Theoretical Aspects Related To Transformational And Transactional Leadership Styles

The Characteristics of Transactional Leadership

Question:

Discuss about the Leadership Styles In A Varying Situational Context.

Transformational leadership is considered as a form of leadership technique that influences transformation among individuals as well as social systems. It further assists in conception of valuable as well as constructive changes in the followers with the purpose of uplifting followers to take the role of leaders. Transactional leadership further regarded as managerial leadership refers to the leadership technique where an excessive dependency of the executive is seen on factor like rewards, recognitions and punishment in order to accomplish effective work performance from the subordinates(Dumdum, Lowe and Avolio2013). However, it must be noted that the concepts of transformational as well as transactional leadership vary largely with the fundamental conjectures of management and inspiration or motivation. This report sheds the light on various theoretical aspects related to transformational and transactional leadership styles. The report also focuses on the association of transformational and transactional leadership. It will further evaluate the several approaches of these two leadership styles by further stating to the ways in which these approaches can be implemented in the work environment of ALBA. ALBA also known as one of the leading aluminium smelters across the globe is famous for its technological expertise and unique policymaking (Taib 2015).

The company gains its popularity through several community related programmes along with social actions that have contributed to the immense value to endorse and maintain its corporate social responsibilities. This paper will examine the prospective impact of both of the leadership approach on the CRE faculty of ALBA along with its expected outcomes of the work performance of the company. In addition to this, this report will throw light on the association of transactional and transformational styles of leadership along with the risk and challenges ALBA might experience by executing these leadership styles resulting to the issues faced through workers’ expectations. Lastly, the paper will try to explore the rate of effectiveness of two leadership approaches on ALBA’s performance by providing certain strategies, which can be adopted to enhance the performance of the company.

The transactional leadership approach also regarded as managerial guidance and leadership focuses primarily on administration, organization and enhancing the potential outcomes of the performance of organizations as well as groups. The characteristics of transactional leadership involve several aspects.

• Practical- The concept of transactional leadership depends on the interchange that occurs among the leader along with the employee or substitute in some contexts. Several concepts of rewards and recognition are reliant upon the expected work performance of the employee (McCleskey2014). The employee generally is appreciated if the expected goal is achieved.

However, these acknowledgements and rewards can be withdrawn if staffs fail to accomplish the desired level of performance.

• Resistance in transformation- Leaders adopting transactional approaches firmly disregards any shift to their work environment. As a result, they rely on steady observation of aims and objects in particular. Leaders executing such transactional management have the ability to identify both performance as well as non-performance of the employees.
• Directive Approach- A transactional leader acknowledges the involvement of decision-making activities and further expects subordinates to follow the instructions proposed by them. However, it must be taken into consideration that in transactional leadership, employees are perceived to adhere to the predetermined standards of the organization.

Comprehend different initiatives to encourage team members- The achievement of transactional leadership is greatly dependent on the members of the team by importance of recognitions, it becomes highly essential to understand the types of recognitions encourage individuals(Van Wart2013).

• Team members should be aware of the reward structure and ways of achieving it.
• Leaders must ascertain that there lies no biasness towards or in opposition to any groups or individuals in particular.
• Further to it, employers must also guarantee that rewards are shortly received after the accomplishment of targets goals.

Transactional leadership style emphasizes on the foundation level of Maslow’s hierarchical structure of needs and desires in order to exert motivation as well as steer achievements. Each of these stages stimulates the behavioural factors of the employees. After the accomplishment of subordinate levels of the hierarchy, leaders focus on anxiety related work performance by individually regulating tasks.

• Effective interaction- Sincere and frequent communication between labours and managers regarding work related issues acts as one of the major motivators of employee motivation.
• Business Impact- This factor offers employees with periodic information on the impact of their work performance on the projects and assignments executed by them.
• Strategies like recognition, rewards and strategies complement the value of the work performed by the employee and thus help them in expending efforts in order to accomplish future targets and goals of the business (Ladegardand Gjerde2014).
• There is also a need for proper guidance and supervision, which would help in the reduction of uncertainty as well as ambiguity within the workforce and further characterizes the path to achieve target (Unsworth, Dmitrieva and Adriasola2013).

• Opportunities- This factor focuses on appreciating the ones belonging to managerial positions. Rewards and appreciations must not only be constrained within the employees but also to the managers who has immense contribution to the development and growth of the employees.

Comprehending Different Initiatives to Encourage Team Members

According to Bernard Bass, there are four major factors of transformational leadership reflecting the attitudes, which can further be characterized into four varied styles. However, these four styles can be considered as the “Four Is’ of transformational leadership (Omar 2013). These “four I’s’ are Idealized influence, individualized consideration, intellectual stimulation and lastly inspirational Motivation

• Idealized influence- This style includes attitudes that encourage pride and motivation in followers for their association with the leader that is usually draws in similarity with charisma. However, the leader with transformational attributes reflects an authoritative sense and courage and is further able to ascertain others to conquer such hindrances.
• Inspirational Motivation is known as the second factor that involves the optimistic agents who focus on the upcoming events and articulate a persuasive sight for the potential outcomes (McKnight2013). However, these leaders believe in accomplishment but further reflect confidence to acquire these targets. This aspect of transformational leadership draws its relevance to societal factors because of the demanding character of the non-profit world, where factors like interest and motivation plays an essential role in order to maintain optimism throughout all segments of the organization.
• Intellectual stimulation is another factor;which is referred to the set of attitudes and elements, which proves that a leader following transformational style engages in varied perspectives and ideas during problem solving sessions, and

Further assists others to perceive situations through the same lens. The ones who execute intellectual stimulation style further acknowledge non-conventional thoughts and ideas by signifying innovative methods of perceiving approaches.

• Individualized consideration is the fourth factor, which endorses the individualized consideration time of inducting and training the subordinates to support self-reliability (Bottomley, Burgessand Fox 2014). Leaders of transformational approach treat others as individuals instead of perceiving them as mere group members as well as recognize the inconsistent desires, skills, and aspirations for those individuals

• Source of Authoritarian power: In transactional leadership, the foundation of the skill to create an impact or influence workers originates from the authoritative position of the person who belongs to the managerial position in the organization (Odumeruand Ogbonna2013). However, this is referred as less productive in comparison to the source of control that depends on perceive character or expertise of the manager.
• Subordinates’ response or feedback- During transactional leadership, the leader generally tends to be contended with employee compliance whereas in case of the transformational leadership style, the authoritative person expects immense dedication and obligation from his subordinates towards the organization.
• Time interval- Managers adapting transactional leadership techniques emphasize on short-term productivity. This is because of the inconvenience subordinates experience while practising external rewards over a long duration of time (Hamstraet al. 2014). On the contrary, Transformational leaders believes in acknowledging associations which are

based on long period of time which further directs followers to enhance and develop commitment towards the organization.

• Concept of Recognition- The concept of acknowledgment and rewards offered by the transactional leaders are considered as extrinsic and further concentrates on Maslow’s lower order requirements and desires, Transformational leaders on the other hand grants higher order recognition.
• Emphasizing on Counselling- Employee observation and evaluation is regarded as the focal point amongst the transactional leaders whereas the transformational leaders believe in employee encouragement and satisfaction.
• Locus of change- Posing an authoritative position on employees is referred as an external symptom of transactional leadership followers (Breevaartet al. 2014)on contradiction to the transactional leaders, transformational authoritative assists in transformation and alteration of employee behavioural patterns, which are further referred as an internal manifestation of leadership expertise.

• Control and Supervision- Individuals attempting transactional leadership techniques intensely monitor the performance of the employees whereas the transformational leaders believe in employee development so that less guidance is required for the subordinates.

The leadership approach purposes to affect the performance, attitudes, and beliefs of others. In terms of organizational context, the approach of the leaders shifts towards the employees. This process is however referred as a complex one as it endures the capabilities and skills of the leader to interact and further connect with the employees(Dumdum, Lowe and Avolio 2013). The concept of leadership skill established with

• comprehending the employee desires and expectations,
• varied leadership influence on followers and the way several behavioural patterns and proficiency of the followers affect the leaders and lastly,
• Productivity of varied leadership approaches in varied circumstances.

The primary approaches related to Leadership theory comprises of

• Characteristics and attributes of the approach, where leaders are born and not developed and the idea of leadership or headship depend on innate traits or skills in particular.
• In functional or collective approach, leaderships can be erudite and established where the aim depends on accountabilities, responsibilities and skills of the leader as well as the group characteristics. One of the primary theorise of functional approach is known as Adair’s Action-Centric Leadership (Li, Mitchelland Boyle2016). This strategy aims to the leadership actions and how balance must be necessitate to accomplish the desires and needs of the individual, team and task provided.
• The approach of Behavioural Style- This approach primarily aims at the actions and conduct of the ones belonging to leadership positions, following the significant factors of leadership techniques and the way it affects the collective performance of the organization.

• Leadership Techniques- Principle aim of leadership techniques focuses on the techniques and influence of the way these techniques are executed. A leader can implement three types of leadership techniques.

1. A) Leadership style proposed by Lewin primarily emphasizes on three basic techniques such as authoritarian, egalitarian and laissez-faire techniques (Tyssen, Wald and Spieth 2014).
2. B) Belbin defined two varied techniques of leadership, which are known as the Solo Leader and the Team Leader
3. C) Another leadership style proposed by Tannenbaum and Schmidt involves a range of leadership techniques, which rely on the authoritarian degree that is exercised by the managers and the democratic level available to followers in the process of decision-making

• Situational Approach and the concept of Contingency model- In this context, the style and technique of leadership, which will result to an effective and productive outcome, is determined through situational factors. However, in this context it must be taken into consideration that a particular technique will not fit into all circumstances.

Transactional approach demands in achieving self-regulation and self-inclination of followers in order to accomplish organizational objectives and goals that have its foundation on the authoritarian position in the structural level of the organization.

Transformational leadership in organizational context- During the execution of transformational styles, the function of guidance involves in the establishment of idea for transforming several functions of the organizations and further demands to the higher principles and values of the employees of the organization.

The mission of attaining closer association with clients across the globe, ALBA, Bahrain that is known as the most leading aluminium smelter has recruited official delegations to make associations with some of the significant clients in Asia and Pacific regions. ALBA, further to this has developed association in Aluminium China 2015 happened at the China’s Shanghai New International Expo Centre. Alba’s Line 6 Expansion Assignment is considered as one of the largest Brownfield establishments in the region(Albasmelter.com 2018). Anticipated to commence production by the beginning of 2019, the project is assumed to increase the annual revenue of smelter’s production by more than five hundred thousand metric tonnes, taking the total production facility to almost 1.5 million tonnes per annum. Transactional leadership can be implemented amongst all the international teams in order to ascertain the smooth performance of all the employees resulting high revenue generation.

Aluminium Bahrain, which is known as the one of the leading smelters in the Kingdom of Bahrain currently, emphasizes on Transformational leadership techniques. The company encourages its obligation towards labour development by several inductions and campaigns titled as ‘Boss vs. Leader’ in order to boost its non-managementlabour force (Albasmelter.com 2018). According to the CEO of Alba, Tim Murray, the objective of Alba will lie on suitable leadership expertise required to participate in the competitive global market.

• Cross Cultural Knowledge- The techniques involved in Transformational Leadership comprises of a firm correspondence knowledge between the leader and the subordinates (Rodriguesand Ferreira2015). This style of leadership however encourages in improving the process of knowledge transfer amongst both local and international clients of Alba. Knowledge and information from varied bases can result in an effective establishment of competitive gain to Alba.
• Individual development- Transformational Leadership can develop growth in individual through interpersonal communication that further inspires employees to experience future risks and challenges.

Impact of Emotional Leadership on Cross Cultural Teams

• Leaders characterising emotional intelligence influences the subordinate performance as well as organizational citizenship attitudes based on varied cultural aspects (Yukl 2013).
• It is immensely important for leaders to recognize the cultural disparities of the organization as well as the cultural gaps within the organization as well as within its clients.

Transactional leadership comprises an exchange between the head and his subordinates. Implementation of transactional leadership occurs in every organization.

• Structure- In the context of transactional leadership, employees receive structure and routine related to the work assigned. A clear and effective communication takes place between the employee and their manager.
• Standardization and competence- The main focal point of the manager lies in the successful completion of projects. A structural framework leads employees to work precisely the way the stakeholders’ preference (Sakiruet al 2013). However, it must be noted that structural work generally becomes repetitive which further become less time consuming. The employees with fewer errors can make improved productive generation.

The Four Major Factors of Transformational Leadership

Transformational leadership involves varied expertise and strategies to the concept of leadership in order to generate profit and growth to the organization.

• Corporate Training and Induction- Accurate employee training and induction must be one of the most significant criteria of any organization. Transformational leaders can be involved in process of corporate training in order to enhance and improve the consequences of existing employees and further equip employees at entry level to produce more generation (Birasnav2014). A leader adapting transformational skills establishes increased effectiveness during the process of corporate training.
• Lower Employee along with consumer revenue costs- Transformational leadership involves with varied genres of people and further seeks to provide satisfaction to their needs and requirements (Donateand Pablo2015). The concept of fewer turnovers implies less recruitment and training, which in turn becomes a great opportunity for the business.

Though Alba Aluminium primarily emphasizes on Transformational Leadership, there is a high degree of self-regulation, integration and believes in adapting the leaders’ perceptions and views as personal (Eisenbeiß and Boerner 2013). Thus, Alba experiences a high rate of growth and learning in its operations. The values and expectations of managers are similar to that of the followers. Thus, it encourages in the development and growth of its people and further enables the labour force to be deeply associated with the organization’s priorities and targets. The introduction of employee management workshop not only allows them to attain similar chances and opportunities but also make them feel the organization as their own. However, for the Alba 6 line project transformational leadership techniques will not work efficiently for the company. In order to align the stakeholders’ preferences transactional leadership will prove to be beneficial to the company(Albasmelter.com 2018). There will be many situations during the Line 6 expansion project, might be favourable to the organization. However, it must be taken into account that a single leadership approach does not prove to be wholly effective to Alba.

• Situational Leadership Style- The situational leadership is referred to the technique where the leaders shapes and develops the leadership techniques in order to adjust the establishment level of subordinates. Developed by Dr. Paul Hersey, the leadership model is considered as highly recognized as well as productive and flexible tool of leadership. Leaders adhering to situational leadership learn to exhibit four fundamental and significant competencies such as Diagnose, Adapt, Interaction and Advance.
• Training for both Transformational and Transactional Leadership Techniques- Alba should introduce both leadership styles in order to educate its employees to deal with varied circumstantial situations. Alba must learn to implement both leadership styles in order to execute international projects as well as any

Therefore, from the above discussion, it can be concluded that both Transactional as well as Transformational Leadership has its significance in the performance of Aluminium Bahrain. The role of transformational leadership style is to influence the core competencies and assumptions of the members of the organization. This technique usually produces better performance than transactional leadership style. The primary responsibility of a transformational leader is to administer an organization by sharing knowledge and information within all levels of the organization. Transformational leadership comprises of aspects related to personality, motivation, developing intellectual stimulation. Transformational leadership further manipulates absorptive capabilities of the employees. However, transactional leadership style comprises of motivating and deviating followers towards the regulations of the organization. It further involves contingent rewards, effective performance and laissez faire. The report has evaluated the characteristics of both transformational as well as transactional leadership techniques, further examines the areas where these to leadership techniques can be implemented in the organizational structure of Alba Bahrain.

This paper further focuses on the various benefits as well as shortcomings of these leadership styles. In further to this, the report raises concern on which of these leadership techniques will prove to be beneficial to Alba’s work performance by providing suitable recommendations to it, in order to earn higher revenues through both global assignments and other projects in Saudi Arabia.

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