Which kind of leader do you want to be?
A transactional leader? Then how can you encourage creativity of your employees and deal with the insensitivity problem?
A transformational leader? Then how can you face detail challenges and control the spread of bad habit?
It has been widely argued that the 20th century leadership theories are no longer appropriate nowadays for knowledge based economies, while most leadership theories need to be criticised as they are more based on masculine theories in Western working practices.
Leadership models of the last century have been products of top-down, bureaucratic paradigms. These models are eminently effective for an economy premised on physical production but are not well-suited for a more knowledge oriented economy.
– Uhl-Bien et al., 2007
Challenging the Last Century Leadership Theories
Transactional leadership style concerns processes and tasks rather than forward-thinking ideas. Transactional leaders always focus on the proper exchange of resources (Bass & Stogdill, 1990). Transactional leadership style is very observable on department stores and production lines where supervision operations is highly necessary. According to McGregor’s (2006) Theory X and Theory Y, type X people who are considered as inherently lazy and not fans of work, and in this case, transactional leadership style will be required to ensure the accomplishment of common tasks.
The transformational leadership theory of Bass (1985) is derived from Burns’ (1978) conceptualisation of transactional and transformational political leaders. If a transactional leader offers followers with something they want in exchange for something the leader wants, transformational leadership results in followers recognising the needs of the leader (Kuhnert & Lewis, 1987). Four components of transformational leadership have been identified by Bass & Stogdill (1990), including idealised influence, inspirational motivation, intellectual stimulation and individualised consideration.
The links between transactional and transformational leadership has been argued in context of the famous Maslow’s (1943) Hierarchy of Needs.
Applying transactional leadership to the lower-level of needs and becoming more managerial in style, can be a stable foundation for transformational leadership to be applied to higher-level of needs (Bass, 1985).
Nowadays, transactional leadership cannot be seen in most organisations, except shopping floors and manufacturing industries, while transformational leadership has become quite popular and has shaped the past decades in research studies
Eisenbeiß & Boerner (2013) have described transformational leadership as a double-edged sword. If a transformational leader overdoes in terms of leadership, the inherent personality defect or experience can possibly turn the leader in to a pseudo transformational leader.
The year of 2000 could be a beginning of hard time for last century leadership theories, to keep up with the pace of the age.
Nokia had exemplified the popular transformational leadership for over a century, evolved its business from a rubber manufacturer to a technology hardware giant. Theses incredible transitions must have employed transformational leadership theory in terms of visionary thinking, long-term planning, organisational culture control and risk taking. But the demise of Nokia still upset the world in 2014. The blog post by Jonobean, “Bye Bye Nokia – A Failure of Management Over Leadership”, argued that the leadership team present during the last 5 years before Nokia’s demise had clearly exerted the characteristics of transactional management, as they immersed too much in their past performance and held a “we know best” attitude.
But let Nokia’s demise be a lesson to us all. In the rapidly changing technology marketplace ensure your top team exerts a transformational as opposed to transactional leadership style and in product and business model development make sure you are clear on whether you are differentiating, neutralising or optimising.
– Jonobean, 2014
But, imaging you are the leader of Nokia, can you really purely employ transformational leadership theory? How can you handle detail orientation at times? How can you properly manage the potential for abuse? At last, how can you even make sure you are always in updated reality? A clear no answer in the contemporary changing world.
Future Research in Leadership
It has been argued that the old leadership theories were formed to deal with a very different bundle of circumstances, thus are becoming questionable regarding to the contemporary working environment (Davenport, 2001). Osborn et al. (2002) also pointed out that the traditionally accepted view on leadership need to be developed, as traditional bureaucracy is becoming rare.
Future academic research should be done more on the rising female leadership, and leadership in context of developing countries, but not blindly building extension blocks based on old theories.
However, a good bridge construction work usually saves time and resources through extending several blocks at the same time. Future academic studies in leadership can be focus more on contemporary phenomena.
According to a very recent Pew Research Centre Study, women now typically occupied top legal and positions, for example, as the CFO, rarely making it to becoming the CEO. Although the ascent is very slow, female leadership is still on the impressive rise. Future academic studies in leadership can be focus more on contemporary phenomena such as female leadership, meanwhile, pros of old leadership model should be taken into consideration.
Bass, B. M. (1985) Leadership and Performance Beyond Expectations, The Free Press, ISBN-13: 978-0029018101.
Bass, B. M. & Stogdill, R. M. (1990) Bass & Stogdill’s Handbook of Leadership: Theory Research, and Managerial Applications, ISBN-13: 9780029015001.
Davenport, T. H. (2001) “Knowledge Work and The Future of Management”, The Future of Leadership: Today’s Top Leadership Thinkers Speak to Tomorrow’s, pp. 41-58.
Eisenbeiß, S. A. & Boerner, S. (2013) “A Double‐Edged Sword: Transformational Leadership and Individual Creativity”, British Journal of Management, Vol. 24 (1), pp. 54-68.
Kuhnert, K. W. & Lewis, P. (1987) “Transactional and Transformational Leadership: A Constructive Developmental Analysis”, Academy of Management Review, Vol. 12 (4), pp. 648-657.
McGregor, D. (2006) The Human Side of Enterprise (Annotated Edition), McGraw-Hill Education, ISBN-13: 978-0071462228.
Osborn, R. N., Hunt, J. G. & Jauch, L. R. (2002) “Toward A Contextual Theory of Leadership”, The Leadership Quarterly, Vol. 13 (6), pp. 797-837.
Uhl-Bien, M., Marion, R. & McKelvey, B. (2007) “Complexity Leadership theory: Shifting Leadership from The Industrial Age to the Knowledge Era”, The Leadership Quarterly, Vol. 18 (4), pp. 298-318.