The Differences In Leadership Styles Management Essay

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1st Jan 1970 Management Reference this

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The differences in leadership styles between professional managers and entrepreneurial leaders can be found in numerous journals, articles and other academic materials. Among the different styles of leadership, the transformational kind seems to emerge as the most recent and applicable leadership style in the contemporary period which is advocated by the entrepreneurs and professional managers of today.

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In searching for the qualities or styles of an effective leader, it is safe to say that finality for good leadership can not be attained that easily. It was even proposed by Leithwood (1999) in his statement that “There is no final word on what is good leadership” [P.4]. The effectiveness of a leadership style depends on many factors such as the kind of organization, number of followers, actual situation and others. However, transformational leadership as a model of school leadership has been exercised for a long time, which means that the use of transformational leadership is beneficial for education improvement. More evidence has accumulated to demonstrate that transformational leadership can move followers to beat expected performance, as well as lead to high levels of follower contentment and commitment to the group and organization (Bass, 1985).

Indeed, when it comes to effective leadership, researchers such as Bernard Bass, Bruce Avolio and Yammanino have been attracted to the application of transformational leadership. These researchers basically argued that transformational leadership is an essential element for the success of the followers. In fact, Avolio and Yammanino (2002) cited a lot of studies and concluded that “In the last two decades there has been accumulating evidence to suggest that transformational leadership is an influential form of leadership that is associated with high levels of individual and organizational performance” [P.67].

The Different Models of Leadership

In order to demonstrate the effectiveness of the transformational leadership, this section provides a succinct discussion of the various models of leadership. It is important to emphasize that each model has its own attributes that are applicable in varied situations. In short, the effectiveness of each model would depend on circumstances in which it is applied, thus, effectiveness is consequential. The presentation below of the models is taken from the theoretical framework of Leithwood (1999). The models or types include participative, instructional, moral, contingent, transformational and managerial leaderships. The Table below shows the similarities and differences between the models and the way leadership is perceived with regards to source of influence. Though Leithwood (1999) particularly applied them in school settings, they are most appropriate in business settings. The table also presents the nature, reason and the effect of that influence.

The Role of Influence in Alternative Leadership Model

Approaches to leadership

Who exerts influence

Sources of influence

Purposes for influence

Outcomes of influence

Instructional

Typically those in formal leadership roles, especially managers

-Expert knowledge -Typically positional power

Enhance the effectiveness of managers

Increased subordinates growth

Transformational

Typically those in formal leadership roles, but not restricted to such persons

Inspire higher levels of commitment and capacity among organization members

-Greater effort and productivity -Develop more skilled practice

Increased capacity of organization to continuously improve

Moral

Those who are in formal administrative roles

Use of a system of moral values to guide organization decision making

-Increase sensitivity to the rightness of decisions -Increase participation in decisions

-Morally justified courses of action

Participative

The group(including non-administrative organization members)

Interpersonal communication

Increase participation in decisions

-Increased capacity of organization to respond productively to internal and external demands for change -More democratic organization

Managerial

Those in formal administrative roles

-Positional power -Policies and procedures

Ensure efficient completion of specified tasks by organization members

Achieve formal goals of the organization

Contingent

Typically those in formal leadership roles

-Matching leader behaviour to organization context -expert problem solving processes

-Better meet needs of organization members -More effective responses to organization’s challenges

-Achieve formal goals of the organization -Increased capacity of organization to respond productively to internal and external demands for change

*Source (Leithwood, 1999: Changing Leadership for Changing Times)

The table is basically useful in evaluating the kind of leadership style that should be utilized by the leader in order to become effective. Leithwood (1999) provided substantial insights as to the various options that a leader would take in a particular activity or endeavor. This table illustrates the differences in the role of influence in alternative leadership models, which means that each of the models has its hypothesis and its approach, but all of these models have similar purposes and some of these are the same, which concentrates on increase participation in decisions as a main factor of the organization’s effectiveness. Leithwood (1999) stated that the six leadership models in the table were presented as definitely different approaches to leadership without any means pure types. He as well mentioned that these six overlapping approaches to leadership are among the most obvious starting point for addressing the leadership needs of any organizations as they respond to the challenges of today and tomorrow.

The Need for Transformational Leadership

As noted above, transformational leadership has been recognized as most appropriate style of leadership in the recent decades. The traditional roles of the leaders such as being a simple planner, motivator, and managing are already his/her given traits. It is advocated that an effective leader nowadays is capable of transforming the whole organization toward the expected goals.

In looking back at the 19th century, we would observed that the main characteristics of a leader as being a technician, financier, salesman, organizer and so on have already been changed over time. The role of leaders of tomorrow will not be the same with that of successful leaders of the previous generations. Leaders all over the world have to cope with multiple cultures nowadays. Their decisions are based on different cultures that would lead to different effects.

Organizations headed by managers and entrepreneurs have to adapt to the changing structures in order to keep track to the needs of the society because societal needs changes. Transformational leadership is a good model of leadership in any society at any time for many reasons. Firstly, it gives the organization a chance to improve by any suitable approach. For example, if any organization fails to achieve its goal or to obtain a good result at the end, this leadership method or style will then try to transform the leadership method and the whole system into a successful one. Secondly, as the world is continually changing, the leaders of today have to find ways to adapt to the nature of change which the transformational leadership style would provide.

The Meaning of Transformational Leadership

The word transformational leadership has started with increasing frequency in writings since the late 1980s. Sometimes it has been used to signify a suitable type of leadership for organization taking up the challenges of reformatting and reorganization, which is now well in progress in most developed countries around the world (Leithwood, 1992).

Nowadays, there is no one exact meaning of transformational leadership (Leithwood, 1999). However, Burn (1978) states that transformational leadership stand for transcendence of self-concern by both leader and led. On the other hand, Bennis (1959) has a different concept of transformational leadership, which he said is the aptitude of a leader to attract others in a way which increases human realization and builds connotation within inspiration meaning that is the basis of power.

The Style of Transformational Leadership

People usually follow who can give them the enthusiasm and energy, but also they need to know the way to makes things done and having a vision and goal can achieve this. (Bass, 1985). Starker (2008) listed four steps for transformational leadership style .First step is developing the vision by the leader, the senior team or from a broad series of discussions. The next step is selling the vision, which takes energy and dedication. “The transformational leader thus takes every opportunity and will use whatever works to convince others to climb on board, the bandwagon” Straker (2008). He also mentioned that the leaders have to be trusted by the followers because they are selling themselves as part of the package with the vision. The next step is finding the way forward. The way may not be understandable or may not have clear information but has an obvious vision, that is, the direction will always be known. Thus finding the way forward can be an ongoing process which involves correction and so, the transformational leader will accept that there will be failures and blind canyons along the way. As long as they feel progress is being made, they will be happy (Straker, 2008). The last step of transformational leadership style is leading the change. Transformational leaders are always seen everywhere in schools. By their mind-set and performance they demonstrate how the others should behave. They also continue their hard work to encourage their followers, constantly listening to the followers and encouraging them.

The Characteristics of Transformational Leadership

Bass (1994) constricted the characteristics of transformational leadership into four main characteristics:

Charisma: This is the qualities of most leadership. “Transformational leadership is not considered to be synonymous with charisma, although charisma is often considered to be an important part of such leadership. Furthermore, efforts to inquire about charismatic leadership predate research about transformational concepts by many decades” Leithwood (1999).

Vision: This involves the design of a final picture of the future; a required future state that followers identify with. By designing this vision, the leader provides resources for followers to develop an obligation, a general goal around which to rally, and approach for followers to feel successful (Bass, 1994).

Intellectual stimulation: Transformational leaders provide new approaches of looking at wrong previous exertions, they confront the existing restrictions and the mental

prisons people put themselves into (Bass, 1994).

Inspiration: It is a difficult to inspire people because one does need to understand their psyches. Phan ″inspiration is a quality which demands a fair knowledge of human mind and behaviour”.

The most important challenge of transformational leadership is to create and manage an organizations culture that concentrates on improvement in any aspects of behavior of the people operating under it. Transformational leadership is a favorable method for entrepreneurs participating in development initiatives since it increases the level of understanding of employees so that they come to give importance organizational objectives and plans to accomplish those goals. Transformational leaders have been differentiated from managers through their unique capability to initiate organizational development and change. Transformational leaders are able to alter the culture of the organization by integrating new perspectives and objectives and by altering the way managers understand their responsibilities.

In this paper, transformational leadership has also been proven to be an important characteristic of being an excellent leader with regard to enabling the participation of the employees and subordinates alike.

Many uncertainties and questions are left unanswered in the ideological and empirical understanding of transformational leadership. Administrators, managers and entrepreneurs must, however, acknowledge the important contributions that have been done over the previous years by various experts. Since 1980, transformational leadership has evolved from being the research of top down, directive attitudes concentrated on educating and learning, to a bottom up participative procedure of guided development for organizational enhancement.

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Transformational leadership, as people understand it, will likely keep on developing over time and this will probably be accompanied by even bigger roles and criticism. In the following years, people will perhaps witness even wider diversity both in ideological perspectives and logical approaches to transformational leadership. That said, it is important that organizational leaders support transformational leadership theories with empirical proof that aid excellent performance of employees.

Entrepreneurship and Leadership Style

In an article, “Entrepreneurship and Innovation: How Leadership Style Makes the Difference?” by Satyabir Bhattacharyya (2006), the author discusses the importance of leadership style entrepreneurship. In the said article, the leadership styles of entrepreneurs and executives have been differentiated. It was noted by the author that the climate within the organization that encourages entrepreneurship and innovation is highly dependent on the leadership style of the leader, whether entrepreneurs or executives.

Bhattacharyya (2006) argues that there is no doubt that founders of businesses are excellent entrepreneurs but it doesn’t mean that they are automatically good leaders. Conversely, this is not the case of successful business executives. Business executives who become successful are considered good leaders and at the same time good entrepreneurs. The author explains that entrepreneurship is just about innovation, the will to start a business and managing the available resources. However, it is argued that leadership goes beyond entrepreneurial skills. This is why it suggested by the author that an entrepreneur has to learn how to become an effective leader in order to attain higher rate of success in business.

Based on the mentioned claims, Bhattacharyya (2006) further claim that most founders of entrepreneurs would usually fail because of the inability to become an effective leader. Though it is the case, successful entrepreneurs who are also executives such as Bill Gates, Steve Jobs, Michael Dell, Sam Walton, Mukesh Ambani, and N R Narayana Murthy are few of the exceptions. Aside from these business tycoons, most executives and entrepreneurs alike tend to struggle to make their businesses become successful and most of the time fail at the beginning because of the lack of leadership skills.

Bhattacharyya (2006) further proposes that entrepreneurs have the capacity to transform into an executive mode in the initial stage of the business. This would make the entrepreneur more effective as a leader. One identified problem by the author is that executives have to learn how to measure their leadership skills in order to adjust to the needs of their expanding businesses. The author also emphasized that the effect of entrepreneurial personality types is so much insignificant than the approach or style of leadership. In short, regardless of the leadership personality types of the leader, one should be able to adapt leadership approaches that would be applicable to the business that he/she is handling. Entrepreneurs and executives alike must learn that new habits should be acquired in order to make their businesses become a success. This would particularly include adapting a leadership style that is appropriate for the business.

It is cited that most entrepreneurs suffer from failure at the start of the business because of two basic reasons. First, they fail to recognize that entrepreneurship should be not focused on the establishment of the business alone, instead, the success would depend on the leadership style to be adopted. Second, their personality types as a leader should be altered to suit the kind of leadership style that the organization needs (Bhattacharyya, 2006).

Bhattacharyya (2006) suggested certain tendencies of entrepreneurs in establishing small businesses that seemed to be effective at the start but fail as the business expands. These are enumerated below:

The loyalty of the leaders to the employees who were beside them at the start of the business. It is not advisable that leaders should remain loyal to such people when the business expands.

The tendency to attend to details is observed to be useful when the business is smalls, but as it expands, the said tendency becomes a liability.

The tendency to focus on one single vision should be modified as the business expands because taking a larger view of the situation is more necessary in such case.

The leader has to work with the group and should be people-oriented as the business grows. Working in isolation would no longer work if the business is expanding because of a larger networks of people that one has to deal with.

The leaders have to overcome these tendencies in order to become successful when the business starts to grow, as proposed by (Bhattacharyya, 2006).

In the article, “The Relationships Among Leadership Styles, Entrepreneurial Orientation, and Business Performance, ” by Chung-Wen Yang (2008), a study was conducted to determine the leadership styles of the entrepreneurs of small and medium enterprises in relation to the impacts of business performance. It was specifically conducted in small and medium enterprises in Taiwan which was primarily aimed to examine the leadership style that can effectively shape the execution of entrepreneurial orientation.

One of the findings of the study is that business performance is greatly affected by the various leadership styles by the entrepreneurs. Between transformational and transactional leadership styles, it was found out that the former is more relevant to business performance than the latter. In other words, the rate of success in terms of business performance can be observed clearly with the use of transformational style with higher entrepreneurial orientation than the other styles of leadership (Yang, 2008).

Incidentally, the results of the study were strongly validated by other researchers such as Covin and Slevin (1989), Smart and Conan (1994), Wiklund and Shepherd (2005), Zahra and Covin (1995), who have found out that business performance has been positively affected by transformational leadership style (Yang, 2008).

In addition, Yang (2008) also stressed the attributes that clearly provide successful business performance. He noted that innovation and proactiveness have emerged as the traits that significantly contribute to high performance of the enterprise. In contrast, the risk taking trait which was very important in the leaders of the previous generations has been identified by the study as not contributory factor in analyzing business performance. Yang (2008) explicates that though risk taking is a necessary trait of a leader, one must be reminded that entrepreneurs should not treat themselves as gamblers. The risk taking trait of the entrepreneurs should be treated as a calculated one. Carefully calculation of the risk that should be taken has to be considered seriously. This would make the entrepreneurs avoid the unnecessary steps in making important decision, which was also emphasized by Peter Drucker (1985), as noted by Yang (2008).

The study strongly supports the idea that transformational leadership is highly effective in predicting business performance than transactional leadership. One of the important findings that the study extracted was the fact that higher productivity in relation to business performance was directly a result of the application of transformational leadership. Moreover, the other skills of an entrepreneur such as financial management, communication, motivation of others, vision, and self-motivation are key elements included in the application of transformational leadership, which contribute greatly to higher business performance (Yang, 2008)

In a peer reviewed article, “Leadership styles and cultural values among managers and subordinates: a comparative study of four countries of the former Soviet Union, Germany, and the US,” written by Alexander Ardichvili and K. Peter Kuchinke (2002), it examines the most effective leadership styles that would address the diverse cultural values of the mentioned countries. The investigation was so extensive that it analyzed the various leadership styles applied in the businesses of the subject countries. The article is insightful because it tries to relate the impact of leadership styles to varied cultural settings by conducting studies that relate to the topic at hand.

There were ten business organizations in six countries that were included in the study. It was specifically aimed to assess the cultural values and leadership styles of almost 4,000 managers and non-managers of the target business organizations. The combined results were analyzed based on the Hofstede’s dimensions of culture and Bass and Avolio’s full range theory of leadership. The latter’s theory included the various kinds of leadership such as transformational, transactional, and laissez-faire leadership behaviors (Ardichvili & Kuchinke, 2002).

Among the findings of the study is that there is a slight difference in the dimension of individualism for the six countries that were investigated. Though, it was found out that the US has the highest rate of individualism, the other countries have scored equally high in the said dimension. When it comes to power distance dimension, employees in Georgia was ranked as the lowest but they scored high in collectivism (Ardichvili & Kuchinke, 2002).

Ardichvili & Kuchinke ( 2002) explicated that if the score is high in the dimension of individualism, the emphasis of the culture is more on the self than the group, or the self than the organization. If translated further, employees with high on individualism are more concerned with their own initiative and decision making ability than the norms. In addition, individual pleasure is prioritized than order, duty and security. In this dimension, employees in the US are more concerned with one’s performance than that of the group.

Another dimension is in terms of masculinity which refers to the emphasis on male culture than the female culture. In this dimension, it was found out that the four Soviet Union countries are quite high. Ambition and material possessions are highly valued in such a cultural climate. Among its many manifestations is that employees would tend to focus on work rather than family life, which has caused work-related stress because of the need to excel and accomplish something in relation to productivity (Ardichvili & Kuchinke, 2002).

Simply put, there were slight differences in the various dimensions of culture among the countries investigated (Germany and the US, the four former SU countries). In other words, the mentioned countries have slight variations in the dimensions in the level of power distance, masculinity, and planning horizons (Ardichvili & Kuchinke, 2002).

The study shows that in countries of the former USSR, there is no obvious reference as to which leadership style that really prevails between the transactional or transformational one. It is speculated that either of the two leadership styles is being utilized by the entrepreneurs and managers alike in the mentioned countries. However, the result was different in Georgia USA. The scores obtained in the said study by the managers in the companies in Georgia revealed that they favored the transformational leadership style (Ardichvili & Kuchinke, 2002).

One insight made from the study that is useful in conducting further research about the connection of culture and leadership styles is that the responses could be affected by some external factors such as the practices, traditions and others. It was noted that some responses in a culture with collectivist dimension are blurred in order to satisfy those who conducted the research. The authors warned the researcher for such complication (Ardichvili & Kuchinke, 2002).

On the hand, the managers in the four countries of the former USSR gave lesser preference for the laissez-faire and management-by-exception leadership styles. Consequently, these two leadership styles are more preferred in the US and Germany. This proposes that the managers of the former USSR have to reconsider the other leadership styles in order to gain advantage in the business industry just like the satisfactory conditions of the companies in the US and Germany because of the mentioned leadership styles (Ardichvili & Kuchinke, 2002).

In relation to this research, the mentioned article has contributed greatly in the assumptions that leadership styles are essential in the analysis of organizational success. It particularly explained the connection of the kind of leadership style that should be used by managers in a particular cultural climate. The study has also revealed that in countries that have rate of success in business nowadays such as in the United States and Germany, managers seemed to opt for a transformational kind of leadership as compared with countries that have a struggle in becoming successful in business.

Women Entrepreneurs as Leaders:

In dealing with effective leadership style, it is inevitable to tackle the differences between men and women as leaders. The traditional view about this idea is that men make better leaders. However, there have been numerous studies that could prove the fact that women also could become effective leaders if given the opportunity.

In an article, “Management in Women-Owned Enterprises,” by Radha Chaganti (1986), it was explicated how women and men differ in their leadership styles of managing their businesses. It was explained that as women are already starting to establish their own businesses which have increasing in rate, it is noticeable how they differ from men as entrepreneurs. It was noted by the article that the survival rates of those enterprises that are managed by women are also high in comparison with those with male-dominated businesses.

Chaganti (1986) maintains that though women are encountering many significant obstacles in handling their own businesses, most of them still manage to become successful. Women of today are trying to prove that the common belief that male leaders are more effective as entrepreneurs is not true in all situations.

However, even though women could prove they also can be effective leaders, there are certain social barriers for their success. As mentioned in the article, in most cases, it is difficult for women to occupy certain managerial positions in an organization. The positions of authority and leadership normally belong or given to male leaders. One major reason for this is the stereotyping that usually exist in every society. There is a common view that women lack the leadership qualities that are necessary in handling higher corporate positions. Nevertheless, this notion has gradually being disproved by many researches about the ability of women to lead. Consequently, this common perception has been the fundamental reason why women are usually being displaced from occupying certain significant positions. It has particularly hinder them from owning and managing business ventures for profit (Chaganti, 1986).

A particular research that emphasizes the effectiveness of women as leaders and entrepreneurs is the article, “Women Entrepreneurs Style Of Transformational Leadership And Performance Outcomes: An Interactive Approach to Building A Climate of Trust,” by Dorothy Perrin Moore (2011). It explicates how effective is the transformational leadership style if employed by women entrepreneurs. The article proposes that women are better leaders as entrepreneurs if they would apply the transformational leadership style. The article particularly suggests that through transformational leadership style, women entrepreneurs tend to excel in the dimensions of building trust and team building skills. The article establishes certain assumptions about entrepreneurship and leadership style.

First, women tend to apply an interactive and transformational leadership style. Second, women tend to enhance their interactive and transformational skills in order to get pass the usual notion that they are not suited for managing a business. Third, women tend to obtain satisfactory results as entrepreneurs when they employ transformational skills by building a climate of trust in the business (Moore, 2011).

Moore (2011) argues that women of today tend to utilize the interactive transformational leadership style as managers and entrepreneurs alike. The top ranks positions that were usually occupied by men have been taken by women when they employ such leadership style. In the recent decades, women have been given the opportunity to showcase their skills in leading an organization. As they present their leadership skills, it has been found out that transformational leadership style would make women better leaders and entrepreneurs that would eventually erase gender biases when it comes to business leadership.

When women employ the transformational leadership in their organizations, Moore (2011) suggests that they become effective leaders as they encourages the building of trust among the members of their organizations. This is because women are more democratic than men as leaders that has become one clear predictor of their success in the organization. In relation to their democratic approach, women tend to put emphasis on working relationships, cooperation and being responsible to their team members, which have become their assets in leading an organization. In emphasizing the working relationships, women have been found out to successfully integrate the members of the organization into certain expected results. This claim is quite evident and effective in certain organizational settings that have individual members with unique traits. It is basically successful as well in establishing an egalitarian type of interpersonal relationships, as the author suggests (Moore, 2011).

Moore (2011) stresses that women lead this way in order to motivate their members to be creative and put their ideas on a collaborative manner. They try to balance the authoritative style of men and the communication style of women, as leaders. In this way, women become better leaders than men.

As mentioned, since women are more democratic and put great emphasis on suggestions and working relationships, it is inevitable for them to build a climate of trust in the organization. The interaction between the woman leaders and the members of the organization has become a pattern of open communication that usually leads to a successful outcome. As shown in the article, this kind of leadership style ha

The differences in leadership styles between professional managers and entrepreneurial leaders can be found in numerous journals, articles and other academic materials. Among the different styles of leadership, the transformational kind seems to emerge as the most recent and applicable leadership style in the contemporary period which is advocated by the entrepreneurs and professional managers of today.

In searching for the qualities or styles of an effective leader, it is safe to say that finality for good leadership can not be attained that easily. It was even proposed by Leithwood (1999) in his statement that “There is no final word on what is good leadership” [P.4]. The effectiveness of a leadership style depends on many factors such as the kind of organization, number of followers, actual situation and others. However, transformational leadership as a model of school leadership has been exercised for a long time, which means that the use of transformational leadership is beneficial for education improvement. More evidence has accumulated to demonstrate that transformational leadership can move followers to beat expected performance, as well as lead to high levels of follower contentment and commitment to the group and organization (Bass, 1985).

Indeed, when it comes to effective leadership, researchers such as Bernard Bass, Bruce Avolio and Yammanino have been attracted to the application of transformational leadership. These researchers basically argued that transformational leadership is an essential element for the success of the followers. In fact, Avolio and Yammanino (2002) cited a lot of studies and concluded that “In the last two decades there has been accumulating evidence to suggest that transformational leadership is an influential form of leadership that is associated with high levels of individual and organizational performance” [P.67].

The Different Models of Leadership

In order to demonstrate the effectiveness of the transformational leadership, this section provides a succinct discussion of the various models of leadership. It is important to emphasize that each model has its own attributes that are applicable in varied situations. In short, the effectiveness of each model would depend on circumstances in which it is applied, thus, effectiveness is consequential. The presentation below of the models is taken from the theoretical framework of Leithwood (1999). The models or types include participative, instructional, moral, contingent, transformational and managerial leaderships. The Table below shows the similarities and differences between the models and the way leadership is perceived with regards to source of influence. Though Leithwood (1999) particularly applied them in school settings, they are most appropriate in business settings. The table also presents the nature, reason and the effect of that influence.

The Role of Influence in Alternative Leadership Model

Approaches to leadership

Who exerts influence

Sources of influence

Purposes for influence

Outcomes of influence

Instructional

Typically those in formal leadership roles, especially managers

-Expert knowledge -Typically positional power

Enhance the effectiveness of managers

Increased subordinates growth

Transformational

Typically those in formal leadership roles, but not restricted to such persons

Inspire higher levels of commitment and capacity among organization members

-Greater effort and productivity -Develop more skilled practice

Increased capacity of organization to continuously improve

Moral

Those who are in formal administrative roles

Use of a system of moral values to guide organization decision making

-Increase sensitivity to the rightness of decisions -Increase participation in decisions

-Morally justified courses of action

Participative

The group(including non-administrative organization members)

Interpersonal communication

Increase participation in decisions

-Increased capacity of organization to respond productively to internal and external demands for change -More democratic organization

Managerial

Those in formal administrative roles

-Positional power -Policies and procedures

Ensure efficient completion of specified tasks by organization members

Achieve formal goals of the organization

Contingent

Typically those in formal leadership roles

-Matching leader behaviour to organization context -expert problem solving processes

-Better meet needs of organization members -More effective responses to organization’s challenges

-Achieve formal goals of the organization -Increased capacity of organization to respond productively to internal and external demands for change

*Source (Leithwood, 1999: Changing Leadership for Changing Times)

The table is basically useful in evaluating the kind of leadership style that should be utilized by the leader in order to become effective. Leithwood (1999) provided substantial insights as to the various options that a leader would take in a particular activity or endeavor. This table illustrates the differences in the role of influence in alternative leadership models, which means that each of the models has its hypothesis and its approach, but all of these models have similar purposes and some of these are the same, which concentrates on increase participation in decisions as a main factor of the organization’s effectiveness. Leithwood (1999) stated that the six leadership models in the table were presented as definitely different approaches to leadership without any means pure types. He as well mentioned that these six overlapping approaches to leadership are among the most obvious starting point for addressing the leadership needs of any organizations as they respond to the challenges of today and tomorrow.

The Need for Transformational Leadership

As noted above, transformational leadership has been recognized as most appropriate style of leadership in the recent decades. The traditional roles of the leaders such as being a simple planner, motivator, and managing are already his/her given traits. It is advocated that an effective leader nowadays is capable of transforming the whole organization toward the expected goals.

In looking back at the 19th century, we would observed that the main characteristics of a leader as being a technician, financier, salesman, organizer and so on have already been changed over time. The role of leaders of tomorrow will not be the same with that of successful leaders of the previous generations. Leaders all over the world have to cope with multiple cultures nowadays. Their decisions are based on different cultures that would lead to different effects.

Organizations headed by managers and entrepreneurs have to adapt to the changing structures in order to keep track to the needs of the society because societal needs changes. Transformational leadership is a good model of leadership in any society at any time for many reasons. Firstly, it gives the organization a chance to improve by any suitable approach. For example, if any organization fails to achieve its goal or to obtain a good result at the end, this leadership method or style will then try to transform the leadership method and the whole system into a successful one. Secondly, as the world is continually changing, the leaders of today have to find ways to adapt to the nature of change which the transformational leadership style would provide.

The Meaning of Transformational Leadership

The word transformational leadership has started with increasing frequency in writings since the late 1980s. Sometimes it has been used to signify a suitable type of leadership for organization taking up the challenges of reformatting and reorganization, which is now well in progress in most developed countries around the world (Leithwood, 1992).

Nowadays, there is no one exact meaning of transformational leadership (Leithwood, 1999). However, Burn (1978) states that transformational leadership stand for transcendence of self-concern by both leader and led. On the other hand, Bennis (1959) has a different concept of transformational leadership, which he said is the aptitude of a leader to attract others in a way which increases human realization and builds connotation within inspiration meaning that is the basis of power.

The Style of Transformational Leadership

People usually follow who can give them the enthusiasm and energy, but also they need to know the way to makes things done and having a vision and goal can achieve this. (Bass, 1985). Starker (2008) listed four steps for transformational leadership style .First step is developing the vision by the leader, the senior team or from a broad series of discussions. The next step is selling the vision, which takes energy and dedication. “The transformational leader thus takes every opportunity and will use whatever works to convince others to climb on board, the bandwagon” Straker (2008). He also mentioned that the leaders have to be trusted by the followers because they are selling themselves as part of the package with the vision. The next step is finding the way forward. The way may not be understandable or may not have clear information but has an obvious vision, that is, the direction will always be known. Thus finding the way forward can be an ongoing process which involves correction and so, the transformational leader will accept that there will be failures and blind canyons along the way. As long as they feel progress is being made, they will be happy (Straker, 2008). The last step of transformational leadership style is leading the change. Transformational leaders are always seen everywhere in schools. By their mind-set and performance they demonstrate how the others should behave. They also continue their hard work to encourage their followers, constantly listening to the followers and encouraging them.

The Characteristics of Transformational Leadership

Bass (1994) constricted the characteristics of transformational leadership into four main characteristics:

Charisma: This is the qualities of most leadership. “Transformational leadership is not considered to be synonymous with charisma, although charisma is often considered to be an important part of such leadership. Furthermore, efforts to inquire about charismatic leadership predate research about transformational concepts by many decades” Leithwood (1999).

Vision: This involves the design of a final picture of the future; a required future state that followers identify with. By designing this vision, the leader provides resources for followers to develop an obligation, a general goal around which to rally, and approach for followers to feel successful (Bass, 1994).

Intellectual stimulation: Transformational leaders provide new approaches of looking at wrong previous exertions, they confront the existing restrictions and the mental

prisons people put themselves into (Bass, 1994).

Inspiration: It is a difficult to inspire people because one does need to understand their psyches. Phan ″inspiration is a quality which demands a fair knowledge of human mind and behaviour”.

The most important challenge of transformational leadership is to create and manage an organizations culture that concentrates on improvement in any aspects of behavior of the people operating under it. Transformational leadership is a favorable method for entrepreneurs participating in development initiatives since it increases the level of understanding of employees so that they come to give importance organizational objectives and plans to accomplish those goals. Transformational leaders have been differentiated from managers through their unique capability to initiate organizational development and change. Transformational leaders are able to alter the culture of the organization by integrating new perspectives and objectives and by altering the way managers understand their responsibilities.

In this paper, transformational leadership has also been proven to be an important characteristic of being an excellent leader with regard to enabling the participation of the employees and subordinates alike.

Many uncertainties and questions are left unanswered in the ideological and empirical understanding of transformational leadership. Administrators, managers and entrepreneurs must, however, acknowledge the important contributions that have been done over the previous years by various experts. Since 1980, transformational leadership has evolved from being the research of top down, directive attitudes concentrated on educating and learning, to a bottom up participative procedure of guided development for organizational enhancement.

Transformational leadership, as people understand it, will likely keep on developing over time and this will probably be accompanied by even bigger roles and criticism. In the following years, people will perhaps witness even wider diversity both in ideological perspectives and logical approaches to transformational leadership. That said, it is important that organizational leaders support transformational leadership theories with empirical proof that aid excellent performance of employees.

Entrepreneurship and Leadership Style

In an article, “Entrepreneurship and Innovation: How Leadership Style Makes the Difference?” by Satyabir Bhattacharyya (2006), the author discusses the importance of leadership style entrepreneurship. In the said article, the leadership styles of entrepreneurs and executives have been differentiated. It was noted by the author that the climate within the organization that encourages entrepreneurship and innovation is highly dependent on the leadership style of the leader, whether entrepreneurs or executives.

Bhattacharyya (2006) argues that there is no doubt that founders of businesses are excellent entrepreneurs but it doesn’t mean that they are automatically good leaders. Conversely, this is not the case of successful business executives. Business executives who become successful are considered good leaders and at the same time good entrepreneurs. The author explains that entrepreneurship is just about innovation, the will to start a business and managing the available resources. However, it is argued that leadership goes beyond entrepreneurial skills. This is why it suggested by the author that an entrepreneur has to learn how to become an effective leader in order to attain higher rate of success in business.

Based on the mentioned claims, Bhattacharyya (2006) further claim that most founders of entrepreneurs would usually fail because of the inability to become an effective leader. Though it is the case, successful entrepreneurs who are also executives such as Bill Gates, Steve Jobs, Michael Dell, Sam Walton, Mukesh Ambani, and N R Narayana Murthy are few of the exceptions. Aside from these business tycoons, most executives and entrepreneurs alike tend to struggle to make their businesses become successful and most of the time fail at the beginning because of the lack of leadership skills.

Bhattacharyya (2006) further proposes that entrepreneurs have the capacity to transform into an executive mode in the initial stage of the business. This would make the entrepreneur more effective as a leader. One identified problem by the author is that executives have to learn how to measure their leadership skills in order to adjust to the needs of their expanding businesses. The author also emphasized that the effect of entrepreneurial personality types is so much insignificant than the approach or style of leadership. In short, regardless of the leadership personality types of the leader, one should be able to adapt leadership approaches that would be applicable to the business that he/she is handling. Entrepreneurs and executives alike must learn that new habits should be acquired in order to make their businesses become a success. This would particularly include adapting a leadership style that is appropriate for the business.

It is cited that most entrepreneurs suffer from failure at the start of the business because of two basic reasons. First, they fail to recognize that entrepreneurship should be not focused on the establishment of the business alone, instead, the success would depend on the leadership style to be adopted. Second, their personality types as a leader should be altered to suit the kind of leadership style that the organization needs (Bhattacharyya, 2006).

Bhattacharyya (2006) suggested certain tendencies of entrepreneurs in establishing small businesses that seemed to be effective at the start but fail as the business expands. These are enumerated below:

The loyalty of the leaders to the employees who were beside them at the start of the business. It is not advisable that leaders should remain loyal to such people when the business expands.

The tendency to attend to details is observed to be useful when the business is smalls, but as it expands, the said tendency becomes a liability.

The tendency to focus on one single vision should be modified as the business expands because taking a larger view of the situation is more necessary in such case.

The leader has to work with the group and should be people-oriented as the business grows. Working in isolation would no longer work if the business is expanding because of a larger networks of people that one has to deal with.

The leaders have to overcome these tendencies in order to become successful when the business starts to grow, as proposed by (Bhattacharyya, 2006).

In the article, “The Relationships Among Leadership Styles, Entrepreneurial Orientation, and Business Performance, ” by Chung-Wen Yang (2008), a study was conducted to determine the leadership styles of the entrepreneurs of small and medium enterprises in relation to the impacts of business performance. It was specifically conducted in small and medium enterprises in Taiwan which was primarily aimed to examine the leadership style that can effectively shape the execution of entrepreneurial orientation.

One of the findings of the study is that business performance is greatly affected by the various leadership styles by the entrepreneurs. Between transformational and transactional leadership styles, it was found out that the former is more relevant to business performance than the latter. In other words, the rate of success in terms of business performance can be observed clearly with the use of transformational style with higher entrepreneurial orientation than the other styles of leadership (Yang, 2008).

Incidentally, the results of the study were strongly validated by other researchers such as Covin and Slevin (1989), Smart and Conan (1994), Wiklund and Shepherd (2005), Zahra and Covin (1995), who have found out that business performance has been positively affected by transformational leadership style (Yang, 2008).

In addition, Yang (2008) also stressed the attributes that clearly provide successful business performance. He noted that innovation and proactiveness have emerged as the traits that significantly contribute to high performance of the enterprise. In contrast, the risk taking trait which was very important in the leaders of the previous generations has been identified by the study as not contributory factor in analyzing business performance. Yang (2008) explicates that though risk taking is a necessary trait of a leader, one must be reminded that entrepreneurs should not treat themselves as gamblers. The risk taking trait of the entrepreneurs should be treated as a calculated one. Carefully calculation of the risk that should be taken has to be considered seriously. This would make the entrepreneurs avoid the unnecessary steps in making important decision, which was also emphasized by Peter Drucker (1985), as noted by Yang (2008).

The study strongly supports the idea that transformational leadership is highly effective in predicting business performance than transactional leadership. One of the important findings that the study extracted was the fact that higher productivity in relation to business performance was directly a result of the application of transformational leadership. Moreover, the other skills of an entrepreneur such as financial management, communication, motivation of others, vision, and self-motivation are key elements included in the application of transformational leadership, which contribute greatly to higher business performance (Yang, 2008)

In a peer reviewed article, “Leadership styles and cultural values among managers and subordinates: a comparative study of four countries of the former Soviet Union, Germany, and the US,” written by Alexander Ardichvili and K. Peter Kuchinke (2002), it examines the most effective leadership styles that would address the diverse cultural values of the mentioned countries. The investigation was so extensive that it analyzed the various leadership styles applied in the businesses of the subject countries. The article is insightful because it tries to relate the impact of leadership styles to varied cultural settings by conducting studies that relate to the topic at hand.

There were ten business organizations in six countries that were included in the study. It was specifically aimed to assess the cultural values and leadership styles of almost 4,000 managers and non-managers of the target business organizations. The combined results were analyzed based on the Hofstede’s dimensions of culture and Bass and Avolio’s full range theory of leadership. The latter’s theory included the various kinds of leadership such as transformational, transactional, and laissez-faire leadership behaviors (Ardichvili & Kuchinke, 2002).

Among the findings of the study is that there is a slight difference in the dimension of individualism for the six countries that were investigated. Though, it was found out that the US has the highest rate of individualism, the other countries have scored equally high in the said dimension. When it comes to power distance dimension, employees in Georgia was ranked as the lowest but they scored high in collectivism (Ardichvili & Kuchinke, 2002).

Ardichvili & Kuchinke ( 2002) explicated that if the score is high in the dimension of individualism, the emphasis of the culture is more on the self than the group, or the self than the organization. If translated further, employees with high on individualism are more concerned with their own initiative and decision making ability than the norms. In addition, individual pleasure is prioritized than order, duty and security. In this dimension, employees in the US are more concerned with one’s performance than that of the group.

Another dimension is in terms of masculinity which refers to the emphasis on male culture than the female culture. In this dimension, it was found out that the four Soviet Union countries are quite high. Ambition and material possessions are highly valued in such a cultural climate. Among its many manifestations is that employees would tend to focus on work rather than family life, which has caused work-related stress because of the need to excel and accomplish something in relation to productivity (Ardichvili & Kuchinke, 2002).

Simply put, there were slight differences in the various dimensions of culture among the countries investigated (Germany and the US, the four former SU countries). In other words, the mentioned countries have slight variations in the dimensions in the level of power distance, masculinity, and planning horizons (Ardichvili & Kuchinke, 2002).

The study shows that in countries of the former USSR, there is no obvious reference as to which leadership style that really prevails between the transactional or transformational one. It is speculated that either of the two leadership styles is being utilized by the entrepreneurs and managers alike in the mentioned countries. However, the result was different in Georgia USA. The scores obtained in the said study by the managers in the companies in Georgia revealed that they favored the transformational leadership style (Ardichvili & Kuchinke, 2002).

One insight made from the study that is useful in conducting further research about the connection of culture and leadership styles is that the responses could be affected by some external factors such as the practices, traditions and others. It was noted that some responses in a culture with collectivist dimension are blurred in order to satisfy those who conducted the research. The authors warned the researcher for such complication (Ardichvili & Kuchinke, 2002).

On the hand, the managers in the four countries of the former USSR gave lesser preference for the laissez-faire and management-by-exception leadership styles. Consequently, these two leadership styles are more preferred in the US and Germany. This proposes that the managers of the former USSR have to reconsider the other leadership styles in order to gain advantage in the business industry just like the satisfactory conditions of the companies in the US and Germany because of the mentioned leadership styles (Ardichvili & Kuchinke, 2002).

In relation to this research, the mentioned article has contributed greatly in the assumptions that leadership styles are essential in the analysis of organizational success. It particularly explained the connection of the kind of leadership style that should be used by managers in a particular cultural climate. The study has also revealed that in countries that have rate of success in business nowadays such as in the United States and Germany, managers seemed to opt for a transformational kind of leadership as compared with countries that have a struggle in becoming successful in business.

Women Entrepreneurs as Leaders:

In dealing with effective leadership style, it is inevitable to tackle the differences between men and women as leaders. The traditional view about this idea is that men make better leaders. However, there have been numerous studies that could prove the fact that women also could become effective leaders if given the opportunity.

In an article, “Management in Women-Owned Enterprises,” by Radha Chaganti (1986), it was explicated how women and men differ in their leadership styles of managing their businesses. It was explained that as women are already starting to establish their own businesses which have increasing in rate, it is noticeable how they differ from men as entrepreneurs. It was noted by the article that the survival rates of those enterprises that are managed by women are also high in comparison with those with male-dominated businesses.

Chaganti (1986) maintains that though women are encountering many significant obstacles in handling their own businesses, most of them still manage to become successful. Women of today are trying to prove that the common belief that male leaders are more effective as entrepreneurs is not true in all situations.

However, even though women could prove they also can be effective leaders, there are certain social barriers for their success. As mentioned in the article, in most cases, it is difficult for women to occupy certain managerial positions in an organization. The positions of authority and leadership normally belong or given to male leaders. One major reason for this is the stereotyping that usually exist in every society. There is a common view that women lack the leadership qualities that are necessary in handling higher corporate positions. Nevertheless, this notion has gradually being disproved by many researches about the ability of women to lead. Consequently, this common perception has been the fundamental reason why women are usually being displaced from occupying certain significant positions. It has particularly hinder them from owning and managing business ventures for profit (Chaganti, 1986).

A particular research that emphasizes the effectiveness of women as leaders and entrepreneurs is the article, “Women Entrepreneurs Style Of Transformational Leadership And Performance Outcomes: An Interactive Approach to Building A Climate of Trust,” by Dorothy Perrin Moore (2011). It explicates how effective is the transformational leadership style if employed by women entrepreneurs. The article proposes that women are better leaders as entrepreneurs if they would apply the transformational leadership style. The article particularly suggests that through transformational leadership style, women entrepreneurs tend to excel in the dimensions of building trust and team building skills. The article establishes certain assumptions about entrepreneurship and leadership style.

First, women tend to apply an interactive and transformational leadership style. Second, women tend to enhance their interactive and transformational skills in order to get pass the usual notion that they are not suited for managing a business. Third, women tend to obtain satisfactory results as entrepreneurs when they employ transformational skills by building a climate of trust in the business (Moore, 2011).

Moore (2011) argues that women of today tend to utilize the interactive transformational leadership style as managers and entrepreneurs alike. The top ranks positions that were usually occupied by men have been taken by women when they employ such leadership style. In the recent decades, women have been given the opportunity to showcase their skills in leading an organization. As they present their leadership skills, it has been found out that transformational leadership style would make women better leaders and entrepreneurs that would eventually erase gender biases when it comes to business leadership.

When women employ the transformational leadership in their organizations, Moore (2011) suggests that they become effective leaders as they encourages the building of trust among the members of their organizations. This is because women are more democratic than men as leaders that has become one clear predictor of their success in the organization. In relation to their democratic approach, women tend to put emphasis on working relationships, cooperation and being responsible to their team members, which have become their assets in leading an organization. In emphasizing the working relationships, women have been found out to successfully integrate the members of the organization into certain expected results. This claim is quite evident and effective in certain organizational settings that have individual members with unique traits. It is basically successful as well in establishing an egalitarian type of interpersonal relationships, as the author suggests (Moore, 2011).

Moore (2011) stresses that women lead this way in order to motivate their members to be creative and put their ideas on a collaborative manner. They try to balance the authoritative style of men and the communication style of women, as leaders. In this way, women become better leaders than men.

As mentioned, since women are more democratic and put great emphasis on suggestions and working relationships, it is inevitable for them to build a climate of trust in the organization. The interaction between the woman leaders and the members of the organization has become a pattern of open communication that usually leads to a successful outcome. As shown in the article, this kind of leadership style ha

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