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The aim of this chapter is to provide the brief overview of management, leadership and the differences between leadership and management. How these concepts work in any organisation and to elaborate the notion transformational leadership? This objective of this chapter is to focus on business leadership rather than a political leadership, military leadership and religious leadership and illustrate exhaustive treatment of this topic.
2.2 The Differences between Leadership and Management
In 1980, the organisational leadership has no difference between the leading and managing any organisation. Any person who has leading post in an organisation is a leader. A person who holds power and authority is a leader. It was different and novel idea that leadership and management have different approaches and different role, behaviour and responsibilities (Hernez-Broome and Hughes, 2007). There are many literatures those differentiate between leadership and management but they don’t give you any clear understanding e.g. Bartol and Martin (1994), Bennis and Nanus (1985), Kotter (1982), Locke (1991), and Schein (1985) were those unable to draw a clear understand between leadership and management. They even did not provide any clear distinction between these concepts. There is no particular line of differentiate (Centre for Labour Market studies) (CLMS), 2009. Management is consisting of planning, organising, staffing, budgeting, co-ordinating and reporting and directing and known as an acronym POSDCORB (CLMS) 2009. All these heads come under management.
However, management classifies as scientific concept. It is also argued that management is an art to thing get done through people. These are the priorities of the management to do all things in time efficiently. If we see in the above mentioned perspective management is about guiding, instructing, influencing, persuading and other skills related to the behavioural skill through different processes.
Pedler et al. (1994), and Quinn et al. (1996), suggest that the nature of work is complex in the modern global environment and it is hard to have rare qualities of self awareness, self motivation and self knowledge, but it is important to have all these qualities for better and reliable management. These qualities nourish the management. These are the qualities which persuade the employees to the better work environment and can make organisation profitable.
In addition, Quinn (1996) link modern management role with: develop the skills and abilities in subordinates of vision, creative thinking and positive change in the organisation. These also make subordinates innovative and knowledge sharing individuals, not just this many other positive changes as well.
Leadership is also difficult to define; it is not easy to give assumption or qualities which can anyone leader. Because leadership qualities vary according to the situation there is not fixed or planned situation for any person where he can show his leadership qualities that is why definition varies and depending upon the purpose of the author, as Stogdill(cites in Yukl, pp 251-289) observed “there are almost many definitions of leadership as there are persons who have attempted to define the concept”. There many concepts but three concept to be consider the fundamental concepts of leaderships are vision, inspiration and followers. But these concepts are the outside the boundary of the management. Management does not match these concepts (Burmeister, 2003). On the basis of these concepts we might be able to differentiate between leadership and management.
Yukl (2008) attempts to justify and clarify the leader’s role in an organisation and explaining the persuasive vision is tough at his best and leader does not lend itself to the management process. He makes and implements policies for the management to achieve the quantitative objective. Management does have the mission for the organization but does not have the dynamic vision which leader has. Leaders think beyond the boundary and their visions are impressive and more grip able. May be is not compelling argument that managers are unab;le to communicate or they think in a specified frame of mind.
Maccoby (2000) described an interesting and useful factor which is helpful to differentiate between leaders and managers this point highlighted the difference between strategic leaders and operational leaders. He argued that the strategic leaders dream of the company in future and make the optimal use of all resources to get maximum output, while the role of the operational leaders to implement the vision. This might be the good categorisation to understand the difference between leadership and management.
Regarding inspiration, Yukl (1998) stated that such this approach appeal to stimulus and linking to a person’s proposal to understand the needs, values, hopes and ides of individual. According to Burmeister (2003) this type of approach is very different from the standard approaches like orders, logical arguments and other approaches which most of the mangers use. On the other hand, we can say that managers are unable to use their interpersonal skills; they can influence people to do any actions. So we can say most of the managers follow directive approach rather than the participative approach.
Durcan and Kirbbride (1994) in the direct contrast suggestions that participative approach is mostly and widely practised, especially in US and other Anglo nations2, there are challenges to this notion that manager can be stereotype as directive and order givers. Even in Yukl’s (1998) managers are unable to influence on emotional level ‘inspirational motivation’ (Bass 1995) is main objective of a leader. All these ideas tell us that leaders do not employ rational logic as a primary stimulus tool.
This is the most crucial distinction which can be made between followers and subordinates. Subordinates are bound to follow the instructions but the followers are the influenced and inspired individuals. The term subordinates is used to determine the activities of a individual, who is directed by a supervisor (Bermiester 2003)
2 Anglo cultures include the U.K, Canada, Australia, and New Zealand (Hofstede, 1980)
Yukl (1981) emphasize that leadership is a process whereby intentional influence (power) put on the followers by leaders; so the source to influence others will be discussed in chapter after.
The Use of Power and Influence Subordinates and Followers
The power and influence which leader use on their followers and manager use on their subordinates? French and Raven’s (Gerloff, 1985) to list the following five point which can draw the power and influence on others.
Coercive Power: This power comes from the reaction. If you are expecting something else and you get unrespectable or you can say your power to punish someone.
Legitimate Power: Legitimate power comes from your rank or designation which you have. As big your position in any organisation same bigger would be your legitimate power. As power increase your responsibilities increase as well.
Referent Power: This power you have if you are the boss or your personality is charismatic. This based on person’s attractiveness and friendship with others.
Reward Power: This power based on access to reward. People love that person how has this power because they want reward and power holder can offer this.
Expert Power: This power comes from your knowledge, expertise, competence and information in particular field. Other people know that you have this power and they believe the power holders knowledge.
Abstractly, the authority give an individual a power in any organisation called legitimate power; this power uses to control all the matter which needs to be solved from subordinates on a workplace. Legitimate power which establishes the relationship between the supervisor to subordinate and these ideas can easily clarify the difference between leader and manager. Furthermore, the legitimate power holder has also the reward and coercive power which is given by the organisation. (Bermiester, 2003).
On the other hand, expert and referent powers are the ability of an individual’s expertise, knowledge and their relations which he has with other individuals. He built all these quality by his own effort rather than he had any position in any organisation (David, Schoorman, and Donaldson 1997). Burmeister (2003) argues that the expert and referent power can create the relationship of follower to leader this relation would be based on acceptance and commitment, rather than a relation in legitimate power of a supervisor and subordinate where problems and resistance occur.
It is also suggested that leadership conferred on person or a group or possibly a person of group. Therefore, leadership can be exercised on group of people which may not have the quality of a leader. This effort may be able to generate the leaders as a particular field of business. Furthermore, the vision, inspiration, follower, and some authors included ‘goals’ are those qualities which leader should have. As Shackleton’s described in his definition;
“…….leadership is a process in which an individual influences other group members towards the attainment of group or organisational goals.”
In this definition, three main component pointed out which Shacklton believes are the main and fundamental to leadership; existence of group, influence, goals, and set of goals which should be achieved under through proper channel. Other writer like Bartol and Martin (1994) define that how the leader influences the work of people to get the organisational goals. it is also noted that leader of any organisation influence the worker of organisation positively towards the achievement of goals banefully. There is possibility that leader can influence the people negatively which can be inappropriate toward the goal achievements. Sometimes they influence negatively to get achieve their personal goals which is totally unethical. In these words it is been tried to discuss the positive factors of leadership, controversial issues, and also tried to discuss the ethical problems also which can be faced. These are some issues which can be faced by any organisation from their leadership and there is a need to address all these issues.
2.2.4 Summary of Debate
Even though many writers used the term ‘leader’ and manger exchange ably (CLMS 1999), Shackleton (1995) argued there is no automatic link between these terms leader and manager because the managerial core function are planning, organising, scheduling, etc but these will not necessarily be the part of leadership qualities (CLMS, 1999). Other writers like Lcoke (1991), and Yukl (1998), suggests that leaders leader are those who make the vision for any organisation and the managers are those who implement that vision.
However, this implies that leaders is not common it only exists only at the executive level and assumes a limited range process or role derives for mangers none of these theories, methods and concepts is helpful by the preceding decisions and analysis, Bennis and Nanus (cited in Shackleton, 1995:4) provide the neat distinction and leadership is ‘path finding’ and ‘doing the right things’ while management is ‘path following’ and ‘doing things right’, but Maccoby (200) described a more useful difference between management and leadership which clarify the difference; he stated:
“Management is a function that must be exercised in any business, whereas leadership is a relationship between leader and led that can energise an organisation”.
2.3 Transactional and Transformational Leadership
Schein (1985) argued that a function of leadership which is major factor to contrast from management, it is creation of management and innovation and many dynamic organisational changes and dynamic organisational culture which accept every change. The main role of a leader is a ‘change agent’ which is responsible for creation and the management of vision, and motivates the employees towards the organisational goals achievement. If we say this could be most important quality which a leader should have that is ‘vision? This is most important theory of Leadership and which are overall known as ‘New Leadership’ (Gronn 1995).
Charismatic Leadership (Conger, 1989, Conger and Kanungo, 1988),
Visionary Leadership (Sashkin, 1998)
Servant Leadership (Greenleaf, 1977, 1996; Spears, 1998), and
Transformational Leadership (Bass, 1985, Tichy and Devanna 1986)
Transactional leadership is the major and vital factor which develops has scholarly quality in the leadership (Bryman 1992). To understand this concept more properly we would discuss transactional and transformational leadership in depth in following section.
The historian James MacGregor Burns (1978) mentioned first time in his book ‘Leadership’ the concepts and theories of transactional and transformational leadership (Humphreys and Einstein 2003), initially, his interest was preliminary political leadership, this term got popularity in political authorities and organisational management circles. Bernard Bass (1985) Burns explained the broader range of transactional and transformational leadership and furthers their behaviour towards organisation and the effectiveness of behaviour.
In addition, Bass (1985) was not satisfied with Burns model and he challenged the model, he made assumption that transactional and transformational leader were mutually exclusive. While, Burn (1978) said that a leader could be once either transactional or transformational. But Bass (1985) argued that transformational leadership is a complement to the transactional leadership rather than a substitute. How does leader use these qualities and take out the organisation beyond the boundaries.
2.3.2 Transactional Leadership
Transactional leader works under a specified environment and there is proper and clear structure of work and it also clear what is does he expect from their subordinates. What would be exchange between them and what reward they will be awarded? The initial stage of transactional leader is to discuss all the related matter with subordinates which need to be discusses before to start any work. Transactional leader allocates the work to the relevant person after that they are responsible to get the things done in time. Transactional leader’s main responsibilities are the things get done in time, fulfilment of every requirement, any advancement if required and the reward to encourage people. You can ideally, these is decision between leader and follower that are u want reward or punishment (Bass, 1985; Daft, 1999).
Even though, the transactional leadership is an effective approach. There is no emotional relationship between the leader and followers and also no commitment, no personal development not any other social relation (Podsakoff at el 2003). There is a transactional relation between the leader and follower. The person who holds the power gives orders to their employees or followers to get things done. So we can say simply the main focus of transactional leadership is get thing done.
In addition, Bass (1990) also warned that the transformational leadership can be a ‘prescription for mediocrity’. He also defends that leadership emphasise on massive output and to reduce the shortfalls and they mostly relies on passive management. The performance and the efficiency of the transactional leadership governed that how they are controlling the rewards and penalties, because these are main objectives of a leader. We can also notice that the followers want rewards or they have any kind of penalty fear. Yukl (1989) also argue that when any leader manipulates their followers through reward and punishment, he is not a leader in real sense.
In the above mentioned scenario, when a leader uses legitimate, reward and coercive power to handle their followers, it is look more common to the management rather than the leadership. Apparently, there is not a major difference between leadership and management.
2.3.3 Transformational Leadership
On the other hand, Burns (1978) argued that the transformational leaders have different types of relation, duties and objective according to diverse environment but the political leaders, they engage with their followers through their involvement, emotions, trust, commitments and their identifications. Bass (1985) elaborate that, in the organisation the transformational leadership occurs when the leader’s mission, vision and the development ideas matches with the followers for the boom of any organisation and also provide resources for the personal development as well (Bass 1985, Avolio 1994).
Transformational leadership is a method or process where the both followers and leaders move their self towards the process of development with the standard level of trust and motivation. In Transformation leadership the relation is based on fairness, justice innovation, motivation, equality and integrity and Burns (1978) called them end values. End values are those which cannot be negotiate and exchange between leader and followers on transactional basis. This shows that transformational leaders most commonly work for social and ethical manners. The transformational leaders do not manipulate results through deception and conditional reinforcement (Bass 1997). The followers response totally in free given environment and do not want any return in transactional leadership (Mullin, 1992).
After expressing all these standards, the transactional leader unites their followers and the most important they can potentially change the goals, objectives and beliefs of their followers (Humphreys and Einstein, 2003). Bass (1995) asserts that transformational leadership, followers work beyond exception because of the leader’s influence. According to Bass (1985), transactional leaders achieve all this by using the combination of behaviour, which are known as the four I’s of the transformational leadership (Avolio et al, 1991)
Idealised Influence (Charisma)
Intellectual Simulation; and
Charisma seems to be a necessary element but it is not enough for the transformational leadership. Attaining the Charisma in the eyes of followers is considered as “central to succeeding as a transformational leader” (Bass 1990). The behaviours which are linked with the charismatic leadership need to be explained more detail now. Especially, House and Shamir (1993) argued in charismatic leadership there is degree of confidence and articulation. In this way leaders work through high admirable, ideological, classical moral values and communication and high performance. They keep followers in a systematic and highly manageable relation. They linked in a very persuasive and less stress able environment. They also guide to followers towards denigrate their opponents (e.g. competitors). The leader has very clear set of goals for their followers to become a role model (Gardner and Avolio, 1998). Emphasising value and collective identification, taking extraordinary risks, and making substantial personal sacrifices in the interest of the charismatic mission are also behaviours associated with charismatic leadership (House and Shamir, 1993).
For the growth of any business we need inspired and motivated work force. Inspiration is associated with charismatic leaders; these leaders are able to excite their followers and can carry out great feats with extra efforts (Bass, 1990). There are some qualities which a inspirational leader should have to inspire any workforce, these qualities can be strong planner, lateral thinker, grip on vision and communication, principled and disciplined.
Although inspirational leadership was initially subsumed by charisma (Bass, 1985). It is been separated there should be higher level of motivation among followers which occurs in the start from charismatic leadership, before being combined again from the charismatic-inspirational dimension (Avolio, 1994, Bass, 1998).
Therefore, it is observed that charisma is necessary and major quality of inspirational leadership. But on other hand, Bass (1990) also discussed that some leaders may have charisma but they do not have inspirational quality to affect their followers. Charisma is necessary but not sufficient for the transformational leadership.
Collins (2001) in his book ‘Good to Great’ discussed about the successful executive (level 5) leaders, they were those who were modest and humble, without ‘inspiring personalities’. However, Collin recognises that these leaders had ‘inspired standards’. These standards with goals, objectives, trust that influence the followers through high performance, took risk which considered being extraordinary and this sacrifice made organisation exceptional. There is a possibility that the |Collins leader may not have the quality of persuasive communication, nevertheless they can possess the charismatic qualities.
According to Tichy and Ullrich (1984) the transformational leader are who can convert a bankrupt company to profitable company. Transformational leaders are those who can bring any positive change in the organisation.
As many other things are linked with transformational leader same as intellectual simulation, Bass (1985) considered this as the third factor of which is associated with transformational leadership by the promotion of intelligence, rationality, logical thinking and careful problem solving. A leader which is equipped with the quality of intellectual simulation has capability to show their follower the new way for the problem’s solution and would involve followers in problem solving (Avolio et al, 1988). Bass (1990) also believe that such type of leaders are tolerant and for the followers mistake and open new ideas for them.
Bass (1985) the fourth dimension or factor of a transactional leader is individualised consideration. This identifies the role of a leader the role which a transformational leader plays for the developing followers, pay full attention to their needs towards their achievement and benefits. A transformational leaders struggle hard to create new opportunities for their developing followers and act as a coach and mentor for the development of an individual (Bass 1990). Under this dimension, Boehnke et al. (2003) emphasise the importance of entrust challenging and interesting tasks to followers to promote them and their development as well. Kuhnert (1994) further added that delegating authority is a necessary component when delegating tasks, it is a way to enable individuals to get educated from the decision making process.
Collins (2001) also suggested that the real effective leaders who pay particular attention to the development of their followers as a necessary requirement for supporting continued organisational success after they leave. Regarding these last two aspects of transformational leadership, Bass concurs that intellectual stimulation and individualised consideration are not entirely charismatic in nature (Smith et al. 2004).
In recent times, there has been interest in the concept of ’emotional intelligence’ (Goleman, 1995), and how it links to transformational leadership. This topic is explored in the following section.
2.3.4 Transformational Leadership and Emotional Leadership
Goleman (1998) has strongly argued that is a requirement for the successful leadership and goes so far as to describe emotional intelligence as the ‘sine qua non’ of leadership. Goleman’s (1998) components of emotional intelligence at work at work’ are described in table 2.1 on the following page.
Table 2.1: The five Components of Emotional Intelligence at Work
The ability to recognise and understand owns moods, emotions, and drivers, as well as their effect on others.
Self-confidence. Realistic self assessment. Self-deprecating sense of humour
The ability to control or redirect disruptive impulses and moods. The propensity to suspend judgement to think before acting.
Trustworthiness and integrity. Comfort with ambiguity. Openness to change.
A passion to work for reason that goes beyond money or status. A propensity to pursue goals with energy and persistence.
Strong drives to achieve. Optimism even in the face of failure. Organisational commitment.
The ability to understand the emotional makeup of other people. Skill in treating people according to their emotional reactions.
Expertise in building and retaining talent. Cross-cultural sensitivity. Service to client and customers.
Proficiency in managing relationships and building networks. An ability to find common ground and build rapport.
Effectiveness in leading change. Persuasiveness. Expertise in building and leading teams.
(Source: Goleman, 1998)
Barling et al. (2002) declare that there are many reasons why individuals high in emotional intelligence and they are more likely to use transformational leadership behaviour. The main and first step a leader who has ability to manage their own emotions and who shows self control and hold-up enjoyment which could serve as a role model for the followers. In that way, enhancing followers belief and respect their leader; this would be dependable with the spirit of idealised influence (Barling et al., 2000).
Secondly, it focuses on the understanding ok others emotions, leaders with high emotions intelligence would preferably placed to realise the extent to which follower’s expectations raised, that is major feature of inspirational motivation (Barling et al., 2000). Third and major element of individualises consideration is the quality to understand follower’s needs and cooperate accordingly.
To put more focus on empathy and ability to manage relationships positively, leaders are apparent towards emotional intelligence and they would likely to apparent individualised consideration (Barling et al., 2000). Barling et al. (2000) were able to provide experimental good reason for this position. And this was further imposed by Palmer’s (2001) research which have found similar correlation,
2.3.5 Transformational Leadership: Controversial Issues
It is proven that charisma is regarded as a necessary quality for transformational leadership to occur, this implies that Bass’s third and fourth dimensions are not transformational in and of themselves, by his own definition. Some other questions which comes in existence when charismatic dimension analysed closely. For instance, because charisma is not an only the characteristic of transformational leaders but this is an additional factor which distinguish leaders from managers (Zaleznik, 1977), then there is possibility exists that the transformational and transactional typology communicate to nothing more than the distinction between work leaders and managers (Gronn, 1995).
Furthermore, to the core build of the transformational leadership model, Gronn (1995) and other observer, like as Keeley (1995), and Lakomski (1995), have putted in to question its legitimacy, ethical applicability and experimental toughness.
In terms of legitimacy of transformational leadership concept, Gronn (1995) emphasize that the transformational leader model described by Bass and his believers revive that leader is a type of ‘hero’ or a great leader. He assert that these is no more than a “tenuous casual connection between the exercise of a transformational leadership and desired organisational outcomes, such as performance effectiveness”, and claims that what little empirical evidence exists derives from an “extraordinary narrow methodological base” (Gronn, 1995)
2.4 Development of Leadership in the Global Business Priority
In the contribution of the 1996 collection of paper on leadership; “the Leader of the Future”, Bolt remarks; at the same time leadership is very vital for any organisation and there is no one to lead the organization because of the shortage of leadership. Drucker States: “the lessons are unambiguous. The first is that there may be ‘born leader, but there are surely too few to depend on them.
To support this argument, approximately 75 percent (500) firms Gregersen et al. (1998) surveyed and did not think that they have an enough number of effective leaders (see also Brake, 1997). If we consult from DDI Leadership Forecast 2008/2009 than we can understand how much improvement is needed to develop the leadership in any organisation? The research shows that from 76 countries of the world 1,493 HR professional and 12,208 leaders participated in this survey. This summary shows us the short fall of leaders all over the world. The DDI Leadership forecast also shows that only 41 percent leaders are agree that the organisations are helping them to enhance leadership capabilities. Most of the organisation have been failed to provide chance to improve.
Harvey et al, (1999) argued that there would be great competition for competent leadership in organisations in future, and this position is reinforced by the DDI leadership forecast 2008/2009. The leadership forecast indicated that the qualified leadership is becoming more and more difficult day by day.
Iles (2001) sees improvement in the three major fields which need the Leadership improvement in the organisation.
The increasing importance of HRM
The increasing importance of knowledge and knowledge management.
Changes in careers and career development.
2.4.1 The Increasing Importance of HRM
The HRM is mostly view on the basis of competitive advantage basis Storey (1989) specifically focused on the gaining of employee’s commitment. He stated that the main factors of HRM (the deployment of human resources, evaluation of performance and reward etc.) as we discussed the earlier the legitimate, reward, coercive power to obtain compliance were mentioned are management techniques and these are the characteristics of transactional leadership. On the other hand, it was also argued that the expert and referent power could leader and follower relationship.
Firms are using commitment oriented practice to gain competitive advantages, which further described how the attention of people is led (Iles, 2001). This shows that modern leadership competencies based on the more likely on the interaction (to gain commitment) rather than commanding and controlling (to gain compliance) (McGregor et al, 2004), and to implement transformational leadership rather than transactional leadership in the organisation.
Stoery’s (1989) described the types of HRM as ‘hard’ and ‘soft’. These approaches linked with transactional and transformational styles of leadership. HRM which comes under the ‘hard’ types of HRM mostly focus on the specific defined policies and procedure. These policies are cost effectiveness, lean production and use of labour. Legge (1995) called this a ‘utilitarian instrumentalism’ in the relationship with employees. Transactional leadership considered as a utilitarian in nature and ‘hard’ HRM practises associated with the transactional leadership (Bass, 1990).
Conversely, the ‘soft’ HRM is considered as ‘development humanism’ (Legge, 1995) in this approach individuals integrated into work processes under such values trust, commitments and to communicate with each other. Therefore, the transactional le
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