4 A closer look at leadership styles
In this section, you will focus on two prominent leadership styles that are regularly discussed together: transformational and transactional leadership.
Initially contrasted by James McGregor Burns (1978), transactional leadership focuses simply on the link between performance and reward, whereas transformational leadership builds a connection with your followers that will motivate and inspire them to achieve more.
Transactional leadership plays an important role in many organisations, particularly where there is a focus on standards and procedures.
Transactional leaders are process and action oriented, and are particularly effective when projects must be tightly controlled, for example on a production line with low paid employees. Their style is responsive and directive, which can be useful in emergency situations.
A key advantage is clarity for employees – they know what’s expected of them and have incentives to perform well. A disadvantage is the lack of autonomy, potentially leading to demotivation for both the leader and employees.
Bill Gates is often given as an example of a transactional leader – particularly in his early days of setting up Microsoft, when reward and punishment were a key focus for his style. Many commentators also view Steve Jobs, the former CEO of Apple, as a transactional leader. He was famous for his strong focus on tasks and structures.
Transformational leadership has become one of the most popular leadership concepts. It was developed further by Bass (1985), who defined four basic elements, known as the four ‘I’s:
- Individualised consideration – supporting individual followers; coaching and developing them
- Intellectual stimulation – encouraging followers to solve problems creatively for themselves
- Inspirational motivation – inspiring and enthusing followers through clear communication of their vision
- Idealised influence (charisma) – being a role model for followers; having high moral and ethical standards.
A case study
A well-known case study (Penn State blog, 2013) that exemplifies transformational leadership is that of Nelson Mandela, the first black President of South Africa.
He motivated and inspired his followers to end apartheid by encouraging them to come up with their own solutions to a variety of issues (intellectual stimulation), showing a personal concern for the struggles of individual followers (individualised consideration), and his ability to repeatedly articulate a clear vision with charisma and conviction.
Can you think of any transformational leaders?
Activity 4 What makes a transformational leader?
Think of someone you consider to be a transformational leader. They could be someone you work with, a community leader, or a historical figure. In the box below, present three pieces of evidence that demonstrate their transformational style.
Walt Disney – animator and founder of one of the top motion picture companies in the world – was often quoted as a transformational leader.
- He had a very clear vision of what he wanted to achieve and understood that he couldn’t do it alone.
- He was a charismatic leader whose enthusiasm was infectious and motivating.
- He was a creative leader who encouraged his team to explore new ideas and offered personal support when needed.
Although transformational leadership is mainly viewed positively, there are potentially negative aspects to this style. For example, transformational leaders often struggle with detail, and while carried away by passion and enthusiasm, they may miss what the facts are telling them and end up leading the organisation in the wrong direction.
Their approach may not meet the needs of all their followers, so they can end up working more closely with a small cohort and isolating other team members.
Their enthusiasm might lead them to expect too much from their followers, such as working long hours.
In this section, you’ve looked at two well-established leadership styles and considered their key characteristics. Did they ring true for you? Have you seen or experienced them in action? In Section 5 you’ll look at some more recently described styles.