Best leadership style for increased and sustainable performance: transformational-vs-transactional leadership style

Author: Iloka Benneth Chiemelie

Published: 19th of May 2014

A review of literatures in the field of organizational culture and leadership reveals two areas proven to be independently capable of influencing organizational performance as leadership styles (see Bycio et al., 1995; Howell and Avolio, 1993), and organizational culture (see Deal and Kennedy, 1982; Denison, 1990; Ouchi, 1981; Pascale and Athos, 1981; Peters and Waterman, 1982; Kotter and Heskett, 1992). Although these two variable are independent in the way they influence performance in organization, they have a direct influence on each other. For instance, leadership style can determine the kind of organizational culture adopted (Schein, 1992; Siehl, 1985) and literatures have also suggested that the ability to understand and work within a culture is based on adopting effective leadership (Hennessey, 1998).

The question of which leadership style yield the best performance is equivocal because they can yield better performance against each other with their level of performance produced depending on external factors and how effective such leadership style has been implanted in the system. In an apparent return to the “one best way of leadership,” recent studies conducted on leadership has been successful in contrasting “transactional” leadership with “transformational” leadership. The emphasis laid down is that transactional leaders are more instrumental and normally focused relationships that will bring about exchange between them and their subordinates (Bass and Avolio, 1993) while transformational leaders are viewed as visionaries and enthusiasts with an inbuilt ability to motivate their subordinates (Bycio et al., 1995; Howell and Avolio, 1993).

If you read the second paragraph with one eyes open, one could say that transactional leadership will bring about higher performance, thus ignoring that transformational leadership also has the same potential because one subordinated are motivated to improve and they eventually improve, the performance of the company will be improved effectively. How about sustainability, it all depends as well because if employees in transformation leadership are used to always returning productive outcomes as communicated between their leaders, they will maintain such view and their productivity will be sustainable. In transformational leadership, continues motivation form leadership will also bring about sustainability. Thus, it will be concluded that both kinds of leadership can bring about higher performance with the level of performance brought depending on how effective such leadership is and external factors (such as market demands, regulations, distribution network etc.)

References

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Bycio, P., Hackett, R.D. and Allen, J.S. (1995) ‘Further Assessments of Bass’s (1985) Conceptualization of Transactional and Transformational Leadership’, Journal of Applied Psychology , 80(4): 468–78.

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Denison, D.R. (1990) Corporate Culture and Organisational Effectiveness. New York: Wiley.

Hennessey, J.T. (1998) ‘ “Reinventing” Government: Does Leadership Make the Difference?’, Public Administration Review, 58(6): 522–32.

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Siehl, C. (1985) ‘After the Founder: An Opportunity to Manage Culture’. In Frost, P.J. et al. (eds) Organizational Culture. Beverly Hills, CA: Sage, pp. 125–40.