ORGANIZATIONAL BEHAVIOR PROJECT

ON

FROM TRANSACTIONAL TO TRANSFORMATIONAL

LEADERSHIP: LEARNING TO SHARE THE VISION

GUIDED BY: PRESENTED BY:

MRS. ARJYALOPA MISHRA SHASHANK KHARE 14/BALLB/043
ASSISTANT PROFESSOR SIDDHANT KARAN SINGH 14/BALLB/046
NATIONAL LAW UNIVERSITY, ODISHA
TABLE OF CONTENT
 1. ACKNOWLEDGEMENT

We take this opportunity to extend our sincere thanks and gratitude to our teacher and
mentor Mrs. Arjyalopa Mishra for her esteemed guidance, encouragement and support
without which we would not have been able to complete this project. We would like to
thank her for giving us this golden opportunity to learn more and gain an in depth
knowledge about this topic.

Last but not the least, we would like to extend our gratitude to our parents and friends for
their continuous support, love and encouragement. It helped us move closer to achieving
our goal. It would not have been possible to complete this project without them.
 2. SUMMARY

Introduction
Leadership matters – while some believe that business outcomes are more governed
by historical, structural, or environmental factors, research has demonstrated a
relationship between managerial effectiveness and positive organizational
performances. Successful organizational outcomes have been linked to the quality of
management, both through meta-analytic studies and anecdotally.
Given that good leaders do have an impact on their followers and organizations, much
research has gone into the field of leadership theory to better understand the
characteristic behaviors of people who demonstrate success. Over the past twenty-five
years, a large body of research has emerged around transformational-transactional
leadership theory. First described by James Burns in 1978, transformational
leadership represents a leadership style that is exemplified by charisma and shared
vision between leaders and followers. The power of transformational leaders comes
from their ability to stimulate and inspire others to produce exceptional work. In
contrast, transactional leadership describes more of a “give and take” working
relationship – rapport between leader and follower is established through exchange,
such as a rewards system for meeting particular objectives.
Bernard Bass further expanded on Burn’s theory in 1985 to describe specific
behaviors that comprise each leadership style. We can examine transformational
leadership along the following five dimensions: two types of idealized influence,
inspirational motivation, intellectual stimulation, and individual consideration.
 3. REVIEW OF LITERATURE

There have been numerous other studies conducted in the field of transactional and
transformational leadership. One of the pioneers of this work was James MacGregor
Burns. Burns in his book Leadership1 elucidated that there are two types of political
leadership: transactional and transformational. Transactional leadership occurs when
one person take the initiative in making contact with other for the purpose of an
exchange something valued. Transformational leadership is based on more than the
compliance of the followers; involves shifts in the beliefs, and the values of followers.
He says that leadership over human beings is exercised when persons with certain
motives and purposes mobilize, in competition or conflict with others, institutional,
political, psychological, and other resources so as to arouse, engage, and satisfy the
motives of followers in order to realize goals mutually held by both leaders and
followers.
Authors Noel Tichy and Michelle Devanna's Transformational Leadership 2 is
centered on corporate transformations. They use a number of examples organizational
transformations in their book. However they indicate that their ultimate purpose is not
for other managers to imitate those in the book; instead, the purpose is to spread a
new of thinking about corporate transformation and to make transformational
leadership an overall part of the organizational thinking rather than to restrict it to a
gifted few. They discuss transformational leadership in terms of very extensive
change, innovation and entrepreneurship. They see such leadership as an orderly
process, consisting of a purposeful and organized search for changes.
Wang and Howell3 in their empirical research said that, leaders need to ensure that the
whole group is working together toward the same goal. Specifically, leaders can
foster collaboration by assigning team goals, rewarding team achievements, and
facilitating social interactions among team members.
Communicating a group vision is defined as articulating an idealized and attractive
picture of the future of the group or unit. This behavior is aligned with inspirational
motivation, which refers to behaviors that inspire and motivate followers to achieve

1
Burns, J.M. (2010). Leadership. New York City, NY: Harper Perennial
2
Noel Tichy and Michelle Devanna (1986). The Transformational Leader. New York, NY; Sage
Publications.
3
Wang, X.-H., & Howell, J. M. (2010). Exploring the Dual-Level Effects of Transformational
Leadership on Followers. Journal of Applied Psychology, 95(6), 1134–1144.
the shared vision and that enhance confidence among followers that the collective
goals will be reached.
In a study by David Waldman, Bernand M. Mass and Francis J. Yammarino 4 the
hypothesis that transformational/charismatic leadership predicts unique variance in
leader effectiveness beyond that of transactional/contingent reward leadership was
tested for a sample of U.S. Navy Officers. The 186 officers were rated by their 793
immediate subordinates on charismatic and contingent reward leadership and
effectiveness, and by their superiors on performance evaluation and early promotion
potential. Results from hierarchical regression analyses indicated that charisma
augmented the predictive power of contingent reward behavior for determining
subordinate-rated effectiveness of focal leaders and superior-rated effectiveness and
early promotion recommendation for focal leaders. Keywords: Behavior,
Effectiveness, Performance, Early promotion, Hierarchical regression, Leader-
follower relationships, Augmentation effectiveness, Multifactor officer questionnaire,
Fitness reports, Naval personnel.
Dasgupta and Asgari5 (2004) found that gender stereotypes about women could be
undermined in environments in which women frequently occupy counterstereotypic
leadership roles. Since transformational leadership is already a leadership style that is
less adherent to existing stereotypes, an overall reduction of gender stereotypes
resulting from exposure to female role models may enhance the degree of communal
and collaborative behavior among students of both genders. Secondly, it is likely that
female faculty exercise forms of transformational leadership – female managers, in
general, have scored higher on the measures of transformational leadership and
student exposure to such leadership styles may also contribute to the development of
transformational leadership behavior in students themselves.
Braun6talks about multilevel mediation model of trust and inter personal conflicts.
Further she said that, transformational leaders display considerate behavior toward
multiple followers when interpersonal conflicts among team members arise, and seek
to promote cooperation.

4
Waldman, Bernand M. Mass and Francis J. Yammarino (1990) Transformational Leadership and
Multiple Levels of Analysis. Human Relations,Vol 43.
5
Dasgupta, N. and Asgara, S. (2004). Seeing is believing: exposure to counterstereotypic women
leaders and its effect on the malleability of automatic gender stereotyping. Journal of Experimental
Psychology, 40, 642-658
6
Braun, S., Peus, C., Weisweiler, S., & Frey, D. (2012). Transformational leadership, job satisfaction,
and team performance: A multilevel mediation model of trust. The Leadership .
Leading teams yields several challenges, like aligning individual goals with a shared
mission, managing resources, establishing a positive climate of trust and support, and
coordinating information transfer and task completion. Exemplary transformational
leadership behavior directed toward the team, like providing the team with a vision
and solving interpersonal conflict, will increase the likelihood that individual
followers are satisfied with their jobs
In addition to effects at the individual level, transformational leadership is posited to
also have an impact at the team level of analysis. This assertion is based on a direct
consensus model, which employs consensus among lower level units to specify
another form of a construct at a higher level... This model is assumed because
transformational leadership (a) comprises individual-focused as well as team-focused
behaviors... and (b) as a participative leadership style, it contributes to mental model
convergence in teams.
Alimo-Metcalfe 7 explored gender differences in the traits people ascribed to
leadership. To this end, she surveyed a number of UK housing managers and found
that women tended to attribute people-oriented, communal traits as characteristic of
leadership more than their male counterparts did; women were more likely to describe
leaders with descriptors of interpersonal relationships, such as “people-oriented”
instead of “confident”. Females, who typically score higher on measures of
transformational leadership, are more likely to describe leadership with more
communal terms.
A study was done by Bernard M. Bass, Bruce J. Avolio and Laurie Goodheim8 for
assessing the transformational leadership at world level.
This study examined how world-class leaders differ on five transactional
transformational leadership factors. Biographical accounts were used to assess
leadership. Subjects were 149 undergraduate business students who completed a
multi-factor leadership behavior questionnaire as if they were subordinates of one of
68 world-class leaders whose biographies they had read. Additional ratings of a
subsample of world-class leaders were completed by participants who had not read
biographies of their chosen leaders. Results indicated support for the construct
validity and reliability of biographical data as a measure of leadership qualities.

7
Alimo-Metcalfe, B. (1995). An investigation of female and male constructs of leadership and
empowerment. Women in Management Review, 10, 3-8.
8
Bernard M. Bass, Bruce J. Avolio and Laurie Goodheim (1987) Biography and Assessment of
Transformation Leadership at the World-Class Level, Journal of Management.
Recommendations for further improving the reliability of psycho historical
procedures are offered.

4. CRITICAL ANALYSIS

Transactional Leadership, also known as managerial leadership, focuses on the role of

supervision, organization, and group performance; transactional leadership is a style
of leadership in which the leader promotes compliance of his/her followers through
both rewards and punishments.
Transformational leadership is a style of leadership where there is an active
involvement of a leader with his employees to identify and abridge the mutual
understandings for a better output.
The active involvement does not imply the leader to strictly abide by rules and
regulations of the company without realizing the needs and comforts of its employees
but a role that creates a vision to guide the change through inspiration and executing
the change in tandem with the committed members of the group.
More importantly, it serves to enhance the motivation, morale and job performance of
the followers through a variety of mechanism to which it is important that the
individual realizes self-identity to the project and the identity of the organization.
Being a role model for followers in order to inspire them and raise their interest in the
project; challenging followers to take greater ownership for their work, and
understanding the strengths and weaknesses of followers, allowing the leader to align
followers with tasks that enhance their performance.

BERNARD M. BASS

Bernard M. Bass extended the work of Burns by explaining the psychological

mechanisms that underlie transforming and transactional leadership. Bass introduced
the term "transformational" in place of "transforming." Bass added to the initial
concepts of Burns to help explain how transformational leadership could be
measured, as well as how it impacts follower motivation and performance. The extent,
to which a leader is transformational, is measured first, in terms of his influence on
the followers. The followers of such a leader feel trust, admiration, loyalty and respect
for the leader and because of the qualities of the transformational leader are willing to
work harder than originally expected. These outcomes occur because the
transformational leader offers followers something more than just working for self-
gain; they provide followers with an inspiring mission and vision and give them an
identity. The leader transforms and motivates followers through his or her idealized
influence (earlier referred to as charisma), intellectual stimulation and individual
consideration. In addition, this leader encourages followers to come up with new and
unique ways to challenge the status quo and to alter the environment to support being
successful. Finally, in contrast to Burns, Bass suggested that leadership can
simultaneously display both transformational and transactional leadership.

According to Bass, transformational leadership is characterized by several patterns of

behavior. First, transformational leadership employs the charisma of leaders in order
to gain the respect and trust of stakeholders and to instill pride in the latter. In
addition, charisma underlines the provision of a common vision and sense of mission
necessary for the transformation. The second characteristic is inspiration through
which leaders employ symbols to redirect followers’ efforts; they express in a
simplistic manner the fundamental purpose of the transformation process, and clearly
communicate the accompanying higher expectations. The third characteristic is
intellectual stimulation. Leaders intellectually stimulate employees by emphasizing
rationality and creativity in problem-solving situations. Finally, transformational
leadership offers individualized consideration: leaders treat employees individually
offering them personal attention and, whenever necessary, they provide coaching and
advise to those employees.
For Bass, self-determination and self-confidence characterize transformational
leaders. Leaders are successful at influencing followers because followers have “trust,
admiration, loyalty and respect” for the transformational leader; and because of the
qualities of the latter, followers are willing to work harder for the achievement of
objectives. Transformational leaders motivate the members of the organization to
transcend their self-interests in order to achieve collective objectives. As per Warrick,
the leader thus can be said to be “a model of integrity and fairness, setting clear goals,
having high expectations, encouraging people and providing support and recognition,
stirring the emotions and passions of people, and getting people to look beyond their
own self-interests and reach for higher goals.”
Fighting with far fewer men and tanks than his enemy had, against superior
equipment, Ernst Rommel, the Desert Fox, won a series of victories in 1941 and 1942
against the British in North Africa, until he was over- whelmed at El Alamein.
Because he was up front at the scene of the action, he could make more rapid
assessments and decisions than could his British counterparts, who stayed 20 miles
back in headquarters. This, and his willingness to accept calculated risks, contributed
to his legendary speed, surprise, and bold- ness, as well as to the continuing high
morale of his troops.

Leadership makes its presence felt through- out the organization and its activities. We
have found that employees not only do a better job when they believe their
supervisors are transformational leaders, but they also are much more satisfied with
the company's performance appraisal system. Likewise, mass communications
directed toward individual employees are much more likely to have an impact if the
messages are reinforced face-to- face by their supervisors at all organizational levels.

Transformational leadership should be encouraged, for it can make a big difference in

the firm's performance at all levels. Man- agers need to do more than focus on the ex-
change of material,, social, and personal benefits for services satisfactorily rendered.
The charismatic leader, like the flamboyant Ted Turner of Turner Broadcasting
System, Inc. can instill a sense of mission; the individually considerate leader, like the
shy and self-ef-facing Roberto Goizueta of the Coca Cola Corporation, can lead
employees to take an interest in higher-level concerns; the intellectually stimulating
leader, like the innovative Roger Smith at General Motors Corporation, can articulate
a shared vision of jointly acceptable possibilities. This is not to say that
transformational leaders are always pro-social in their efforts, for some fulfill
grandiose dreams at the expense of their followers.

Despite the many successes with management development programs and the leader-
ship development programs in our military academies, many executives still feel that
leadership is like the weather — something to talk about, but about which not much
can be done. Others say leadership ability is mystical—one needs to be born with it.

In fact, much can be done to improve leadership in an organization and to change the
presiding style from transactional to transformational. The overall amount of
transformational leadership in an organization can be increased substantially by
suitable organizational and human resources policies.

The new model of transformational leadership presents opportunities for enhancing a

corporation's image and for improving its success in recruitment, selection, and
promotion. This model also has implications for the organization’s training and
development activities and for the design of its jobs and organizational structure.

ASSUMPTION TO TRANSFORMATIONAL THEORY

To execute the transformational theory well, the basic assumptions were considered
by Bass were: -
a) Awareness of task importance motivates people.
b) A focus on the team or organization produces better work.

Bass simply defined transformational leadership in terms of how the leaders affects
the followers, who are intended to trust, admire and respect the transformational
leader.
He also identified three ways in which leader can transform their followers:
1) Increasing their awareness of task importance and value.
2) Getting them to focus first on team or organizational goals, rather than their
own interests.
3) Activation their high order needs.
 5. CONCLUSION

Transformational-transactional leadership theory is one way in which the behaviors of

leaders can be described and evaluated. Transformational leaders exhibit charisma
and shared vision with their followers, stimulating others to produce exceptional
work. Transactional leadership describes more of a “give and take” working
relationship – rapport between leader and follower is established through exchange,
such as a rewards system for meeting particular objectives. Meta-analyses reveal that
transformational leadership is correlated to more positive outcomes than any other
leadership style, and it also predicts better contextual performance, describing
follower performance above and beyond what is delineated by job requirements
alone. Finally, research has also shown that female managers typically outscore male
managers on measures of transformational leadership, leading some to suggest the
existence of a "female leadership advantage." However, stereotypes remain
salient(since leadership is stereotypically a male domain) and give rise to pressures
such as role incongruity and a double-bind effect that remain a challenge today.
 6. REFERENCES

1. Burns, J.M. (2010). Leadership. New York City, NY: Harper Perennial
2. Noel Tichy and Michelle Devanna (1986). The Transformational Leader. New
York, NY; Sage Publications.
3. Wang, X.-H., & Howell, J. M. (2010). Exploring the Dual-Level Effects of
Transformational Leadership on Followers. Journal of Applied Psychology,
95(6), 1134–1144
4. Waldman, Bernand M. Mass and Francis J. Yammarino (1990)
Transformational Leadership and Multiple Levels of Analysis. Human
Relations,Vol 43.
5. Dasgupta, N. and Asgara, S. (2004). Seeing isbelieving: exposure to
counterstereotypic women leaders and its effect on the malleability of
automatic gender stereotyping. Journal of Experimental Psychology, 40, 642-
658.
6. Braun, S., Peus, C., Weisweiler, S., & Frey, D. (2012). Transformational
leadership, job satisfaction, and team performance: A multilevel mediation
model of trust. The Leadership .
7. Alimo-Metcalfe, B. (1995). An investigation of female and male constructs of
leadership and empowerment. Women in Management Review, 10, 3-8.
8. Bernard M. Bass, Bruce J. Avolio and Laurie Goodheim (1987) Biography
and Assessment of Transformation Leadership at the World-Class Level,
Journal of Management.