Generic filters
Exact matches only
Search in title
Search in excerpt
Search in content
Filter by Practice Category
Business Setup & Contracts
Commercial & Business Transactions
Land Assembly & Real Estate Development
Litigation
Mortgage and Loan Enforcement
Mortgage Syndication
Private Mortgage Closings & Administration
Real Estate Closings & Property Law
Wills, Estates & Tax
Filter by Practice Industry Category
Business & Finance
Estates & Tax
Litigation
Real Estate

CORPORATE GOVERNANCE: Transactional versus transformational leadership, the charismatic leader.

In its earliest stages the strongest influence on a “movement” is likely to be the charismatic leader who personally symbolizes its values.  At some point intellectuals play a leadership role by contributing to the developing ideology of the movement, be it corporate strategy or game planning.  And if a movement endures and grows for any length of time, administrative leaders arise who are concerned with the practical matters of organization and strategy.  When considering supervisory leadership, many are concerned with ways in which the exercise of authority could be made compatible with democratic ideology. (Bernard M. Bass)  Would the “employee-centred”, otherwise known as “transformational”, supervisor, who showed concern for the welfare of his workers, be more highly regarded by the workers than the “production-centred”, otherwise known as “transactional”, supervisor, who focused all his attention on getting out the product? (Bernard M. Bass, Robbins & Langton)  Would the employee-centred or transformational supervisor also get more production out of his department than the production-centred or transactional supervisor?  In other words, were consistent relations to be found among supervisory style, worker satisfaction, and productivity?  The answer is no.  Although there is no guarantee that one way of supervisory style is better than the other, the correlation between their success in dealing with performance and productivity issues lies on their proper facilitation during the different course of challenges put on the table.  That is, an effective leader must be charismatic, while demonstrating proper judgement of which supervisory style to follow for different circumstances that arise with every new challenge.  The truth is, leadership takes on many different roles, however, not too many who act as leaders succeed as leaders.  When one takes on the initiative of a leadership role or is assigned to manage as one, he or she should consider their followers, those of whom need leadership. (Bernard M. Bass)  Once a leader realizes the circumstances under which they must lead, that is, the followers and what is required of them along with what they are capable of, he or she must choose to facilitate their supervisory style through transactional or transformational delivery.  However, in order to effectively deliver those supervisory styles a leader must learn to incorporate an empowering strategy in his or her character so that they portray themselves as a charismatic leader. (Patricia Sellers, Robbins & Langton)  Through the remaining paragraphs the circumstances under which a leader must lead will be used to illustrate how those circumstances can facilitate the proper choice of a supervisory style, along with the need for a certain character development, where the leader is respected for his or her reputation and charismatic nature.  The ultimate purpose will be defined once the notion that a good charismatic leader is similar to that of a hero, where he or she imparts a significant difference or change that has an eternal beneficial influence on the performance and progress of that entity, like Jack Welch had done with General Electric and Michael Jordan had done with the Chicago Bulls.

Not every leader has similar followers and not every leader has similar leadership styles, however, in order to choose this leadership style a leader must consider whom he or she is leading.  Obviously, when leading a sports team a different leadership style will be facilitated than when leading a team of front-line workers.  The reason for this required difference in leadership style is developed along the notion of what is required of those followers, what they are capable of and their power when it comes to influencing the performance and progress of the entity they are part of.  Lets consider the front-line workers of a manufacturing organization.  Most of these workers are simple-minded individuals with a more or less simple goal in mind, that is, to provide a physical service in order to be compensated with a salary.  Their jobs are physically demanding and require their focus on what is required of them.  In fact, these workers do not tend to look for enlightening experiences within their working environment, simply because, they do not usually have the time and cannot be bothered to challenge themselves mentally as well as physically.  More importantly the success of the organization largely depends on the front-line workers’ ability to perform adequately and consistently not innovatively and creatively, which is left for the higher management positions. (Chris Argyris, Bernard M. Bass)  Thus, if one was required to lead a group of these front-line workers he or she may benefit more from a transactional supervisory style.  Where the leader must simply clarify what is required from each of these front-line workers and motivate them to follow the set established goal of adequate performance and consistency, while providing a means for reward on the basis of their ability to follow this goal. (Bernard M. Bass, Robbins & Langton)  For these workers, do not necessary need an individualized consideration with an intellectually stimulating experience in order to increase the attainment of their established goal, as seen with transformational leadership, simply because the circumstances do not require a transformational supervisory style when dealing with these types of followers, front-line workers. (Robbins & Langton)  Although the front-line workers’ contribution to the organization is crucial and can be argued as the foundation holding up the performance of that entity, the fact of that matter is, they can be easily replaced and at a much quicker rate than those who work at higher positions such as managers. (Jon R. Katzenbach & Jason A. Santamaria)  Thus, it would not make much sense for a front-line leader to invest in a transformational supervisory style, when the performance and progress of that organization cannot be enhanced much further than at the optimal working level of those front-line workers, which can simply be achieved through transactional leadership.

Lets now consider the higher employment positions in the same manufacturing organization such as those in charge of marketing.  For a manufacturing organization the ability to sell their product quick and at a competitive price is a key measure of their performance and progress.  For the organization must consider how their product is affected by competitive prices, the quality they now can offer, changes in the consumer preference for their product and market trends.  Thus, a marketing team is crucial for the development of solutions that optimize the earning power of the organization through proper marketing techniques and devices used to sell and promote their product.  Without the proper marketing techniques and devices built upon the concepts of their product, the organization will perish in the hands of their competitors.  Thus, the marketing team is crucial for the survival of the organization.  Further, usually the individuals that make up a marketing team have some short of background or education associated with that field such as a marketing degree, MBA or an advertising background.  Therefore, the replacement of any one of these individuals will be difficult and costly, both literally and time wise.  The organization must do what it takes to maintain their valuable marketing executives.  If one was required to lead such a team of individuals, in order to increase the performance and progress of the organization through the successful accomplishments of that team along with maintaining those employees, a leader should engage in a transformational supervisory style.  For often enough higher employment positions such as the marketing team requires a more creative and innovative aspiration in order to facilitate a constantly adjusting frame of mind for every new challenge at hand.  Such that every employee must be intellectually stimulated and challenged in order to perform optimally both for the progress of the organization and for the self desire of that employee, providing a source of gratification with every successful accomplishment. (Jon R. Katzenbach & Jason A. Santamaria, Robbins & Langton)  A transformational advisory style requires that every individual be personally considered and intellectually stimulated with a stronger empowerment, to perform at a continuously increasing optimal rate. (Bernard M. Bass, Robbins & Langton)  Thus, when a brainstorm of creative ideas are needed to implement new marketing desires, a transformational supervisory style will be more effective in enthusiastically motivating the followers, marketing employees, to challenge themselves subconsciously and consciously beyond their self-perceived capabilities. (Bernard M. Bass, Robbins & Langton)  The motivational atmosphere created by the transformational leader will create a strong individual and team commitment by each follower.  Each employee will have the desire to supersede their capabilities and accomplishments with every new challenge put forth such that their ability to meet this self-sustained ambition will provide them with the proper contentment and compensation, that is, their “psychic gratification”. (Patricia Sellers, Robbins & Langton)  Therefore, at higher levels of employment within an organization, an effective leader should engage in a transformational supervisory style in order to promote a more innovative, creative, intellectually stimulating, self-sustained motivating and self-gratifying working environment for his or her followers, especially when organizations thrive on each of those employment qualifications.

It is one thing to know what type of supervisory style to employ it is another thing when one knows how to employ them.  In order for an effective leader to properly employ the supervisory styles with an immediate response, he or she must develop an image of their character that is portrayed as one of high status and reputation within the eyes of their followers.  That is, the leader must demonstrate a quality that far surpasses any of those seen within his or her followers, such that the followers will realize this superior quality as something far different than they have ever imagined in a leader and that it seams almost beyond their reach of qualifications, so much so that the followers would render it an intrinsic or born with quality even though it is not. (Bernard M. Bass, Robbins & Langton)  Thus, because the followers will now feel somewhat inferior in status and reputation they would engage in actions to learn and gain, as much insight from their leader as possible with the hopes that one day they can achieve this level of character superiority. (Judy B. Rosener, Jay Conger – The Art of Persuasion)  This quality is known as charisma.  Charisma originally meant a divine gift. More recently it has come to be applied to the extraordinary powers of great leaders. Jesus or Napoleon or F. D. Roosevelt – men with quite different aims – are all said to have displayed charisma. In common usage, charisma often means the personal, magnetic qualities of any popular leader.  When charisma is used positively it can develop an empowering strategy to employ the maximal levels of the capabilities of all who follow. (Bernard M. Bass)  More so than transactional, an effective transformational supervisory style requires an altruistic nature captured by a charismatic leader.  An effective leader should use his or her charisma to empower a motivational setting, where what is envisioned by the leader is also envisioned by the followers.  When the employees begin to envision the future progress of their organization they become more connected and willing to sustain their desire to help develop the organization through increased performance and productivity.  The followers subconsciously become their own bosses of free will with the intent and desire to benefit the organization, since they see it as a means to further themselves if and only if the organization proceeds in the same “movement” of increasing progress.  Again, the strongest influence on a movement is likely to be the charismatic leader who personally symbolizes its values through transformational leadership.

So how does one approach the notion of facilitating proper leadership through the two supervisory styles?  One must decide the circumstances relevant to his or her leadership role by looking into the factors mentioned before on all that is needed to know about his or her followers.  Thus, if one is to lead a team of front-line workers or employees of lower level positions, where the performance and productivity of the organization depends on those employees’ ability to perform adequately and consistently not innovatively and creatively, it would be more efficient and appropriate for a leader to engage in a transactional supervisory style.  However, where the role of the leader is to manage a group of higher positioned employees such as marketing executives, that is, where the higher positioned employees are required to develop a more creative and innovative aspiration that allows for them to be intellectually stimulated and challenged in order to perform optimally both for the progress of the organization and for the self-maintained desire of that employee, the leader would be wise to engage in a transformational supervisory style in order to facilitate the required performance.  However, in order to build upon the trust and acceptance by each follower such that the supervisory styles become immediately effective and empowering, the leader should assert his or her character as that of charismatic.  Now, where does our ultimate purpose lay, that is, the notion that a good charismatic leader is similar to that of a hero, where he or she imparts a significant difference or change that has an eternal beneficial influence on the performance and progress of that entity?  It lays in those who are require to lead the entire entity as a whole, that is, the CEOs (also presidents, vice presidents etc…) of an organization, where they must lead not only the higher positions of employment but all those levels in between from the bottom up, including the lower positions like the front-line workers, thus engaging in his or her mastered performance in both transformational and transactional supervisory styles.  Unfortunately, not every CEO is a good leader in that sense, however those who are, deliver this notion with the outmost prestige.  One merely has to look at the 20-year timeline consisting of Jack Welch’s contribution as a good leader/CEO to General Electric. (John A. Byrne)  Jack Welch took one of the world’s oldest organizations into the fountain of youth and made it young and inspiring again, through the innovative and creative intellect facilitated by his knowing of when and how to implement both transformational and transactional leadership styles, with the most charismatic stature seen today.  Not only could Jack Welch be considered as one of General Electric’s leaders/CEOs that eternally influenced, for the better, the future performance and productivity of that organization, but also his exposure of leadership to all those who followed, listened, watched and read about, will forever revolutionize the leadership aspects of every present and future organization in the world.  Through the mastery of the proper facilitation of both transformational and transactional supervisory styles as a good charismatic leader, an individual can impart a lifelong beneficial contribution to the business world, leaving as a good leader and remembered as a hero.

Articles