Differentiate between
Transactional and Transformational leadership. Describe the competencies and
skills required for a leader in order to bring change in organisations.
Ans :
Transactional and transformational leadership are two
distinct managerial styles that either seek to maintain or change the
organization. Transactional leadership is largely characterized by a desire to
maintain the company's existing culture, policies, and procedures. It uses a
reward-and-punishment based system to compel employees to perform certain
behaviors. In contrast, the transformational leadership style seeks to provoke
change in the way the company operates. Leaders who exhibit transformational
leadership are often characterized as charismatic, inspiring, and motivating.
Goals of Transactional Leadership
Transactional Leadership Characteristics
Goals of Transformational Leadership
Transformational Leadership Characteristics
The primary goal of transactional leadership is to promote
stability in the organization by creating a give-and-take type of exchange
between managers and employees. Specific performance objectives are determined
and communicated to employees. They are then responsible for meeting those
performance objectives, but either receive a reward or punishment depending
upon the outcome. Rewards are based upon meeting certain criteria, such as
achieving a sales quota. Mistakes are either actively or passively observed by
managers and dealt with accordingly. In active management by exception, leaders
take swift corrective action against performance deviations and actively look
for mistakes.
The relationships between transactional leaders and their
employees tends to be focused on the successful completion of short-term tasks.
Relations between the two groups are somewhat impersonal and temporary.
Quantitative results are emphasized and employees are expected to follow the
goals and directions of the leaders. The relationship is largely based on
exchanges that satisfy two separate sets of objectives. For example, an
employee shows up to work to receive a paycheck in order to maintain a certain
standard of living. The manager wants the employee to show up to work to
perform job tasks that he does not want to do himself.
The main goal of transformational leadership is to inspire
change in an organization by exceeding prior standards and expectations. It
does not rely on accomplishing objectives through certain types of exchanges or
a reward-and-punishment system. Transformational leadership motivates employees
to work towards a common objective, rather than seek out the fulfillment of
individual goals. It tends to take a more individualized perspective towards
employees, capitalizing on individual strengths and talents. Transformational
leadership fosters an environment of thinking, teamwork, and mutual admiration.
Transformational leaders seek to gain the trust of their
employees. The relationship is built upon the idea of establishing a long-term
bond that encompasses more than just the company's performance objectives.
Leaders who exhibit a transformational style of leadership tend to empower
their employees to make decisions and contribute to the company's strategies. Values,
personal meaning, personal power, and ethics are emphasized. A long-term
perspective is one of the primary characteristics of the transformational
leadership style. It fosters creativity, challenge, and individual employee
development.
Introduction
Leadership competencies are leadership skills and behaviors
that contribute to superior performance. By using a competency-based
approach to leadership, organizations can better identify and develop their
next generation of leaders.2 Essential leadership competencies and
global competencies have been defined by researchers. However,
future business trends and strategy should drive the development of new
leadership competencies. While some leadership competencies are
essential to all firms, an organization should also define what leadership
attributes are distinctive to the particular organization to create competitive
advantage.
Essential Leadership Competencies
A focus on leadership competencies and skill development
promotes better leadership.3 However, skills needed for a
particular position may change depending on the specific leadership level in
the organization. By using a competency approach, organizations can
determine what positions at which levels require specific competencies.4 Researchers
at the Center for Creative Leadership have identified some essential leadership
competencies that are consistent among organizations. They divide
the overall structure into competencies for leading the organization, leading
the self and leading others in the organization (see Figure 1).
When selecting and developing leaders, HR professionals
should consider the competencies that the individual possesses and compare
those to the ones that need further development for success in a leadership
role. By looking at his/her current competencies and comparing those
to the skills necessary to fill a leadership position, organizations can make
better informed decisions in hiring, developing and promoting leaders.5
Leadership Competencies
Leading the organization:
- managing
change
- solving
problems and making decisions
- managing
politics and influencing others
- taking
risks and innovating
- setting
vision and strategy
- managing
the work
- enhancing
business skills and knowledge
- understanding
and navigating the organization
Leading the self:
- demonstrating
ethics and integrity
- displaying
drive and purpose
- exhibiting
leadership stature
- increasing
your capacity to learn
- managing
yourself
- increasing
self-awareness
- developing
adaptability
Leading others:
- communicating
effectively
- developing
others
- valuing
diversity and difference
- building
and maintaining relationships
- managing
effective teams and work groups
Global Leadership Competencies
Developing successful global leaders is a competitive
advantage for multinational organizations.6 In addition to essential
leadership competencies, global leaders face special challenges that require
additional competencies. To clarify, a global leader is commonly defined as
someone that cultivates business in a foreign market, sets business strategy at
a global level and manages globally diverse and diffused
teams.7 According to a Conference Board research report, 73% of
managers agree that domestic business leadership and global leadership differ
in the skills required. Some of the challenges that global leaders
may face are managing a diverse group of employees and business processes;
adaptively approaching problems and challenges; adjusting to new values and
cultures; and adapting to different types of business and personal stressors.8
To address the unique
challenges of global leaders, researchers have identified global leadership
competencies that can contribute to success. Among these global
competencies, developing a global mindset, cross-cultural communication skills
and respecting cultural diversity are paramount to succeeding in the global
workplace.9 Morgan McCall and George Hollenback studied successful
global leaders and developed a list of common competencies specific to the
global leader HR practitioners can use global leadership competencies
to support the development of leaders and thus the overall global business
strategy.
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