Review Of Modern Theory Of Leadership Management Essay

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The objective of this report is to make a review of modern theory of leadership and to identify the practicability of the transformational style of leadership in an organisation and there by evaluating the same qualities in the particular leader in the organisation. Several leadership theories were discussed with special focus given to transformational leadership theory which has gained large consideration in recent times. The review of literature explains the transformational leadership qualities and transformational style , identifying some critical themes on transformational leadership. These themes are then compared with a successful company which has succeeded by applying these themes and also themes are compared with a unsuccessfull company which has failed to apply these themes. Finally from the review of literature and themes derived a development plan is drafted to improve my leadership capabilities.

The review of literature is done through historic evaluation and thorough research made till date. In this report the methodology followed for the review of literature is deductive method and extensive research done by understanding number of business journals and articles through the digital library of University of Bedfordshire. The company's information has been taken from their website. Personality test and leadership test has been taken through online to evaluate my leadership qualities, and all are checked for genuine contents and information and properly referenced in the referencing section.


According to Nicholas and Ghobadian leadership is " the process of transforming organisations from what they are to what the leader would have them come" (Nicholas and Ghobadian, 2004). In today's environment for any business there is a need of qualified individuals possessing the qualities of leader, more than a supervisor, taking charge of the groups or organisation.

A review of leadership literature discloses that the early theories were focussing on the behaviour and quality of leaders on contrast to the later theories which is focussed on the contextual nature of leadership and role of followers. Based on the behavioural patterns of particular leader leadership can be categorised as - Transformational and charismatic leadership as compared to the classical study of transactional leadership.

In the current trend, there is an increasing interest in Transformational leadership. There is also a concern about the progress of delegating power and about the follower's responsibility. In the following section we will discuss about different leadership styles and focus on the very demanding leadership style with individualistic views of the successful leaders with a great importance to the development of the management and leadership standards.

The report is divided into different sections, section I discusses different types of leadership styles and focusing mainly on one particular style which admired me is transformational leadership style, themes are drawn from the review of literature on theory of transformational leadership. This review of literature is done by extensive research on journals and articles not later than 2000.

Section II speaks about evaluating and analysing the themes that are derived from the review of literature and applying these themes to two chosen companies, the first company is a successful company and applies the themes in the organisation where as the second company is a unsuccessful company with absence of the same themes with that of the first company. To further intensify the discussion, the themes are evaluated to identify the role of leadership towards the progress of the company

The last section, Section III deals with analysing and evaluating my leadership qualities and personal traits by using some of the online psychometric tests and analysing my leadership qualities and behavioural pattern with the derived themes and finally a development plan is drafted.



Leadership styles can be broadly divided into four categories depending mainly on the behaviour of a leader and also on his past experience and his approach with a particular issue.

They are

Transactional leadership

Directive leadership

Empowering leadership

Transformational leadership


Transactional leadership style is considered as a more traditional style of leadership, was created in line with House's path goal theory ( 1971 ), Vroom's Expectancy theory ( 1964 ) and further developments were made by Adams ( 1963 ), from Equity theory and Luthans and Kreitner (1985). According to transactional theory employees engaged in a task are encouraged by monetary benefits, transactional leader mainly uses this monetary behavioural tools and exchange monetary rewards for the work that is done by the employees. Transactional leadership style of leadership contains no emotions , no affective experiences (Glaso,2006) , no symbolism, no so much encouragement for independent thinking. Transformational leadership focuses mainly on establishing goals and getting feedback. Transformational leaders have a good communicating power and they pass the goals and objectives of the organisation to achieve the desired outcomes.

According to Berry and Coad (1998) transactional leaders follow the behavioural pattern called as Management by Exception, where the leader wants his sub ordinate to fulfil his duties to their standards and expect their sub-ordinates to be trust worthy.

Transactional leaders are the leaders who never think differently or innovatively and do not like a change in their work atmosphere and would always wish to stick to the old and comfortable atmosphere. Transactional leader's only style to motivate employees is by offering their employees with material rewards like some of the rewards include bonuses, and other benefits, says Berry and Coad ( 1998 ) .


Burns (1978) developed Transformational leadership from the principles of charismatic leadership. Transformational leadership was developed from Webers (1924, 1946 and 1947) master piece called Charisma of sociology. The principles of Transformation leadership and Charismatic leadership are parallel to each other. Transformational leadership focuses mainly on behaviour patterns and traits of the leader with their employees. Transformational leadership was further researched by House et al (1993 ). Further to this, Transformational leadership is often described a specific kind of Charismatic Leadership theory but some researchers treat it like a quite different style and could not be compared or assigned to any other style of leadership.

After burns many researchers like Bass ( 1985 ), Hatter ( 1988 ), Yammarino ( 1990 ) & Avolio et al.., (1999) developed this theory further, according to them transformational leaders strive to bring in an essential and intrinsic change and try to change their employees or subordinates by impressing them with their behaviour, enhancing their morale to a elevated level there by raising standards and extending their capabilities beyond the expectation, transformational leaders strives for attaining self-actualisation (Maslow's Theory ,1954) and follower's self- actualisation.

Transformational and charismatic leadership has gained a large consideration in recent years, both the styles have similar verbalization of vision and ingredients of representation.


According to Raven and French (1959) Directive leadership is a style of leadership that comes from a particular position the leader, which is a legitimate and legal one, on contrast to this style is also influenced from illegal one taken forcefully from others. Directive leadership style was developed from McGregor's X management style and initially structured by Fleishman ( 1953 ) and this pattern of behaviour was similar with task oriented studies by Katz et al.,(1950) further to this Arvey and Ivancevitch (1980) studied about the rewards and punishment.


Empowering leadership was developed by Arnkoff and Mahoney (1980) from Clinical Psychology and it was Sims and Manz (1980) who developed Empowering Leadership further. Empowering leadership mainly focuses on development plan on self-leadership and self-management to become an ambitious leader.

Moreover , it reiterates on motivating employees to achieve the goals, encourage the followers to develop individual behaviours, motivating the employees by other than monetary benefits, engrafting disciplinary actions to employees who doesn't follow instructions and finally take the pride and ingeminate the expected outcome.


This report mainly focuses on theory of transformational leadership, the reason is transformational leadership style is very successful in recent times in many organisations around the world. Bass( 1985 ) suggests , transformational leadership is an act to promote and create interest of the employee in bringing in benefit to the firm, to create knowledge and getting acceptance of the group's target and to motivate the employees to perform ahead of their self-interest. Bontis, Distefano and Boehnke ()explains transformational leadership pattern as stimulating, training, inspiring, and team-building.

Transformational leadership is been followed by many organisations and also proved to be a successful leadership style in many organisations. There are various evidence for the success and positive outcome of the transformational leadership, later part of this report describes the positive outcome of the transformational leadership in an organisation. The research methodology used in this report is deductive method.

Macgregor Burns ( 1978 ) proposed transformational leadership , at first this particular style of leadership was only used in politics but later on with certain changes in the transformational theory it is also been used in the organisations. According to burns( 1978 ) this style of leadership significantly deals with the organisational ethics and the organisational values.

Burns reflects transformational leadership is the phenomenon where the leaders and the followers move ahead to a comparatively higher level of motivation and morale by helping each other. In his literature Burns discusses about the difference between the management and leadership, explained the difference in their characteristics and behavioural pattern. Burns explains that there are two main constituents in the leadership concept - Transformational leadership and Transactional leadership. Transformational leadership enhances the performance of the employee and the organisation as well. Burns has a strong belief that Transformational style of leadership would remodel the opinions of organisational structure and culture and will strive to bring in an essential difference in employee's life by enhancing the standards of thinking and their expectations. Thus transformational leadership brings higher level of commitments from the employee. The second element transactional leadership only focuses on the work and motivates the employee towards work through monetary benefits.

Avolio, Einstein & Waldman (1998) explains that, transformational leadership can bring transformational change by the leader's impressive capabilities. The followers or employees of a transformational leader feels secured and properly taken care of their personal and official needs and get their requirements fulfilled , and well respected by the management , and also feel that the leader will create better work conditions. Under such environment, employees would feel good and also makes the work atmosphere more enjoyable, in turn the employees work with extra effort and perform beyond their capabilities. The employees will become more responsible and thus the outputs would be more than the expected one.

There are four elements of Transformational leadership. They are

Charisma/ idealised Influence

Inspirational Motivation

Intellectual Simulation

Individual Consideration.

The Above elements are called as 4 I's of transformational style of leadership and let us see each ' I' briefly,

Charisma/Idealised Influence: Avolio ( 1998) argues that transformational leaders are gifted ones having a characteristic capability to impress others with their Charisma in an organisation and in public. With their Charisma transformational leaders can get the trust and confidence of their employees and followers. This Charisma impregnates a feeling of trust and dedication towards the work and further to this a well-defined goal sets the mission of the organisation, with a well-defined road map that guides them. According to Bass (1985) transformational leaders communicate with their followers in a very transparent fashion and avoid any conservative rules and restrictions keeping away the traditional approaches which can prevent any hindrances in the system or the organisation.

Intellectual simulation: Transformational leaders expect their followers to think in an innovative way even to a traditional issue in the organisation. Barling and Kelloway (2000) said, transformational leaders utilize their intellectual simulation in changing their followers and sub ordinates to act innovatively and creatively in solving a work related problems. According to Dudinsky et al., (1995) They encourage to achieve their motives and stimulate their thought process and tries to correct the shortcomings by providing proper technical support that is required for upgrading the skills of the employees and provide proper training so that the employees can benefit the organisation in its progress and for their self- progress as well.

Individual Consideration: According to Kim et al.., (1994) transformational leaders show empathy towards individual followers there by making the followers more committed and become more loyal to their leaders. According to transformational leaders each and every individual contribute to the success and in bringing in an essential change in an system so Transformational leaders focuses mainly in fulfilling the requirements of the employees and provide them proper training and self-developed plans to transform the employee to a responsible and dedicated employee. Transformational leaders motivate their followers to train in the recent techniques and advanced methods at par with the industry standards thus contributing to the progress and success of the organisation.

Inspirational motivation; Transformational leaders strives to encourage their followers about the idealistic organisation, with an realistic and achievable goal, which has high standards and accepted by every member of the group and done based on inspirational persuasion and inspirational motivational abilities. Dudinsky et al..,(1995) and Sarros and Santora (2001) says transformational leaders inspire their followers with the leader's behaviour and drive them to go beyond the target set by the organisation, with the sense of self-determination and having strong commitment to attain the objective and the different goals of the organisation based on futuristic ideal, they desire for.

To summarise the above four elements, the four I's a transformational leader is who acts as a good confident team member, a efficient leader, a powerful facilitator, and a knowledgeable teacher says Kelloway and Braling ( 2000 ). Avolio & Bass ( 1997 ) researched more and developed a multi-dimensional questionnaire , MLQ for identifying the above four aspects of leadership qualities. These developments were further supported by Bycio (1995), Den Hartog, and Jung (1999).House et al.., (1997) was successful in proving the developments of Bass (1997), and proving the four aspects of transformational leader in different cultural backgrounds.


According to Conger and Kanungo (1998) empowerment is a good practice to enhance the trust and dedication of the employee which effectively increases the efficiency and the performance of the employee. According to London (1993 p.57) empowerment is the authority given to the employee in terms of taking independent decisions in the issues that is related to the work. Thomas and Velthouse argued that empowerment has a positive conceptual influence and brings in positive effect to the organisation. A conservative and restricted work environment could make the employees ineffective, subdued, powerless, with a passive mind which directly affects the work output of the employee. Recent concepts in leadership argues to remove the old work rules and enable the employee to perform his duties independently executing his innovative and creative thoughts which will motivate him/her intrinsically and there by provides expected performance.

Transformational leader remodel the work environment and transforms it to be a participative one where the employees can participate very freely and hence become responsible and dedicated , eventually gains the authority to lead and handle groups and thus engaging them in taking forward the leader's vision and leader's mission of the futuristic organisation. According to scholar Eden (1992) transformational leaders are able to communicate the goals and views to the subordinates and commit them with their responsibilities, thus the employees accepts the responsibilities and change their behaviour likewise to achieve the goal of the organisation with enhanced commitment, confidence and enhanced with the including the employment help.


According to Bass (1995) the relationship between collective efficacy and transformational leadership is measured by the work outcome which is divided into three parameters they are performance towards job, commitment towards the organisation and job satisfaction. These relationships were further researched by Allen (1995), Bycio Streers (1995) confirmed the same through Meta analytic review. Transformational leaders influence the individual employee's interest into group interest and direct them towards organisational objectives. These leaders motivate the employees to think creatively and encourage them to create innovative approach towards a problem, influence the employees to entrust their responsibilities there by creating excellent results, enhanced job satisfaction, and enhanced commitment towards the organisation.

According to the social identity theory developed by Pratt (1998), an individual belief about the organisation is self - assumed, self-portrayed or self-made. The main objective of the transformational leader is to align this individual belief with the organisational objectives and organizational belief and the group with the mission. According to Kark & Shamir (2002) Since the group mission is self-assumed the employees would react accordingly. Transformational leaders influence the followers by elevating the commitments and contributions of the objective of the group and thereby motivating the employees to identify their self -belief and the group as well. The alignment of the employees self-belief with the group can be used to enhance the collective efficiency of the group says Kark & Shamir (2002). Individual consideration can enhance the employees efficiency and abilities which in turn can enhance the performance of the employee beyond the expected one says Athur, Shamir and House ( 1993 )


Johnson ( 2002), Wysocki and Kepner (2002) argues that this type of leaders have all the chance to misuse the authority and power gained by them, this misusing behaviour has been studied by Bass (1997) and he suggested that by elevating the position of self at the cost of the committed and trusted employees can have negative effects on the work environment. This behaviour of the transformational leader can affect the shared decision of the organisation which has an adverse effect on the equal opportunity, depleting the fair practises, willingness and commitment of the employees in the organisation.

According to Bass (1995), on a long run, this particular behaviour of the transformational leader can cause imbalance in his/her behaviour , and further results in dictatorship and domination towards the employees which can result in majority dominating and controlling the minority group in the organisation.

According to Bass ( 1995 ), transformational leaders tries to promote the employees of the organisation to keep the organisation's interest rather than keeping their own interest. Thus the leader might involve in emotional blackmail with the employee in the alignment of his/her sinful means, but keeping the organisation's interest in front than their self- interest there by achieving excellence. To summarise, the employees in the organisation could be exploited by transformational leaders if there are is an absence of supervision for the behaviour and actions of these leaders.


After a thorough research on transformational leadership, criticism of transformational leadership and empowerment of the transformational leadership we can arrive at the following themes.

Theme 1; Transformational leadership has four components, the four I's with which they can enhance the motivation level of the employees, design a healthy environment, make the work environment an enjoyable one and train the employees to evolve as a future leader.

Theme 2; Transformational leaders are capable of bringing a radical change in the organisation and act as link between team efficiency and work outcomes in the organisation.

Theme 3; Empowerment can make an employee more innovative and productive there by increasing the performance of self and the organisation as well.


This section deals with two companies, the first company is Wipro Technologies limited which applies the above derived themes in the organisation and is a successful company. The second company is Four Square Limited in which the above themes are absent and is an unsuccessful company.


Wipro is the leading service provider around the world with over 80,000 efficient employees with more than 300 satisfied customers across the world. In 1966, after the death of his father Azim Premji took over the position as Chairperson of Wipro, and transformed the company from cooking fats company to a leading service provider and with a net value of two million dollars. In 1980 Wipro started its business in developing software and in developing customised software.

Wipro Strongly believes in Research and Development with more than 45 research centre and invests heavily in developing the same, with the help of which it projects the orientation of the organisation as the leading information technology outsourcing company in the world.

In 1977 Wipro started focusing in Information Technology (IT) and also started manufacturing standard computers and it was the first company to manufacture computers. After gaining the market knowledge in the field in 1980 Wipro decided to engage in software development with software products. After Azim Premji taking the position the company earned revenue of 650million dollars within a short period of time. Wipro stands in the top 50 companies in fortune 500 companies.



The vision of wipro is to become the leading provider in terms of Integrated business, process solution and technology across the world. Wipro proudly displays the certificate of CMMI level and it is the first organisation to get the same outside United States.


Mission of Wipro depends on providing quality service to its valuable customers and there by transforming their business with accurate insights.


Wipro as an organisation has always supported change and always welcomes creative and innovative ideas. With the help of its strong Research and development plant Wipro has retained its leading position in providing solution to its customers.


Wipro has strong leadership policies in controlling and managing its team and the structure of the programme follows a series of events which includes screening the qualities that is expected in Wipro and each employee has to prepare a personal development plan to elevate his position in the organisation, under the guidance of his/ her team leaders guidance.

The programme insists every employee to prepare and follow the development plan and to grow up in the career ladder along with the growth of the company. Wipro does not believe in motivating employees only by giving perks incentives and other monetary benefits but Wipro strongly believes in employee empowerment.


Wipro has a specific programme to execute the employee empowerment, Wipro Employees stock option plan and under which it also rewards the excellence of the employee. Under this scheme Wipro has clubbed the WESOP with the ESOP under which it is rewarding the permanent employees with a particular amount of equity shares.


Wipro strongly believes and follows employee empowerment which enhances the capabilities of the employee there by helping them to grow along with the company. Wipro has a strong policy in terms of training which helps the employee to sharpen and strengthen his skills and elevate his position. Wipro also encourages every employee to prepare and draft a road map which is self-designed to enhance their opportunities to grow inside the organisation and this programme is named as 'Wings Within'.

Further to empowerment of employee, the employees are well supported by the organisation in terms of culture, climate and personality traits. Climate, the work environment of the organisation, culture is very flexible as it has a variety of choice, personality traits- the employee has opportunity to expose his capabilities. To summarise all, the organisation has all the constituent to form a social-emotional system.

Applying the four I's of transformational theory to Wipro

Premji has created a creative and innovative environment and welcomes the innovative ideas of the employees.

Premji has created a people oriented environment keeping the motivational levels of employees high and wanted the environment to be conductive there by achieving the mission of the company.

The company was able to provide a stable balance with work and life by providing flexibility in working hours as well. The company managed to provide flexible working hours to accommodate the employee's needs. Wipro was awarded with Smart Work Place by the Economic times in the year 2008

Azim Premji was capable to lead the company from the ground level to one of the leading MNC by his strong optimistic ideas, entrepreneurial ability and innovative ideas.

There was always a priority given to employee empowerment with which the company has achieved this success.

The culture in the company strongly supports in motivating employees, Wipro has initiated a 360 degree system of appraisal and feedback system.

The company has maintained a strict code of ethics and an elevated level of code of conduct to maintain the spirit of Wipro and its core values.


Four square limited company deals with developing social networking website and also the software for mobile devices which can be used for sending texts and allows the user to utilize other application in the mobile.

The company was lacking certain important things which Wipro possess and four square limited do not possess. Four Square limited does not have psychological bonding with their employees and also lacks in employee empowerment.

There are no motivating factors in the company and also absence of the four 'I's .

The work environment in the company was not supportive for the employee to gain recognition in the organisation.

The company was greatly task oriented and least people oriented which is an area of concern.

There was an absence of code of conduct and corporate governance and there was a lack of transparency and leadership qualities.

Employee empowerment was not present in the organisation.

To conclude this part of the report, transformational leaders always strive to bring a essential change in the work environment and welcomes new creative ideas and innovate the industry with recent technologies. Transformational leaders believe in employee empowerment and the four 'I's of the transformational leadership theory and excel in their industry, this has been supported by Mr. Premji's leadership qualities in transforming a cooking fat company with a revenue of 105 million dollars to a world's leading software provider with 662 million dollars company in a short period.

Section III

Understanding the themes that is derived from section I and also understanding the practical viability and significance of transformational leadership from section II, I am drafting a self- development plan.


This part of the report reveals about my qualities both leadership and personal qualities., later I would compare the themes derived in the section 1 with these qualities and I would find out insufficiency or shortfall in my leadership style and personality with which finally, a self-development assessment plan is drafted.

Jung Typology Test





The preferences Strength %





According to the above test I am a

Moderately expressed Extravert person.

Distinctively expressed judging person.

Low expressed intuitive person.

Low expressed thinking personality.

T-P Leadership Results:

I have analysed my leadership quality by using T-P leadership questionnaire, online and the links are referenced below. The scoring of the test says my personality to be people oriented and not much of task oriented.

Task orientation - 12

People orientation - 16


In this part of the report I am going to discuss about my leadership qualities and my personality and then compare with the themes from the section I to improve my qualities and help me in developing myself as a Transformational leader.

I consider myself as an extrovert and the personality tests confirm the same and I take this as a constructive factor.

At times I estimate people wrongly and allocate more duties to incapable people to handle it. I need to develop my skill in judging people which is very critical in this environment.

According to the above psychometric tests I am a people oriented personality, have feelings and sympathy for indigents whereas my leadership quality indicates that me as a Task oriented person, thus this projects me as a combination of both the styles.

I need to improve my communication skills to become a good leader in my organisation. Because to be successful my innovative ideas has to be properly communicated to the middle as well as with the top management, and also my communication should be clear to my subordinates.

I possess good organisational skills which I have learnt from my personal and professional experience, things suggest that I have some Charismatic leadership qualities , I have a natural ability to influence and impress people and gain commitment and trust.

I possess some positive qualities such as discipline, cheerfulness, warmth, empathy and commitment towards work. All these qualities can help me in understanding people in my organisation and in turn help me in making me effective team player and also a powerful leader.

As the personality test suggests I am not a thinking person because of which I can fail in making my ideas less attractive.


Area of development

Action Plans


Need to communicate my ideas and plans in a structured and professional way

To attend Communication Programs

Creativity and Innovation

To attend creativity workshops and also to follow Dr. Pauline Loewenberger's suggestions on being creative and innovative.

To rehearse plans and ideas prior to implementation


To interact with people and understand their capabilities before allocating duties to them so that over estimation of people is avoided.

Qualities to retain



To be sensitive to others opinions ideas and feelings

To take second opinions from my colleagues

During the conflicts try to make environment even more healthy by creative felling

Friendly Nature

Towards colleagues try to be more friendly and Warm nature.

Organisational Capabilities

to influence people with my behaviour and discipline

To work as a team

To attend managerial workshop to developing organisational requirements


To Meditate and to focus more on the task, with a defined vision give power to focus and meditate on the task.

Accept tough task for healthy challenges.

Commitment towards


To be committed towards the work and avoid postponement of tasks.

To work harder towards the goal.

Dedication towards work

Maintaining the statistics and numbers

To utilise the opportunities consistently.


To pre plan everything so that last minute rush is avoided.

Before taking decision consider all issue and then rational judge any thing


To conclude this section of the report, this section has given me an opportunity to retrospect my strength and weakness and to identify my current position in terms of leading a group or team. I have identified my strengths and weakness in terms of my behavioural pattern and also drafted a personal development plan to which helps me to enhance my strengths and in improving in the areas where I lag. I have derived themes from the literature review on transformational leadership and applied the derived themes on my leadership qualities and I have evaluated myself against the themes. Based on the analysis of these themes against my leadership qualities I have created a development plan to enhance my leadership qualities.