATIONAL LEADERSHIP

Leadership comes in various forms, such as the civil rights leadership of Dr. Martin Luther King
Jr., the political leadership of John F. Kennedy, and the managerial leadership of a small
business owner. Like leaders, there are several leadership styles, including transformational
leadership, which is appropriate for many business environments. Transformational leaders are
true and trusted leaders. As a small business owner, apply the seven principles of
transformational leadership to obtain a harmonious work atmosphere.
A transformational leader inspires his team and displays integrity.
(1) Simplification
Under the principle of simplification, the transformational leader speaks in a clear and practical
manner while articulating the direction the team is heading. Specifically, the plan for each
project should include more than what needs to be done at the moment. The desired end result
should also be vividly communicated so employees know where they, and the project, are
heading. By knowing and effectively relaying what the project needs to transform into the
anticipated result, you eliminate miscommunication and misunderstanding.
(2) Motivation
Employees need motivation to perform at their best. Under the principle of motivation, you gain
the agreement and commitment necessary to elevate your vision. By understanding your
employees likes and dislikes, you know what motivates and what doesnt. For example,
recognizing and applauding their accomplishments, providing training to increase their
34
knowledge base, establishing a pleasant work environment, giving half-days off for performing
above expectations, or providing weekly snacks such as bagels or donuts, can motivate
employees into performing at their highest level.
(3) Determination
Determination means having the tenacity to finish the race regardless of the hurdles that come
your way. The principle of determination requires you to depend on your courage, stamina,
strength and perseverance to realize your vision. By displaying endurance, you show
employees that hard work pays off in the end.
(4) Mobilization
You need the right people to elevate your vision. Transformational leaders know how to
assemble the appropriate team to get the job done. This includes enlisting, empowering and
equipping qualified team leaders and other willing participants who do not have leadership roles.
The transformational leader understands the importance of assigning tasks based on
participants characteristics and abilities.
(5) Preparation
The principle of preparation requires transformational leaders to be infinite students. You must
have the introspective ability to keep learning about yourself, alone or with the assistance of
others. To maintain a flourishing bond with your employees, you must always be prepared to
nurture and support the relationship. This means looking outside yourself, concentrating on
whats best for the team, and transferring this energy to your employees so they emulate this
behaviour.
(6) Facilitation
The principle of facilitation requires you to provide your employees with the proper learning tools
to elevate the vision to its greatest height. Specifically, workers need stimulating work that
challenges and expands their minds and facilitates the desire to keep learning. As a
transformational leader, you recognize this principle and work toward improving your
employees intellectuality.
(7) Innovation
Change in a business environment is inevitable. Under the principle of innovation, you
courageously recognize the need for change and initiate it accordingly. For example, innovation
may include learning and adapting to an upgraded accounting system, or adjusting to an
employee who has just been promoted to management. As a transformational leader, you
effectively show employees why the change is needed, how it will benefit them and the
company, and how to embrace it.
35
5. THE QUALITIES OF TRANSFORMATIONAL

LEADERSHIP
5.1 Qualities
The conditions of modern organizations functioning require undertaking radical, transformational
changes. Conceptualizing and implementing such changes requires new leadership skills and
qualities, those of transformational leadership. In this article I intend to point out those attributes
that distinguish organizational leaders capable of conducting their respective organizations
through major disruptive change, based on our research and own experience working with
hundreds of organizational leaders for over twenty (20) years.
As an idea, transformational leadership was first mentioned in 1973, in the sociological study
conducted by the author J. V. Downton, "Rebel Leadership: Commitment and Charisma in the
revolutionary process". After that, James McGregor used the term transformational leadership in
his book "Leadership" (1978). In 1985, Barnard M. Bass presented a formal transformational
leadership theory, which included the models and factors of leadership behaviour. One year
latter (1986) Noel M. Tichy and Marry Anne Devanna published a book under the title "The
Transformational Leader" (2). Research projects, and books in the field of transformational
leadership have been published in recent years have contributed to the development of the
most actual leaders' concept.
The optimal profile of transformational leadership is characterized by the presence of certain
qualities. They are the leaders' qualities contained in appropriate transformational abilities of
leaders and in certain attributes which are assumptions for the use of leaders' skills and for
successful performance of leadership roles. In their book improving organizational effectiveness
through transformational leadership B.M. Bass and B.J. Avolio, presented a classification of
skills of transformational leaders in what is known as the "Four I's" model. Following is a
description of those four skill sets:
Idealized influence:represents the ability of building confidence in the leader and appreciating
the leader by the followers, which forms the basis for accepting radical change in organization.
Without such confidence in the leader, that is, in his motives and aims, an attempt to redirect the
organization may cause great resistance. You can "lead" people if you make them ready to
engage. You will have to become a leader who possesses idealized influence and who
represents "The Roles Model" to his followers. The leaders with idealized influence are
honoured, appreciated, they are trusted, the followers admire them, and they identify with them
and try to imitate them. Such leaders, which represent the model roles to their followers, do "the
right things", demonstrating high moral and ethical behaviour. They do not use their position and
abilities to achieve personal interests, but they use the potentials of people to achieve the aims
of organizations.
36
Inspirational motivation: is the ability of transformational leadership, to inspire and motivate

people to adopt the appropriate behaviour. In the conditions when transformational change is
being conducted in an organization, the leader has the task of clearly and continuously
stimulating others to follow a new idea. Transformational leaders should, therefore, behave in
such a way, which motivates and inspires people. Such behaviour includes implicitly showing
enthusiasm and optimism, stimulating team work, pointing out positive results, advantages,
emphasizing aims, stimulating followers, etc.
Intellectual stimulation:as ability of transformational leaders has an important role in the
transformation process of organizations. Transformational leaders stimulate permanent reexamination of the existent assumptions, stimulate change in the way of thinking about
problems, plead the use of analogy and metaphor, etc. By constantly searching for new
knowledge, transformational leaders constantly teach, illustrate, but also promote and get new
and creative ideas for solving problems from all organizational members.
Individualized consideration: inclusion of people into the transformation process of an
organization implies the need to diagnose their wishes, needs, values and abilities in the right
way. This type of activity leads to higher levels of trust in the leader. So, besides a global
picture, a transformational leader must know what motivates any of his team members
individually. Human wishes and needs are different. Some want certainty, some want
excitement and change; some prefer money, and some free time. The leader, who is aware of
the difference in needs and wishes of people, has an opportunity to use all those different
demands in the right way. By their behaviour, transformational leaders demonstrate acceptance
of individual differences and assign the tasks in accordance with their personal affinities.
Following the progress in performing the individual tasks, a leader gets a picture of regularity (or
irregularity) of his own action of "individualized consideration".
Transformational leaders are individuals who, through the use of their knowledge, imagination
and ability to influence the behaviour of people, make conditions for transforming organizational
arrangements. The extent, to which a leader is transformational, is measured first, in terms of
his influence on other organizational members. The people that work with such type of leaders
feel trust, admiration, loyalty and respect for the leader and because of the qualities of the
transformational leader are willing to work harder than originally expected. These outcomes
occur because the transformational leader offers people something more than just working for
self-gain; they provide an inspiring mission and vision and give them an identity. The leader
transforms and motivates followers through his or her idealized influence, intellectual stimulation
and individual consideration. In addition, this leader encourages followers to come up with new
and unique ways to challenge the status quo and to alter the environment.
5.2 Characteristics of Transformational Leaders

There are certain core characteristics the majority of leaders possess. However, there are also
an additional set of characteristics that define transformational leaders leaders that have
thSe ability to make an impact on organizational growth.
37
It is an organizations ability to develop this next level of leadership capabilities through training
programs, mentoring, and skill development programs that put organizations in the enviable
position to grow year over year without experiencing dips in performance.
Core leadership characteristics

There are certain leadership characteristics that, while important, do not inspire organizational
change and growth that help companies develop into innovative, consistent industry leaders.
Examples of these core leadership characteristics include:
Good judgment
Communication skills
Competence or knowledge
Interpersonal skills
Confidence
We hear about these leadership characteristics all the time and in many different contexts.
While they are very important for leaders to have, there is another level of leadership
characteristics that are must haves for transformational leaders. These are the leadership
characteristics that make an impact and spur growth.
Transformational Leadership characteristics that impact organizational growth

In order to put your organization in a position to grow effectively and on a consistent basis,
leaders with the following characteristics not only make them an effective leader but also a
transformational leader:
1.
Internal motivation and self-management: Transformational leaders find motivation

from within and use that as the driving force to effectively manage the direction of the
company. The best natural form of motivation is to love what you do and ensure that
your values are aligned with the organization you work with.
2.
The ability to make difficult decisions: Difficult decisions are a part of being a leader.
Transformational leaders do not back away or put off tough decisions. Difficult decisions
are made easier when decisions align with clearly defined vision, values, goals, and
objectives.
3.
Check their ego: When placed in a position of power, it is easy to let your ego get the
best of you. However, transformational leaders keep their ego in check and do not let it
get in the way of doing what is best for business. The benefit of checking your ego
ensures you put the company first over personal gain and encourages the best input
from others within the organization because when the company succeeds, you as a
leader also succeed.
38
4.
Willing to take the right risks: Anyone can take a risk. Transformational leaders take
calculated risks that more often than not result in positive outcomes. Trusting your
instinct, as well as your team to gather the necessary intelligence is important. Trusting
your gut is easier when you have taken the time to research, evaluate and inform your
decisions with input from those around you. Failure to take the appropriate risks and
make these difficult decisions will inhibit change and your ability to grow.
5.
Organizational consciousness: Transformational leaders share the collective

conscious of their organization. They understand what actions to take to evoke change,
spur innovation, and make decisions that will create growth. Since their own values are
aligned with the organization they share a joint purpose with the organization and do not
just view their position in the company as just a job.
6.
Adaptability: Transformational leaders are willing to adapt and are always seeking new
ways to respond to a constantly changing business environment. They know that the
second they stand still is when they will be passed by their competitors; which means
they are open-minded to change and lifelong learners.
7.
Willing to listen and entertain new ideas: It is a rare individual who can build an
empire. Transformational leaders understand that success is a team effort and growth is
derived from the willingness to be open and listen to ideas from all levels of their
organization. Transformational leaders create intentional ways to listen to their team and
incorporate their insights.
8.
Inspirational: People want to be inspired. Transformational leaders have the ability to

make those around rise to the occasion. Inspiration comes not just from a formal
motivational speech or simple recognition for a job well done, but by treating people as
individuals and taking the time to understand what motivates and inspires their team.
9.
Proactive: Transformational leaders are proactive decision makers. They do not wait
around for others to make decisions and then react. They are willing to take risks, try
new things and take an innovative approach to growing the organization. However, they
also understand how to manage risk and make decisions that are backed by research,
multiple insights and are well thought out.
10.
Visionary: Being a visionary is about setting a realistic and concise company

mission, vision, and values that fit the culture of your organization. Transformational
leaders have the ability not only to effectively communicate the vision, but also get every
person to buy in and work toward that vision by communicating with passion and clearly
emphasizing the direction they want the company to pursue.
Transformational leaders constantly strive to have these characteristics. Developing these

characteristics is what separates companies that are led by managers versus leaders.
39
5.3 The Benefits of Transformational Leadership

A transformational leader is manager with charisma who can make subordinates feel passionate
about the success of the company. The benefits of transformational leadership are seen in
nearly every aspect of operations from training to corporate planning. Understand the positive
aspects of transformational management and you may find that an inspirational leader is exactly
what your company needs.
Transformational leadership may be an ideal fit for your company.
(1) Motivation
A transformational leader uses her belief in the vision of the company to inspire the staff to be
more productive and work towards company goals. The drive behind a transformational leader
is to find ways in which she can get the entire staff on board with corporate strategy and
planning. When the entire company is on the same page with the corporate vision, it can make
achieving that vision easier.
(2) Planning
Inspirational managers do not focus their energy solely on motivating the staff. A good
transformational leader has broad visions for the company's future, and those visions can
become instrumental in company planning. Whether it is refining the overall business plan or
affecting individual marketing programs, the transformational manager has ideas and visions for
the future of the company that he wants to share with the management team and work to turn
those plans into reality.
40
(3) Retention
The idea of transformational leadership is to reach out to each employee and bring out the best
in them. An inspirational manager spends time with each employee discussing ways to make
the employee's job easier, and helping to create plans for developing the employee's career.
This individual attention that is offered by transformational leaders helps to create a strong bond
between the manager and his employees that will reduce employee turnover.
(4) Growth
A manager that is not intimately involved in the growth of the company and the development of
her staff can start to struggle with managing her department as the company grows. A
transformational leader is constantly involved with the growth of the company and the on-going
development of employees. As the company grows, the transformational leader maintains that
closes contact to the company and employees and can make the process of growing a more
involved experience for new and veteran employees.
41
6.TRANSFORMATIONAL LEADERSHIP Vs.

TRANSACTIONAL LEADERSHIP
Transformational leaders can inspire creativity at all levels of an organization.
Different managers employ distinctly different management styles, ranging from relatively
hands-off, facilitative styles to autocratic, micromanaging styles. Managers can also employ
different motivational strategies and techniques to boost employee performance or accomplish
internal change. Transformational and transactional leadership are polar opposites when it
comes to the underlying theories of management and motivation. Understanding the difference
between transformational and transactional leadership is crucial for anyone pursuing a career in
management.
Transactional Leadership
Transactional leadership styles are more concerned with maintaining the normal flow of
operations. Transactional leadership can be described as "keeping the ship afloat."
Transactional leaders use disciplinary power and an array of incentives to motivate employees
to perform at their best. The term "transactional" refers to the fact that this type of leader
essentially motivates subordinates by exchanging rewards for performance.
42
A transactional leader generally does not look ahead in strategically guiding an organization to a
position of market leadership; instead, these managers are solely concerned with making sure
everything flows smoothly today.
A transformational leader goes beyond managing day-to-day operations and crafts strategies for
taking his company, department or work team to the next level of performance and success.
Transformational leadership styles focus on team-building, motivation and collaboration with
employees at different levels of an organization to accomplish change for the better.
Transformational leaders set goals and incentives to push their subordinates to higher
performance levels, while providing opportunities for personal and professional growth for each
employee.
Advantages
Both leadership styles are needed for guiding an organization to success. Transactional leaders
provide distinct advantages through their abilities to address small operational details quickly.
Transactional leaders handle all the details that come together to build a strong reputation in the
marketplace, while keeping employees productive on the front line.
43
Transformational leadership styles are crucial to the strategic development of a small business.
Small businesses with transformational leaders at the helm shoot for ambitious goals, and can
they achieve rapid success through the vision and team-building skills of the leader.
Applications
Different management styles are best suited to different situations. When it comes to front-line
supervisors of minimum-wage employees, for example, a transactional leadership style can be
more effective. Shift supervisors at a fast food restaurant will be much more effective if they are
concerned with ensuring all of the various stations run smoothly, rather than spending their time
thinking up better ways to serve hamburgers.
On the other hand, CEOs or sales managers can be more effective if they are transformational
leaders. Executive managers need the ability to design and communicate grand
strategicmissions, passing the missions down to transactional leaders for implementation of the
details.
How to Improve Organizational Effectiveness through

Transformational leadership is a energetic management style that allows charismatic leaders to
motivate employees through various methods. Persistent transformational leadership can be its
own form of staff motivation and improved organizational effectiveness. Once you have the right
transformational managers in place, you can begin to inspire and motivate your staff.
Confidence
Transformational leaders tend to be visible to the staff. They work among the employees
moving the staff forward with inspirational words and actions. One of the lasting effects of this
kind of management style is that the employees begin to develop a stronger sense of
confidence in the company. Managers are seen as the company representatives, and when the
company representatives are overtly upbeat about the company's future, then the subordinates
begin to accept that as motivation. Rather than questioning company methods, employees work
harder to help achieve company results.
Commitment
Employees that become inspired by transformational leaders find themselves wanting the
company to succeed. With a transformational manager pushing hard on the staff, the staff
begins to believe in the success of the company and starts to take company success personally.
This elicits a stronger sense of commitment from the staff that will have a direct positive effect
on productivity and efficiency. Employees want to see the success that they hear about through
44
transformational leaders, and that causes the staff to dedicate more of its time and effort to
insuring company success.
Education
Transformational leaders often inspire employees by explaining how an employee can improve
her performance through greater education. As a visionary leader, the transformational manager
helps employees to envision career success through further education and training. When
employees see positive results from training and education, they will become even more
dedicated to developing their own careers as outlined by the transformational leader.
Growth
One of the elements of being a transformational leader is delegating responsibility to
subordinates to assist in their career development. Transformational leaders believe that
employees benefit through additional responsibility, according to Ronald E. Riggio, a professor
at Claremont McKenna College who researches leadership issues. As employees take on
greater responsibility, they become company leaders themselves. Transformational leadership
tends to perpetuate itself by getting the staff involved in important decisions and showing
confidence in the employees' ability to make the right choices. This creates an ongoing
managerial talent pool to choose from and allows the company to grow
Comparison of Transactional and Transformational Leadership
Categories
Transactional
Transformational
Leaders source of
power
Follower reaction
Time frame
Rewards
Rank, position
Character, competence
Compliance
Short-term
Pay, promotion, etc.
Commitment
Long-term
Pride, self-esteem, etc.
Supervision
Counselling focus
Important
Evaluation
Less important
Development
Where change occurs

Where leadership
found
Follower behaviour
Leaders behaviour
Follower attitude, values

Followers heart
Which style is best?

The above table compares transactional and transformational leadership. Each has its advantages
and its limitations. In choosing the appropriate style for a given situation, you must considerthe time
you have to accomplish your objective, your abilities and those of your Soldiers,and the nature of
your objective itself.
45
In other words, how you influence others to achieve your mission, goal, or objectives is affected
not only by the leadership style you choose but also by the situation, yourfollowers, and your
own skills and abilities. Transactional leadership tends to have anoperational or here and now
focus. Transformational leadership runs deeper and focuses on a strategic and fundamental
change in your Soldiers professional character.
But transactional and transformational leadership are not opposing approaches to getting
things done. Rather, think of transformational leadership as growing out of transactional
leadership. It produces levels of effort and performance on your subordinates part that go beyond
what you can help them achieve using the transactional approach. The two styles can even
complement each otherand frequently do.
46
7.TRANSFORMATIONAL LEADERSHIP vs. SITUATIONAL

LEADERSHIP
Situational leaders can generally fit into more types of work environments.
Transformational Leadership Basics

A transformation in an organization is a virtual makeover. It means the company is going
through a change in philosophy or is moving in a new direction. Transformation leaders are
often brought in specifically to head an operation when it is in flux or embarking on significant
changes. Transformational leaders are known for having strong vision and a passion for
accomplishing great things, according to the website ChangingMinds.org.
Transformational Leadership Details

Vision is critical for transformational leadership because employees are more comfortable when
they understand the vision and direction of the company going forward. Passion helps the
transformational leader sell his vision to the company and its employees. This is important,
especially in companies where morale is low and the company is making a major change in
direction. Transformational leaders are often known for their personal charisma, which enables
them to inspire and motivate workers to change their roles and performs in line with the new
organizational philosophy.
Situational Leadership Basics

Situational leadership has emerged as a prominent approach to organizational leadership in the
early 21st century. Whereas other leadership styles are based on the traits and approaches of
the leader, situational leadership is based on the notion that the leader adapts to each situation
he faces. ChangingMinds.org refers to transformational leadership as a single preferred style,
47
while situational leadership means applying different leadership skills to the motivation and
capabilities of the employee in a situation.
Situational Leadership Details

A number of factors are related to situational leadership, including external relationships,
resources, group management and organizational culture. A transformational leader would
apply his approach regardless of organizational culture. A situational leader recognizes a culture
that places strong importance on teamwork and cooperation. In this instance, the situational
leader would base his communication with a particular employee on how well he is fitting into
that team-oriented culture. KenBlanchard.com also points out that situational leaders put special
emphasis on retaining top employees and make individual development a priority for
organizational success.
48
8. REACHING NEW LEVELS OF PERFORMANCE

The transformational leadership style draws on assorted capabilities and approaches to
leadership, creating distinct advantages for the organization. A leader using this approach
possesses integrity, sets a good example and clearly communicates his goals to his followers.
He expects the best from them. He inspires people to look beyond their own interests and focus
on the interests and needs of the team. He provides stimulating work and takes the time to
recognize good work and good people.
8.1
The Advantages of Transformational Leadership Style
Transformational leaders sometimes think outside the box.
(1) Exceptional People Skills

Sir McGregor Burns studied the transformational leadership style in 1978 and wrote a book
titled "Leadership." He states that the transformational leader "... recognizes and exploits an
existing need or demand of a potential follower... (and) looks for potential motives in followers,
seeks to satisfy higher needs, and engages the full person of the follower." Burns described
transformational leaders as heroic, vigorous, decisive -- even charismatic -- because the
transformational leader so skilfully motivates employees. A leader with these exceptional people
skills brings an advantage to any endeavour she undertakes.
49
(2) Lower Employee and Customer Turnover Costs

One advantage of the transformational leadership style is the manager's ability to retain
employees and customers. The transformational leader fully engages with people and seeks to
satisfy their needs right along with the organization's needs. The employees are more likely to
feel a corporate fit and stay with the company when they report to a transformational leader,
says Richard Cox in an article on Transformational Leadership. Less turnover means less hiring
and less training -- a big savings for the business. When a transformational leader interacts with
customers in the same, effective manner, he retains your customers, potentially limiting the cost
of constantly marketing for and selling new customers.
(3) New Initiatives

Placing managers with transformational leadership skills in roles where you need to manage
change and improvement will bring some of your best returns, according to the website
Transformational Leadership. Ask a transformational leader to oversee special projects in the
form of new initiatives. As she responds to the ever-changing needs of both the organization
and the team, the transformational leader empowers employees to makes changes in
themselves and realize their full potential. This obviously provides the business the advantage
of superior employee performance.
(4) Corporate Learning

Every business must train employees if it expects effective outcomes. Put transformational
leaders in charge of corporate learning, and they tend to improve the outcomes of existing
employees and equip new employees for productive work. A transformational leader brings
increased effectiveness to your staff when he engages in corporate learning -- a definite
advantage for any business. According to the Transformational Leadership website,
transformational leaders are particularly good at culture building, providing intellectual
stimulation and individual support, modelling positive behaviours, vision-building and holding
high performance expectations for your employees.
50
8.2 Negatives of Transformational Leadership

In spite of the enormous potential for change, transformational leadership is not without
drawbacks. While this leadership approach can be learned, it takes a visionary personality to
make it work. The transformational leader tends to see the big picture but may not be mindful of
the details that it takes to get there. Not everyone on your team may buy into your vision, and
some may prefer a known concept to an uncertain promise. You need to project enthusiasm,
but excessive enthusiasm can wear thin. In addition, team members do not all move at the
same pace.
(1) Misuse of Influence

Transformational leaders use their charisma to act as role models for their organization. As
respected and admired leaders, they show subordinates how to accomplish tasks with
determination and energy. Transformational leaders typically accept risks in order to achieve
innovation. However, excessive risk can be disruptive and detrimental to the organization. If
leaders act immorally or unethically, the entire operation suffers.
(2) Loss of Inspiration

By creating an environment characterized by employees working toward a shared vision,
transformational leaders inspire their subordinates by leading with enthusiasm. Telling and
showing your followers how other groups achieve success tends to inspire your team members
and encourage them to make the commitment required to work toward a strategic goal. If you
present an optimistic view of the future, your followers tend to respond with vigour. Productivity
increases. However, if long hours and unreasonable deadlines persist for lengthy periods of
time, employees burn out.
(3) Pursuit of Intellectual Ideas with No Merit

Transformational leaders stimulate innovative thinking by encouraging their teams to take
carefully calculated risks. By running workshops and conducting focus groups, leaders help
teams ponder complex ideas. By spurring intellectual curiosity and creativity, you can foster
individual expression and help your team solve problems in new ways. Without establishing
procedures for acknowledging and accepting failure, however, transformational leadership
strategies can cause you to pursue ideas with little or no merit.
(4) Overemphasis on Some Individuals

Transformational leaders mentor and coach their teams' members to work together productively
but they also focus on individual needs. Offering personnel the opportunity to pursue career
development options such as training, internships or conferences enables people to develop the
skills, knowledge and expertise necessary to help an organization transition and transform into a
new state. By maintaining a commitment to diversity, you ensure that differences are accepted
51
by everyone. Without balancing the needs of the group with the preferences of individuals,
however, you could overemphasize the needs or contribution of a single member. Dividing the
training budget equally should be a priority.
8.3 How to Improve Transformational Leadership

Transformational leadership is the best answer to the heightened competitive markets that small
businesses encounter in the face of global competition. Businesses with transformational
leaders demonstrate higher levels of performance and employee satisfaction attributes
necessary for survival in a competitive world. If you wish to improve your performance, examine
what you do in the context of what transformational leadership embodies.
Effective transformational leaders develop a vision, communicate changes to followers
convincingly, foster trust and inspire others to take action. These leaders motivate their
subordinates by making compelling presentations and lectures. They overcome objections by
listening to their followers' concerns. By speaking in a soothing tone, you can help alleviate fear,
ambivalence and tension. Sustain momentum by recognizing success and rewarding
employees who facilitate changes and improvements. You can avoid the pitfalls of
transformational leadership by finding ways to inspire work without demanding blind allegiance.
Transformational leadership empowers your team.
Transformational leadership combines some well-known and accepted management skills

under the leadership of a visionary manager to revitalize or reinvent the workplace. For a small
52
business owner, it offers the tools to energize employees and is a way to share your passion for
the business with your employees. Transformational leadership includes a vision for where you
want the business to go and a passion to drive it. You must have solid integrity to inspire trust
from employees, and you must have -- or develop -- the people skills to encourage your
employees to work together to make the vision become reality.
8.4Implications for managers

1.
2.
3.
4.
5.
Develop a challenging and attractive vision, together with the employees.

Tie the vision to a strategy for its achievement.
Develop the vision, specify and translate it to actions.
Express confidence, decisiveness and optimism about the vision and its implementation.
Realize the vision through small planned steps and small successes in the path for its
full implementation.
8.5Transformational Leadership Has Positive Effects on Employee

Well-Being:
Leadership Style May Promote Mental Health As Well As Performance
News wise PHILADELPHIA, PA A transformational leadership stylevalued for
stimulating innovation and worker performanceis also associated with increased well-being
among employees, reports a study in the July Journal of Occupational and Environmental
Medicine, official publication of the American College of Occupational and Environmental
Medicine (ACOEM).
"A transformational leadership style, which conveys a sense of trust and meaningfulness and
individually challenges and develops employees, could lead to greater employee well-being,"
according to the new research by Christine Jacobs of University of Cologne and colleagues.
Workers at six German information and communication technology companies were surveyed
regarding their employer's leadership style. A transformational leadership score was based on
qualities such as leading by example, making employees feel they are contributing to a
common goal, providing intellectual stimulation, and giving positive feedback for good
performance. Employees also completed a standard test of psychological well-being.
Based on the results, "Employees perceiving a higher degree of transformational leadership
are more likely to experience well-being," the researchers write. The effect of transformational
53
leadership remained significant after accounting for other factors linked to well-being, such as
age, education, and job strain.
The findings add to studies from other industries suggesting that a transformational style can
favourably affect employee well-being. That's especially important because company
leadership and managers can readily learn communication skills used in transformational
leadership, such as recognizing the needs of others and resolving conflicts. "Such training
programs can be seen as another essential component of workplace health promotion and
prevention efforts and therefore should receive wide support," Jacobs and co-authors
conclude.
8.6Research in the area

Earlier research on transformational leadership was limited, because the knowledge in this area
was too primitive for finding good examples for the items in the questionnaire. Another
weakness in the first version of the MLQ related to the wording of items. Most items in the scale
of charismatic leadership described the result of leadership, instead of specific actions of the
leader that can be observed and that, in turn, lead to the results. In response to the critics, Bass
and Avolio (1990) included in the revised and now subsequent versions many more items that
describe leadership actions that are observed directly. They also split out attributions of
leadership associated with Idealized Influence and behaviours and actions into two separate
scales.
54
9. THREE LEVELS OF LEADERSHIP MODEL
9.1 Overview of three levels of leadership model

The model is intended as a practical tool for developing leaders leadership presence, knowhow
and skill. It aims to summarize what leaders have to do, not only to bring leadership to their
group or organization, but also to develop themselves technically and psychologically as
leaders.
The three levels referred to in the models name are Public, Private and Personal leadership.
The model is usually presented in diagram form as three concentric circles and four outwardlydirected arrows, with personal leadership in the centre.
Three Levels of Leadership model
The first two levels public and private leadership are outer or behavioural
levels. Scouller distinguished between the behaviours involved in influencing two or
more people simultaneously (what he called public leadership) from the behaviour
needed to select and influence individuals one to one (which he called private
leadership). He listed 34 distinct public leadership behaviours and a further 14 private
leadership behaviours.
The third level personal leadership is an inner level and concerns a persons
leadership presence, knowhow, skills, beliefs, emotions and unconscious habits. "At its
55
heart is the leaders self-awareness, his progress toward self-mastery and technical
competence, and his sense of connection with those around him. It's the inner core, the
source, of a leaders outer leadership effectiveness. (Scouller, 2011).
The idea is that if leaders want to be effective they must work on all three levels in parallel.
The two outer levels public and private leadership are what the leader must do behaviourally
with individuals or groups to address the four dimensions of leadership (Scouller 2011). These
are:
1.
2.
3.
4.
A shared, motivating group purpose or vision.

Action, progress and results.
Collective unity or team spirit.
Individual selection and motivation.
The inner level personal leadership refers to what leaders should do to grow their leadership
presence, knowhow and skill. It has three aspects:
1. Developing ones technical knowhow and skill.
2. Cultivating the right attitude toward other people.
3. Working on psychological self-mastery.
Scouller argued that self-mastery is the key to growing ones leadership presence, building
trusting relationships with followers and enabling behavioural flexibility as circumstances
change, while staying connected to ones core values (that is, while remaining authentic). To
support leaders development, he introduced a new model of the human psyche and outlined
the principles and techniques of self-mastery (Scouller 2011).
The assumption in this model is that personal leadership is the most powerful of the three
levels. Scouller likened its effect to dropping a pebble in a pond and seeing the ripples
spreading out from the centre hence the four arrows pointing outward in the diagram. "The
pebble represents inner, personal leadership and the ripples the two outer levels. Helpful inner
change and growth will affect outer leadership positively. Negative inner change will cause the
opposite.(Scouller, 2011).
Public leadership
Public leadership refers to the actions or behaviours that leaders take to influence two or more
people simultaneously perhaps in a meeting or when addressing a large group. Public
leadership is directed towards (1) setting and agreeing a motivating vision or future for the group
or organization to ensure unity of purpose; (2) creating positive peer pressure towards shared,
high performance standards and an atmosphere of trust and team spirit; and (3) driving
successful collective action and results. Public leadership therefore serves the first three
dimensions of leadership mentioned in the overview section.
56
There are 34 distinct public leadership behaviours (Scouller, 2011), which break out as follows:
Setting the vision, staying focused: 4 behaviours.

Organizing, planning, giving power to others: 2 behaviours.
Ideation, problem-solving, decision-making: 10 behaviours.
Executing: 6 behaviours.
Group building and maintenance: 12 behaviours.
Leaders need to balance their time between the 22 vision/planning/thinking/execution

behaviours and the 12 group building/maintenance behaviours.
According to the Three Levels of Leadership model, the key to widening one's repertoire of
public leadership behaviours (and the skill with which they are performed) is attention to
personal leadership.
Private leadership
Private leadership concerns the leaders one-to-one handling of individuals (which is the fourth
of Scoullers four dimensions of leadership). Although leadership involves creating a sense of
group unity, groups are composed of individuals and they vary in their ambitions, confidence,
experience and psychological make-up. Therefore they have to be treated as individuals
hence the importance of personal leadership. There are 14 private leadership behaviours
(Scouller, 2011):
Individual purpose and task (e.g. appraising, selecting, disciplining): 5 behaviours.

Individual building and maintenance (e.g. recognizing rising talent): 9 behaviours.
Some people experience the powerful conversations demanded by private leadership (e.g.
performance appraisals) as uncomfortable. Consequently, leaders may avoid some of the
private leadership behaviours (Scouller, 2011), which reduces their leadership effectiveness.
Scouller argued that the intimacy of private leadership leads to avoidance behaviour either
because of a lack of skill or because of negative self-image beliefs that give rise to powerful
fears of what may happen in such encounters. This is why personal leadership is so important in
improving a leaders one-to-one skill and reducing his or her interpersonal fears.
57
Personal leadership
Personal leadership addresses the leaders technical, psychological and moral development
and its impact on his or her leadership presence, skill and behaviour. It is, essentially, the key to
making the theory of the two outer behavioural levels practical. Scouller went further in
suggesting (in the preface of his book, The Three Levels of Leadership), that personal
leadership is the answer to what Jim Collins called "the inner development of a person to level 5
leadership" in the book Good to Great something that Collins admitted he was unable to
explain.
Personal leadership has three elements: (1) technical knowhow and skill; (2) the right attitude
towards other people; and (3) psychological self-mastery.
The first element, Technical Knowhow and Skill, is about knowing one's technical weaknesses
and taking action to update ones knowledge and skills. Scouller (2011) suggested that there
are three areas of knowhow that all leaders should learn: time management, individual
psychology and group psychology. He also described the six sets of skills that underlie the
public and private leadership behaviours: (1) group problem-solving and planning; (2) group
decision-making; (3) interpersonal ability, which has a strong overlap with emotional intelligence
(4) managing group process; (5) assertiveness; (6) goal-setting.
The second element, Attitude Toward Others, is about developing the right attitude toward
colleagues in order to maintain the leaders relationships throughout the group's journey to its
shared vision or goal. The right attitude is to believe that other people are as important as
oneself and see leadership as an act of service (Scouller, 2011). Although there is a moral
aspect to this, there is also a practical side for a leaders attitude and behaviour toward others
will largely influence how much they respect and trust that person and want to work with him or
her. Scouller outlined the five parts of the right attitude toward others: (1) interdependence (2)
appreciation (3) caring (4) service (5) balance. The two keys, he suggested, to developing these
five aspects are to ensure that:
There is a demanding, distinctive, shared vision that everyone in the group cares about
and wants to achieve.
The leader works on self-mastery to reduce self-esteem issues that make it hard to
connect with, appreciate and adopt an attitude of service towards colleagues.
The third element of personal leadership is Self-Mastery. It emphasizes self-awareness and

flexible command of one's mind, which allows the leader to let go of previously unconscious
limiting beliefs and their associated defensive habits (like avoiding powerful conversations, e.g.
appraisal discussions). It also enables leaders to connect more strongly with their values, let
their leadership presence flow and act authentically in serving those they lead.
58
Because self-mastery is a psychological process, Scouller proposed a new model of the human
psyche to support its practice. In addition, he outlined the principles of and obstacles to
personal change and proposed six self-mastery techniques, which include mindfulness
meditation.
9.2 Leadership presence

The importance and development of leadership presence is a central feature of the Three
Levels of Leadership model. Scouller suggested that it takes more than the right knowhow, skills
and behaviours to lead well that it also demands "presence". Presence has been summed up
in this way:
What is presence? At its root, it is wholeness the rare but attainable inner alignment of selfidentity, purpose and feelings that eventually leads to freedom from fear. It reveals itself as the
magnetic, radiating effect you have on others when you're being the authentic you, giving them
your full respect and attention, speaking honestly and letting your unique character traits flow.
As leaders, we must be technically competent to gain others respect, but it's our unique
genuine presence that inspires people and prompts them to trust us in short, to want us as
their leader."(Scouller, 2011.)
In the Three Levels of Leadership model, "presence" is not the same as charisma. Scouller
argued that leaders can be charismatic by relying on a job title, fame, skilful acting or by the
projection of an aura of specialness by followers whereas presence is something deeper,
more authentic, more fundamental and more powerful and does not depend on social status. He
contrasted the mental and moral resilience of a person with real presence with the susceptibility
to pressure and immoral actions of someone whose charisma rests only on acting skills (and the
power their followers give them), not their true inner qualities.
Scouller also suggested that each person's authentic presence is unique and outlined seven
qualities of presence: (1) personal power command over ones thoughts, feelings and actions;
(2) high, real self-esteem; (3) the drive to be more, to learn, to grow; (4) a balance of an
energetic sense of purpose with a concern for the service of others and respect for their free
will; (5) intuition; (6) being in the now; (7) inner peace of mind and a sense of fulfilment.
Presence, according to this model, is developed by practicing personal leadership.
59
9.3 How the three levels model addresses older theories limitations
The section at the start of this page discussed the older theories potential limitations. The table
below explains how the Three Levels of Leadership model tries to address them.
Theory
Limitations
Traits
Researchers do not
agree on a common list
of traits, which
undermines the idea
that a leaders
effectiveness can be
traced back to specific
character qualities.
Even if they could
agree, this theory does
not help to develop
leaders (although it
would help in selecting
them).
How three levels model addresses

them
The Three Levels of
Leadership model accepts
the premise that the best
leaders have something
about them (leadership
presence) that causes
followers to see them as
credible, inspirational and
trustworthy. However, it
presupposes that presence
is unique to each person and
cannot be pinned down to a
shortlist of common character
traits (which seems to fit the
evidence from research).
The Three Levels models
solution to a means of
developing ones unique
leadership presence is the
practice of personal
leadership, especially selfmastery.
Behavioural/styles
Situational/contingency
Proposes one ideal

style that may not be
best in all
circumstances.
Ignores leadership
presence.
Assumes everyone can

change their behaviour
at will to suit different
situations or followers,
60
The Three Levels of

Leadership model does not
disagree with Blake &
Moutons ideal of balancing
concern for task with concern
for people, but it also allows
for changing the emphasis if
the situation requires it.
Leadership presence is an
integral part of the Three
Levels model.
The Three Levels of
Leadership model supports
the idea of behavioural
flexibility as circumstances
but many cannot.

Ignores peoples
controlling psychology.
Ignores leadership
presence.
Functional
Assumes that all

leaders can adopt the
required behaviours
after behavioural
training, but many
cannot.
Ignores peoples
controlling psychology.
Ignores leadership
presence.
demand, but rests on the

idea that the key to achieving
it is to go beyond behavioural
training and also work on
ones inner psychology (that
is, ones limiting beliefs and
emotions) as this controls our
tendency to cling to rigid,
defensive behaviours.
Leadership presence is a
central feature of the Three
Levels model.
In some respects, the Three
Levels of Leadership model
is like the older functional
models in that it concentrates
on what leaders have to do in
their role in order to provide
leadership. However, it does
not focus solely on
interpersonal behaviour; it
also addresses what leaders
can do to develop
themselves technically and
psychologically. The idea
behind this is to help them
translate functional theory
into practice by freeing
themselves from old, rigid,
fear-based mind-sets,
enabling them to flex and
extend their behavioural
range at will.
Leadership presence is a
central feature of the Three
Levels model.
9.4 Shared leadership

Most traditional theories of leadership explicitly or implicitly promote the idea of the leader as the
admired hero the person with all the answers that people want to follow. The Three Levels of
Leadership model shifts away from this view. It does not reject the possibility of an impressive
heroic leader, but it promotes the idea that this is only one way of leading (and, indeed,
following) and that shared leadership is more realistic.
61
This view stems from Scouller's position that leadership is a process, "a series of choices and
actions around defining and achieving a goal". Therefore, in his view, "leadership is a practical
challenge that's bigger than the leader." He pointed out the danger of confusing "leadership"
with the role of "leader". As other authors such as John Adair have pointed out, leadership does
not have to rely on one person because anyone in a group can exert leadership. Scouller went
further to suggest that "not only can others exert leadership; they must exert it at times if a
group is to be successful." In other words, he believed that shared rather than solo leadership is
not an idealistic aspiration; it is a matter of practicality. He suggested three reasons for this:
1. The sheer number of different behaviours required of leaders means they are unlikely to
be equally proficient at all of them, so it is sensible for them to draw on their colleagues
strengths (that is, to allow them to lead at times).
2. It is foolish to make one person responsible for all of the many leadership behaviours as
it is likely to overburden them and frustrate any colleagues who are willing and able to
lead indeed, more able to lead in certain circumstances.
3. Shared leadership means that more people are involved in the group's big decisions and
this promotes joint accountability which, as Katzenbach& Smith found in their research,
is a distinct feature of high-performance teams.
Now, potentially, this leaves the leader's role unclear after all, if anyone in a group can lead,
what is the distinct purpose of the leader? Scouller said this of the leader's role: "The purpose of
a leader is to make sure there is leadership to ensure that all four dimensions of leadership
are [being addressed]. The four dimensions being: (1) a shared, motivating group purpose or
vision (2) action, progress and results (3) collective unity or team spirit (4) attention to
individuals. For example, the leader has to ensure that there is a motivating vision or goal, but
that does not mean he or she has to supply the vision on their own. That is certainly one way of
leading, but it is not the only way; another way is to co-create the vision with one's colleagues.
This means that the leader does not always have to lead from the front or have all the answers;
he or she can delegate, or share, part of the responsibility for leadership. However, the final
responsibility for making sure that all four dimensions are covered still rests with the leader. So
although leaders can let someone else lead in a particular situation, they cannot let go of
responsibility to make sure there is leadership; so when the situation changes the leader must
decide whether to take charge personally or pass situational responsibility to someone else.
Criticism
One criticism of the Three Levels of Leadership model has been that it may be difficult for some
leaders to use it as a guide to self-development without the assistance of a professional coach
or psychotherapist at some point as many of its ideas around self-mastery are deeply
psychological.
62
9.5 Limitations of older leadership theories

In reviewing the older leadership theories, Scouller highlighted certain limitations in relation to
the development of a leaders skill and effectiveness:
Traits theory:As Stogdill (1948) and Buchanan &Huczynski (1997) had previously
pointed out, this approach has failed to develop a universally agreed list of leadership
qualities and successful leaders seem to defy classification from the traits perspective.
Moreover, because traits theory gave rise to the idea that leaders are born not made,
Scouller (2011) argued that its approach is better suited to selecting leaders than
developing them.
Behavioural styles theory:Blake and Mouton, in their managerial grid model,
proposed five leadership styles based on two axes concern for the task versus
concern for people. They suggested that the ideal is the "team style", which balances
concern for the task with concern for people. Scouller (2011) argued that this ideal
approach may not suit all circumstances; for example, emergencies or turnarounds.
Situational/contingency theories:Most of these (e.g. Hersey & Blanchards
Situational leadership theory, Houses Path-goal theory,Tannenbaum& Schmidts
leadership continuum) assume that leaders can change their behaviour at will to meet
differing circumstances, when in practice many find it hard to do so even after training
because of unconscious fixed beliefs, fears or ingrained habits. For this reason, leaders
need to work on their underlying psychology if they are to attain the flexibility to apply
these theories (Scouller, 2011).
Functional theories:Widely-used approaches like Kouzes& Posners Five Leadership
Practices model and Adairs Action-Cantered Leadership theory assume that once the
leader understands and has been trained in the required leadership behaviours, he
or she will apply them as needed, regardless of their personality. However, as with the
situational theories, Scouller noted that many cannot do so because of hidden beliefs
and old habits so again he argued that most leaders may need to master their inner
psychology if they are to adopt unfamiliar behaviours at will.
Leadership presence:The best leaders usually have something beyond their
behaviour something distinctive that commands attention, wins people's trust and
enables them to lead successfully, which is often called "leadership presence (Scouller,
2011). This is possibly why the traits approach became researchers original line of
investigation into the sources of a leaders effectiveness. However, that something
that presence varies from person to person and research has shown it is hard to define
in terms of common personality characteristics, so the traits approach failed to capture
the elusive phenomenon of presence. The other leading leadership theories do not
address the nature and development of presence.
63
10. CASE STUDY

Transformational Leadership in India: The Case of Naoroji (Naval) Pirojsha Godrej
(1916-1990)
Background
Godrej and Boyce Manufacturing Company Limited is more than a hundred years old,
having a turnover of over Rs. 6,200 million and engaged in the manufacture of consumer
durables and industrial products like safes, locks, office equipment, machine tools, process
equipment, and typewriters. Since its inception, the company has been controlled by the Godrej
family based in Mumbai, India. Its shares are not listed on any stock exchange. About 32% of the
share capital is held by Pirojsha Godrej Foundation, a public charitable trust.
Over the last hundred years, what started as a small outfit making locks and safes, is today a
beautiful industrial township of more than 3000 acres at Vikhroli including a factory, workers
residences, a school, a training institute, and a recreation centre. The brand Godrej is a
household name associated with the finest quality (for a list of Godrej products their dates of
introduction refer Annexure I).
One of persons instrumental in transforming Godrej into an industrial powerhouse
was Mr. Naval Pirojsha Godrej or NPG as he was fondly called. NPG was the son of Mr.
Pirojsha Godrej, and the nephew of Mr.Ardeshir Godrej, the founder of the Godrej Empire. From
an early age, Naval was by his fathers side assisting him in his business. Even though he never
went to college, he had a keen sense of observation and a flair for machines. By working shoulder
to shoulder with his factory workers, he not only picked up the nuances of engineering, but he also
earned the respect of his people. He was very simple in his dress and behaviour, a true Gandhian.
He would hardly be seen at his desk, because he preferred to be on the shop floor with his people.
He was known to be always smiling, very humble, extremely approachable, and friendly with his
people. Driven by the dream of Indias industrial self-reliance, he is credited with starting a number
of engineering related businesses for the first time in India like typewriters, machine tools,
refrigerators, and the tool room (read Annexure I). Naval shared his father and uncles obsession
with quality. He never hesitated to reject even finished goods at high cost, if they did not meet
stringent quality standards. In his later years, he took on the role of a spokesperson for the Indian
machine tool industry. He alsoinitiated a number of welfare projects and schemes for his
workforce and his community.
One of the most significant achievements of NPG was the manufacture of the all Indian typewriter
in 1953. At that time, foreign typewriter manufacturers like Remington and Halda were established
players in the market. Typewriters were made up of more than 1800 precision parts and
manufacture was a highly involved process, but NPG decided to take the challenge and face the
64
competition head on. Most other firms were content with selling foreign machines and making a
good profit, however, NPG was inspired by the vision of a technologically self-reliant nation.
Even though Godrej had actually conceived the idea of typewriter manufacture as
early as 1942, due to restrictions and wartime considerations, it was not possible to start
production and production started only in 1953. Typewriter manufacturing required highly
specialized machinery and high workmanship and before NPGs efforts, typewriters had never
been made anywhere in Asia. NPG was the driving and inspiring force, providing all the designing,
tooling, machining facilities, and supervising each process of manufacture. He established a quality
control section and put a qualified engineer in charge of it. So particular was he of the quality that
nothing short of world class would be satisfactory for him. The first typewriter model, M-9 had a very
hard touch causing fatigue to the typist. The next model was an improved M-8, which was followed
by the feather-touch M-12.Complaints kept pouring in until 1965 and often the engineers would
lose hope in their project. However, at those times, NPG would keep pushing them to improve the
quality until it became world class.
In 1970, another model, the lightweight and ergonomic Godrej AB was introduced. This product was
also offered in a number of Indian and foreign languages. After a nine-year stint, the Godrej AB
was followed by the PB Godrej typewriter, which offered the optimum combination of light touch
and speed. The ribbon movement was specially designed; it had a better key lever mechanism, and
gave 33% more ribbon usage. The culmination of this saga of engineering perfection, the Godrej
Prima was introduced in April 1983 whose sales made the market share jump to over 65%. When
Godrej started the National Speed Typing Championships, more than 30,000 people participated.
What was earlier a boring office task was suddenly converted into a competitive sport. People
competed with each other to improve their speed and accuracy and a number of people went on to
win world championships or create world records using Godrej typewriters. For details of the
production of the different models of typewriters, refer Annexure II and Annexure III.
In its long history of more than 100 years, there have been two instances during the 70s when
Godrej had some labour trouble. During that period, the entire Thane-Belapurindustrial belt was
under the sway of an aggressively violent union leader Dr.Datta Samant. Specifically, during the
years 1972 and 1979, the trouble was at its peak and some workers resorted to violence. Things
came of a nadir, on January 8, 1979, when NPG was brutally stabbed at his residence, along with
his daughter-in-law and mother-in-law. This act, incited by a powerful trade union leader in
Mumbai, outraged the public at large. Even though NPG recovered from the attack, his health
suffered greatly and he remained in pain for theremaining twelve years of his life.
NPG followed the family tradition of giving back to society in terms of wealth, time, and energy. The
Godrej enterprise gave significant contributions to the World Wide Fund for Nature, The Bombay
Environment Action Group, the Latur Earthquake Relief, the Andhra Cyclone Relief Fund, the
Chief Ministers Relief Fund, and the Prime Ministers relief fund. Naval initiated the Foundation for
Research in Community Health to provide meaningful health care to people living in villages and
set up a Primary Health Care Centre in the village of Mandhwa near Mumbai.
65
Because of his attack, Naval had to undergo two major operations, and a number of blood
transfusions. Since in those days, blood was not tested for hepatitis, Naval was infected and died
of liver failure on August 8, 1990. It is a wonder that for one who had achieved so much, Naval was
so little known except among his peers. He never gave interviews to the press and never
appeared on the glossy pages of business magazines. Naval was essentially a very private person,
and perhaps that is why he was denied his share of fame.
66
11. TRANSFORATIONAL LEADERSHIP IN THE INDIAN

MICROFINANCE ORGANISATION
11.1 Introduction
During the last two decades, microfinance has received considerable public and
institutionalattention accumulating in the Nobel Peace Prize in 2006 and is today presented
as themagic bullet for fighting global poverty. A country with a particularly
interestingmicrofinance sector is India; in 2008, the total outstanding microfinance loans
amounted toUSD 8 billion, and more than 50% of all low-income households are covered by
some formof microfinance product (Srinivasan, 2009). Yet, while Indian MFOs are assumed to
helpbring the countrys poor out of poverty, and thereby contribute to reaching the
MillenniumDevelopment Goals, private capital is pouring into the sector and supporters have
started toask for financial returns on their funds. MFOs are hence expected to balance between
havinga social mission on the one hand, and running a profitable operation on the other.
A first natural question is to ask whether the corporatized MFO manages to stay on track
anddeliver both on the social and on the financial side, if it is mission drifting or not.
Missiondrift is related to the performance of the MFO, mainly measured in how well
theorganization succeeds in reaching poor borrowers who lack access to formal
financialinstitutions (Copestake, 2007). With an increased pressure from shareholders asking
forreturns and good financial results, serving the poor without making too many
compromisesundoubtedly becomes a great challenge.
Although the right policy documents, good governance procedures, and legal frameworksmay
contribute to ensuring that the social mission is safeguarded, it is here argued thatleadership will
be decisive in the future performance of MFOs, significantly impacting theirdouble bottom line.
However, given the complex organizational environment, internaltensions, and rather unique
organizational traits, the Indian MFO requires a specific kind ofleadership. I here suggest that
what has been labelled transformational leadership embodiesmany of the key features that so
desperately are needed in the Indian microfinance sector.
Below is an attempt to describe transformational leadership and its potential impacts onfollower
motivation and performance, as well as explain why this type of leadership isparticularly well
suited, or even desirable, for the MFO.
67
11.2 Transformational leadership sub dimensions

Burns developed two constructs of leadership: the transactional and the transformational.These
two leadership forms are opposing and each represent an extreme. However, whenmeasuring
leadership with the Multifactor Leadership Questionnaire, every leader displays afrequency of
both the transactional and transformational factors, but each leaders profileinvolves more of
one and less of the other. Although this specific paper is concerned with thelatter construct
transformational leadership the basic ideas behind the transactional formdeserve mentioning.
Transactional leadership occurs when the leader and the follower makesan exchange of valued
things, e.g. votes, money, goods, or even hospitality for a willingnessto listen to ones troubles.
This type of leadership is hence a bargaining process not more,not less catering to the
followers immediate self-interests. However, when the transactionalleader emphasizes what
your country can do for you, the transformational leader asks whatyou can do for your country
(Bass, 1999).
Transformational leadership occurs when leaders and followers engage in a mutual
process,raising one another to higher levels of motivation and morality. In doing so, the
purposes ofthe leader and the follower become fused. Burns argued that transforming leaders
encouragefollowers to embrace moral values such as justice, equality, and the interests of the
collective(van Knippenberg, De Cremer and van Knippenberg, 2006). Transforming leaders are
alsosuggested to actively develop followers into leaders (Avolio and Gardner,
2005).Transformational leadership presupposes a self that is connected to friends, family,
andcommunity whose welfare may be more important to the leader than his/her own welfare.
Theindividual is thus seen as a social being situated in a context and guided by social norms
andcultural beliefs (Bass and Steidlmeier, 1999).
Transformational leadership incorporates four sub-dimensions: (1) charisma or
idealizedinfluence; (2) inspirational motivation; (3) individualized consideration; and (4)
intellectualstimulation. Idealized influence, that is, being influential about ideals, involves
leadership thatis envisioning, confident, sets high standards for emulation, often has a spiritual
dimension,and holds high moral values in the influence process. This renders a leader, whose
behavior sets a moral example, and thereby gaining respect and trust among his/her
followers.Inspirational motivation is closely connected to the idealized influence and
involvesleadership with a clear vision that appears appealing and inspiring to followers. Leaders
whohave inspirational motivation challenge followers with high standards, are optimistic
aboutthe future, and, perhaps most importantly, provide meaning for the everyday work. This
inturn results in followers with a strong sense of purpose and meaning. The leaders ability
tocommunicate the common goals and vision in an understandable, precise, powerful,
andengaging way is here central (Bass and Steidlmeier, 1999). Compared to other forms
ofleadership, the transforming leader is also a very charismatic person who is able to
dazzlehis/her surrounding (Avolio and Gardner, 2005).Individualized consideration underscores
altruism in leadership, in order to separateleadership from authoritarian control. The
transforming leader treats the follower as anindividual and provides coaching, mentoring and
growth opportunities (Bass and Steidlmeier,1999).
68
Finally, a leader who is able to intellectually stimulate has an open approach to processes
ofsituation evaluation, vision formulation, and patterns of implementation. This openness has
atranscendent and spiritual dimension that helps followers to question underlying
assumptions,come up with constructive solution, and think out of the box (Bass and Steidlmeier,
1999).Related to the above is also the issue of fairness. Transformational leadership is seen
amongthe followers as more procedurally fair compared to other leadership forms, contributing
tocreating trust in the leader and strong organizational commitment (van Knippenberg,
DeCremer and van Knippenberg, 2006). Further, in order to get followers to accept changes
inthe organization, leaders can exercise their authority via fair procedures. This relationship
isespecially strong among those followers whose identification with the organization is
high(Tyler and De Cremer, 2005).
Since leadership occurs in a dynamic and complex context, this must also be incorporated inthe
analysis of leadership development and effectiveness:leadership style is a dependent variable
which depends on something else. That somethingelse is the historic context in which they
[leaders] arise, the setting in which they function. . .They are an integral part of the system,
subject to the forces that affect the system (Avolio andGardner, 2005, p. 327).
As suggested by Avolio and Gardner (2005), transformational leadership is particularly suitedfor
organizational environments characterized by uncertainty, inclusion, and an ethics.Transforming
leaders produce in their followers a higher: salience of the collective identity intheir self-concept;
sense of consistency between their self-concept and their actions on behalfof the leader and the
collective; level of self-esteem; and similarity between their self-conceptand their perception of
the leader. This has strong and enduring behavioral consequences,resulting in increased
engagement of the self, self-monitoring, self-evaluation, andmotivation. Ultimately, this leads to
increased commitment to the vision and mission of theleader (Bass, 1999).
Indian microfinance
In broad, microfinance can be defined as the provision of financial services such as
credits,savings, and insurances to low-income people in developing nations who lack
traditionalcollateral and who do not have access to the formal financial system. A vast majority
ofIndian microfinance clients are women, and many microfinance providers have an
outspokenstrategy to target women only. Microfinance loans are often given to different
groupconstellations, e.g. self-help groups, joint liability groups, or solidarity groups, as opposed
toindividuals, and the group is responsible for repaying the loan. The development andexistence
of social capital is deemed critical to the success of microfinance (Leigh Andersonand Locker,
2002). Social capital is maintained as making microcredit lending feasible byfunctioning as an
individual collateral substitute where peer pressure, also referred to associal collateral, is
accepted in lieu of the physical collateral normally required intraditional banking (Reinke, 1998).
Indian microfinance is undergoing rapid change transformation. Most early MFOs were
nonprofitnongovernmental organisations, offering subsidised interest rates covered by soft
loansand donations. However, because of the commercialization trend, there are signs of
69
amounting number of commercially oriented MFOs being established (Mehta, 2004). MFOshave
started to move away from a dependency on donors and subsidies, to an arena wherethey
manage on a business basis as part of the regulated financial system (Drake and Rhyne,2002,
p. 4). Profits are viewed as not only acceptable, but essential, because profits arepresumed to
attract private investment to the sector (Conning, 1999). However, critics to thistrend describe
the current developments more bluntly:
Many of the [nongovernmental organizations] have completely changed their strategy of
socialintermediation from issue-based activism to financial delivery. Some of them are on the
wayto achieving the ultimate goal of becoming formally established, self-sustaining, commercial
banks, the most exciting indication that their [microfinance] programmes have come to
stay(Nair, 2001, p. 402).With commercialization also follows more business-like characteristics,
demonstrated in, forinstance, an emphasis on financial reports and figures. New recruits to
senior levels are todaylikely to come from business schools rather than from the field of social
work, compensationlevels for professionals are increasing, and reward systems tied to loanoutput is common. The rhetoric has also changed into a more corporate one, where client,
joint liabilitygroup, and an untapped customer segment have replaced concepts such as
target group,self-help group, and beneficiaries unable to access formal markets. In addition,
manyMFOs are today promoted by entrepreneurs with mainstream banking, consulting,
orcorporate experience, rather than by the traditional development workers (George,Maheswari,
and Pandian, 2007; Nair, 2001).
11.3 Discussion
In light of the above, what are the potential consequences of introducing
transformationalleadership in the Indian MFO, struggling to combine profitability with a social
agenda, and,further, why is this leadership construct so suitable for MFOs? First, as described
above,Indian microfinance is undergoing rapid change transformation from a non-profit domain
andinto a semi-profit, more corporate one. The organizational environment is marked
byuncertainty and complexity. Such changes may give rise to much internal tension and
disputeAs MFOs engage in substantial organizational and strategic changes to accommodate
thetransformation to a more corporate form, it is not unlikely that conflicts arise regarding
theappropriate course of action. At times, conflicting views and positions may rest on
differentbeliefs and aspirations about what the organization is and should be. For instance,
people indifferent organizational sections and levels may develop diverging views and
aspirations,which may give rise to internal tensions. Hence, in order to motivate and get all
followersonboard the change train, there is evident need of a transforming leader.As already
noted, MFOs are partly mission driven organizations expected to have a positiveimpact on
poverty and women empowerment. Some MFOs, especially those working withclear social
issues such as women empowerment may even be categorized as value-basedorganizations. A
value can be defined as an enduring belief that a specific mode of conductor end-state of
existence is personally or socially preferable to an opposite or converse modeof conduct or endstate of existence (Rokeach, 1973, p. 5). Transformational leadershipemphasizes the
importance of having a clear mission and vision in order to create meaningand purpose.The
next step is then to be able to articulate the same mission and vision to the followers.
70
Themission statements of many non-profit organizations may sometimes be vague and difficult
totranslate into practical actions; hence, communicating the message and turning into
strategyand practice may here be a challenge. Also, if the leader is unable to create meaning
aroundthe MFOs mission and vision and thereafter communicate how these general ideas will
betransformed into practice, there is an evident risk of the followers drowning in big
worldproblems.Like most non-profit organizations, MFOs are unable to pay salaries that
compete withtraditional banking. At the same time, MFOs want to attract experienced and
committedprofessionals, since they have to implement similar functions and systems as formal
banks. Atransforming leader may be able to attract and retain the right kind of people without
offeringthe same reward system as the corporate sector and thereafter unleash tremendous
energyfrom the followers. Within the organization, there is likely to be a conflict between
socialworkers on the one hand and business people on the other in how to plan, execute and
talkabout things. By creating common goals and purposes, the transforming leader may
howeverbe able to solve such differences. In doing so, it is, however, central that the leader sets
a goodexample and work long and hard days, and that the compensation for the
leaderhimself/herself is moderate and considered reasonable or even modest among the
followers.Working in an MFO means meeting and dealing with poor, often illiterate, rural
women. Inaddition, MFOs are by nature rather decentralized and each loan-officer typically has
a lot ofpower. The loan-officer should thus have a responsible and mature way since he/she will
belooked upon with much respect and esteem and since there is a risk of misusing power. In
anorganization where the leader fosters the followers to become leaders, this will be easier
toattain.Further, as discussed above, building social capital is critical to the success of
microfinance.When individuals engage in networks they develop a framework for common
values andbeliefs, which in turn can generate trust and norms of reciprocity labeled social
capital and in thereafter result in collective action (Rankin, 2002). It thus becomes the loanofficerstask to contribute to building bonds between the group members. This underpins the
centralidea in transformational leadership that the leader transforms the follower into a leader.
Thisshows the importance of the leader conveying how you can make an impact in circles
beyondyour direct action area by, e.g. being a good model for other MFOs.A commonly cited
example of a transforming leader is Gandhi, who transformed the lives ofmillions of Indians
(Burns, 1978). In the Indian context, Gandhi is of course an especiallyimportant role model;
however, in the non-profit sector, he is close to God. This furtherreinforces the idea of the leader
as an altruistic, community-oriented person who gives uphimself/herself for others. Spirituality
also plays a role here as many spiritual leadersrepresent true leadership and closeness with the
followers while business leaders andpoliticians represent corruption and nepotism. In such
context, it becomes even more centralto walk the talk.Finally, a challenge for the leader is to
contribute to creating a united organizational identityto which the followers can subscribe. A
cornerstone of such identity must be the altruisticdimension of the MFO. In their interactions
with poor communities, MFO employees mustshow justice, equality, and the interests of the
collective.
71
12. TOWARDS UNDERSTANDING TRANSFORMATIONAL

LEADERSHIP IN INDIA:
Indian Culture
India has a unique mix of both western and traditional culture in its society as well as in its
organizational setting. In India, the first major influence on organizational design came from UK
because of the colonial legacy (Gupta, 1991). Singh and Bhandarkar(1988) went to the extent of
accusing Indians of importing the latest in management systems and styles. They observed
that the key to the success of Japan and Korea lay in their ability to evolve an indigenous
management process and that India would not progress in the business sector unless she
evolved theories that arise from her cultural roots. The operative social values in India could be
broadly classified into (a) preference for hierarchy; (b) embeddedness; (c) personalized rather
than contractual relationship; (d) harmony rather than confrontation; and (e) duty and obligation
rather than hedonism (Sinha, 2000: 27). Krishnan (2001) argued that Indian culture is conducive
to emergence of transformational leaders, as worldviewconcept of Maya, preference for
action, potential divinity, and goal of freedomfacilitate the emergence of transformational
leadership. Kejriwal and Krishnan (2004) found that SattvaGuna(awareness) and Vedic
worldview separately enhance transformational leadership whereas TamasGuna(inertness)
reduces it. The purpose of the presentresearch is to extend our understanding of change
heralding leadership in India. The results of this study will help us map a behavioral profile of
transformational leaders in the Indian context. More pertinent to the present study, is the
grounded theory method chosen for investigation. It incorporates the suggestions put forth by
Parry (1998) and has the potential to yield pragmatic and actionable insights.
Methodology
In addition to the call put forth by Parry (1998), the decision to conduct a purely qualitative study
was motivated by several factors. We have used this method to obtain the intricate details about
the inspiring kinds of behaviors displayed by leaders. Such rich details are difficult to extract or
learn through quantitative research methods that are more conventional. According to Conger
(1998), when one attempts to capture specific behaviors displayed bythe leader, that go to the
extent of touching theunderlying deep emotions, feelings, and thoughtprocesses of the
followers, we should rely onqualitative research methods. Specifically, in thispaper, we have
used the grounded theory method(Egan, 2002) to explore the followers perspective of
what constitutes transformational leadershipbehaviors of managers in Indian organizations.
Researcher took the followers perspective because, otherwise,there are strong chances of
socially desirable responsecreeping into the data, which would have happened ifwe had taken
self-described behaviors of leaders.
72
Researcher contacted executives who were working in India,had at least one year of
experience, and had workedunder their current superior for at least six months. Theusable
sample size consisted of 250 working executivesfrom all over the country and various
industries, someof whom were working executives who were also partof an online managerial
program conducted by anacademic institution. Sample statistics are reported inTable 1. One
thousand six hundred and seventeen(1617) response sets were generated from the openendedquestionnaires, which were later contentanalyzed to generate the themes. Bass (1985)
was the first person to develop a measure of transformational leadershipthe Multifactor
Leadership Questionnaire (MLQ), and a recent met analysis showed that it has been the most
widely used scale for studying transformational leadership.
Bass (1997) accepted that though the formulation of transformational leadership is in a relatively
universal manner, a leader might need to act in different ways within differing cultural contexts,
in order to be transformational. This is so because there are cultural differences in how the four
components of transformational leadership are manifested in behavior. An example of this is
shown by the study conducted by Ardichvili and Gasparishvili (2001), which found that though
transformational leadership was the most prevalent style of leadership in four former USSR
countries under study, individualized consideration and charisma were reported to be least
effective in increasing followers performance. Another characteristic the means of
communicating a vision (which is one of the basic factors of transformational leadership) was
shown to be culturally contingent, ranging from use of exceptional public oratory skills in USA to
quietly demonstrating exemplary personal service by people like Mother Teresa in India (Smith
and Peterson, 2002). Bass and Steidlmeier (1999) contended that for transformational
leadership to be authentic, it must incorporate a central core of moral values whose ordering
and relative importance are culturally relative. Some authors have argued that developing
countries such as India are most conducive for the emergence of transformationalleadership
(Kanungo and Misra, 2004; Khandwalla,1990). They felt that only a transformational leader
canaddress the apparently contradicting needs of ushering change, while addressing the unique
cultural requirements. Singh and Bhandarker (1990: 344) found that the success of change
strategy of transformationalleaders depended upon leaders sensitivity to culture specific
complexities and nuances operating withintheir organizations. Thus, we see that even though
the general definition of transformational leadership is applicable globally, its effective
operationalization is culturally contingent. As a result, there is a growing awareness of the need
for a better understanding of leadership theories specific to the culture and environment.
The Indian socialization influence is such that it fosters an organizational ethic of personalized
relationshipsand idealized family-centered work ethics (Kanungo and Jaeger, 1990). The work
relationships of Indians are
personalized rather than contractual (Sinha, 2000). Personal loyalty takes preference over
organizationalefficiency. Many influences such as authoritarian practices within the family,
educational system, societys hierarchical structure, and religious institutions act together to
create a strong sense of dependence (Dayal, 1999: 101-105). Unconditional obedience by
surrendering to authority is considered a virtue (Sinha, 2000: 26-40.). Because of low
73
masculinity and high power distance (Hofstede, 2001) prevalent in the Indian society, the worker
is made to believe that expressions of affection and personal loyalty to the superior are
important and expected (Sinha, 2000: 31-34). The manager, who is like the father figure of the
joint family system, similarlydemands and expects unquestioning obedience and loyalty from the
workers. Sinha said that a snehshradha(affection-deference) relationship exists between the
leader and follower. He suggested that ideally a leader in the Indian setting should ensure that
the follower sincerely does the task given, and then the leader could show snehtowards him.
The follower reciprocates by offering shradhato the leader. Followers in collectivistic societies
such as India feel a moral obligation to reciprocate towards the leaders with unquestioning
loyalty and obedience. A kind of family feeling is developed between the group of followers and
the leader. Literature shows that this kind of feeling is one of the essential outcomes of
transformational leadership (Bass, 1985: 153-168). Thus, accepting unquestioning loyalty would
enhance transformational leadership.
CONCLUSION:
An important factor that contributes to successful organizational transformation is leadership.
Transformational leaders take strategic decisions and give shape to such changes, thereby
ensuring that theirorganizations stay competitive. While the core of transformational leadership
is universal, timeless andimmanent, its behavioral manifestations, however, differ across
cultures. This project attempts to take apreliminary look at those behavioral manifestations of
transformational leadership that are unique to Indianculture. The project paper concludes by
discussing the importance of recognizing culture-specific manifestations for leading change.
74
BIBLIOGRAPHY:
1. iactglobal.in/sixsigma
2. http://www.billhogg.ca/2012/03/10-characteristics-of-transformational-leaders/
3. http://psychology.about.com/od/leadership/a/transformational.htm
4. http://www.newswise.com/articles/transformational-leadership-has-positive-effects-onemployee-well-being
5. http://www.mindtools.com/pages/article/newLDR_84.htm
6. www.opinionvalue.in/OnlineSurveyJob
7. http://smallbusiness.chron.com/advantages-disadvantages-transformational-leadership20979.html
75

Transformational Leadership

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Transformational Leadership

Uploaded by

Copyright:

Available Formats

TRANSFORMATIONAL LEADERSHIP - THE MANTRA FOR 21st CENTURY BUSINESS

WELINGKAR INSTITUTE OF MANAGEMENT