Such perspectives have suggested that when employees become involved in the decision making processes then this can strengthen leadership.
Transactional Leadership
Transactional leadership is the leadership model that represents what most people view as the concept of management. Transactional leadership is defined by an exchange relationship between the managers and the employees that are all motivated by their own self-interests and meeting the expectations that are associated with their job description. Transactional leadership consists of monitoring, controlling, and motivating employees through economic incentives and other types of exchange incentives (Bass, 1985). Most of the motivation in this model stems from financial exchanges such as by either salaries, performance bonuses, benefits or other incentives to lead the organization towards is shared goals by more of a contractual arrangement than anything else.
On form of transactional leadership is known as management by exception. This is a form of management that involves monitoring performance at regular intervals and taking corrective action when it is needed. The management by exception model can either be used actively or passively. If the manager is motivated then they may actively seek to find barriers that prevent more efficiency. A passive approach to managing by exception is represented by a manager basically waiting for a problem to come to them in which requires some decision to be made. This approach is actually well-suited to many scenarios including those in which a manager has a large number of employees that they oversee.
An even more hands off approach is represented by the laissez-faire leadership model which is also a form of transactional leadership. A Laissez-Faire leader will actively try to avoid intervening in the organization; they avoid decisions, delay actions, and ignore responsibilities (Bass, 1998). This type of manager will generally not use whatever authority has been granted to them by their position to pursue organizational goals. Rather they purposely distance themselves from the workforce in any way they can. Although this type of manager does not have desire to achieve organizational goals they can be more common than a human resources department would like to believe. In many cases such managers get promoted on the basis of seniority or some other factor that doesn't consider their motivation towards organizational goals.
Transformational Leadership
Transformational leadership is one of the most popular leadership models and has been called one of the most effective among the various theories of leadership (Judge & Bono, 2000). Transformational leaders are able to motivate their subordinates to reach their full potential by setting challenging expectations will in many cases leads the employees to achieve higher performances (Bass, 1999). Not only do transformational leaders have high performance marks, they also work well in a dynamic environment. They are able to adapt to change and are also known for their role in organizational change and change management. Transformational leaders can help an organization transition from one stage to the next in times of organizational change.
The transformational leadership model, was first presented by Burns who compared it to the transactional leader or manager role (Judge & Bono, 2000). Judge and Bono (2000) give the definition of transformational leadership as a leader who could appeal to the moral values of the employees. This in turn, motivates them to contribute to the organizational goals established without necessarily having a contractual motivation to do so. Employees who are inspired in an organization for a variety of reasons will perform better and devote more of their attention to what they can offer the organization and their role in the organization's goals.
Other versions of the definition of transformational leadership include that a transformational leader motivates followers to do their best, sets challenging expectations, and thus achieves higher performances. Furthermore, Bass later defined transformational leadership as simply a leader's ability to push followers beyond their immediate self-interests (Bass, 1985). He argued that a transformational leader could help an employee develop a higher level of maturity in their ideals, as well as their concern for the achievement, self-actualization, and well-being of others, of organizations, and of society generally. This type of motivation is not depending on a material rewards system.
Bass (1985) defined transformational leadership by four main components that the leader can exhibit. Idealized influence is a component that deals with a leader's ability to fit the image of leader and to maintain this "ideal" image. It is difficult to define what an ideal image would be, but the leader must exhibit...
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