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Transformational, Transactional and Laissez-Faire Leadership

Info: 2108 words (8 pages) Essay
Published: 16th Jul 2019 in Management

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Healthcare organizations nowadays are facing many complex issues that affect theirs success like providing best health care within affordable cost and staff retention. Lack of job satisfaction among nurses and increase the rate of staff absenteeism and turnover, consider other critical issues that have great impact on the organization continuation. Those challenges need well prepared leader who adopt an effective leadership style to mange and over come them. Leadership style affects the development and employee’s commitment (Spinelli, 2006).

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Many scientists and researchers are interested nowadays in leadership and management field. Leadership define as the process of motivating people to work together collaboratively to accomplish great things or the capacity to influence others. Effective leader help to increase the followers’ commitment and interest in the organization goals Different leadership theories and styles were tested to study their effectiveness. Early studies and researches in leadership was based on belief that the leader should have or born with specific general personal trait and he the ones who mainly set the rules and the responsibilities and the follower accomplish them. But with the time, the value of the collaboration and teamwork increase especially in the health care setting different which lead to contemporary theories to evolve. Contemporary theories consider that effective leadership is a certain skills that can be taught, trained or adopted by the leader. In this paper we will compare between three contemporary leadership theories: The transformational, transactional and the laissez-faire leadership what they mean and which one is more effective (Vroom & Jago, 2007).

Transactional Leadership Style

Burns (1979) developed the transformational and transactional leadership theories and later Bass (1985) applied them to study their effectiveness in the organizations (Spinelli, 2006).Transactional leadership is an exchange process that identifies needs of employees and provides rewards to meet those needs in return for expected performance. A transactional leadership style consider as replacement of the autocratic leadership because both of them generate a level of predictability and order. The transactional leadership is more practical in nature because of its emphasis on meeting specific targets or objectives and focused more on daily basis task. Subordinates of transactional leaders are not expected to be creatively because they are monitored and evaluated on the basis of predetermined criteria (Aarons, 2006).

Burns (1978) believed that transactional leadership is based on bureaucratic authority. Transactional leaders focus on work standards, assignments and task-oriented goals. In addition, he believed that transactional leaders tend to focus on task completion and employee compliance. Those leaders influence employee performance by using the organizational rewards and punishments. The transactional leader described also, as an agent of change and goal setter; a leader that works well with employees resulting in improvements in productivity (Emery, College, Barker, & Fredonia, 2007).

Bass and Avolio (1987) transactional leadership can be divided to there model: passive, active and contingent. Passive transactional leadership or management-by exception (MBE) means that status will remain as it’s unless things go wrong, in this case leader practicing passive management-by-exception will take actions that often have a negative implication. active transactional leadership involves an interaction between leader and follower that stress more on a more positive exchange; for example, providing appropriate rewards when followers meet objectives. Through that the leader will emphasizes on acceptable accomplishments and increase the followers motivation. Finally contingent style is where the leader focused on clarifying the rules and requirements for the followers and then rewards them due to fulfilling the obligations (Murphy, 2005).

Transformational Leadership Style

The transformational leadership theory is a cooperative, process-focused networking where the leader motivates his followers to create, inspire and influences changes in them. Leader of this style act as role model for his followers, attend their needs and involve them in the decision making process. The main point in this theory is to encourage the followers to perform to their full capacity and meet the expectations. Transformational Leader need to have a base of transaction qualities to establish his style successfully. Transformational leadership is not a substitute for transactional leadership, but it develops and enhances it (Tomey, 2004).

The transformational and transactional leadership consisting of seven dimensions.(Bass, 1985; Avolio, Bass & Jung, 1999) developed an instrument that include all those seven dimensions and used to measure the components of transactional, transformational leadership and laissez-faire leadership styles. This instrument, called the Multifactor Leadership Questionnaire (Gumusluoglu, & Ilsev, 2009).

Transformational leadership is measured by four dimensions: idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. In Idealized influence the leader does the “right thing”, take risks and act as role model for his followers which make him trusted and respected from his followers. . Inspirationally motivating leaders has high expectations and they are trying to inspire and motive their followers by changing their thoughts to achieve their leader’s visions and expectations. Intellectual stimulation involves providing a supportive environment in the work which will encourage the employees to be more creative, accepting challenging tasks and involve in decisions making process. Finally, an individually considerate leader treats each employee as a unique person with respect to their differences, spends time coaching employees and appreciate their achievements with continues feed backing. (Arnold, Turner, Barling, Kelloway, & McKee, (2007).

Laissez-Faire Leadership Style

Laissez-Faire leadership can be described as a nondirective, passive and inactive style. Leaders of this style believe that internal drives and believes motivate the follower to act .The leader in this style sets few rules for processing the issues in the organization and then delegates them to the subordinates. The leader needs to know very well the level of knowledge, competence and integrity of his followers to be able to delegate the tasks. This style helps the follower to invest their talents and abilities to the maximum. It’s more effective if used with very mature and autonomous employees, but mostly it not effective or productive style. The risks here arise when the leader mistaken in choosing the suitable employee to accomplished the delegated tasks. Lack of clear vision and direction for the organization lead the followers to adopt different goals and objective, increase the stress level among the followers and decrease the productivity and the quality. Laissez-Faire leader do not influence the organization culture due to minimal interactions between him and his followers. Finally Laissez-Faire leadership style mainly can be used in small business not for big organizations like health organizations (Daly, Speedy& Jackson, 2004).

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The Effectiveness of Transformational, Transactional and Laissez-Faire Leadership

Many researches and studies done to test the effectiveness and the consequences of adopting different leadership styles on the employee and the organization itself. For example, a study done in 2008 include of 447 staff working in a care center for the elderly in large Danish local government. This study used a longitudinal survey design and questionnaires. Transformational researchers here were testing three hypotheses one of them is the direct relationship between leadership and wellbeing in the followers. The study shown that the there is a strong relation between using the leader the transformational leadership style in dealing with his employees’ and their well being and decreasing their level of the work stress (Gumusluoglu et al., 2009). Other study done by Berson and Linton in 2005 conclude that the leader who follows the transformational leadership style in dealing with his employees’ will help them to be more creative and enthusiastic, increase their commitment in the job

In 2006, a research done that involve subordinate managers from five hospitals in northeastern Pennsylvania.101 surveys were been distributed in five hospitals in northeastern Pennsylvania .The survey instrument used was the Multifactor Leadership Questionnaire (MLQ) that developed by Bernard Bass and Bruce Avolio (1997). The scientists want here to test the relation between the transformational, transactional and laissez-faire leadership styles of healthcare CEOs and their subordinate manager’s satisfaction with them, their willingness to exert extra effort, and perception of their leaders’ effectiveness. The study shown that the more CEOs followed the laissez-faire style in dealing with their subordinate managers, the lesser subordinate managers reported exerting extra effort and expressed satisfaction with the leader, and disbelieved in the efficiency of their leader (Spinelli, 2006).

Employee job satisfaction is often consisting of the following elements: the job itself, supervisor relationship, management beliefs, future opportunity, work environment, pay/benefits/rewards, and co-worker relationships. According to Morris’s research, employee job satisfaction is a critical factor in the satisfaction of the customers. In a study of customer satisfaction at a major Midwestern hospital, the correlation between the nurses’ job satisfaction and the patients’ willingness to recommend the unit was .85, in the same study the nurses them self shown more satisfaction if their head managers developed transformational behaviors (Emery et al., 2007).

Many studies encourage health care mangers to use both the transformational and the transactional leadership skills in their setting. Aarons (2006) did a study include 303 mental health providers working in 49 mental health programs for youths in California where involved in a study aim to examine the relation between leadership and mental health providers’ attitudes toward adopting evidence-based practice. The study shown that both transformational and transactional leadership were positively associated with providers’ having more positive attitudes toward adoption of evidence-based practice, but in transformational leadership the employees found no difference between their current practice and evidence-based practice which may affect the application of the new practices in the organization. The researchers recommend in this study that the mental health service organizations may benefit from improving transformational and transactional leadership skills in preparation for implementing evidence-based practices. McGuire and Kennerly (2006) mentioned that the leader needs to have a balance between transformational and transactional skills in his management, create effective plan that meet his employees’ needs.


Effective leadership styles and theories has been thoroughly studied and tested by scientists due its importance in the success of the organization. Leader in transactional style focused on tasks and reward the employee and recognize them if they meet the agreed objectives. Transformational leader act as role model for his followers inspires and motivate them and meet their needs. Laissez-faire leader provide no visions or directions for his followers, tend to delegate the tasks and avoid decision making. Many studies support the transformational style because its provide supportive environment where the employee work creatively, show commitment and meet the expected requirements. Some studies encourage leaders to make combination between the three styles in their management, because different situation need the style. Transformational and Laissez-faire styles are more useful in encouraging the employees to work independently and creativity. Transactional style is more effective when the leader want to set new practices and need to implement them within specific time.


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