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1.

Introduction

This paperwork will discussed about the two most popular and important style of leadership, transformational and transactional leadership. Before we delve into the detail information about both leasdership style, we will discussed first, about the literal and conceptual meaning of it. Then, we will discuss in vivid about the principles, vision, strategy, skills, behaviour and characteristics of both leadership style. After all, we will go to the main point of discussion which is the comparison between both as the conclusion. But in line with the popular usage of transformational leadership style these days, we will discuss more on it since it got a tons of importance in management world. 2.0 Definition

Literally, transformational come out from word transform which is mean something else that change or convert into something. Basically, it is a transformation from destructive to a constructive way. Based on MacMillan dictionary, latest edition of 2010, utter that transformational is a process of something to change, which it has several stages of process to change. As for conceptual meaning, based on two management expertise, Jerry W. Koehler and Joseph M. Pankowski, transformational leadership defined as a process of inspiring change and empowering followers to achieve greater heights, to improve organization processes. It is an enabling process causing followers to accept responsibility and accountability for themselves and the processes to which they are assigned. For transactional leadership, it is adapted from the word transaction which is mean a business that dealed from others to others, also can be known as an act of selling or buying something. For conceptual, there is no authority taken because as we know, that there is no more wide usage of
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transactional leadership style of behaviour. But in an easy word, transactional leadership is an opposite way of leadership if we compare to transformational leadership. 3.0 The Principles of Transformational Leadership

Based on the book written by Jerry W. Koehler and Joseph M. Pankowski named Transformational Leadership in Government, there are eight classification of principle in transformational leadership. Principle is a general belief that you should have regarding the way you should behave, which influences your behaviour. Meaning that, the principle of transformational leadership is something that a leader in an organization must practice in order to really fullfil the needs and requirement of transformational leadership. 3.1 View Organization as System

If we make a futher research in traditional style of leadership, we can see that traditional managers frequently view organizations as a separate and distinctions functions which led an organization to divided into several departments according to the function respectively in a distinct division of labour among employees. Plus, traditional managers managed certain particular organization by direct the labour force to fullfil the purpose of each function and concentrate on the performance of individuals. But all changed after the coming of transformational leadership which it view the organization as a system that is composed of interrelationships and interactions among employees to achieve specified organizational outcomes.

3.2

Establish and Communicate Organization Strategy

In order to make this principle to succeed, there are two questions to be answered. First, what is the best use or organization resources and how does one go about deploying these resources? Meaning that, it comes out with two questionnaire, but the major point is, how to use the resource in a very wise way. So, to make it happen, the organization must have a strategy. Strategy is an organizations plan for achieving desirable outcomes and leaders are play such an important roles and responsible for developing, implementing and communcating strategy. And in transformational leadership, the leaders must have work with others to create the vision, mission, values, design of organization, structure, goals and the use of human resources. What important is, the strategy should not be a well-kept secret, especially in a top management division. It should be shared with all members of organization. 3.3 Institutionalize a Management System

Traditionally, manegers in an organization have been able to elect their own management system without thinking their associates opinions nor feelings. But, it its time, it is acceptable since the implementation of the division of labour. But in transformational system, espcially when organizations are viewed as a system, all the employees rights and role will not be denied. In a very easy word, everybody got their own important role in an organization. 3.4 Develop and Train All Associate in Process Management

In a traditional management era, organization have offered management training to managers and skill and technical training to others in an organization. There are an enormous different kind of traing that given to the managers and, what we called as associate. Managers will be taught the principles of planning, organizing, directing and controlling while the associates will be
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trained to perform their task more effectively. But in transformational leadership system, it expect associate to use their brain to improve processes which is need the to practice an equal and similar of training. Therefore, the managers and associate both receive aimilar training. Both responsible for improving processes and need to grow that they can effectively improve their processes. According to Robert Daft, a management expertise, he said that the the training may be required in the areas of customer focus, data collection and analysis, team development, flowcharting and other important element in improving organizations processes. 3.5 Empower Individuals and Teams

Rather than directing subordinates by telling them what to do, transformational leaders transfer their powers to members of their organization so that associates not only accept the responsibility for improving organizational processes, but also have the authority to take action they feel is in the best interest of the organization. Traditional administrators in organization often find the empowerment issue of associates very difficult to accept. They mistakenly believe that if associates are empowered, they are given the right to do whatever they feel like doing. That perhaps might be the case if one applied empowerment in the traditional management approach. However, trained associates, whose task is to improve organizational processes in a systematic approach using scientific methods, clearly understand their boundaries and role in decision making. For the most part, associates actions are governed by team consensus and organizational values. Transformational leaders do not have to use their time and effort to control the behavior of their associates, but rather can control the processes for which they are responsible. Transformational leaders managed and control processes allowing associates the freedom to select behaviors that they believe are appropriate for contributing to continual improvement, whether they act individually or within a team.
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3.6

Measure and Control Processes

Traditional administrators focus primarily on assigned functions and division on labor. They primarily measure only outputs and individual productivity. Transformational leaders measure outputs, process activities, outputs and outcomes. They focus daily on quality indicators and data collected at specific points within the process to maintain control. 3.7 Recognize and Reward Continual Improvement

Effective traditional administrators understood the importance of recognition and rewards. They were always anxious to somehow reward who those who were outstanding in their performance. However, even the best administrators often found it difficult to properly reward those who did on outstanding job because other workers in the office rarely understood why they were not selected. When one individual is recognized above all others, jealousy can often consume their peers. The recognition of one individual may thus produce unhealthy competition rather than cooperation. Transformational leaders recognized continual improvement first, and those who contribute toward making continual improvements in their process are then recognized. The best approach to motivation is to let teams recognized individuals and let leaders recognized and rewards teams. Transformational leaders built recognition and rewards system that focus on teams, and furthermore, praise teams who take the time and the risk to recognize and reward one of their own. 3.8 Inspire Continual Change

Traditional administrators often resist change since they believe their job is to control the subordinates. It is much easier to control subordinates when the climate is very stable. Subordinates know what it is expected of them, and jobs do not change. Transformational leaders
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on the other hand, understand that continual improvement is necessary to maintain gains. There are hardly jobs that exist today which exist as it did five years ago. It easy to understand, for example, that professionals who does not improves themselves will not be able to maintain the gains they made in their profession only a few years ago. The same implies to system in organizations. With the advancement of technology and product development, organizational systems change rapidly just to maintain the effectiveness their system achieved only a few years ago. Transformational leaders know that it is their responsibility to cause change. The role of a transformational leader is to inspire others to continually improve themselves and organizational processes. Rather than resisting change, such leaders embrace change and employ change strategies to improve the organization. 4.0 Vision and Strategy of Transformational Leadership

Transformational leadership needs the leader to influence their subordinates to make them accept responsibility for making decisions in order to improve organizational processes. Furthermore, transformational leadership is different from traditional leadership. It more focusing on leader who seeks approval for a predetermined decision but transformational leadership objective is to get others to do the right thing. Transformational leader are expected to set the stage for continual improvement. They influence others to help them create an environment or culture that promotes continual improvement and associate empowerment. So in order to make transformational leadership fit in, it need a few visions and strategy. First step is Transformational leadership needs to create a vision for the organization. According to the expert transformational leadership is begins with Vision. Vision is a long term plan for organization. To make a vision become reality, its take time and requires leaders to influence

their followers to cooperate and patient. Transformational leader should know what do they want to create? Politic leaders such as Gandhi, King, Kennedy and Churchill all had a vision of where they wanted to lead their followers. So it is not impossible for them to have many followers. In business arena many leader such as Steve Job at Apple Inc, Welch at General Electric and Gates at Microsoft begins with a vision. They knew where they wanted their organization to be in the future. Second is developing a mission statement to the organization. We also can say that mission statement is short term plan for the organization. Besides that mission statement is the reason for organization to exist. Mission statement describes the values, aspirations, and reasons for being. A well define mission is the basis for all other goal. If it properly practiced, it can have a significant impact upon associates. An effective mission statement answers the following questions such as who are we? What is our purpose? For whom do we do it? Why we do it? For example to answers the questions who are we? We are work for human welfare department. What is our Purpose? To ensure people especially the poor get help. For whom do we do it? Let say to the poor people, then why we do it? Maybe the answer is to achieve goals and mission of the department and government. The Third step of transformational leadership is to identify the desirable outcomes. Transformational leader should be able to identify the desirable outcomes that result from organization efficiency and effectiveness. In other word, what should occur as a result of the system? By define the desirable outcomes and design their organization to achieve success. By not focusing on goals and quotas and focusing instead on desired outcomes, front-liners can use their brain power to help achieve them. Moreover transformational leader empower subordinates to work toward achieving desirable outcomes by first clearly defining those outcomes, and
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second ,by allowing them to decide the best way to achieve the desired outcomes by continually improving their processes. After that, transformational leader must develop a strategic plan for achieving its desired outcomes. An effective strategy clearly outlines what organizational leaders believe is the most effective use of resources, and how these resources should be used to achieve desirable outcomes. Strategic plan is the organizations plan for achieving its desired outcomes. It focuses on customer and directed toward achieving desired outcomes. It involves everyone in the organization and it is not something that delegated to the planning department. It also constantly changing and are not just done annually. Furthermore it is not a document that has a fancy cover but something that guides associates in the direction the organization should go. After that, transformational leader need to have a strong principle. Principle is a medium that can acts as the foundation of management actions. These are the principle that every administrators and manager in the organization adheres to and uses to manage in the organization. In an organization, one manager cannot use one set of principles while another manager uses a different set of principles. The best Principles that suitable in 21st century are in Total Quality Management or known as TQM. There are ten principles according to TQM. There are meet or exceed customer expectations, manage and maximum process capability, data collection and analysis is an ongoing activity, decisions are data-based, process improvement requires supplier and customer and organizational partnership, process improvement teams are responsible for continual improvement, organizational communication and recognition are shared responsibilities, train all associates, process performance is measured by quality indicators, outputs and outcomes and

leadership is empowering others to do the right thing the first time and creating customers orientation. 5.0 Values of Transformational Leadership

The next step of transformational leadership is establishes organization values. Values drive the organization behavior. It shows what is right and how we ought to behave in the organizations. There many values that should be practice in the organization. First is quality that needs us to meet customer requirement the first time and every time. Our internal and external customers include individual, teams and organization that are receive and use the output of our work process. Second is flexibility and ready capability for modification or changes. Then we also need to adapt to the new environment. Third is responsiveness and willingness to provide information and reply to customer request. With regard to providing quality customer service, it is absolutely essential to meet or exceed the expectations of all customers in terms of responsiveness. Next is respect, it is the quality of accepting and holding in high esteem all person right to their belief, values, autonomy and differences while treating them with dignity, worth, courtesy, civility and politeness. Then it is sense of total commitment. It is an awareness of the need to be continuously involved in the activities intended to achieve quality work. The sixth value is open and honest communication among managers and associates. As a

professional, exchanging of information, ideas and divergent opinion between all levels in the organization are require. Humor is needed to make our live happy. So it also useful in organization that allows oneself and others mixed with each other without tension and more fun. A non offensive joke provides a link between individuals and creates unity out of diversity. A shared bit of humor encourages the development of common ground. Next is empowerment between leaders and subordinates. Empowerment is the freedom and power to act, command, or
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decide upon a course of action. Teams are empowered with authority related to the work and processes for which they are responsible, in order to achieve gains in quality and productivity. Then, the next value is teamwork. Teamwork is an ability of an individual to work together toward a common vision by each doing a part to achieve the efficiency of the whole. It is the capacity to direct individual accomplishment toward organizational objectives. And the last one is diversity in workplace. We can realize the full potential of our workplace if we celebrate both of our unity of purposes as an organization and uniqueness as individuals. Through the recognition and affirmation of diversity within our workplace, we foster associates personal growth, strengthen our ability to respond to challenges and improve service to our customer. 6.0 Characteristic of Transformational Leadership

For years, the study of leaderships focused primarily on trying to identify the characteristics frequently associated with leaders. At one point in history, characteristic often associated with effective leadership strongly influence leadership selection. Furthermore a person could have characteristic of transformational leadership but not necessarily always displays them. People should not be selected for leadership positions just because they display certain characteristic, but rather an individual should understand that developing these characteristic will enhance their effectiveness. To maintain the effectiveness we should follow some characteristic that enable in transformational leaderships. First characteristic is high tolerance for uncertainty. Empowerment of the work force is frequently discussed but seldom implemented. As we can see if we implemented total quality management in the state agency, we were overwhelmed to find so many government administrators who were uncomfortable with change. We believe that the reason for so many

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administrator rejected change was because they could not tolerate the uncertainty of change. The most significant differences between manager in the industries and administrator in government were that administrator in government needed to be more secure in their environment. Second characteristic is low tolerance for certainty. As said before, most effective leader in organization is they can tolerate uncertainty but on the other hand, have low tolerance for certainty. Certainty means that an issue is settled or determined. For example, an organization adopt concern, belief, a mission, values, and management principle, they do so with high degree of certainty. When this kind of certainty exist, the most effective leader in organization have low tolerance for associates, particularly administer, who do not abide them. Transformational leader have strong convictions and a low tolerance for people who have been trained to understand implement their convictions, but for one reason or another choose not to. Third characteristic is sustained the energy. Energy is the capacity for vigorous action. Being a successful transformational leader require being an energetic person. An important characteristic of transformational leaders is the willingness to commit energy to enable and support their associates. They also not only do their administrator work but they are able to some time to spend with their associates at all level. Fourth characteristic is positive self image. Transformational leader need to be mentally tough. Their self image must be so positive that they can properly and effectively deal with people who vigorously attempt to destroy their concepts. Transformational leader should have a positive picture of them. Having a positive self image allow them to acknowledge their strength as well as weakness and enable them not to fear failure. Many leaders with a positive self image believe

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that they are lucky because they are excited about all because they are excited about all good things that might be happened as a result of their leaderships. Next characteristic is credibility. Credibility is mandatory for any person who desires to influence others. It also can define as the perceived trust you attach to a person. Transformational leader need to be perceived as having high credibility by most of their followers. Obviously not every person in the organization is going to ascribe high credibility to be a leader. It is important for transformational leader to not have credibility with each individual within the organization. But rather, the leader must be perceived overall as having credibility. Last characteristic is desire to influence others. Having a strong need to influence others does not mean you have a need to control them. Transformational leader have a need to control the process not the people. They also have a strong need to influence people to get them to accept the concept that they advocate. They want their followers to conclude on their own that these concepts are valuable and worthwhile. Transformational leader must have a strong need to share their concepts and beliefs not just with people to whom they report or with their peers, but everyone in the organization. 7.0 Skills of Transformational Leadership

In transformational leadership style of behavior, the skills are divided and classified into three types. First, it is conceptual skills, human skills and lastly, technical skills. Besides, there are several skills outside of those three types of skills. Lets go delve one by one. Conceptual skill is the ability to work with abstractions and hypothetical notations, ability that can/should be deal with the ideas and concepts that have potential to shape the organizations in their creativity with the process of synthesis as well analytical. However, these are cognitive abilities, to whether they
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are natural or learned with time. By the way conceptual skills are the central processing units of the creating visions and strategic plans for an organization

For human skills, based on an article in a web sites, it is refers to the people-skills; these are abilities of the leaders to effectively work with subordinates or co-workers, colleagues, peers, and bosses. The soft skills can be considered as traits for the people who have them naturally and skills for others who have to train themselves seriously to be more effective in dealing with others. The human skills have larger extent and high complexity, at the end is a communication skill that deals with the multi-party negotiations of human relations.

Lastly the technical skills, technical skills are the job knowledge required for a particular leadership role that can be termed as the technical skills of leadership. The leaders must have understanding the output of the organization in term of the product or even service, without his possibility of utilizing his conceptual skills to their maximum ability. The second step is to have good knowledge of organization management processes to boost the effectiveness of the organization activities and must have knowledge about the technology and its uses effectively such as Computers, Software, and all knowledge relating with the organizations daily activities. The leader must not only understand on how technology is use but also regarding about the laws, rules regulations, as well how to use effectively technical skills such as measuring and improving processes of the organizations way forward.

Other than those skills discussed above, there are many other skills that are much important both Transformation leadership and none of it and it is very important to everybody who wishes one day will be leader either leader of his family or country or organization or by any means of

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leader. However some examples of those skills are presented as communication skills, team participation, brainstorming, public speaking and team facilitating.

8.0

Transformational Leadership Behavior

Although broadly speaking, the topic of transformational leadership has received a great deal of attention in recent years or even since it became familiar, our understanding of what is involved in transformational leadership still is somewhat unclear. Nevertheless, one thing that is clear, is that transformational leadership is multi-dimensional in nature. However, the over view of the wider literature suggests that there are at least six key important behaviors related with the transformational leaders and are presented as articulating and identifying a visions which means that behavior on the part of the leader aimed at identifying a new opportunities for his/her division/company, and developing articulating, as well inspiring others with his/her vision of the future. Second one is providing an appropriate model behavior, as a simple elaboration, easy to say that on the part of the leader that sets an example for employees to follow that is consistent with the values the leader espouses. Third is fostering the acceptance of group goals which is need the coordinate behavior on the parts of the leader that is aimed at the promoting cooperation among employees and getting them to work as together towards common goals. Others are high performance expectations, providing individualized support and lastly, intellectual stimulation.

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9.0

Transactional Leadership

The transactional style of leadership was first described by Max Weber in 1947 and then by Bernard Bass in 1981. This style is most often used by the managers. It focuses on the basic management process of controlling, organizing, and short-term planning. The famous examples of leaders who have used transactional technique include McCarthy and de Gaulle. Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest. The power of transactional leaders comes from their formal authority and responsibility in the organization. The main goal of the follower is to obey the instructions of the leader. The style can also be mentioned as a telling style. The leader believes in motivating through a system of rewards and punishment. If a subordinate does what is desired, a reward will follow, and if he does not go as per the wishes of the leader, a punishment will follow. Here, the exchange between leader and follower takes place to achieve routine performance goals.

9.1

Four Dimensions of Exchange between the Leaders and the Followers

The exchange between leader and follower which takes place to achieve routine performance goals involve four dimensions. One of the dimensions is contingent rewards. Transactional leaders link the goal to rewards, clarify expectations, provide necessary resources, set mutually agreed upon goals and provide various kinds of reward for successful performance. They set SMART which stands for specific, measureable, attainable, realistic, and timely goals for their subordinates. The second dimension is active management by exception. In this dimensions, transactional leaders actively monitor the work of their subordinates, watch for deviations from rules and standards and taking corrective action to prevent mistakes. The third dimension is passive management by exception which the transactional leaders intervene only when standards
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are not met or when the performance is not as per the expectations. The last dimension is laissezfaire. In this dimension, the leader provides an environment where the subordinates get many opportunities to makes decisions. The leader himself abdicates responsibilities and avoids making decisions and therefore the group often lacks direction.

9.3

Assumptions of Transactional Theory

The assumption of transactional theory is that employees are motivated by reward and punishment, then the subordinates have to obey the orders of the superior, and they also are not self motivated because they are closely monitored and controlled to get the work done for them. The subordinates and associates will not be given any chances to be in strategic planning team to define the organization goal, vision and missions. All are done by the leaders and the highest member of an organization.

9.4

Implications of Transactional Theory

The transactional leaders overemphasize detailed and short-term goals, and standard rules and procedures. They do not make an effort to enhance followers creativity and generation of new ideas. This kind of a leadership style may work well where the organizational problems are simple and clearly defined. Such leaders tend to not reward or ignore ideas that do not fit with existing plans and goals. The transactional leaders are found to be quite effective in guiding efficiency decisions which are aimed at cutting costs and improving productivity. The transactional leaders tend to be highly directive and action oriented and their relationship with the followers tends to be transitory and not based on emotional bonds.

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The theory assumes that subordinates can be motivated by simple rewards. The only transaction between the leader and the followers is the money which the followers receive for their compliance and effort.

9.5 The

Differences between Transactional and Transformational Leaders between Transactional and Transformational leaders

differences

there are various differences among transactional and transformational type of leadership. The leaders in transactional leadership often can be seen as responsive compare to the leaders of transformational leadership which is more proactive. Furthermore, the leader in transactional leadership works within the organizational culture whereas the leaders in transformational leadership work to change the organizational culture by implementing new ideas. The leaders in transactional leadership make employees achieve organizational objectives through rewards and punishments while the leaders in transformational leadership motivate and empower employees to achieve companys objectives by appealing to higher ideals and moral values. Last but not least, the differences between transactional leadership and transformational leadership can be seen trough the way the leaders motivate their followers. The leaders in transactional leadership motivate followers by appealing to their own self interest while in transformational leadership, the leaders motivates followers by encouraging them to transcend their own interests for those of the group or unit. 10.0 Conclusion

The transactional style of leadership is viewed as insufficient, but not bad, in developing the maximum leadership potential. It forms as the basis for more mature interactions but care should be taken by leaders not to practice it exclusively, otherwise it will lead to the creation of
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environment permeated by position, power, perks, and politics. But both transactional and transformational leadership can be practiced by the manager based on the need and the situation of an organization. But in my opinion, transformational leadership is the best approach to be practiced in the organization because this approach are not just rely on the managers or the leader to determine the best for the organization but also the subordinate also have the power in decision making process thus ensure the efficiency of an organization.

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Bibliography Books Jerry W. Koehler and Joseph M. Pankowski (2001). Transformational leadership in government. St. Lucies Press: USA John R. Schermerhorn, Jr, James G. Hunt, Richard N. Osborn and Mary Uhl-Bien (2011). Organizational behavior: international student version, 11th ed. John Wiley and Sons Pte Ltd Richard L. Daft (2008). New era of management: ninth edition. South-Western Cengage Learning: Canada Web sites Transformational Leadership Theory. Meaning, its assumptions and implications. Retrieved on: 1st November 2011, from http://www.managementstudyguide.com/transactional-leadership.htm. Retrieved on 1st November 2011, from: http://psychology.about.com/od/leadership/a/transformational.htm. Retrieved on 1st November 2011, from: http://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm Retrieved on 1st November 2011, from: http://www.practical-management.com/Leadership-Development/Leadership-Skills.html Retrieved on 1st November 2011, from: http://www.scribd.com/doc/24200794/Leadership-Applied-Theory.

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