Interpret how situational variables influence the choice of leadership style

According to situation, the style the leader adopt depends on the pattern of behavior, the way group acts and
tries to achieve the goals. The leadership qualities naturally we have are the qualities with which we born or
learn at young age for e.g. openness to new ideas, patience etc. As behavior of a person can be changed by
processes of learning so using counterproductive actions leaders turns the bad situations into favorable
situations. Leader’s response to event depends on the situation and his habits he learn during childhood, and
the individual need. For e.g. a need for a power would tend to lead someone to be more authoritative and
demanding whereas a need to be liked by others would encourage “going-along-to-get-a-long.” Further, the
environment in which we are working effects the behavior of leader’s for e.g. if we are in an environment that
encourages risk-taking, we are more likely to take risks for instance. Leaders understand that we have to interpret our
operating environment for those around us in a way that is motivating, encouraging creativity and allowing
appropriate flexibility, rather than with rigidity and inflexibility.

Evaluate the practical value of a leadership style to a manager in achieving organizational objectives

Distinguish between two different leadership styles

Leadership style is the way an individual uses the methods and theories to lead other people, to solve
problems and make decisions. There are variety of leadership styles based on the way leaders acts,
number of followers, and the followers and the situation. So we consider the most common style
i.e. Transformational and transactional leadership which are at the diagonally opposite ends , based on the
motivational & management theories. Transactional leaders focus on organization, supervision and group
performance, whereas transformational leaders focus on change within the organization.

Transactional leadership, leader’s offers some valuable thing in exchange for the follower’s services, i.e. based on belief, “quid
pro quo”.

A transformational leader who fails to charm his or her followers will often resort to transactional leadership. Transactional
leadership is a shortcut and is not as long-lasting as transformational leadership, because the reward promised may not always be
available, but the charisma of the leader will never be depleted.
Transformational leadership transcends the transactional style. Motivation from within the follower produces powerful results.

Another trait of transactional leadership is “management by exception.” The active form of this type of management involves
assessing employee performance and taking corrective measures where needed. In the passive form, the leader only intervenes
where things have gotten out of hand. The last of the transactional traits is the laissez faire leadership, in which the leader allows
employees to do as they like.

Leadership can be described as transactional or transformational. Transactional leaders focuses on the

role of supervision, organization, and group performance. They are concerned about the status quo and
day-to-day progress toward goals. Transformational leaders work to enhance the motivation and
engagement of followers by directing their behavior toward a shared vision. While transactional
leadership operates within existing boundaries of processes, structures, and goals, transformational
leadership challenges the current state and is change-oriented.

Transactional Leadership

Transactional leadership promotes compliance with existing organizational goals and performance
expectations through supervision and the use of rewards and punishments. Transactional leaders are
task- and outcome-oriented. Especially effective under strict time and resource constraints and in highly-
specified projects, this approach adheres to the status quo and employs a form of management that pays
close attention to how employees perform their tasks.

Transformational Leadership

Transformational leadership focuses on increasing employee motivation and engagement and attempts to
link employees’ sense of self with organizational values. This leadership style emphasizes leading by
example, so followers can identify with the leader’s vision and values. A transformational approach
focuses on individual strengths and weaknesses of employees and on enhancing their capabilities and
their commitment to organizational goals, often by seeking their buy-in for decisions.

Comparing Leadership Types

Transactional and transformational leadership exhibit five key differences:

1. Transactional leadership reacts to problems as they arise, whereas transformational leadership is

more likely to address issues before they become problematic.
2. Transactional leaders work within existing an organizational culture, while transformational leaders
emphasize new ideas and thereby “transform” organizational culture.
3. Transactional leaders reward and punish in traditional ways according to organizational standards;
transformational leaders attempt to achieve positive results from employees by keeping them
invested in projects, leading to an internal, high-order reward system.
4. Transactional leaders appeal to the self-interest of employees who seek out rewards for
themselves, in contrast to transformational leaders, who appeal to group interests and notions of
organizational success.
5. Transactional leadership is more akin to the common notions of management, whereas
transformational leadership adheres more closely to what is colloquially referred to as leadership.

Key Behaviors of Transactional Leaders

Transactional leaders focus on performance, promote success with rewards and punishments, and
maintain compliance with organizational norms.

Transactional leaders focus on managing and supervising their employees and on facilitating group
performance. The role of a transactional leader is primarily passive, in that it sets policy and assessment
criteria and then intervenes only in the event of performance problems or needs for exceptions.
Transactional leaders seek to maintain compliance within existing goals and expectations and the current
organizational culture. They are extrinsic motivators who encourage success through the use of rewards
and punishment.
Benchmarking Measures Performance: Results are the paramount concern to a transactional leader. Performance ratings can be
used to measure results.

Transactional leaders are expected to do the following:

 Set goals and provide explicit guidance regarding what they expect from organizational members
and how they will be rewarded for their efforts and commitment
 Provide constructive feedback on performance
 Focus on increasing the efficiency of established routines and procedures and show concern for
following existing rules rather than making changes
 Establish and standardize practices that will help the organization become efficient and productive
 Respond to deviations from expected outcomes and identify corrective actions to improve
performance

Psychologist Abraham Maslow characterized people’s motivating factors in terms of needs. Maslow’s
Hierarchy of Needs describes levels of needs ranging from the most essential, such as physiological
(e.g., food and sleep) and safety, to higher levels of esteem and self-actualization. Transactional
leadership satisfies lower-level needs but addresses those at a high level only to a limited degree. As
such, transactional leaders’ behavior appeals to only a portion of followers’ motivating factors.

Transactional leadership can be very effective in the right settings. Coaches of sports teams are a good
example of appropriate transactional leadership. The rules for a sports team allow for little flexibility, and
adherence to organizational norms is key; even so, effective coaches can motivate their team members
to play and win, even at risk to themselves.

Key Behaviors of Transformational Leaders

Transformational leaders exhibit individualized consideration, intellectual stimulation, inspirational
motivation, and idealized influence.

LEARNING OBJECTIVES

Explain the varying approaches and behaviors that define transformational leadership

KEY TAKEAWAYS

Key Points

 Transformational leaders show individualized consideration to followers by paying attention to and

meeting the needs of followers.
 Transformational leaders stimulate ideas and creativity from followers by creating a safe
environment to challenge the status quo.
 Transformational leaders have a vision that inspires and motivates followers to achieve important
goals.
 Transformational leaders serve as role models for their followers, allow them to identify with a
shared organizational vision, and provide a sense of meaning and achievement.

Key Terms

 Transformational Leadership: An approach to leading that enhances the motivation, morale, and
performance of followers through a variety of mechanisms.

Transformational leaders challenge followers with an attractive vision and tie that vision to a strategy for
its achievement. They engage and motivate followers to identify with the organization ‘s goals and values.
Transformational leadership comprises four types of behavior:
Leading the team: Transformational leaders inspire their employees to do more.
 Individualized consideration or compassionate leadership
 Intellectual stimulation
 Inspirational motivation
 Idealized influence or charismatic leadership

Individualized Consideration

Individualized consideration is the degree to which the leader attends to each follower’s needs, acts as a
mentor or coach to the follower, and listens to the follower’s concerns. This behavior can include the
following actions:

 Discussing and empathizing with the needs of individual employees

 Making interpersonal connections with employees
 Showing genuine compassion
 Encouraging ongoing professional development and personal growth of employees

Intellectual Stimulation

Transformational leaders encourage followers to be innovative and creative. Intellectual stimulation

springs from leaders who establish safe conditions for experimentation and sharing ideas. They tackle old
problems in a novel fashion and inspire employees to think about their conventional methods critically and
share new ideas. This type of behavior includes:

 Encouraging employees’ creativity

 Challenging the status quo
 Aiming for consistent innovation
 Empowering employees to disagree with leadership
 Risk-taking when appropriate to achieve goals

Inspirational Motivation

Leaders with an inspiring vision challenge followers to leave their comfort zones, communicate optimism
about future goals, and provide meaning for the task at hand. Purpose and meaning provide the energy
that drives a group forward. The visionary aspects of leadership are supported by communication skills
that make the vision understandable, precise, powerful, and engaging. Followers are willing to invest
more effort in their tasks; they are encouraged and optimistic about the future and believe in their abilities.
Behaviors that demonstrate inspirational motivation include:

 Inspiring employees to improve their outcomes

 Explaining how the organization will change over time
 Fostering a strong sense of purpose among employees
 Linking individual employee and organizational goals
 Aiding employees to succeed to an even greater extent than they expect

Idealized Influence

Transformational leaders act as role models for their followers. Transformational leaders must embody
the values that the followers should be learning and internalizing. The foundation of transformational
leadership is the promotion of consistent vision and values. Transformational leaders guide followers by
providing them with a sense of meaning and challenge. They foster the spirit of teamwork and
commitment in the following ways:

 Promoting a broad, inclusive vision

 Leading by example
 Showing strong commitment to goals
 Creating trust and confidence in employees
 Representing organizational goals, culture, and mission

A Blended Approach to Leadership

The full-range leadership theory blends the features of transactional and transformational leadership into
one comprehensive approach.
 LEARNING OBJECTIVES

Assess the intrinsic value of blending transactional leadership behaviors with transformational leadership behaviors

KEY TAKEAWAYS

Key Points

 Transactional and transformational leadership are not mutually exclusive, and leaders often
demonstrate traits associated with both approaches.
 The Multifactor Leadership Questionnaire is used in diagnosing leadership styles and for
developing leadership.
 Leaders use elements of transformational and transactional leadership as the situation calls for
them.

Key Terms

 Transformational Leadership: A theory of leading that enhances the motivation, morale, and
performance of followers through a variety of mechanisms.
 Transactional Leadership: A theory of leading that focuses on the role of supervision,
organization, and group performance; leader promotes compliance through rewards and
punishments. Also known as managerial leadership.

The full-range theory of leadership seeks to blend the best aspects of transactional and transformational
leadership into one comprehensive approach. Transactional leadership focuses on exchanges between
leaders and followers. Transformational leadership deals with how leaders help followers go beyond
individual interests to pursue a shared vision. These two approaches are neither mutually exclusive, nor
do leaders necessarily exhibit only one or the other set of behaviors. Depending on the objectives and the
situation, a leader may move from using one approach to the other as needed.

Management researcher Bernard Bass developed the Multifactor Leadership Questionnaire (MLQ),
consisting of 36 items that reflect the leadership aspects associated with both approaches. The MLQ also
includes several characteristics of a more passive leadership approach known as laissez-faire.
Respondents are asked to think about a leader they work with and to rate how frequently the individual
exhibits the leadership behaviors. The MLQ is used to help leaders discover how their followers perceive
their behaviors, so they can develop their leadership abilities. The questionnaire is most effective with
eight to twelve respondents, as this feedback gives leaders a broad set of perspectives from the people
who interact with them.