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I present a review of the empirical literature on transformational leadership to date in research and development organisations. The studies suggest that transformational leadership has a direct positive relationship with organisational innovation in respect of the performance of project groups. As well as this direct relationship, moderators have emerged out of the literature that suggest that team identity and the source of knowledge indirectly affect project group performance. Path-goal and strategic leadership theories have been brought into analysis as a context tool for the reader. Directions for future research have been suggested.
1. INTRODUCTION
Leadership has been empirically studied in relation to innovation with findings that suggest innovation and leadership have a strong relationship. There is a vast amount of literature that focuses on various leadership theories; however only a fraction has been tested within research and development (R&D) contexts. This encourages the question whether generalised studies on leadership are applicable to R&D settings, or is the R&D context as conceptually distant from existing research and their situational characteristics as possible? The answer to that question has driven this review into existence; the R&D context for leadership is fundamentally different and existing literature cannot be used to examine leadership in R&D organisations. Existing studies have found that transformational leadership has a more positive relationship with innovation than other theories. This observation forms the basis of the current literature review; which that studies the relationship between transformational leadership and innovation in an R&D context. Other important theories will be called upon to demystify areas of potential confusion. Innovation for firms is important and a priority for those that are in growing markets. The nature of the global market results in an increasing number of competitors, all of whom are competing for a larger share in the market. The need for flexibility is apparent because todays technologies and markets are unpredictable, all of these factors mean that companies in todays market must rapidly develop new products in an environment that is plagued with shortening product life cycles. Thus, a premium is being placed on creativity and innovation in the current global market (Mumford & Gustafson, 1988). To keep a level playing ground with competitors there is also a need for leadership that is primarily geared toward change and development (Arvonen & Pettersson, 2002) and effective usage of human resources and efficient knowledge management (Dess & Picken, 2000). It is embedded in our culture that innovation is a process that must happen, and is happening at sporadic rates in recent years. It is how this innovation occurs and what processes are needed that the majority of managers are unaware of and can therefore not replicate to become a leader. Recent works, like that of Tornatzky & Fleischer (1990) suggests that innovation is an interpersonal process where members work in project groups with project leaders. Keller (1995) further examined these project groups and identified two categories; research groups that focus on radical innovations; and development groups that concentrate on upgrades of an incremental sort on existing products. It is through project groups where innovative behaviour is conducted, and where we are interested in how the leadership style affects innovation and performance outcomes. In reference to the management and leaders of project groups, Narayanan (2001) states that leaders are chosen on the basis of their technical expertise as well as leadership skills. Formal training in handling interpersonal conflicts is not generally one of the requirements for leaders, resulting in less than adequate control. It is therefore recommended that in recruiting an individual to lead a project group it is necessary to ascertain whether they possess skills other than their technical expertise (Mumford, Scott, Gaddis & Strange, 2002). The structure of the literature review will be as follows; first a brief overview of the literature on the theories of path-goal and strategic leadership. This will serve as a context tool and allow the reader to get a perspective of how project groups are led in an R&D context. A detailed section about
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transformational leadership will follow which consults a wider array of literature and themes that are central to the effectiveness of transformational leadership. A review of the methodology has been carried out which will follow the main review of the theories; which will analyse the methodologies that the authors have used in their studies and look at their limitations and strengths. From this literature review a number of directions for future research have been found that can be used by anyone that wishes to undertake a deeper study into the effect of transformational leadership in an R&D organisation, these are included in the general discussion.
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Another interesting find within this paper is that the results displayed evidence for the performance of the project at the time 1 influenced and the perception of the charisma of the leader during time 2. Keller found that subordinates felt the leader was increasingly transformational because of the success of the last project, the perceptions of the leader were based on previous experiences that the followers had with them. To be an effective transformational leader, experience is essential, one cannot jump into the role with just the trained knowledge and expect to succeed; a relationship must be built with the followers. In reference to the way a subordinate perceives their belonging to a group, or in other words team identity, Paulsen et al (2009) found through their study of 34 project groups that team identity did not directly have a relationship with innovation. What they actually found was that the cooperative behaviours of followers and leaders led to much higher performance and through further examinations of the pathways for their proposed innovation-influence model, they found that team identity and cooperative behaviours had a strong positive relationship. Followers with a strong sense of team identity are more likely to be involved in shared decision making and to find answers that benefit the group rather than vying for promotions; this is evidence that the strong correlation between innovation and team identity is heavily mediated by cooperative behaviour. For leaders to succeed in creating a sense of team identity among their subordinates, Paulsen et al (2009) and Shamir, House & Arthur (1993) provide evidence that transformational leadership substantially influences the development of said team identity. All things considered, the positive relationship between transformational leadership and innovation is mediated by a sense of belonging and cooperation. Gumusluoglue & Ilsev (2009) looked at the idea of where the knowledge utilised in innovation comes from and how the source of the knowledge mediates the relationship between transformational leadership and organisational innovation in their study that involved 43 Turkish companies. Findings revealed that when the source of knowledge was internal - knowledge obtained from subordinates that are in the project groups - the mediating role of internal support was not apparent. On the other hand, the role of external sources of support - where knowledge is brought into the project groups from outside - did mediate the relationship substantially. What this shows is that external support is not directly related to performance but can act as a catalyst for innovation when transformational leadership is employed; when a transformational leader obtains knowledge from universities and other experts they are avoiding the confusion that can arise from conflicts between subordinates. The fact that the hypotheses for the mediating role of internal support was not supported gives evidence that conflicts can and do happen and affect the performance of the project groups.
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In order to avoid the pitfall of developing into a mis-leader, Drucker (1988) explains three activities that a leader must partake in. In his concise article on leadership Drucker states that on its own charisma is not enough to ensure effectiveness as a leader; a leader that solely relies on their charisma becomes inflexible and convinced that they are infallible.
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The three processes that are a requirement for any leader are; to work hard, a solid foundation for leadership is to have extensive knowledge about the organisations mission and to make compromises that reflect his own beliefs; to accept responsibility, Drucker realises that being a leader is not a privilege but a responsibility where a leader must take blame for failures instead of blaming his subordinates; and to earn the trust of his followers; without trust subordinates would not be followers. Psychologically, leadership is a complex subject. In order to remain a positive leader, that leader must learn the basics of the leader-member relationship and its psychological aspects. In Sankowskys (1995) study on the symbolic power that a leader has he explains that in the leader-follower relationship, the followers symbolise their leader as a parent; this is called transference. This results in followers being highly motivated to gain the personal approval of their leader which also leads to the leader being able to fundamentally transpose the followers thoughts and emotions. It is the abuse of this symbolic power that Sankowsky states can turn a leader into a mis-leader. Sankowsky also explains that the abuse of this power reveals itself mainly in communication; once a leader begins to withhold information and conceal results in order to reveal half truths that promote themselves, the abuse has started. Throughout a charismatic leaders leadership, it is the very attribute of being charismatic and their ability to earn the trust of their followers through being omnipotent and paternalistic, that charisma and a natural narcissistic personality can disguise a leaders personal needs and quests and present them as a vision of their own grandiosity and self belief which exploit subordinates values. Existing research has also touched upon the topic of whether a leader is actually needed or if the whole attribute of a leader is an imagined excuse for an extreme of performance. Meindl, Ehrlich & Dukerich (1985) created a study on how leadership is a romanticised concept based on studies that evaluated newspaper articles, dissertations and undergraduate courses. Meindl et als term romanticised leadership refers to the practise of subordinates bestowing the credit of being a leader to an individual in certain situations such as in times of extreme positive or negative organisational outcomes (Meindl et al, 1985) and when there is a need for subordinates to find causes among human actors (Pfeffer & Salancik, 1978). Therefore it is put forward that leaders are only needed and used ad hoc; rather than having a leader in the traditional sense, a leader is used to be blamed and celebrated in certain situations and for the influence that leaders have over subordinates.
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given the many complaints of the paucity of research on the relationships between leadership and innovation implementation (Beyer & Trice, 1978; Tornatzky & Klein, 1982). In Michaelis et als (2009) study that was based on a survey completed by 194 employees from a German car company, it was hypothesised that there would be a positive relationship between charismatic leadership and employees innovation implementation behaviour. Through the common use of Avolio & Bass (1995) multifactor leadership questionnaire it was found that this hypothesis was correct; the more charismatic attributes that the leader showed, the more the employees participated in innovation implementation behaviour. Michaelis also suggests that leadership training is incredibly important when it comes to adopting an innovation, and points the reader towards research undertaken by Barling, Weber & Kelloway, (1996) that studied to what extent charismatic leadership qualities are trainable. Selecting leaders that are trained in this way would substantially speed up the adoption process.
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5. DISCUSSION OF METHODOLOGY
One of the main characteristics of the methodologies in the majority of the research that I have reviewed is that they make use of Bass and Avolios multi-factor leadership questionnaire (MLQ). The MLQ was created in order to effectively measure leadership styles in any situation through questions that are designed to analyse the actions and effects of leadership. There are however disadvantages in solely relying on this method of measurement. According to McNamaras fallacy (Handy, 1994), McNamara states that if something is ignored or not detected then it doesnt mean that it isnt occurring. If the MLQ misses something in its measurement of the situation, then the results of the analysis will not completely represent the context. The variables that the methodologies in the literature measure are also fundamentally subjective, and based entirely on opinions; this means that we must consult qualitative methods in order to get a better grasp on the situation. Every study that has been used in this review has involved questioning the leaders and followers. This does pose a problem however; because the variables are opinion based, one might not mean the same thing that someone else does in answering a question, and people could view the question as ambiguous and not give a justified answer; leading to results that do not entirely represent the context. Large sample sizes have been continuously used in the existing literature leading to much higher reliability in that sense, the more project groups and leader-followers examined the more chance one has of finding evidence for relationships, either positive or negative. Throughout the various methodologies in the literature, numerous biases are evident; such as the common method bias and the halo effect. These will skew the results and leave them unreliable if they are not eradicated. The majority of the literature has contingencies for these biases mathematically in order to blunt the effect that these biases have on the outcomes. However a truly representative study would not need to as it would have been assured that no biases are evident.
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The effect that training has on the ability of leaders is also under researched. Directing ones research into whether transformational leadership can be trained will be useful to determine if leaders are bred or bought; it is useful to determine if leaders can be bred by an organisation or they always have to be bought in from outside, or are the fundamentals of a transformational leader cemented into the fabric of their upbringing and their personality? This would have many practical implications; the search for the perfect leader would be more about searching for an individual who has a significant learning capacity. I have amalgamated many sources of literature for this review and have synergised the findings to create an analysis that gives the reader a breakdown of the main themes that run through the transformational leadership style. I have also given directions for research that will help advance the knowledge of leadership, specifically in the R&D context. The knowledge that I have summarised here is for those that wish to get a complete understanding of the subject without having to extensively read the literature on the subject, I have written it so that the main points are expressed without delving too deeply into the data and technicalities that many of the studies discuss. Advancement of transformational leadership theory is slow, however effective leadership in an R&D context is becoming increasingly likely as the importance of the literature studied magnifies and knowledge workers begin to utilise the vast amounts of research that are to hand.
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