The paper "Leadership Style Is an Important Ingredient for Organisational Success" is a perfect example of management coursework. As human capital has become the most important of all assets within the knowledge economy today, managing and leading employees effectively is a key ingredient in achieving organisational success. With the growth of the service sector and the importance of knowledge workers, transactional management styles such as autocratic management or situational management approaches are no longer effective. In place of these classic theories, transformational leadership styles such as servant leadership, charismatic leadership, and super leadership styles are becoming popular.
In today’ s organisational context, it is essential to apply the appropriate style to achieve organisational success. In one of the major leadership studies, House et. al. (2006) defined leadership as "the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members" (House et. al. 2006. p. 15). Most of the theories on leadership fall into the transactional category where the leader offers or withholds a certain reward, an incentive or benefit to the follower, in order to elicit desired behavior from the followers (Weiss, 2001).
Fiedler’ s contingency model, for example, holds that effective leadership is dependent on the interaction between leadership style and the leader control and influence in the context. From context to context, the degree of control and influence differs and this, in turn, must alter the leadership style. Path-Goal theory proposed by house points out that a leader can help followers by showing them how their efforts relate to the organisational performance as well as to obtaining rewards (Weiss, 2000).
This model too highlights the importance of rewards and values attached to manipulate the follower’ s behavior. These transactional leadership methods may be successful in certain contexts, depending upon the follower characteristics such as cultural influence, beliefs, perception and value placed on the reward systems. The greatest advantage of transactional leadership styles is that it allows for contextual factors as follower’ s caliber, educational level and motivational stimuli to be taken in to account. However, many scholars identified the need for alternative approaches that can meet the higher-order motivational needs such as “ achievement” and “ self-actualization” needs of the workforce, as proposed by Maslow. Alternative approaches to leadership from above classical models have emerged in the form of Transformational theories, first proposed by Burns in 1978.
The transformational approach is more democratic and involves the followers in decisions and grant them autonomy and responsibilities along with capabilities. In such scenarios, these Laissez-faire leaders may choose to render their leadership role and empower their followers whom they want to groom as self-motivated and autonomous workers who are capable of self leading (Rollinson, 2005). According to Bass and Avolio (2000), results of studies point out that transformational leadership has a positive effect on the employees' effort and satisfaction as he or she acts more of a mentor, a facilitator and an inspirational role model than a supervisor or a dictator.
However, there are downsides to the transformational leadership approaches where, “ political and arbitrary misuse of power, promotion of ulterior motives and unethical leadership” can occur (Weiss, 2000).