Transformational Leadership Theory

In 1978, James Macgregor introduced the
transformational leadership theory in which he advocated that leaders adopted
either a transactional or transformational style of leadership  (Northouse, 2016).
In 1985, Bernard Bass refined Burns’ previous work on transformational
leadership and extended it to focusing more on the follower’s need as opposed
to those of the leader  (Northouse, 2016). In Yammarino’s
study, Bass also extended House’s work by giving more attention to the emotional elements and
origins of charisma and by suggesting that charisma is a necessary but not
sufficient condition for transformational leadership (as cited by Northouse, 2016).

Bass’ theory affirms
that real transformational leadership is grounded on moral foundations that are
based on four key components. These are idealized influence, inspirational motivation, intellectual
stimulation, and individualized consideration.

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Idealized influence. Describes leaders with high ethical behaviour, who instills pride respect
and trust, and who act as strong role models for followers.

motivation. Speaks to the degree to
which the leader provides a strong and compelling vision for the followers.

stimulation. Speaks to the extent to
which the leader is able to challenge the status quo, challenge assumptions, takes
risks and encourages followers to participate in the decision making process.

consideration. The degree to which
the leader acts as a coach or mentor in attending to the needs of his or her followers.
This component reinforces the need for respect and gives consideration to the
contribution each individual makes to the team.

Leadership Questionnaire (MLQ)

The multifactor leadership questionnaire (MLQ) was created to survey
leadership factors from both a transactional and transformational perspective. The
survey measures a leader’s behavior in seven areas: idealized influence
(charisma), inspirational motivation, intellectual stimulation, individualized
consideration, contingent reward, management-by-exception, and laissez-faire  (Judge, Woolf,
Hurst, & Livingston, 2006; Northouse, 2016). According to Northouse
(2016), high scores on individualized consideration and motivation factors are
most indicative of strong transformational leadership.

Bass’ Transformational Leadership Theory

transformational leadership theory has strength in that it is not limited to traditional
transactional models, but broadens leadership to include the growth of
followers, and placed great emphasis on morals and values  (Northouse, 2016). On the flip side, because there
is a basic assumption that leaders are ethical and there is a heavy dependence
on the MLQ, in the absence of a decent set of ethics, the results could be
disasterous if used counterproductively. A second limitation of the model is
that it lacks clarity as to the parameters of transformational leadership  (Northouse, 2016).

Leader-Member Exchange (LMX) Theory

exchange (LMX) theory, originally referred to as vertical dyadic linkage (VDL),
is a relationship based theory that is centered around two-way communication
between leaders and followers  (Northouse, 2016). Its goal is to
explain the effect of leadership on followers, teams and organizations. Since
its introduction in 1975 by Dansereau, Graen, and Haga, the LMX theory
has undergone a number of revisions  (Northouse, 2016). According to Graen
and Uhl-Bein (1995), a key tenet of LMX is that the work-related atitudes and
behaviours of members are directly dependent on how their leaders treat them  (Rockstuhl,
Dulebohn, Ang, & Shore, 1997).

In-Group and Out-Group

The theory
suggests that leaders tend to form different kinds of relationships with
various groups of employees. One group, referred to as the in-group  (Northouse, 2016), is given what is considered to be
extra roles including higher levels of responsibility, greater influence on the
decision making process as well as access to more company resources (Graen & Uhl-Bien, 1995; Northouse,
2016). Outside
of the in-group are those employees considered as part of the out-group, who
are disfavoured by the leader, given fewer valued resources and are related to
based on their formal employment contracts (Northouse, 2016). Dansereau,
Graen, & Haga, (1975) cites personality, among other personal
characteristics as key determinants to the group one falls into.

Subsequent to earlier studies, Graen and
Uhl-Bien (1995) presented a shift in the focus of the LMX theory to one that
examined its relationship to organizational success as opposed to its original
focus on in-group out-group differences. More specifically, these later studies
examined the impact of leader–member exchanges on outcomes from a leader,
follower, group, and organizational perspective (Graen & Uhl-Bien, 1995).

In Graen and Uhl-Bien’s study (as cited by
Northouse, 2016) research of LMX theory has also focused on how exchanges
between leaders and followers can be used for leadership making through a three
phase process.

Phase 1: The
Stranger Phase

            In phase 1, the member or employee joins the team and his/her talents and
abilities are assesed by the leader. Interactions are generally rule
bound with heavy reliance on contractual relationships and within prescribed organizational roles sinilar to those in the
out-group (Northouse, 2016). During this phase both leader and follower
understands how each like to be respected and movement to the next phase is
dependent on the performance of the follower  (Graen & Uhl-Bien, 1995).

Phase 2: The
Acquaintance Phase

            The second phase see the building of trust and respect through more
diverse interactions.  (Dansereau, Graen,
& Haga, 1975) indicates that it is also during this phase that primary
focus on self-interests begin to fade and greater emphasis placed on the
purpose and objectives of the group.


Phase 3: The
Partnership Phase

Phase three is marked by an high-quality and ongoing social exchange
between the leader and member and is indicative
of a high degree of mutual trust, respect and oblgation between leader and
member (Northouse, 2016).

Evaluating the LMX Theory

While the LMX theory focuses on relationship between leader and member,
it does not explain or forms a basis for how high-quality exchanges are
created, nor does it helpful in describing leadership behaviours that promote
high performance. Based on information presented in research, leaders will
infact support those members with who they have a specil relationship (as seen
in the in-groups), sometimes resulting in favouritism and prejudice towards
other members of the group.

Path-Goal Leadership Theory

First introduced
in 1970 by Martin Evans and later developed by Professor Robert J. House in 1971, the path-goal theory of leadership
speaks to the way in which leaders encourage and support followers to achieve
designated goals (Northouse, 2016). The objective
of this theory as identified by Northouse (2016) is to improve follower satisfaction
and performance by focusing on follower motivation. The theoretical base of the
path-goal theory is Vroom’s expectancy theory of motivation.

Vroom’s Expectancy Theory, suggests that if
given an option, individuals will select their behaviors based on the outcomes
that they expect as a result of those behaviors (Vroom,
1964). House (1971) and Northouse (2016) strengthens this central
concept of the expectancy theory by emphasisng that individuals choose to
engage in specific behaviours primarily because 1) the behavior will result in
a specific outcome, and 2) because of the benefits or satisfaction to be
derived from the outcome. Take for
example, if faced with the choice of arriving for work and working hard all
day, while going above and beyond what is expected in order to help the orgnization
grow versus doing just enough to meet the basic requirements of the job.
An employee will most likely choose the option that makes the most sense for
him/her as an individual based on the rewards available.  

Path-goal theory differs from situational approach in that path-goal theory
emphasizes the relationship between the leader’s style and the characteristics
of the followers within the organizational construct, whereas the situational
approach is based on the leader’s ability to adapt to his/her followers
developmental level  (Northouse, 2016). Table 1.0 illustrates the different components of
path-goal theory, which includes leader behaviors, follower
characteristics, task characteristics, and motivation.

Leader Behaviors

            As leader behaviors is the
independent variable, the leader must therefore adjust his/her behavior and
style to employees so that the employees succeed at achieving their goals. In
other words, leaders must understand the importance of clarifying goals, paths,
and enhance satisfaction through extrinsic rewards, which will, in turn,
increase employee intrinsic motivation  (Polston-Murdoch, 2013). Four initial
leader behaviors were identified and assessed as part of path-goal theory,
these are directive, supportive, participative, and achievement (Northouse
2016;  Polston-Murdoch, 2013) .

Directive. Directive leaders sets performance standards and outlines
rules and regulations for followers (Northouse,
2016). Instructions
are given about assigned tasks, what is expected of the follower, how the task
is to be done, and the timeline in which it should be done.

Supportive. Supportive
leaders endeavours to create an enjoyable work environment for their followers
while treating followers as equals and with respect Northouse (2016). In an
organizational construct, this style is most appropriate for improving employee
morale when tasks are boring, frustrating, highly repetitive, stressful, and

Participative. Through solicitation and
consultations, these leaders encourage active participation in the decision
making process to achieve group or organizational results  (Northouse,

Achievement. Leaders using this style
challenge their followers to high standards of performance and to incorporate
ongoing improvements in the process  (Northouse, 2016). Not only are
followers expected to perform at high levls of performance, but achievement
oriented leaders are driven by a high degree of confidence in the abilities of
their followers  (Northouse, 2016).  According to
Rowe & Guerrero (2013), the path–goal theory differs from trait
theory in that leaders are not constrained to a leadership style that depends
on their personality. It also differs from contingency theory in that leaders
do not have to be matched to particular situations or the situation changed to match
leader style.

The Contingency Model

The contingency theory, developed by Fielder in
1964 and revised in 1974 by Fiedler and Chemers affirms that there is no best
style of leadership and that a leadership style that is effective in one
situation may not be effective in another  (Peters, Hartke, & Pohlmann, 1985).  The first step in the model is identifying
leadership style. Fiedler was of the opinion that leadership style is fixed and
that it can be measured using a scale he developed called the Least Preferred Co-Worker
(LPC) scale.

According to Fiedler’s theory,
leaders can be charaterized, on the basis of their scores, on the Least Preferred
Co-Worker (LPC) scale as being either task oriented or people oriented (Peters,, 1985).

The Contingency Theory

The first


In conclusion, conducting a
taxonomy on leadership theories assists with the understanding of each theory.
What is evident is that each the four theories are different based on the
factors, focal point and value placed on the respective variables.


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