Transformational Leadership

Fundamentals - Models - Differences - Impact on employees

Seminar Paper, 2010

28 Pages, Grade: 1,3



1 Introduction

2 Fundamentals
2.1 Fundamentals of Leadership
2.1.1 Trait Leadership Theory
2.1.2 Process Leadership Theory
2.2 Fundamentals of Management
2.3 Management versus Leadership

3 Leadership Models
3.1 Overview of Leadership Models
3.2 Transactional Leadership
3.2.1 Definition of Transactional Leadership
3.2.2 Components of Transactional Leadership
3.3 Transformational Leadership
3.3.1 Definition of Transactional Leadership
3.3.2 Components of Transformational Leadership
3.3.3 Other Transformational Leadership Theories
3.3.4 Measurement and Application of Transformational Leadership
3.4 Transactional versus Transformational Leadership

4 Discussion
4.1 Strengths of Transformational Leadership
4.2 Criticisms on Transformational Leadership

5 Summary and Prospects

List of Abbreviations

List of Figures


A Management Functions

B Multifactor Leadership Questionnaire
B.1 Overview of MLQ Questions
B.2 Relationship of MLQ Scales and Satisfaction
B.3 Relationship of MLQ Scales and Performance



"Transformational leadership is the buzzword in business today.

It conveys passionate commitment. It inspires hope because it promises a purposeful way forward to a positive mind-changing and life-changing future."

(Lim, 2010)

The author Lim (2010) emphasises in his article the popularity of transformational lead- ership in the world of the 21th century. According to Lim (2010) the economic and social environment is changing constantly with an increasing speed. Therefore many politics and business executives ask themselves how they should cope with the changed circumstances, such as globalisation and global poverty (Bass & Riggio, 2005, p. 224). From Burns’s (2003) point of view transformational leadership gives answers to these most critical questions of the world. The transformational leadership model helps leaders to prepare themselves and their followers for the future. It is a process that changes and transforms people. It deals with emotions, values, ethics standards and long-term goals. Finally, it pushes the follower to the unexpected and creates a common vision (Northouse, 2009, p. 186).

However, there arises the question what is transformational leadership really and why is it so popular in contrast to other types of leadership?

In order to answer these questions chapter 2 defines the terms leadership, management and outlines the contrast between leaders and managers. Chapter 3 presents the main chapter of this assignment. It gives a brief overview of different leadership models and their characteristics in section 3.1. The following three sections deal with the transactional and transformational leadership model and their impact on behaviour and performance of employees. Moreover chapter 4 discusses the advantages and disadvantages of transfor- mational leadership theories. Finally chapter 5 summarizes the basic insights and gives a short perspective.

Chapter 2 Fundamentals

2.1 Fundamentals of Leadership

Regarding Northouse (2009) leadership can be defined from a trait or process viewpoint.

2.1.1 Trait Leadership Theory

The trait approach assumes that certain individuals have a special set of inborn characteristics. This approach suggests that leadership is only restricted to specific humans and cannot be learned. Peter F. Drucker said:

"Leaders are born, not made and leadership can not be created, promoted, taught or learned." (Drucker 1955 cited Mullins, 2010)

The five major leadership traits in reference to Northouse (2009, p. 20) are (Figure 2.1):

- Intelligence: Intellectual ability is positively related to leadership. Moreover strong verbal, perceptual skills and reasoning are features of good leaders (Zaccaro et al., 2004).
- Self-confidence: The ability to be certain about one’s competencies and skills. It contains also self-assurance and the belief that one can make the difference.
- Determination: The ability to be proactive and dominant at times and situations when followers need directions.
- Integrity: The quality of honesty and trustworthiness. Besides leaders take respon- sibility for their actions and inspire confidence.
- Sociability: The pursuit of pleasant social relationships. Leaders who show socia- bility are friendly, outgoing and diplomatic.

2.1.2 Process Leadership Theory

In contrast to the trait approach the process viewpoint suggests that leadership is a complex process of interaction with multiple dimensions. This comprises that leadership can be learned and is defined as follows:

"Leadership is a process whereby an individual influence a group of individuals to achieve a common goal." (Northouse, 2009, p. 3-5)

The process leadership approach contains the following characteristics (Figure 2.1) (Northouse, 2009, p. 3):

- Process: Leadership is not a trait or characteristic, but an interactive event between leaders and followers. It involves that a leader affects followers and vice versa.
- Influence and groups: Influence is essential for leadership. Besides groups are the context in which leadership takes place.
- Common goal: Leaders and followers have a mutual goal. It increases the proba- bility that they will work together towards a common good.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.1: Different Views of Leadership (Northouse, 2009, p. 5)

2.2 Fundamentals of Management

Management is related to Lorenzana (1998) a process by which a manager of an organization efficiently utilizes resources to achieve its overall goals at minimum cost and maximum profit. The primary functions of management are planning, organizing, staffing, directing and controlling (Koontz & O’Donnell, 1964) (Figure A.1).

2.3 Management versus Leadership

Regarding Kotter (1990) leadership and management will often be seen as the same thing or are at least closely related. But the major activities of leadership and management are totally different (see Figure 2.2):

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.2: Functions of Management and Leadership (Northouse, 2009, p. 10)

Management was invented to bring a degree of order and consistency in complex organizations (Kotter, 1990, p. 4). In contrast to that, leadership creates vision and constructive change. In brief, effective organizations need both, management in order to do things right and leadership for doing the right things (Bennis & Nanus, 1985, p. 221).

Chapter 3 Leadership Models

3.1 Overview of Leadership Models

The following diagram gives a first overview of actual leadership models based on the research of Bass & Riggio (2005). The leadership spectrum goes from laissez-faire over transactional to transformational leadership with increasing frequency of activity and effectiveness (Figure 3.1):

Abbildung in dieser Leseprobe nicht enthalten

Figure 3.1: Full Range of Leadership Model (Bass & Riggio, 2005, p. 9)

- Laissez-faire leadership: The laissez-faire model represents the absence of lead- ership. It is also called the hands-off or let-things-ride approach. This leader rejects responsibility, delays decisions, gives no feedback and creates no vision or motivation for the followers (Northouse, 2009).
- Transactional leadership: The transactional leadership concentrates on the social exchange between leaders and subordinates.
- Transformational leadership: The transformational leadership is concerned with improving the performance of every follower individually to their fullest potential (Avolio, 1999).

The next sections concentrate on the transactional and transformational leadership model. It deals with their characteristics and different impact on behaviour and performance of employees.


Excerpt out of 28 pages


Transformational Leadership
Fundamentals - Models - Differences - Impact on employees
AKAD University of Applied Sciences Stuttgart
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Diese Seminararbeit wurde im Rahmen des berufsbegleitenden Master-Studiengangs "Wirtschaftsinformatik" erstellt.
Leadership, Transformational Leadership, Transactional Leadership, Organizational Behavior, Management, Leadership Models, Management-by-Exception, Management-by-Objectives, Leadership Practices Inventory, MLQ, Manager, Führung, Führungskraft
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Dipl.-Ing. (DH) Michael Lang (Author), 2010, Transformational Leadership, Munich, GRIN Verlag,


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