Leadership styles. Leaders tend to occupy centre stage in organisational life and many of us use leader in attempts to make sense of organisational behaviour. There is also a strong tendency to focus the blame on the leader if the organisation fails

University Degree Business and Administrative studies

Samiul Ali

S04578412

Leadership Styles

Leadership is a concept which consists of the leader and followers’, yet there is no agreed definition to this. There are nearly as many definitions given to leadership as there have been authors defining this (Bass, 1990). However, all definitions emphasis on the leader’s ability to influence and supports followers in achieving the vision. Leaders tend to occupy centre stage in organisational life and many of us use leader in attempts to make sense of organisational behaviour. There is also a strong tendency to focus the blame on the leader if the organisation fails. This is evident, taking the recent economic meltdown where Chief Executive Officers of banks are held accountable for the country going into recession.

Research carried out by the Hay Group (HR Zone, 2008) claims leaders who take a long term orientation, engage the team to create a secure and energising climate; leads to improved bottom line performance by 30%. An approach to engage the team can be done through explaining the why behind the what, showing an interest in the team by understanding what motivates them. They also can involve their team in decision making and build capability to enable effective delegation and trust. This research highlights the importance trust within the leader and their ability to influence. Influence is a similar concept to motivation because both terms consider the impact the leader has on followers. This navigates to the main themes of this essay, how transformational and transactional leadership styles are linked to trust and motivation and the impact it of them on followers.

It’s important to understand the concept of trust what trust is before applying it to leadership. Trust in the leader- follower relationship; means they can rely on each other and both have good intensions for one another (Cook and Wall, 1980). Therefore, the leader will get things done through trusted influence (links to motivation). An example of this can be seen in Barack Obama's fundraising team, who made constant attempts to persuade people to buy Obama towels/t-shirts/memorial pencils in order to raise funds without no personal financial gain but help Obama get victory (BBC News, 2008). Supporters of Obama didn’t actually have any concrete evidence of his leadership skills yet trusted him to lead. There are many evident reasons for this in his speeches. For example, he offered hope by saying “America, we are better than these last eight years. We are a better country than this”. Obama built faith in people by understanding how people felt and responded to their needs; hope and faith encouraged people to trust him. Furthermore, he clarifies the rewards of his victory such as workers’ tax cut, paid sick days, world class education for all children and most of all his commitment to serve the country. Together with trust, these factors encouraged and motivated followers to vote for him and ultimately this gave Obama victory.

Burns (1978) introduced transformational and transactional leadership styles; both taking a contrasting approach to influence followers. One great differentiating factor between them is how the reward followers, which links into their motivation towards the vision (Blanchard and Thacker, 2007). A transactional leader motivates followers by reaching to their self-interest and exchanging benefits. Therefore, leaders may provide pay and other attractive benefits in return for their effort to achieve assigned tasks. The leaders influence is attached to legitimate authority and respect for rules and traditions (Pierce & Newstorm, 2008). This approach is perhaps reflective of bureaucratic organisations where there is limited autonomy and can inhibit productivity as employees are not encouraged to think outside the box. However, this may not be suited for today’s and tomorrow’s strategic business environment where thinking outside the box is a competitive advantage. Lack of autonomy can decrease motivation. Furthermore, lack of autonomy can signify the leader does not trust the followers to work independently and using their initiative. The more trust the leader places on followers, the less he/she feels the need to control. It becomes a social exchange relationship. How can followers trust their transactional leader if he/she does not trust them? However, a sound psychological contract is present in a transactional leader and values are related to the exchange process, such as honestly fairness and mutual exchange (Burns).

Conversely, “intellectual stimulation”, an essential tool to develop transformational leadership skills; allows followers to develop creativity which transactional leader lacks in. Intellectual stimulation helps followers to question assumptions and to generate more creative solutions to problems (Bass and Avolio, 1990). The vision provides the framework for followers to see how they connect to the leader, the organization, each other, and the goals’. Once they have this big picture view and are allowed freedom from convention they can creatively overcome any obstacles in the way of the mission (Gosling et al, 2007). Furthermore, the idea of enhancing knowledge also increases followers’ motivation levels. Jamail (2009), a leading motivational speaker adds knowledge creates confidence and when a person is confident, he or she is more motivated to take action: (Knowledge + Confidence = Motivation).

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An important element of transformational leadership is the inclusion of individualized consideration. Individual consideration occurs when leaders are focused on developing people and responds according to their needs (Bass, 1985). This has practical evidence within organisations today. Managers are encouraged more and more to focus on enhancing knowledge and skills of employees and the term career is a widely used term signifying, constant development towards promotion. Furthermore, Skills secretary John Denham said: "We know that those companies that invest in development of employees are best equipped to weather tough economic times, and are also best placed to capitalise on opportunities for growth” (BBC News, 2008a). Therefore, elements of transformational leadership not only benefit followers but organisation’s to gain competitive advantage. Individual consideration works towards fulfilling follower’s need for self-actualization, self-fulfilment, and self worth. This also naturally propels them to further achievement and growth, evidently enhancing motivation.

In development of the above, Maslow’s (1954) hierarchy of needs theory recognises that the higher-order needs for esteem and self fulfilment provide the greatest impetus to motivation. However, there is no verified empirical research (Armstrong, 2006). It also fails to recognise, all human have different needs depending on their culture which will be discussed in the later part of this essay. Yet, Maslow’s theory has been used widely in literature.

Stogdill 1(948) viewed leadership as a working relationship between followers and the leader; where individuals depend and support one another for the attainment of mutual goal, (Hollander and Julian (1969). Depending on each other is used to define trust; this again enhances the importance of trust in such a relationship. Avolio et al (1999) used the term supportive leadership which supports the above. Characteristics of supportive leadership includes expressing concern for followers, taking in account their individual needs and affectionate to their feelings. This form of behaviour is encouraged and visible is organisations today. For example, personal support is appropriate on a one-to-one basis using coaching and mentoring techniques. A survey conducted by CIPD (2004) concluded that over three-quarters of respondents used coaching and mentoring within their organisations. In these sessions, individuals are given personal feedback, where they understand each others perceptive in a supportive confidential context, similarly to supportive leadership. Evidently, trust is vital in this process, if the followers don’t trust the feedback offered they will simply ignore it and perhaps continue with behaviour which hinders achieving the vision. In support, Goleman (2006) adds, the more strongly connected we are with someone emotionally, the greater the mutual force.

Path Goal theory, has strengthened the concept of supportive leadership in describing the way leaders encourage and support their followers in achieving the goals; by making the path they should take a comfortable and enjoyable journey (House and Mitchell, 1974). The implication for the leader is to be clear in what he expects, removing obstacles and increasing rewards along the route. The CEO of Superdrug was a strong advocate of this; he ensured all departments had sufficient resources on a regular basis and sent memos to the rest of the business recognising and rewarding achievements. As a result the business is gaining competitive advantage even with High Street profits deceasing. However, this approach assumes that there is one right way of achieving goals; the leader can see it and follower cannot. This casts the leader as the knowing person and the follower as dependent.

Supportive leader’s behaviour should be directed towards the satisfaction of subordinates needs and preferences (House, 1996). Motivation arises when needs are satisfied, therefore followers will exert more energy in achieving the goal when their needs are met. As a leader, it does not matter what product or service your company offers or what specific responsibility your team has; your job is to motivate and develop your employees by understanding their needs and rewarding them accordingly once goals are met (Jamail, 2009).

Two types of motivations have been indentified, extrinsic (practiced by a transactional leaders) and intrinsic motivation (practiced by a transformational leaders). The former motivation is directly linked to an external/tangible reward such as money. The head of Merrill Lynch, Stan O'Neal, resigned after reporting heavy losses (BBC News, 2007). Does this mean, he was only extrinsically motivated by the salary and bonuses he received? Now, that the business is not doing well, there is not much chance for him to receive the attractive bonus, as a result decided to leave. Should managers encourage this form of motivation? Or did he leave because he did not want to take ownership of the errors made, hence the bank not doing well? Despite who made the mistakes, a transformational leader will take responsibility of them because he feels the followers belong to him, but a transactional leader will not. Evidently, extrinsic motivation only has short term benefits and costly to the organisation.

Intrinsic motivation is not linked to any apparent rewards except the enjoyment activity itself, e.g. satisfaction of achieving goals, verbal praise and encouragement from leader (Yulk, 2006). This form of motivation is future orientated and perhaps less costly for the organisation. However, model of agency theory claims introducing extrinsic incentives cannot lower effort levels (Kreps, 1997). Without extrinsic incentives, why would a worker expend any effort? It’s hard to imagine an employment situation without any extrinsic incentives.

Perhaps, motivation depends on the nature of work and leader may have little impact. For example, call centres are highly performance orientated, target driven and based on bonuses. As a result, employees are more likely to be extrinsically motivated. Jobs which involve a great deal of task ambiguity encourage intrinsic motivation (Staw, 1989).

Heider’s attribution theory, the most influential contemporary theory with implications for academic motivation emphasizes the idea that learners are strongly motivated by the pleasant outcome of being able to feel good about themselves. This also links with the cognitive self efficacy theory which is an important component of Bandura’s (1977) social cognitive theory. Follower’s self-perceptions will strongly influence the amount of energy they exert in achieving the vision. Therefore, the leader needs to be able to ensure followers possess high self efficacy in order to unlock their potential in the given tasks’. In order to achieve optimum performance, leaders can help build self-efficacy by modelling effective behaviours, verbal persuasion, allowing self-determination and relatedness (Blanchard & Thacker, 2007). This will also enhance psychological and emotional well being. These behaviours can only be displayed if there is high amount of trust because there is a great need for the follower and leader get on and believe in each others opinions. Furthermore, self-determination contributes to high motivation. If the leader allows followers to take ownership of the task, followers’ may form a personal bond because they perceive the task personal; ultimately enhancing creativity and organisational performance. Creativity is a competitive advantage in organisations today.

Extrinsic rewards will not be effective considering the current economic downturn; organisations are struggling to pay salaries never mind offering bonus payment. As transactional leadership is contingent upon rewards, no rewards will results is no motivation; perhaps a transactional leader will be less successful in today’s disastrous economy.

As a result of the current recession, employees feel unsecure and stressed, and are in need of emotional support and reassurance. Servant leadership may be most effective for such times, and reflects transformational leadership. A servant leader will prioritise, serving followers needs before own (Greenleaf, 1977). The people served by the leader, become wiser and more likely themselves to become servants (Greenleaf, 1977). Some can view this as a manipulation process, serve their needs first, but in the long term they serve you needs. However, the ability to connect with people at both head and heart level is one of the key strengths according to Goleman’s (2002) work on emotional intelligence. For example, Rose, CEO of Marks and Spenser is regularly seen on the shop floor close to employees and customers, he immediately engages with employees at all levels and expects his team to do likewise, even if High Street spending has decreased. Goleman adds leaders who can say optimistic and upbeat, even under intense pressure, radiate the positive feelings that create resonance. By staying in control of their feelings and impulses, the leader can craft an environment of trust, comfort and fairness.

Fairness is associated with ethical leadership and is supported by Burns, founder of transformational leadership. He suggests, what makes a leader ethical is one who can solve conflicts, by helping followers confront conflicts and find solutions (Heiftz, 1994). This can only be possible if followers perceive their leaders values are based on integrity, fairness; this again reinforces the importance of trust in leader-follower relationship. Ethical leadership also strengthens the support for intrinsic motivation. The leader enforces ethical policies and procedural justice, because its part of their internal beliefs and personally takes responsibility of followers. It s a psychodynamic process, the more motivated followers are because of the ethical values, the more they trust the transformational leader; ultimately leading superior performance. In contrast, executives of Royal Bank of Scotland want to give £1 billion in bonuses, at the time of financial crisis caused partly by them. Evidently, this not ethical; and been rejected by Gordon Brown who believes executives need to take moral responsibility (BBC News, 2009). Unethical behaviour is obviously not approved.

However, it’s important to recognise what may be ethical leadership behaviour in the UK may have a different meaning across different cultures. While leadership is a validated concept globally, is there such thing as a global leader or is leadership culturally contingent? However, cross-cultural literature has generally stressed a strong connection between culture and leadership styles (Pierce & Newstrorm, 2008). Different cultures hold differentiating perceptions of leader, for example, Arabs worship their leader as long as they are in power, the French expect leader to be highly educated in arts and mathematics, and the Americans seek empowerment of their leader when given autonomy yet respect a leader who is bold (House & Aditya 1997). This reinforces that followers have different expectations from leaders and the way leaders can influence followers differently again depending on the culture. It’s important to note that one country can have many cultures, for example, in Pakistan, people living in the “Punjab” province are more acceptable and adaptable to western values than people living in “Sindh” province.

Global Leadership and Organisational Effectiveness (GLOBE) carried out by House et al (2004), an empirically sound research project and social entity have had immense input and implication for cross cultural leadership. It has been carried out by 170 social scientists and management scholars from 61 cultures throughout the world, to examine the interrelationship between societal culture, organisational culture and leadership. It hypothesised charismatic/ value-based leadership would be universally endorsed, and was strongly supported. Furthermore, team-orientated leadership is strongly correlated with charismatic/value-based leadership, and also universally endorsed. Humane and participant leadership dimensions are to some extent universally endorsed. This research strengthens the need for the leader to be sensitive towards followers’ needs, show kindness and everyone are untied as a team, characteristics of transformational leadership.

The distinction between charismatic and the transformational leader is not always visible, as many scholars make no distinction between the two (Pierce & Newstrom, 2008). Perhaps, this means transformational leadership would be accepted by followers despite the cultural context. Furthermore, this reinforces the importance of trust and motivated in the leader-follower relationship as discussed considerably in this essay.

The charismatic leader, by the sheer force of their personality is capable of having profound effects on followers and from that generates intense loyalty and passion. Followers become that enthusiastic that they give blind obedience to the leader (Conger & Kanungo, 1998). Furthermore, a charismatic leader has the ability to influence followers, so they internalize his beliefs to serve the source of intrinsic motivation to carry out the mission of the organisation. Realistically, followers would only show obedience if they strongly comply with the vision and trust the leader’s values. However, excessive confidence and blind trust of charismatic leadership can lead followers into real dangerous activities, for example Hitler.

Organisations are not only based on intrinsic motivation and intangible rewards. People are also motivated by the perceived outcome, also referred as valance by Vroom’s (1964) expectancy theory. People in different cultures are motivated by different things. For example, in emerging markets such as India and China, people are motivated by pay, where as in developed countries employees are motivated by training practices, praise and promotion. Therefore, leaders in China should perhaps take a performance orientated approach and ensure equality with pay and tangible rewards. However, a leader in the UK should be focused on performance appraisals and development orientated with constructive feedback.

In addition, Hofstedes (1980) research on cross cultural dimensions proposes there is a difference in power and status acceptance among people-power distance. For example, countries in high power distance, India/Mexico prefer autocratic leader where there’s a clear distinction between management and employee roles. Employees in countries that rank low on power distance, Sweden/ Israel prefer a consultative and participant management styles. There are also great differences between collectivistic and individual cultures. These differences emphasize, there is not one best leadership approach, the leaders ability to be flexible is pivotal. Hollander (1993) reminds, without follower there is no leader. Therefore, leaders should respond to needs of followers to ensure they are motivated to achieve the vision.

Trustworthiness, inspirational and communicative are behaviours and traits which are universally considered facilitators of leadership effectiveness (Javidan et al, 2006). This validates the importance and effectiveness of a transformational leader over the transactional leader, despite the culture. This is because he/she has the ability to emotionally and personally influence followers’, provide rewards according to their needs which increase intrinsic motivate followers. Leadership means, having influence on followers and a dependable relationship, motivation reflects the ability to influence, evidently even the definition of leadership forces the need to motivate. People will only depend on another if there is an element of trust. Again, the concept of leadership indirectly means trust.

DeNunzio (CEO of Asda) says, leaders take the job of people and make the extraordinary- that s what your job is about (Joyce, 2004).

Gordon Ramsey (2007): “When you find a winner, groom it daily. Protect it with your life”.

Both of them emphasize to what extent people in the organisation matter, and their success is highly evident world wide

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Websites

BBC News, (2008)

BBC News, (2008a)

BBC News, (2009) http://news.bbc.co.uk/1/hi/uk_politics/7878418.stm

BBC News, (2007) http://news.bbc.co.uk/1/hi/business/7078251.stm

HR Zone, (2007) http://www.hrzone.co.uk/cgi-bin/item.cgi?id=193584&d=1063

Jamail, N. (2009) www.nathanjamail.com