Transformational Theory Of Leadership Commerce Essay

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Participative leaders accept input from one or more group members when making decisions and solving problems, but the leader retains the final say when choices are made. Group members tend to be encouraged and motivated by this style of leadership. This style of leadership often leads to more effective and accurate decisions, since no leader can be an expert in all areas. Input from group members with specialized knowledge and expertise creates a more complete basis for decision-making.


According to the both surveys my leadership style is participative. In participative style in which all the decisions are made and solved with the help of all team members. It help us to take effective decisions in the company. I am satisfy with my survey results and this will help me in future in further taking decisions. With the help of this style employees get motivate and also help them to achieve the goals. In this you can encourage your employees to give their opinions to develop more productive work and make the company more efficient.

Apart of this I also got some weakness. My weakness is that sometime we get double minded in decision making and I always have a fear of getting wrong decision. To improve this weakness I should try to build more confidence within myself and trust my employees.

Leadership Theories:

Participative Theory (democratic): According to this theory the ultimate leadership style is the one in which input from others is taken into account. This allows all members of group to participate and assist in the decision making process. However, in this theory it is up to the leader to allow input from the team members. The benefit of this style is that there is higher job satisfaction among team members as they help out in decision making process, develop team skills, people skills, more open communication skills, and motivated to work diligently. Since participation is time consuming, this slow decision making process often yield good results. This kind of approach is useful in scenarios where team work is important and quality is important than quantity. The drawback of this approach is that it the process is slower which mean coming to a final decision or outcome could take a while.

Behaviour Theory: According to theory, successful leadership behaviour can be learned, and need not be inherent. That is, leaders can be made, rather than are born. These theories look at what leaders can do, by learning rather than being born with those capabilities or traits. By correlating success of a person/leader with behaviours it can be determined whether behaviour is the real reason behind that person success/failure. Actions of a successful leader can lead people to act in same way. Thus, behavioural traits can be learned and need not be inherent. My participative style is relevant to this theory is because when I participate, I get to listen and learn what other have to say. If the outcome is a success I know which steps I need to take if I want to become a leader. My leadership style of participative is relevant to this approach as input is allowed by the leader from all group members.

Contingency Theory: According to this theory, variable related to the environment determine which style of leadership is ideal for the given situation. Hence, no leadership style is the best and it is the situation and other variables that determine the strength of the leadership style. For example, success in a given task could possibly depend on the quantity of team members, intelligence of the team members, and the integrity of the leader and so on. My style of participative is relevant to this theory as my personality and my individuality plays an important role in how much I participate. The more I know about a given task or situation may enable me to participate more, however, my shy personality can make me hesitate to participate in front of my team members. Thus, a lot of variables come into play when we look into the contingency theory.

Transformational theory of leadership

Transformational leadership concept was developed by James MacGregor Burns. According to him, transforming leadership is a process in which "leaders and followers help each other to advance to a higher level of morale and motivation." Leadership thersosists around the world agree on four elements of transformational leadership that is individualized consideration, intellectual stimulation, and inspirational motivation and idealized influence. In transformational leadership various mechanisms are used to boost employee morale and motivation in this type of leadership. The list below shows part of some of the mechanisms used:

Incorporating individual goals with the organizational goal, in order to create a sense of belongingness; and also connecting identity of a person to the identity of the organization as a whole.

Following the leader as a role model so everyone can follow him. This also helps create a common path for the followers to follow.

Followers are given grater credit for their work which encourages facing the consequences of ones' actions, either positive or negative.

The leader is held responsible for supporting and heightening employee performance, that is, by taking into accounts the strength and weakness.

Transactional theory of leadership

It is also known as the responsive approach to leadership. Leaders use this approach to use rewards and punishments as a way of making followers more obedient and agreeable. It is believed that this type of theory is best suited to emergency conditions. Leaders pay close attention to the followers work so they can find faults and incompliances. Additionally, they do not want to change things and about keeping things the way they are.

Transactional leaders are considered to be the most result oriented. They use both rewards and punishments to gain compliance from followers. Rewards are given to people with good performance and who set high standards whereas, punishment is given to the opposite ones. Rewards are often selected based on various models like Maslow's hierarchy of needs. Transactional leadership theory is also considered to be a base for the development of transformational theory of leadership which then can be applied to higher levels of management while transactional theory is mainly used for low level management.

Below are differences between transformational and transactional theory of leadership:

Transactional Leadership

Transformational Leadership

Leaders depend on general forms of encouragement, reward, punishment and agreement to control followers

Leaders motivate followers by setting goals and giving promising rewards when the goals are met and performance targets are achieved

Leadership is responsive and main aim is to deal with present issues

Leadership depends on the leader's power to support followers for their successful attempt to meet goals.

Leaders know about the link between the effort and reward

Leadership is proactive and new expectations are formed in the followers.

Leaders proved opportunities to learn and encourage followers to solve problems

Leaders stimulate emotions which motivates their followers to do better and stand out from the crowd

Leaders have a sound vision, verbal and management skills to allow formation of strong bonds with followers.

Leaders are noticed for their capability to inspire others and individualized consideration, intellectual stimulation and idealized influence to their followers

Two business leaders whose examples fit into my leadership preference and aspirations:

Barack Obama Profile: Barack Hussein Obama is the 44th and current president of United States of America. He is the first African- American to hold this position. He was born in Hawaii and had studied at the Harvard Law School. He was a civil rights attorney and taught constitutional law. He received national attention when he represented Illinois during his campaign.  He began his presidential campaign in 2007. He received presidential nomination when he won adequate delegates in Democratic Party primaries. He defeated John McCain in the elections to become the president in 2009. Obama was named the 2009 Nobel Peace Prize laureate. He was re-elected president in November 2012.

He also took his presidential seat in the middle of the worst economic crisis. However, he did all he could to get the economy back on track as millions of jobs has been opened. This shows his diligence and great attitude for his people. He shows that no matter what the situation is, a great leader can stand against any obstacle.

On his website, he has talked about moving forward, not going back and trying to do something extraordinary. This shows that he is a visionary, and encourages us to not stay stagnant. This is an example of contingency theory, as he knew that the economy was in crisis and motivated people to believe in them. With the passage of time and his determination, the economy was back on track within few months.

On Obama's official website, one can find multiple requests, various forms so an ordinary person can give their opinion about the issues that are being discussed. This shows that he wants to listen to the people's voice, making him a good leader. In this way, my participative style of leadership is similar to him. If I become a leader in my field at any given time, I will definitely take everyone's opinion in my team to reach or make a final decision.

President Obama had also worked, in Chicago, as an organizer to help rebuild communities devastated by the closure of local steel plants. This shows he is willing to help out not only the locals but also the community. This is an example of behavioural theory, as his good and generous behaviour made reach out to people in urgent need. Another example is that Obama did legal work as a civil rights lawyer and a professor teaching constitutional law means he was also a teacher. This is a great skill to possess by any leader because it shows the leader himself knows what he/she had learned and how to put that knowledge in application.

He also ended the war in Iraq which shows he wants to make peace. Additionally, he fought for equal rights and woman's rights to make her own health decisions, and make college education more affordable. This shows he believes in equality, he knows what his country people need that is the right to make their own decisions and getting an affordable education. These are examples of transformational approach as both the followers and leaders help each other out. This is mutually beneficial relationship and helps to bring about desirable changes.

Obama has also created a plan to create a strong economy by starting or creating jobs for the middle class. This is because the middle class is growing. This will ensure that the economy is restored and remains secured. This shows his morals and values and why he makes an ideal leader. This is an example of transformational approach again as both parties help each other out that is, Obama gets the votes from middle class (who are in greater population) while middle classes peoples need are taken care of by the president.

One of his leadership qualities that he is strong. This is due to the fact is that he is responsible for appointing people that will advise him and work for him. Hiring people to work for him must mean he needs to select people who are experts in their field, have higher intelligence and suitable overall for each position. Thus, this is why the recent achievements seen in U.S and it is plausible to say that Obama's team has been carefully selected. This is an example of transactional approach as the people who deserve the job and bring success to his work will be rewarded while others will either be given more training or fired because since they are working for the president, they are expected to be worthy of that.

William (Bill) H. Gates-

Profile: Bill Gates was born on October 28, 1955. He is a co-founder, chairman and chief executive officer of Microsoft Corporation. It is a leading provider of software for personal computers. He developed at Harvard University, a version of programming language basic. He dropped out of Harvard, to devote his time and energy for his Microsoft Company that he started in 1975. Since gates was a drop out and pursued his interest in writing soft wares for computers for each computer in the world, just shows how risk taking, passionate and driven he was. With the help of his friend, Paul Allen, he started developing software. He was an innovative person. In late 1977, Gates released a version of FORTRAN language for microcomputers. In 1978, Gates and Allen introduced aversion of COBOL. At about this time, Microsoft emerged as the market leader in microcomputer languages with sales exceeding $1 million. Microsoft developed a new version of BASIC in 1979. He had an interest in software from very beginning and began programming computers at the age of thirteen. He is also a continuous learner as he learned and created something new that the whole world can use. Therefore, he is regarded as a great inventor in the field of Business, Technology and Entrepreneurship.

He believes that if a person is intelligent and have the ability to apply that intelligence, they can achieve anything. From his childhood, Gates was ambitious, intelligent and competitive and such qualities helped him to attain top position in his profession.

Entrepreneurship is present in Bill Gates from the beginning. He knows how to manage his work, he always takes a sincere interest in learning, he learns from his own mistakes, he is a creative person and lastly, he is focused towards his goals

Microsoft's vision is "A computer on every desk and Microsoft software on every computer he will continue to stomp out the competition until he dies. "Every business and household must have a computer and must run Microsoft software", was the basic guiding vision of Bill Gates.

His vision and determination regarding personal computing was the key behind his success of Microsoft and the software industry. He plays an important role in the management and decision making at the Microsoft. He had made a huge contribution in the development of technical products. His ability to run a successful and profitable entrepreneurship shows his passion for his work. His hard work, dedication and confidence cannot be overlooked and his story of success is highly motivating.

He has constantly tried to keep his company at the forefront of new technological developments by funding new research initiatives. This is an example of contingency style as now his position, situation and his power made him starts projects by funding .This long term approach helped ensure Microsoft's remarkable staying power. From his business activities to his philanthropic efforts, his has been showing great desire to learn, one of the reasons behind his success. All the above examples show his participative style as he is participative in his work as well as outside of work.

His great managerial skills helped Microsoft to be a successful company. He efficiently managed all the areas of the company which required his focus. He is gifted with great convincing skills as he has made lots of successful deals in his career. An example of this was the deal with IBM. Thus, with the passage of time, he learned that to manage a company like Microsoft, he will need great managerial skills. This can be an example of behavioral style as he acquired these skills.

He also stays in touch with the company's customers by meeting them. Additionally, he meets with Microsoft employees throughout the world by e-mail. He has skills to identify the people who are best for the jobs he has to offer. For example, he insisted on hiring people who were young, strong and attempted to create creative environment for them to thrive in. Gates prioritized his team by bringing trusted friends to help him start the company. This is an example of transformational approach and both parties helped each other out, benefitting at the end.

Being an expert in field, and having huge skills and knowledge means people often respected him. He also has the power to influence people as his expertise was never questioned. Again, this is an example of transformational approach, mostly, because of his skills and power in this particular scenario.

Microsoft is famous for giving huge remuneration packages to its employees. Giving reward power means having control over resources. This method allows evaluating employee's performance determining their raises, promotions and other rewards. Therefore, at the initial stage when Microsoft was developing, this can be an example of transactional approach, and with expansion and development it has now taken a form of the transformational approach.

Gates also use Rational Persuasion while dealing with higher-level managers. This includes logical arguments with factual evidence to persuade others to implement your recommended action. This is another example of transactional approaches it happens to make the employees more agreeable.




Benchmarked Figure

Actual (My Own)










Drive and ambition




Task oriented








The elements of leadership chosen above have been used as an benchmarking framework for my own personal development because:

Self- confidence- I am fairly confident about myself and the work I do. This is because I do my work with full dedication and try to improve on things where I am weak. For example, when I have to make calls to order goods in behalf of my manager, I was initially very shy. However, with more exposure and understanding of the English slang in New Zealand, I became more confident and patient.

Dependability- I am dependable person. However, I need to be more aware of what is going on around me. For example, sometimes my manager asks me about my co-workers performance and if they are suitable for the position. In such cases, I become confused because I tend to unnoticed m co-workers and concentrate more on other things at work.

Drive and ambition- I am not very drive and ambitions about my goals because I am sometimes not sure if I am capable of managing a place or a shop.

Task oriented- I am quite a task oriented as I tend to worry less about my interpersonal personal relationships with the co-workers and concentrate more on successfully completing the task at hand. For example, I do not hesitate to ask my co-workers to clean the shop when they have nothing to do as I believe everyone should work and not just stand around when they have nothing to so.


I am from India and my family owns cement and veterinary medicine business. My father runs this business with his brother and he is the one who inspired me to open my own business. I came in New Zealand to study business so that I can good background knowledge about how to run a business. I am currently employed at the tank juice bar. My short term goal is to become a manager in one of its branches. My current manager, has already given me assistant manager training, however, due to my studies, I have to wait before they give me contract for branch manager. I know I have the capability to become a good leader/manager, because my manager shows me where I make mistakes and I am also rewarded for my work and behaviour. In my manager's absence, I have also managed the shop on my own. My participative style is true and would like all my employees (in future) to participate at work. This can be done by taking their opinions, looking into work place difficulties and how to run the shop more efficiently.

Opportunities: In future, I will try to find opportunities where I can improve on my weakness such as

1) Drive and ambition- if I get a chance to become a manager at work, I will try to be more enthusiastic about my work and try my best at a later stage to become an area manager.

2) Confidence- I want to become more confident. This can be done by talking to more people, travelling and being more honest and open. This confidence will help me make more ambitious and a go- getter person.

3) Dependability-I want to try and take more notice of things around me. This is because a leaser needs to know what is going on in whatever area of work it may be. For example, if I became the manager, I will try to keep my staff happy, my area manager satisfied with my work.


It is reasonable for me to select the situations and opportunities listed above as I want to improve on my drive and ambition, confidence and dependability. The situations above are only examples for improving myself but a lot more can be done and achieved. My goal is to become a manager at my work, and the contexts above are ideal for that.


To develop those skills now or in the future I will start with planning. I will take a course of action to improve on my weaknesses as stated under opportunities.

Time Frame:

It will not take me a whole lot of time to improve myself as I know what needs to be done, and I can start working towards my goals from now. Every position and job comes with certain responsibilities, and I believe training and cooperation with the organisation will help me expand my knowledge and make me a better person overall.


To measure my progress i will ask my Manager at my work place about my work and any improvements she has observed. I can also ask my co-workers if they have any ideas as to how I can perform better and keep everyone and myself happy


To develop my management goals I will read self-improvement book, do research on internet and take some help from my lecturers and friends.