Transactional And Transformational Leadership Essay Example

and respected existence among the dairy factories all over the world.

In addition to that, Al Safi was recognized in Guinness World Book of Records [1998 edition] as the largest dairy farm in the world. It covers approximately 3,500 hectares of land and employs an around-the-clock 1,400 workforce. Furthermore, in 1973, the Danone group was considered as the largest nutrition company in the world because of the diversified partnerships with small and large companies all over the world.Therefore, its products spread to more than 30 countries around the world resulting in revenues of 83. 9 billion French Francs in 1996. In 2001, Al-Faisaliah Holding Group and International DANONE Group formed a joint venture between Al Safi and the French dairy Danone.

This joint-venture gave birth to Al Safi Danone which is considered as region’s largest dairy company. The company owns the largest transportation fleet in the kingdom: 500 refrigerated vans serving 28,000 POS (Points of Sales) in 25 regional distribution centers, where the company has many branches.On average, the company launches four new products annually. Al Safi Danone’s market share is 36% from the total dairy market in Saudi Arabia; the company is planning to increase the percentage of the Saudi employees to 40%, while now it is 25%.

Leaders in the new millennium will create an environment that encourages the development of skills, learning and openness so that those on their team can participate in the deployment of financial and human resources. (Laurie J. Mullins 2002).Accordingly, the above supports the saying that traditional command and control leadership models are not relevant for today’s organizations management.

Where today’s leadership requires empowering others through sharing information, power, and authority to

make decisions and take actions. And also increasingly emphasizes on soft skills, team working, communication and motivation. Leadership theory is one of the most talked-about, researched and written-about management topics. Many people believe that leadership is simply being the first, biggest or most powerful.Leadership in organizations has a different and more meaningful definition.

Very simply put, a leader is interpreted as someone who sets direction in an effort and influences people to follow that direction. How they set that direction and influence people depends on a variety of factors. There are numerous theories about leadership, or about carrying out the role of leader, e. g. , servant leader, democratic leader, principle-centered leader, group-man theory, great-man theory, traits theory, visionary leader, total leader, situational leader, etc.

It is very interesting to navigate through rich books and articles talking about leadership’s definitions, arguments, etc. In this chapter, the author will go through the most of this important subject. The author has selected two approaches of leadership to write about “Transactional and Transformational”.

Business experts and gurus have viewed the leadership skills of many leaders and their abilities such as: Leo-Tzo, Mohammed, Nelson Mandela, Martin Luther King, Jack Welsh and many others but never agreed on a single definition for neither leadership nor teams.Manfred Kets de Vries, a professor at INSEAD, argues that leadership is “a set of characteristics, behavior patterns and personality attributes that make certain individual more effective in achieving a set goal or objective” (C. J. Williams, 2007, pp. 1). Leadership also can be defined in a simpler way as an influencing process aimed at goal achievement (Ralph Stogdill 1950).

Also the leadership expert Warren Bennis defined the model

leader to be “a programmatic dreamer, a person with an original but attainable vision.Inevitably, the leader has to invent a style that suits the group. The standard models, especially command and control, simply don’t work. The heads of groups have to act deceivably, but never arbitrarily. They have to make decisions without limiting the perceived autonomy of the other participants. Devising on atmosphere in which others can put a dent in the universe is the leader’s creative act” (Jonathan Farrington, 2007, pp.2).

Debates between experts continue to argue the difference between Managers and leaders.A lot of organizations mix between the concept of leadership and management and tend to promote people to middle and high management based on hard skills such as result orientation and neglecting soft skills like team working, motivation and communication. This makes the first difference between the leader and the manager. Warren Bennis and Burt Nanus (1985, pp.21) argued another obvious difference is that “managers do thin right, while leaders do the right thing” (quoted in Huczynski & Buchanan, 1985, pp. 697). This emphasizes the need for organization to pay more attention in preparing leaders and succession programs.

The historian leadership guru James MacGregor Burns described Transactional & Transformational Leadership in his famous book “Leadership” as the old map and new map respectively (Rickards & Clark, 2006). The Transactional Theory assumes that all job performances are regarded as series of transactions between leaders and subordinates.

These kinds of transactions involve motivating people by reward and punishments or in other words, a follower agrees to serve the leader in return for some sort of incentive.In the Transactional style, Negotiation and the definition of clear exchange relationships

are vital for the growth of long- and short-term work. Lussier & Achua defined this style as “Transactional leadership seeks to maintain stability rather than promoting change within an organization through regular economic and social exchanges that achieve specific goals for both the leaders and their followers. ” (Lussier & Achua, 2004, p. 358).

Burns considered Transactional style of leadership as the basic ground of approach that should be polish and sharpen the attitude of successful leaders.Although he thinks that the Transformational style is better and more appropriate to be used nowadays, he thinks that every Transformational Leader should be a transactional leader at the first place (Zhang & Chen, 2006). In fact, the transformational leadership style is complementary to the transactional style and likely to be ineffective in the total absence of a transactional relationship between leaders and subordinates (Bass & Avolio, 1990; Goodwin, Wofford&Whittington, 2001).

Barbuto (2005, p. 27); Bass, Avolio, Jung & Berson (2003, p.208); Judge & Piccolo (2004, pp. 55-756) stated that Transactional Leadership has four main components which are:

• Contingent rewards: This part includes identifying clear goals and promise rewards as an exchange for effort contracted.
• Management by exception (active): this kind of approach involves specifying standards by leaders and aggressive corrective action taken quickly if necessary. These actions may involve follower punishment.
•  Management by exception (passive): in this part, leader mostly awaits emergence of problems before taking any actions. No preventive actions made for that.
• Passive-avoidant / Laissez-faire: his part is famous to the point that many authors consider it as a separate style of leadership. In this style, no agreements specified; no expectations set; goals and standards avoided.

On the other

hand, the transformational leadership style is simply using rewards as a component of a system designed to increase followers’ commitment and internally motivate followers (Goodwin, Wofford&Whittington, 2001; Rafferty& Griffin, 2004). We can think of the literal meaning of transformational style as it motivates subordinates by transforming or converting self-interest into collective concerns.Burns also claimed that the latter form of leadership is more effective than the former (Brown & Moshavi, 2002, p.

80). Transformational Leaders create wonderful and uplifting experience and work environment. They put passion and energy into everything and they care about subordinates and want them to succeed. Transformational leadership consists of four interdependent components – known commonly as the ‘4Is’ – which, when shared, have a positive effect that result in performance beyond expectations (Gellis, 2001; Hall, Johnson, Wysocki & Kepner, 2002; Kelly, 2003).These components are:

• Idealized influence which is some attributes & behaviors that build confidence and trust and provide a role model that followers seek at any organization.
• Inspirational motivation by supporting followers to melt with processes and challenge them with high standards. Leaders may use tools like motivational speeches and conversations and other public displays of optimism and enthusiasm, highlighting positive outcomes, and stimulating teamwork.
• Intellectual stimulation by bringing the best out of subordinates and encouraging them to innovate and create.Transformational leaders authorize followers by persuading them to propose new and contentious ideas without fear of punishment or mockery. On the contrary, Transactional leadership is typically characterized by work within prevailing and dominant systems.
• Individualized consideration involves treating people individually, differently and fairly on the basis of their knowledge and performance and with the intention of developing them to promote and
  

reach higher levels of achievement than might otherwise have been achieved. . the ability to call on group members' knowledge, skills and abilities insures that the task can be tackled.