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Effects of Transformational and Transactional Leadership

6091 words (24 pages) Business Assignment

3rd Jun 2020 Business Assignment Reference this

Tags: Business AssignmentsBusinessLiterature ReviewLeadership


Leaders are like the captains of ships and planes, the success and failure of the journey is determined by those two key people. Managers create target oriented goals, vision as well as working culture. They have to set the standards of their organizations (Alkhajeh, 2018). According to Locke, 1991, leadership should motivate and inspire the workforce, instil motivation, ambitions in the workforce as well as the achievement through set goals and targets benchmarks. The workforces need to have the right skills through training and other staff development programmes.  Management is about planning m setting goals and targets which to be smart and reviewed consistently, Managers should be able articulate vision, bring changes on daily basis.  Transformational leadership matches Locke’s attributes, as they are ambitious; always searching for new ideas, stretch an challenge the workforce. They are always associated with achievement of desired performance and always have a vision. These types of Managers offer a two way communication which enhances total effective communication (Burke, Caryl, Cooper, Ronald, 2006).

Managers are to set goals, targets and a structure for their subordinates to follow, they set a direction which will yield good results for the entire workforce so as for them to be able to compete the global markets.  The type of a Manager who will yield good results needs to be task oriented, creating a conducive, stimulating environment which will inspire the workers to achieve their goals and targets. As well the workers need to be empowered so that they feel valued, and then they develop the spirit of ownership, working so hard, avoiding letting the organisation down as they feel being part of the project.


This study aimed at finding out the effect of transformational and transactional leadership. The success or failure of any organisation is determined by the leaders leading the organisation. As the leader is like a driver, a ship captain who gives the subordinates a direction, inspiring and motivating them to achieve the set goals. This is a secondary research, scrutinizing previous researches and analysing the management of different companies, those which are succeeding and those which are failing. The researcher is aiming to use as much literature review to get as much evidence, from the organisations and companies which have succeeded in using different types of leadership styles to achieve their goals and targets. Leaders play a pivotal role in influencing the efficiency of the workforce, they are just like football managers who have to set the tone for their players to achieve their targets and goals. It is important to scrutinize how managers create a tone and working spirit for success as well be able to solve problems individuals or the workforce face at work , as well as other problems they might be having at home which might impact their performance. Literature review would be explored focussing on leadership styles , give a critical analysis of each and every leadership style on performance and team building.

Literature Review

The importance of Leadership in reviewing the role stressors

Creating competitive teams, who have the right skills is part of a good manager, who can transform the workers to be competitive and aspire for higher goals and targets. Workers need to be clear of their expectations and targets so as not to be found wanting .Gaps and shortfalls need to be reduced by the competitive managers who use the correct leadership styles so as to create competitive teams. The management needs to have a positive influence, act as good role models, so as for the subordinates to emulate and follow. “Beginning in the 1970s and rapidly accelerating during the 1980s, there has been a further change that place leaders in a pivotal role as an essential part of achieving better productivity and performance” (Kippenberger, 2002). This type of leadership was transforming leaders to focus on performance and increase production.  Leaders on this situation are to motivate, inspire and produce workforce which has the right skills to produce more.  “To get the best out of people, they need to be led not just managed as subordinates” (Kippenberger, 2002).  Workers to produce more need to feel valued  and included in all the organisation programmes , so that they develop a sense of inclusiveness, so that they feel being part of the programme , owning up they programme  they are self motivated to deliver as they do not want the organisation to collapse. This can be produced by the organization’s management by empowering the workers, providing programmes which will equip the workforce with relevant skills by engaging in coaching and mentoring programmes.  My main focus, is to focus on Transformational leaders are vital in this century as they transform the organisations to be competitive and target oriented. Creating workforce who are target oriented and who have the right skills to compete.  These leaders set targets and challenges for their organisations.  They set targets and expectations for their subordinates which will enhance good results and production and compete other competitors global.  In this case these leaders with their idealised influence they act as good role models, then the subordinates emulate them. They empower their staff, inspire and motivate them to take their lead in the organisation’s agenda. They motivate and stimulate their workforce, through skills empowering which can be through individualised training, mentoring and coaching programme and other individualised personal development plans. Participative leadership has proved to be a good source of stimulating and building a competitive team which produces more in various organisations and companies.  Much of the focus of this organisation is the inputs from the subordinates. The inputs can be gathered on a one to one supervision or through evaluation or feedback forms which can be passed to the subordinates to complete, how they feel about everything.

Transformational leadership is another type of leadership relevant in the modern world, where there is competition for the market. The Manager in this case needs to create a competitive workforce which will compete and meet the needs of the customers, retain high level of customers.  The subordinates are inspired and motivated to participate, deliver and bring the inputs to the management.  This type of leadership brings the motivational level of the workforce to self-actualization. This type of Manager act as facilitator bringing ideas to the subordinates so as for them to achieve their  goals,  this type of leadership brings a two way communication , and inputs from both sides , that is the manager and the subordinates. This type of leadership offers a two communication which enhances total effective communication, there is always communication between the manager and the subordinates so as to share experiences, targeting at topics like “job satisfaction from the subordinates and the management, commitment from both sides, productivity and performance”. There is accountability of delivery and performance which can be through personal development plan, smart targets and goals setting and reviewing.

The type of a leadership style which can empower the workforce is key in this case, and has proved to be successful in different researches carried out recently.  For example If that type of leadership is to empower the workers, and If these workers are empowered, they develop confidence, self-esteem, which enables the organisation or company to compete global with other competitors.  Leadership styles like transformational have proved to have an influence on the performance part of the employees , enabling them to be focussed and enthusiastic about  acquiring new skills which will enable them to compete with other competitors global. The workers become eager to achieve their targets and goals , If they are empowered , as this type of leadership empowers everyone to contribute to the development of the organisation as a whole , as their inputs are taken seriously by the entire Management(Murari,2015). The other researchers have hinted out that the type of style used by any manager will have any effect to the running of the organisation, whether in a successful or negative way, so Managers are to assess and choose the styles which will bring success and joy to their organisations. As these styles enhance corporate culture that influence the entire organisation and how it delivers. “The type of leadership can foster a work environment in which decisions are made and implemented without a lot of back and forth discussion, which can lead to increased productivity and efficiency”(Seidel,2019). The leadership styles should be careful selected so as to yield positive outcomes and the results. They should create direction which would enable the workforce focus and targets and delivery. If the workers are aware of what they are supposed to be doing, if the targets and goals are smart. The workforce would be clear on what to do as they know, what is expected out of them. For example Transformational; leadership and participative leadership yield the same results. As it enhances a two way communication, inputs from the workforce is taken seriously and on-board.  By creating a situation and empowering the workforce, the workers feel valued and respected, enabling them to excel more, that is increasing their delivery. At the same time enhancing a team spirit, workers working as a team whereby they share the ideas, and reduce errors, reducing laziness amongst the workforce. Everybody feels valued if given that authority and respect.  Although researches have shown some draw backs from these leadership styles, as they do not bring success only to the organisations but bring failure sometimes. . For example leading to paralysis by analysis” (Seidel, 2019). Sometimes the leaders, they fail to challenge and stretch their workers as they intend to impress all of their workers. By challenging their workers, they feel and that they would be demotivated and do less by showing rebellious behaviours.  This can cause confusion and lack of direction as well, with this jeopardising the company’ goals and targets (Seidel, 2019). Transformational leadership has been singled out as an effective style in producing competitive staff, who are aware of their goals and targets.  It enhances some moralities, by increasing the workforce’s skills, motivation and inspiration levels, by creating a bridge between the workforce and the leadership. By doing so, it creates the clear outcomes and targets to be followed by the entire organisation so as to achieve the best results and survive the global competition from other competitors. This type of leadership, increases the interest, zeal; of the employees, it real appetizes them to do more all the time (Khajeh, 2018). Another research carried out, on the impact of leadership styles on Management of different organisations and companies, was carried out Girling in 2018. This was carried out on 4000 executives.  The findings of this research was that “climate contributions to around 30% of company’s profitability, leadership styles have a direct major impact on climate, creating a negative or positive working atmosphere. The study ranks six leadership styles in terms of their positive impacts by creating flexibility, responsibility, employee wellbeing, standards, leadership training, rewards, clarity and commitment.  The six of these were authoritative, giving guide and a vision, affiliative creates harmony and emotional bonding amongst the workforce, democratic enhances choices and that voices are heard.

Asaari carried research as well, on six leadership styles, that included transformational, Transactional, autocratic, charismatic, bureaucratic, democratic. The results portrayed some negatives and positive impacts. For example transactional , charismatic , bureaucratic had a negative relationship with the organization performance , as these styles proved tot to inspire and motivate the workforce to do more. “These styles do not induce the employees to perform better and stimulate high turnover intention” (Asaari,). The results singled out the following as the most important styles which brings some positive outcomes within the organisations, the democratic, transformational and autocratic styles. These have proved to “induce employees to perform better as per level of their expectations” (Asaari,). These types of leadership need to be cherished by most organisations as they bring positive results, as far as production is concerned.  To add flavour to this research, the researcher looked at different researches carried out by other gurus in the area of Management. In another article produced by Khumalo, in her article The impact of leadership styles in organisational commitment, she examined leadership styles in an organisation specialising in oil gas industry. Her findings were that there was a correlation between leadership styles and management styles as Managers should focus on using and rotating leadership styles which can bring some developments in progression within the organisations. Targeting at areas like staff development which will equip the workforce with the right skills to compete as well as developing confidence in discharging their duties , as well as using a leadership style which is inclusive which will empower the workforce as well as motive them(khumalo, 2015).

Research Aim, Research Questions or Hypotheses, and Objectives

  1. What characterises an effective leader?
  2. Do you think your working environment is inclusive, do you participate in any decision making?
  3. Do you think leadership styles pray a role in creating a conducive working environment, which is characterised by high performance?

Research Methodology

For a relevant and applicable literature, an initial search was conducted to check the relevancy and availability of the information (Holland and Rees 2010; Aveyard 2014). A combination of some management  databases were also used, using a search engine, google , google books, University site, in order to find different published papers and for the sake of this discussion, only five papers were selected. These data bases were identified and used because they are well known for providing “good quality information” (Holland and Rees 2010). The relevant key themes used to find the literature included: Management styles used by different companies like Arriva , Stage coach. This research study hence used a wider literature as well as both quantitative and qualitative studies to address the research question as well as evaluating and concluding findings (Thomas 2013).

Data Collection

Authors Purpose of study Sample and setting Design  and methods Key Findings/Themes Limitations
Khajeh, E.H.A


Impact of Leadership styles on organizations 2662 employees drawn from 311 companies , quantitative research Transformational and democratic leadership styles have been identified as more influential styles in producing  more productive , motivated workforce 6 leadership styles. limited the research
Andrew S.K.

Cooke R.A. Willis, W.


The impact of leadership styles on organizational culture and firm effectiveness: An empirical study Survey drawn from 2662 employees targeting 311 organizations Managers and supervisors , play a pivotal role in producing competitive and more dynamic workforce who are product oriented
Iqbal, T.


Leadership styles on organizational effectiveness Research  questions , problem statement , independent/dependent variables Transformational leadership , proved out to be the most effective , productive style

Research by other researchers collected, analysed and used, to have a clear picture of the leadership styles used before and what results did those styles bring to various organisations and companies.

Data Analysis/Results

Authors Purpose of study Sample and setting Design  and methods Key Findings/Themes Limitations
Khajeh, E.H.A


Impact of Leadership styles on organizations 2662 employees drawn from 311 companies , quantitative research Transformational and democratic leadership styles have been identified as more influential styles in producing  more productive , motivated workforce 6 leadership styles. limited the research
Andrew S.K.

Cooke R.A. Willis, W.


The impact of leadership styles on organizational culture and firm effectiveness: An empirical study Survey drawn from 2662 employees targeting 311 organizations Managers and supervisors , play a pivotal role in producing competitive and more dynamic workforce who are product oriented
Iqbal, T.


Leadership styles on organizational effectiveness Research  questions , problem statement , independent/dependent variables Transformational leadership , proved out to be the most effective , productive style

In this research, companies have been identified, which have transformational leaders, who have transformed companies. For example companies like Vodafone.  Their Management provide inclusive leadership. These Managers act as role models so as for the subordinates to follow the set targets and goals set by their superiors.  This organisation offers training and development so as for the workforce to develop the right skill so as to enable them to compete global. They also provide learning academies so as for the entire workforce to acquire the right skills, so as to reduce the shortfalls and the gaps in their delivery (Vodafone, 2015). As well Vodafone offers online e-learning courses so as to enhance personal development plans.  The type of leadership provided by Vodafone, modernises the company’s approach so as to meet the global demands. “ Where it is crucial for business that enter these market places to go beyond their core business lines and help improve education, protect the environment , address poverty, and human rights , enhance their reputations and business models”(Pilot, 2015).

These companies most of them have adopted, transformational leadership, which is vital in modern world and century.  This type of leadership is able to transform the workers to be competitive, and as well make companies able to copy with globalisation.  This will enable the companies bring together staff from different backgrounds who are competitive. (Cockburn, 2015).Dynamic leadership styles being embedded by these leaders as well, as this type of leadership is able to bring outcomes and the results .The workforce needs to be competitive , produce more , by acquiring the right skills. Companies like Vodafone have been able to transform their organisation to a competitive one, which is why it is one of the successful companies global in technology. The organisation has been able to create “strategic initiatives and mergers, strategic acquisitions” (Vodafone Group, 2019).

Transformational leadership goes along with Locke’s basic model of leadership. Locke is an advocate of inspiring and, motivating the workforce to produce more. If the workforce if motivativated and inspired, they would strive for greater results and achievements, the workforce needs to be ambitious to strive for more yields. The workforce needs to have the right skills and training to compete and conquer. The Managers need to be proactive so as to plan for higher goals, empower the staff to be proactive as well, so as to have problem solving capabilities (Burke, Carly, Cooper, Ronald, 2006). According to Locke transformational leaders always “search for new ways of working and willing to change things the way they are usually done, and associated with achievement of desired performance objectives”(Burke, Caryl, Cooper, Ronald ,2006). The transformational Manager will praise his subordinates, by using vouchers and certificates. As well by individual pays based on individual performances this will enhance intrinsic motivation amongst the workforce, with this enabling the workforce to meet the targets and set goals. Also issues like ethical standards, team spirit would be achieved (Frey, Osterloh, 2002).

If the workforce work in a conducive environment, through inspiring and motivating management skills, styles and models, they produce more at work.  Through Transformational leadership styles, the workforce develop intrinsic motivation, as well as extrinsic motivation, they end up performing beyond their maximum capabilities, and increase their potential of delivery.  If workforce are empowered at work, their show up their interest and talents, with this enabling the management to develop their talents through a variety of staff development courses so as to stretch their workforce, through different training programmes which will increase their skills (Growley, 2011). The same leadership style will foster and expand the organization’s effectiveness and capabilities through that formational leadership. This will foster the organization’s strategies, ethos, values and ethics.  By doing so it will maximise and stretch the Human resources’ capabilities, maximise performance and development (Avolio, Bass, 1994).

This type of leadership will create inclusiveness , trust within the organisation , with this enabling the workforce develop a sense of ownership , and increasing their extrinsic motivation , enabling them to produce and natural improve themselves through staff development programmes. This leadership will keep the workforce updated as for the organisation to succeed it needs to acquire the right information, training and education as well as the resources which will empower them to deliver and acquire the right skills.  Also this type of leadership will create a joint ownership which will increase inclusivity, creating a performance management which will create bench marks, as well create a reward structure that appreciates joint accountability (Hawkins, 2017).

Professor Michael West carried out a research in 2012 in UK both with commercial companies and the Health service.  He came out with the following recommendations which can make companies and organisations prosper.  The Management needs to set objectives and goals which are smart which need to be achieved by the team. Team work needs to created to achieve those set targets and the goals. These targets and goals need to be reviewed regularly to review progress and the obstacles, find remedies for any shortfalls through these regular reviews.  Transformational leadership has its roots from James Burns (1978).  Who described this type of leadership as a process in which leaders and the subordinates assist each other to advance to a higher level of morale and inspiration? Working through structures to expand new roles. He described these transformational leaders as leaders who use “charisma, inspirational stimulation, intellectual stimulation, individual consideration” (Dr, Shelton, 2012). Inclusivity and joint ownership is created, everyone is motivated and inspired to deliver.  With this creating team working spirit, role modelling, people learning from others, setting up of benchmarks, goals and targets, people know what is expected from them, they are challenged and stretched both the workforce and the management.

There is a success story of Transformational Management being implemented by organisations like Arriva, who say “there is no I in a team but there is an individual” (Yexley, 2015).  Individuals are the ones who have contributed to the success of the team developing excellence for both the business and the customers. Arriva identifies the importance and the role of the workforce in bringing the inputs in the success of the business. They value and respect their workforce by keeping the workforce inspired and motivated.  The management remain innovative and creative in their communications approach so as to enhance two way communication approaches, making sure the benchmarks, goals and targets are clear.

The management listens to the opinions of the workforce, which assist in developing their goals and targets to meet customer demand and satisfaction. The organisation runs an annual group survey so as to get some inputs from the workforce, as well helping the organisation benchmarks employee satisfaction across a range of measures.  In 2014 300 000 employees participated in the survey global, In their big picture programme, employees had the opportunity of discussing how the entire organisation’s goals and targets are delivered. (Yexley, 2015).

Another success story is from Stagecoach   , its management strategies and styles enhance, strong commitment to diversity across the business, they value the workforce inputs by treating the workforce fairly, and listening to their views and opinions along business lines. In the form of individual staff development programmes, they offer staff development programmes , by having schemes like the graduate schemes , classroom room tutors who offer tutoring programmes so as to equip the workforce with the right skills.  They reward the workforce’s commitment by offering rewards like the internal award schemes, through the use the vouchers, certificates and global annual champions (Stagecoach Group, 2018). The other leadership styles which brings positive yields in different organisations, is the participative leadership style.  The Manager takes the lead, then the subordinates follow, they work as a team to increase production, and doing so they reduce making mistakes. They are inspired in producing more and motivating the customers. This increases the customer satisfaction and demand, It creates a conducive working environment which allows the workforce to participate in decision making (Duggan, 2018). To echo my sentiments, in another article carried by Kennedy and Anderson, They wanted to find out the effect of leadership styles and emotions on the workers’ performance within organisations. As Managers can shape out the environment to anything to anything, whether succeeding or failing environments, depending on the leadership styles put in place. In their findings, they concluded that transformational leadership style has a positive impact on “optimism” amongst the workers, as the workers are empowered to make some contributions on the running of the organisations as well as being coached, trained with the right skills, so as to reach the gaps (Anderson, Kennedy, 2002). Managers are meant to facilitate by building up business environments which will yield positive results. This could be achieved by embedding and alternating leadership styles which are targeted in addressing setting issues like training for skills, inspiring and motivating the workforce. In this research , the results indicated that leaders to achieve , to produce more for their organisations , they should use effective leadership styles which will produce the results by addressing these key areas , inspiring and motivating the workforce, providing training skills so as to enable the workforce to compete , by reducing skills gaps(Goleman, 2000). Salahuddin , as well in his research in the same area of leadership styles and their impact on delivery within the organisations , his findings were that Leadership style is key in delivery and producing good results within various organisations.  Haq and Kuchinike as well looked at the same topic, “the impact of leadership styles on employees’ attitude towards their leader and performance”, the results, showed that Managers were key in positive delivery within the organisations, at least by using the right leadership styles, “there is a significant and positive relationship between leadership styles and performance outcomes” (Haq, Kuchinine, 2016).


Leadership is all about giving direction which will benefit the organisation by producing a self-motivated workforce, which have got the right skills to deliver and achieve good results.  To achieve this it needs strategic planning and using leadership styles which will focus on targeted goals , for example transformational leadership. To create a competitive team, there would be issues as well, so the Manager should be able to resolve ambiguity, solve prevailing problems and role conflicts which might bring undesirable results (Al-Malki, Juan, 2018).


This study has focussed on the impact of leadership styles on the organizational performance. The focus of the study was on leadership styles. The quantitative data was used, reduced the scope and applicability of the research. The researcher will encourage the future researchers to focus on using the relevant research methods, as well as the qualitative methods so as to determine the relationship between leadership style and organisational performance (Khajeh, 2018). In this research after giving a critical analysis of the data and literature review carried by other researchers in different organisations , there is great evidence that there a correlation between leadership styles and organisation performance. Leadership styles can bring positive and negative in the running of the organisations. There is great evidence that these leadership styles impact employees’ morale, outputs, production, even when it comes to making decisions. (Duggan, 2018). One important Theory which is related to the leaders and their leadership styles is the is the Trait Theory. Of which all achieving Managers who are able to bring positive results to the organisations should be flexible to the situations, they should be proactive, always solutions to the problems. They should always think on their feet, be open minded and alert to the environment, they should have the zeal and enthusiasm of delivering and achieving great yields. These sort of Managers target oriented, charismatic and energetic (Al-Malki, Juan, 2018).

Limitations/Future Research/ Recommendation

Three leadership styles looked at, of which it does not give a 100% results, so in the next research if more leadership styles are scrutinised, making a detailed comparison of the results. My recommendation is that Managers should use a variety of leadership styles for targeted outcomes and results.


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