Beneficial Leadership. Leadership Theories and Styles

Term Paper , 2013 , 10 Pages , Grade: 1,3

Business economics - Business Management, Corporate Governance

“One of the most universal cravings of our time is a hunger for compelling and creative leadership”, wrote James MacGregor Burns in his 1978 Pulitzer Prize-winning book on leadership. But does this compelling hunger lead to more effective leadership, and not only to more creative styles? And how to define effective leadership? A leadership style can be effective in simple numbers like profit of the respective department. But furthermore it may also affect the motivation and team-spirit of the led employees. It is to debate if even the health of the employees or the public image can be affected by a different leadership style.

Contents

1 Introduction

2 Evolution of leadership theories

3 Leadership style and success

4 Consequences of the leadership style

5 Conclusion

Bibliography

1 Introduction

“One of the most universal cravings of our time is a hunger for compelling and creative leadership”, wrote James MacGregor Burns in his 1978 Pulitzer Prize-winning book on leadership (p. 1). But does this compelling hunger lead to more effective leadership, and not only to more creative styles? And how to define effective leadership? A leadership style can be effective in simple numbers like profit of the respective department. But furthermore it may also affect the motivation and team-spirit of the led employees. It is to debate if even the health of the employees or the public image can be affected by a different leadership style.

2 Evolution of leadership theories

The definition of the word leadership covers a wide range of words, persons or actions. The first documented use of this word has been by Sun Tzu in his late recovered work The Art of War written in the second century before Christi. Sun defines a perfect leader with some characteristic personality traits (Sun, 1996), an idea what is still reflected in some of the modern leadership theories like the great man theory (Carlyle, 1988). Carlyle says, that some key traits of important men like Napoleon or Luther define the key to good leadership (1988). Newer research shows that personality traits cannot be the only important factor in a good leadership. Moreover is the great man theory (Carlyle, 1988) not empiric reliable, as it is not possible to falsify. Therefore it is called outdated since the late 1970 (Neuberger, 2002). Caused by the criticism, the personality trait based theories are too static, these theories where supplement by a situative factor like in the Fiedler contingency model (Fiedler, 1967) or the Vroom–Yetton-Decisionmodel (Vroom & Yetton, 1973). The situation-centred-theories fathom the questions, if and which leadership style the success of leading in a conclusive situation affects. These theories face an objective reality and as such does seldom appear in a real-life situation, the situation-centred-theories need to be modified to be more adaptive for the actual active use (Neuberger, 2002).

Based on this attempt the theory of transactional leadership followed. This is based on the transaction between leader and follow employee. The leader offers extrinsic rewards for successfully achieved tasks. The theory of transactional leadership is fundamental for the development of the theory of transformational leadership, which has been initiated 1978 by Burns. The main principle extends the idea of rewards towards the actual substantial requirements of the led employees and therefore takes influence onto the development and characteristics of those employees (Burns 1978).

Transformational led employees shall stand as a role model due to their motivation. This closes the circle back to the personality-trait-theories in a modified version. A related approach is the theory of charismatic leadership. This focuses among the intellectual challenge onto the individual appraisal and inspiration (House & Shamir, 1993). In 1985 Bass introduced his expanded theories and research about transformational and transactional leadership (Bass, 1985).

On account of these many research about this subject, a meta-analysis could show that implanting the theory of transactional leadership could affect in a small positive, and the implanting of transformational leadership style in a strong positive outcome towards the success of the leader (Sturm, Reiher, Heinitz & Soellner, 2011).

3 Leadership style and success

To define the relation between the introduced leadership styles and the success the dimensions of success need to be defined. Introductory it is to mention that the general criteria of success are manifold and therefore not always distinct how to measure success in the given situation (Kirchler, 2011). The following definition by Lehner has been approved during time: According to him, leadership-success can firstly be measured objective direct and objective indirect, and secondly subjective (Lehner, 1995). The objective and direct approach measures the earning and cost-effectiveness of a company or a distinct department. The objective and indirect approach observes variables like the promotion of the leader, labour turnover rate and the illness caused absence of work. The subjective approach depends on the employee’s sense of self. To measure it, general criteria like employee-satisfaction and the team spirit are essential (Lehner, 1995).

The first huge paradigm of leadership separates employee-oriented and task-related leadership. The relation between both leadership styles and the criteria of success are quite well researched (Neuberger, 2002; Fisher & Edwards, 1988). In this context, Neuberger did different studies, which classifies the correlated results between satisfaction and performance as positive, negative and not significant (2002). Both criteria are not only relevant indicators for the leadership-success (Lehner, 1995), it is more possible to see the performance also as a subjective part of the definition of success (Kirchler, 2011).

The results indicate that a huge part of the studies shows a positive coherence between employee-oriented leadership and job satisfaction (Neuberger, 2002). Doubtful is a significant coherence between employee-oriented leadership and the job performance. Many different studies show a positive relation, but there are as many which could not find any relation between these two constructs (Neuberger, 2002). The results in task-related leaderships are similar. The amount of studies which found a positive coherence between task-related leadership and job satisfaction is nearly identical with the amount of studies with a negative or none coherence at all. A clear relation can though be found between the performance and the task-related leadership. Most of the studies recognize a positive relation between these constructs (Neuberger, 2002).

Another meta-analysis done by Fisher and Edwards (1988) correlates both leadership theories with performance and job satisfaction. The results are a weak correlation between employee-oriented leadership and performance and a stronger correlation between employee oriented leadership and job satisfaction. On the contrary to that the task related leadership shows a weak positive correlation with the job satisfaction and a stronger correlation with the performance (Fisher & Edwards, 1988).

The second paradigm of the leadership research differs between transformational, transactional and passive avoiding leadership. The relation between leadership style and success got to be researched in a meta-analysis by Sturm, Reiher, Heinitz and Soellner (2011). To measure these leadership styles the surveys Multifactor Leadership Questionnaire (MLQ), and the Transformational Leadership Behavior Inventory (TLI) got used, as they got well-tried in past. These surveys measure with different scales the occurrence of leadership at the leading supervisor (Sturm et al., 2011). The results show a strong positive correlation between transformational leadership and success. Moreover there is also a positive correlation between transactional leadership and success as well. In contrast to that the research shows a strong negative correlation between success and the passive-avoiding leadership (Sturm et al, 2011).

So the transactional and transformational leadership are bringing the best results. Leadership brings then the best outcome when the leader uses mainly the transformational style, sometimes the transactional style and as rare as possible the passive-avoiding style (Bass & Avolio, 1994).

4 Consequences of the leadership style

As stated above, the selection of one leadership style can have significant influence onto the success. But there are more areas in a company and the working live, where the leadership style has a high influence. For example organizational commitment, team cohesion and motivation have strong relations with the chosen leadership style (Bass, Avolio, Jung & Berson, 2003).

The result of the studies by Bass et al. (2003), shows the following relations: Transactional and transformational leadership correlate positive with all three variables (organizational commitment, team cohesion and motivation) under the circumstance that there is a direct contact between leader and led employee. The passive avoiding leadership style shows a negative correlation to all of these variables (Bass et al., 2003).

Above all, the leadership styles stay in relation with stress in the job. These relations where researched in a study by Rowold & Heinitz (2008). This research differs firstly the employee and task related and secondly the transformational and transactional leadership style. The results show that all leadership styles correlated diversely negative with the appearance of stress. The only exception is the transactional leadership style: it correlates positively with the appearance of stress. This indicates a stress inducing effect of this style (Rowold & Heinitz, 2008).

The physical welfare of employees is getting more regarded in the present time. The question what influence the leadership style onto this physical welfare has, got researched in a meta-analysis of 42 different publications (Gregersen, Kuhnert, Zimber & Nienhaus, 2011). This research shows that especially transformational and employee-oriented leadership style has a very positive effect onto the employee health.

5 Conclusion

Leading is always a factor of people, as people stand on the receiving and on the giving side of each leadership style. The human factor is therefore always a factor what is hard to control. That might explain the inconstant results that some of studies show. But as there are some factors what are still a little obscure, the general effects of the different leadership styles are well researched and shown in this paper. Thus it is not possible to give an overall recommendation for one style, as the outcome of each differs in some key aspects. Nevertheless the consistent factor in each prosperous style is the human factor. Leadership styles where employees get well treated and respected got in each mentioned research a better result, though they differ in important factors like success, health and motivation. It seems beneficial for a leader to know the different aspects of each style and to implement them for the diverse appropriate situations.

Bibliography

Bass, B. M. Leadership and performance beyond expectations. New York: Academic Press, 1985.

Bass, B. M. & Avolio, B. J. Improving organizational effectiveness through transformational leadership. Thousand Oaks, CA: Sage, 1994.

Bass, B. M., Avolio, B. J., Jung, D. I. & Berson, Y. Predicting Unit Performance by Assessing Transformational and Transactional Leadership. Journal of Applied Psychology (2003), 88 , 2, 207-218.

Burns, J. M. Leadership. New York: Harper&Row, 1978.

Carlyle, T. On Heroes, Hero-Worship and the Heroic in History. New York: Fredrick A. Stokes & Brother, 1988.

Fiedler, F. E. A theory of leadership effectiveness. New York: McGraw Hill, 1967.

Fisher, B. M. & Edwards, J. E. Consideration and initiating structure and their relationships with leader effectiveness: A meta-analysis. In: Proceedings of the Academy of Management, S. 201 – 205, 1988.

House, R. J. & Shamir, B. Towards the integration of transformational, charismatic, and visionary theories. In M. M. Chemers & R. Ayman (Eds.). Leadership theory and research (S. 81 - 107). San Diego, CA: Academic Press, 1993.

Kirchler, E. Arbeits- und Organisationspsychologie. 3rd ed. Wien: Facultas Verlag, 2011.

Lehner, J. Führungserfolg – Messung. In A. Kieser, G. Reber & R. Wunderer (Eds.), Handwörterbuch der Führung (2nd ed., S. 550 – 562). Stuttgart: Schäffer-Poeschel, 1995.

Neuberger, O. Führen und führen lassen. 6th ed. Stuttgart: Lucius & Lucius Verlagsgesellschaft, 2002.

McGregor Burns, J. Leadership. New York: Harper & Rowe, 1978.

Rowold, J. & Heinitz, K. Führungsstile als Stressbarrieren – Zum Zusammenhang zwischen transformationaler, transaktionaler, mitarbeiter- und aufgabenorientierter Führung und Indikatoren von Stress bei Mitarbeitern. Zeitschrift für Personalpsychologie (2008), 7 (3), 129-140.

Sun Tzu translated by Giles L. The Art of War. N.p.,1996

Sturm, M., Reiher, S., Heinitz, K., & Soellner, R. Transformationale, transaktionale und passiv-vermeidende Führung. Eine metaanalytische Untersuchung ihres Zusammenhangs mit Führungserfolg. Zeitschrift für Arbeits- und Organisationspsychologie (2011) , 2, 88-104.

Vroom, V. H. & Yetton, P. W. Leadership and Decision-Making. Pittsburgh: University of Pittsburgh Press, 1973

• College: Fresenius University of Applied Sciences Köln
• Grade: 1,3
• Author: Fabian Swars (Author)
• Publication Year: 2013
• Pages: 10
• Catalog Number: V317248
• ISBN (eBook): 9783668172630
• ISBN (Book): 9783668172647
• Language: English
• Tags: Leadership, transactional, transformational, charismatic