Contemporary Leadership Styles Impact On Organizational Success

No one is more arresting than the person who breaks through his confining environment, seizes opportunities, overcomes all obstacles, and changes how the rest of us perceive, think and act” (Burns, 2003, p. 153). Although there are various types of leadership styles, the true leader will be the one who defy complex challenges and create solutions. Most importantly, reaches results beyond expectations; thereby benefiting self and organization (Palus & Horth, 2005). Different kinds of leadership styles are available either traditional or contemporary. For each leadership style, the leader has specific characteristics different than others, but certainly not conclusive to one. One of the traditional theories states that leaders are born not made. Nonetheless, people can be leaders and follow different styles by learning what style suits their personality (Sullivan and Decker, 2009). This report aims to explore three contemporary leadership styles and the influence of charismatic and transformational leadership styles on the organizational success.

Charismatic, Transformational and Transactional leadership styles

Charisma is a Greek ward means a “gift of grace or divine grace” (Hoffmann, 2009, p. 234). For Weber, the founder of charismatic leadership theory, charisma is a source of authority used for good deeds; causing people to believe on the extraordinary quality of the leader. It is the ability to have personal magnetism and other qualities that compel people to follow. Max Weber sees charisma as a sociological dimension whereas relationships play an important role (Bowden, 2010). While, Walter, & Bruch (2009) sees charisma as a psychological dimension that refers to an individual characteristic.

As such, charismatic leaders have tremendous personality character and behavior and sense of mission that appeal people through their interactions in arguments and discussions (Walter, & Bruch, 2009). There are certain factors that make charismatic leaders who they are. Those are social demographics, cognitive ability, personality, attitudes and values and emotional intelligence. Based on these factors, charismatic leaders will be willing to take risks, achieve targets and exercise non-exploitative approach in dealing with people. Their persuasion, evolved ideas, confidence, moral reasoning, optimism, hope, resiliency and belief on self and others will certainly lead to extraordinary outcomes. They have the ability to empower and motivate followers and more importantly maintain that; creating an environment of loyalty and devotion. These characteristics will definitely make people committed because of the activation of their moral commitment by the leader (Levay, 2010; Ladkin, 2010).

On the contrary, McCarthy (2005) sees charismatic leaders as a great influence in the short terms or at difficult times and thought to have tendency for failure on the long run. Ladkin (2010) adds that if charismatic leaders lose their power to meet the followers’ need, the charismatic character will decrease, although Max Weber emphasized on the followers’ role in the relationship. Additionally, Waldman & Javidan (2009) stated that personalized charismatic leaders pursue their own vision, and commit to their own interest. While the socialized ones desire to build a shared vision, and commit to organizational values. Nevertheless, personalized charismatic leadership will contradict the definition of charisma by Weber, and its leader will be less likely to be nominated by any one (Ladkin, 2010).

Secondly, transformational leadership is known as a stimulant and inspiring approach for followers to accomplish exceptional outcomes and grow into leaders. It was previously thought that transformational leadership style has three components; charismatic-inspirational, intellectual stimulation and individual consideration. Nevertheless, charismatic factor changed to idealized influence and got separated from the inspirational factor (Bass, & Riggio, 2006).

This style embodies four components. Firstly, idealized influence is a way of behaving that permits leaders to act as a role model for and viewed as a person with extraordinary capabilities, persistence and determination. They are also recognized as risk takers and followers of high ethical and moral standards. Secondly, inspirational motivation provides motivation, inspires followers by the provision of meaning and challenge to their work and engages employees in envisioning future. Thirdly, intellectual stimulation stimulates group members to innovate by questioning hypotheses, reframing problems and modifying old experiences to adapt with current situations. Fourthly, individualized consideration is the ability of the leader to identify followers’ needs for achievement and growth (Jansen, Vera, & Crossan, 2009; Bass, & Riggio, 2006).

One of the most essential conceptual arguments for the charismatic and transformational leadership is the degree to which they are alike. The assumption of being similar has been questioned by leadership scholars and encountered as distinguished, yet, somehow overlapping processes (Rowold, & Heinitz, 2007). These two leadership styles are known as change inducers. They share vision, and emotional attachment between leaders and followers which are imperative to change their beliefs and attitudes. They also share questioning the status quo, find new approaches to solve issues and understand and evaluate followers’ needs.

A difference between these styles is that transformational leadership seeks the change of the situation in dramatic and revolutionary approaches, whilst charismatic leadership will change followers as will as the scene to have revolutionary outcomes (McCarthy, 2005).

Thirdly, transactional leadership style views the relationship among the leader and team members as a reciprocal process. It is based on a system of rewards and punishment. Transactional leaders are characterized by high ideal self, high intelligence, low originality, and high military leadership. They offer encouragement, prizes and praises, benefits and rewards for followers. A failure to accomplish their work, lack of productivity and errors making will result in negative reinforcement, punishment and/or rewards and promotions withhold (Bass, & Riggio, 2006).

More over, transactional leadership depends on bureaucratic authority and legitimacy inside organizational settings. It focuses on working standards, assignments, task oriented goals and completions. It also emphasize on compliance, performance, productivity improvement and task completion. The transactional leadership style composes of passive and active models. The passive transactional leadership style is known as management by exception which make the status quo to exist and old approaches to be followed. However, if there is a wrong result by any chance, the leader will follow actions that usually have negative consequences (Ruggieri, 2009).

On the contrary, active transactional leadership style relies on a proactive exchange among the leader and followers, for instance, suitable rewards when organizational members meet the predetermined goals. The emphasis of active leadership style is rewarding for the accomplishments of the expected organizational objectives. Such a leader will acquire information about followers’ needs, encourage them to reach the expected goals and reward them accordingly. As a result, this will increase followers’ motivation to work (Emery, & Barker, 2007).

Furthermore, transformational and charismatic leaderships focus on relationships with employees more than tasks, whereas the transactional style particularly emphasizes on tasks and outcomes (Ruggie, 2009).

How a Person can be an Effective Leader

Every person has the capability to be a leader. Along with coaching and diagnostic tools, it would be easy to identify obstacles that hold individuals back (Berta, 2006). There are multiple characteristics and skills needed to be an effective leader. Effective leader characteristics include personal authority, personal qualities and practical approach. Firstly, personal authority means that the leader position only affects and extends downward. With the increase of power, responsibilities increase. Thus, the leader will have the ability to reward and discipline according to individuals’ performance. As well, people who use their former power tend to be less effective (Patterson, 2009).

Secondly, personal qualities play an important role in influencing peers as will as superiors to create and maintain relationships inside and outside organizations. These personal traits compose of emotional resiliency, extroversion, learning orientation, collegiality and conscientiousness. Leaders with these traits are characterized by having warmth, assertiveness, imagination and creativity, sensitivity and the ability to be responsible and competent. As a result, they will be able to handle stress and negative emotions, sustain successful relationships, maintain employees’ safety, bring change to the environment and be far ahead of those influenced and others. It is also the ability to understand followers’ concerns and feelings; thereby being compassionately motivating rather than demanding (Krause, 2007).

As well as characteristics are important, certain skills can be learned to be an effective leader. One of these skills is communication skills. It is important to start with the use of appropriate empathized language. Clear choice and usage of words will identify exactly what is meant and attract the audience emotions to the talk; eliminating chances of misunderstandings and employees’ opposition. As every idea presented is known to be true unless there is a contradicted idea. An effective leader should find a common agreement to keep the audience yes minded by using different tones and enthusiastic manner. Then, he/she can present the new idea. Communication is an exchange process, thus, active listening is important because it influences followers feedback and leader’s chance for improvement. Lastly, the road to an effective communicator is expelling barriers related to the message, sender, channel or receiver, for example, hostility, being impatient, information overload, and sarcastic manner. There is no short way to be an effective communicator rather it is a long learning process (Kumuyi, 2007).

Lastly, practical approach is the ability of the leader to maintain objectivity and function within cultural boundaries. Subjectivity will impair judgment as well as motivation and creativity. In addition, effective leaders are reliable and consistent with the conversations basing their actions on beliefs. They persuade people about their ideas minimizing the usage of their positional power. They also comprehend situations and people’s opinion to allow a better approach for solving problems (Patterson, 2009).

The influence of Charismatic and Transformational Leadership Styles on Organizations

After the literature presented the pros and cons for each leadership style, it is concluded that there is no individual style considered perfect or comprehensive. As an economist magazine once stated “success will depend more than ever on the merged companies’ ability to create added value” (Waldman, & Javidan, 2009, p. 131). When a leadership style has an impact on the organization, it means that it has an impact on the organizational culture, structure, systems, finance and employees. Organizations are often competitive and seek the lead, market power, achievement of the organizational objectives through learning and accessing new or improved resources. Therefore, intensive efforts are required. What a better way to empower, persuade and provide employees with resources to accomplish goals (Waldman, & Javidan, 2009, p. 131).

Charismatic leadership style has the most influence on the followers in terms of increased motivation and satisfaction. It also makes the team leaders understand the leader goals and willingness to surpass their own interest for the sake of the organization. When a leader present high degree of understanding (empathy) toward followers, followers will be enthusiastic about any project, develop trust, and commitment which are significant behaviors for good a team (Murphy, & Ensher, 2008). Followers need to integrate their actions and work in complex and dynamic environment cohesively. By keeping good team cohesion, the employees will feel part of the organization and have the desire to work, which is definitely better than forcing employees to comply with roles and policies. Thus, group performance and organizational performance will rise. In addition, if employees have no desire to work, it would be difficult to abide them to perform good job (Wang, Chou, & Jiang, 2005).

Charismatic leaders will also assist organizational members in identifying their tasks or/and roles and stimulate their self worthiness and perception, intrinsic motivation, and initiative behavior. The leader will assess the environmental growth opportunities for an organization and carefully evaluates employees’ concerns. Then, the leader will synthesize a strategic vision in an inspiring approach and finally demonstrates personal risk and unconventional behavior to organizational members and objectives (Rowold, & Heinitz, 2007). These leaders assist followers in self expression, evaluation and consistency aiming for better future (Bass, & Riggio, 2006). By doing so, hospitals will have low turnover, low hospital costs, increased goals’ achievements in units and high enthusiastic approach to customer service therby; increasing patient satisfaction (Beorner, & Dutschke, 2008).

Moreover, transformational style changes organizational cultures and systems from controlled based to commitment based. An environment of commitment will lead to initiative, responsible and active participation of work. When employees find the work enjoyable and benefits are better in the organization than others, they will commit to their job and sustain for a long term. Inspiring, stimulating and considerate organization also encourages employees’ involvement and loyalty. Achievements of objectives become meaningful to followers as well as to the leader (Walter, & Bruch, 2010). In spite of early researches in the eighties evidenced the effectiveness and efficiency of transformational leadership in military sectors, recent researches displayed the essentiality of this style in each organizational setting including; schools, companies and hospitals. Hospitals often have increased demands and decreased control which leads to stress related mental and physical issues.

Sometimes there are restructuring processes in hospitals which contains the rise of standardizations through the control of work processes, for instance; introduction to restrictive list of effective drugs, enhanced treatment guidelines, development directives and introduction of computerized computer documentation. These restructuring processes cause increased stress and pressure to abide with new roles and regulations (Bass, & Riggio, 2006). Transformational leadership style will increase patient satisfaction and improve the working environment, staff satisfaction with work and payment, staff health and wellbeing and nurse-physician relationships. As a result, the productivity and effectiveness of the team and organization will increase (Cummings et al., 2010). As well, the organizational profits and employees’ performance and organizational costs will certainly decrease (Rowold, & Heinitz, 2007).

Finally, if the leadership style is charismatic or transformational, similar consequences will be a result in terms of their impact on organizations (Boerner, & Dutschke, 2008).

In conclusion, as every organization follows certain or multi-leadership styles, certain styles such as charismatic and transformational leadership could effectively meet the organizational goals. A good leadership style is the ability of the leader to make followers reach sense of commitment, loyalty and devotion. There is no doubt that, people like rewards and promotions in their careers; however, what is a better way to attract employees to work by motivating and rewarding. A good leader is a good communicator with knowledge and expertise. Not only that, it is the ability to persuade people; evolving their ideas for self and organization. Moreover, a good leader has the ability to decrease stress, decrease costs and increase productivity and effictivity of services. There is no such a best leadership style; nevertheless, there are certain characteristics and skills needed to have the best outcome according to the situation provided. Although this paper only states three contemporary styles, a view to other leadership styles are needed to extract what is best for the leader characteristics and skills to be followed.