Leadership theories in the context of healthcare management

Do healthcare mangers need leadership theories? Critically evaluate at least two leadership theories in the context of healthcare management. According to Huczynski and Buchanan (2007), Leadership is defined as “the process of influencing the activities of an organised group in its effort towards goal setting and goal achievement.” Grint (2005:2) describes leadership as ‘a function of relationship between leaders and followers, rather than simply focused on the person of the leader.’ According to Bass (1990:19), “leadership is an interaction between two or more members of the group that often involves a structuring or restructuring of the situations, perceptions and expectations of the members.” Thus it can be said from the above definitions that leadership is enacted through relationships with others i.e. the followers and leadership is widely distributed throughout the organization. Healthcare organisations around the world spend enormous amount of money in infrastructure and renovating facilities in hospitals, but spend a relatively less time or effort for the management of people who work in it. Effective leadership is therefore necessary for the smooth functioning of healthcare organization.

According to Gunderman R. (2009), healthcare leaders should understand the nature of the organization where they work and should work in harmony with physicians, nurses, technologists, administrators and other members of organization. The people who work in healthcare organizations as leaders should understand the needs of the people they work with and should motivate them in order to increase their performance. Thus the overall performance of the organization depends upon the behaviour of leaders with their followers. Failure to understand human motivation can result in downfall of the organization. Medical leaders should look at the following questions: Which is more effective way to deal with the workers, benefits such as salary raises and public praise, or sticks, such as threat of termination and reduction in compensation? How can we improve workers performance, through tighter control or by increasing autonomy and empowerment? If the crucial needs of the workers are not fulfilled it can affect their commitment towards organization and may result in financial instability of the organization.

Leadership and management are often compared under the same platform. People are often confused and ask a question, Are managers leaders? The answer is NO, they differ from each other in many ways. Leadership is one of the roles that managers have to play and is therefore a subset of management. According to Gopee and Galloway (2009), management is about measuring and monitoring performance against pre-determined goals, following policies and procedures, controlling and organizing the structure and systems, working within resource allocation and maximizing output and productivity for the organization. Whilst on the other side leadership is about being visionary, anticipating change, motivating and inspiring workers and focusing on development of individuals. Watson (1983), describes seven ‘Ss’ models to distinguish between leaders and managers. According to Watson (1983), managers mainly rely upon 3 ‘Ss’ namely strategy, structure and systems, whereas leaders depends on 4 soft ‘Ss’ called style, staff, skills and shared goals. Hollingsworth (1999) suggests fundamental differences between leaders and managers. According to him managers do things right i.e. they are transactional, while leaders do the right things i.e. transformational, managers administer while leaders innovate, manager focus on systems and structure while leaders focus on people. Thus leadership is a two-way process based on leader-follower relationship while management is based on relationship between the people working in the organization as individuals or teams. (Gopee and Gathway, 2009).

Theories of Leadership:

Several leadership theories have emerged over the past suggesting practical applications of leadership and its concept. Different leadership theories that are developed since 1920s are listed below:

Time period




Trait or Great man theory

Barnard (1938) for ‘prescriptives’: Ghiselli and Wald & Doty (1954) for the ‘descriptives’.

Style or behavioural theory

Blake and Mouton (1964), Likert (1961) and McGregor (1960)


Intelligence, initiative and self-assurance.

Participative culture, Represented a more democratic humanistic approach to the use of man in organisations and come at the time of reaction against scientific management.


Contingency theory

Fielder (1967), Schein (1980) and Vroom and Yetton (1973)

An integrative way of looking at leadership, more specific to task work group and position of leader within that work group. A best fit approach.


Post contingencies theory

Bennis (1992), Kotter (1982), Mant (1983) and Peters and Waterman (1982)

This theory particularly focused on American Business leaders with some perceptive comments as well as Anglo-Saxon leadership habits.


Transformational leadership

Bass and Avolio (1993), Cunningham and Kitson (2000a, 2000b) and Sushter (1994)

Four components. 1. Idealised influence; 2. Inspirational motivation; 3. Intellectual stimulation; and 4. Individualised consideration.

Late 90s-2000s

Contemporary theories.

Goleman (1999), Jumaa (2001),

Alleyne (2002), Goffee and Jones (2000)

Charismatic leadership

Connective leadership

Servant leadership

Transactional leadership

Transformational leadership

Adapted from- Jasper M. and Jumaa M (2005), Effective Healthcare Leadership,page-25-26

‘Trait’ or ‘Great man’ leadership theory.

According to this theory certain persons have inborn leadership traits. Many studies were conducted by the end of 1950s which explored specific characteristics of effective leaders. (Handy 1993). These studies described significant correlation between leadership effectiveness and following traits:





Supervisory ability


Bass (1990), based on several findings from studies developed a profile of traits that are marked in effective leaders. These are categorised in 3 areas mainly:













– Popularity


However the trait theory has certain weakness and problems like;

the traits are very difficult to define accurately or to understand fully;

many exceptional leaders do not possess all identified leadership traits;

it cannot be concluded that a person is better or worse as a manager or leader only by possessing one or two traits.

It is still questionable whether an individual could have all the traits for being a leader.

However despite of many other leadership theories emerged today, trait theory has not been completely disregarded. For example- Recent research study conducted by kouzes and Posner (2007) concluded that ‘Admired Leaders’ were likely to draw out specific characteristics, whereas 50% or more respondents selected: Honest (88%), Forward looking (71%), Competent (66%) and inspiring (65%). Around 28-47% of respondents selected intelligent, broad minded, straightforward, co-operative, dependable and imaginative as specific characteristics of effective leaders; while less than 25% of people selected ambitious, caring, mature, courageous, loyal, self controlled and independent. However there is no evidence between the correlation of nature and the essential characteristics of leader nor on what an effective leader is. It can be seen as trait of position, or power or knowledge and wisdom. Kotter (1990) suggested the functional approach and focused on the fact that the performance can be improved can be improved by training and the leadership skills can be developed over a period of time and perfected. He also suggested that organisations should not wait for leaders to come by their own rather ‘grow’ their own by identifying employees which have certain potential to be a good leader.

Read also  Consequences Of Lacking Loyalty In The Work Place Management Essay

Transactional and Transformational theories have gained popularity for Leadership in Healthcare Organizations out of the various leadership theories available.

Transactional leadership theory.

Transactional theory of leadership is based on leading people by the virtue of management position held in the organizational hierarchy. It is seen that in this theory leaders identify the needs of the followers and ‘transact’ with them. Thus this theory is considered as a social exchange process based on the power and reward system. In healthcare organisations this theory is related to the achievement of organizational goals which also includes attending health of local population.( Gopee and Galloway, 2005)

According to Bass and Riggio (2006), the transactional theory is based on the leaders who are successful or effective in such a way that they maintain equilibrium and harmony by fulfilling their roles according to the procedures and policies and use incentives to enhance employee loyalty and performance. The transactional leader sets goals, gives direction and uses rewards to strengthen employee’s behaviour towards meeting or exceeding established goals (McGuire and Kennerly 2006). Although this theory supports status quo and is more predictable but it has also been criticised by various authors as it is lacking vision for future of the healthcare organisation. Thus the transactional theory of leadership has a very narrow focus and the leader can have a high self interest which may eventually lead to disturbance in the organisational structure.(Gopee and Galloway, 2009)

Transformational leadership theory

Transformational leadership is widely supported leadership approach for healthcare. According to Burnes (1978), transformational leadership is identified as a process where “one or more person engage in such a way that leaders and followers raise one another to higher level of motivation and morality”. ‘In transformational leadership leaders motivate their followers by transcending their own self interests, elevating their needs and making them aware of the mission of larger entity of the organisation where they belong’. (Bass 1995). Transformational leadership is considered superior to the transactional leadership style as the whole workforce is developed as the part of the process whose main function is delivering organisation’s objective. This can be achieved by fostering identification, going beyond simple leader-follower transaction and developing and intellectually stimulating employees. (Vandenberghe et al. 2002).

According to Murphy (2005), ‘transformational leaders are visionary, self-confident, and self-aware in breaking professional boundaries to develop a multidisciplinary team approach towards patient care’. Transformational leaders inspire the followers and motivate them to exercise leadership by encouraging their belief that have the potential to achieve high aims. Thus a transformational leader is ‘the catalyst for creating new innovative organisational paradigms’ (Murphy 2005 :135). The transformational leadership style is described by Markham (1998) as collaborative, consultative and consensus seeking and attributing power to interpersonal skills and personal contact.

Thus the transformational leadership allow the followers to develop ideas and aspirations on how things could be better in healthcare settings. It articulates a vision for betterment of the healthcare services and thus allows one to work for raising the standards of care and treatment. Manley (2001) identifies six transformational leadership processes in practice;

Ability to develop a shared vision

Inspiring and communicating

Valuing others

Challenging and stimulating

Developing trust


Using these processes, transformational leaders assist the people working with them to become empowered and take responsibility of ownership to practice challenges and solutions (Sashkin and Burke 1990). The impact of transformational leadership does not restrict to development of individuals but it can also produce significant changes in practice settings by influencing the organisational culture. One of the main features of the transformational leaders is that they can ‘inspire other people to follow their clear vision’ and that ‘they demonstrate self-confidence in their ability to articulate the vision and promote change.'( Mullally 2001). Transformational leadership is also compared to that of a leadership style previously called as ‘charismatic’leadership which is now out of fashion. For example, people like Hitler, Churchill, Mussolini, Mao Tse Tung and The Reverend Moon have been perceived as charismatic leaders in the past but in today’s modern era it will be difficult to call them as ‘transformational’ leaders. Charismatic leaders are assumed to use their magnetic personalities to attract the followers. They are usually good orators and share their imaginary ideas with followers to create a common purpose. For example-Barack Obama demonstrated this ability during his election campaign and is believed to demonstrate complex ideas in a comprehensible manner to his followers.

The concept of transformational leadership and its applications in complex organisations such as healthcare is based on four central components (Bass 1998), (Plesek and Wilson 2001):

Idealised influence (charisma)

Inspirational motivation

Intellectual stimulation

Individualised consideration

Transformational leadership topic has been debated since the past three decades because the above four components can reflect the potential for causing organisational harm and destruction if the leader in the framework is supported by ’emotional intelligence’ (Goleman 2000a) to guide them through the ‘swampy lowlands’ of organisational life (Schon 1983). According to Manley (2000) the transformational leadership approach is highly beneficial for the healthcare organisations as it has positive effects in the organisational change. An analysis of transformational leadership style in North America has shown qualities of integrity and honesty all strengthen by strong core of moral and ethical values (Bashor 2000).

The key principle required in applying the transformational leadership in healthcare organisation needs much openness and honesty in all interactions (Jasper 2005). The use of personal qualities (such as charisma, influencing skills and communication) needs to be equally balanced by high levels of understanding and personal insight. This can be achieved through self perception and feedback from other colleagues. The ability to inspire and motivate depends upon the process of visioning. The leaders should be able to describe their ideas with clarity and details and should explain about the future consequences. To achieve this vision one should start working for the ‘future vision’ by learning from the ‘past realities’ and should show a collective effort where everyone has an opportunity to participate in the creation (Fenton 2003). Intellectual stimulation can be achieved by maintaining mental and intellectual alertness and acuity which can be gained by encouraging open criticism and debate of wide ranging evidence base thus it helps to form the foundation of substantive change. The development of all individual towards their potential is one of the goals of transformational leadership. This can only be achieved by sharing thoughts of power bases in both organisations and interpersonal relationships. (Jumma and Jasper 2005).

Read also  Research The Interpretivism Philosophy Management Essay

Thus it is seen that the two leadership approaches i.e. transformational and transactional approach are different from each other. Transactional leadership mainly involves ‘transaction’ between the managers and their managed people while transformational leadership mainly focuses on various radical changes that can present challenges and growth for all.

Comparison of Transformational and Transactional leadership approaches

Transformational leadership

Transactional leadership

Merges own, followers and the

organisations goals, desire values

into common goal.

Generates employee commitment to the vision.

Challenges subordinate

Rewards informally and personally

Is emotional passionate about existing and new ventures

Sees home and work on a continuum

Aims to maintain equilibrium and status quo

Is task-centred and orderly

Coaches and fosters sheltered learning

Uses extrinsic rewards

High self-interest

Sees home and work as separate


Adapted from- Gallow and Gopee (2009), Leadership and Management in Healthcare, page-59

Limitations of transformational theory:

Although transformational leadership skills are highly desirable for effective functioning of an organisation, many management theorists like Bass, Avoliio and Goodheim (1987) think that transformational leadership alone can cause problem in long time. According to them transformational qualities must be coupled with more transactional qualities of day to day managerial role. According to Bass and colleagues, the transformational leader will fail without the traditional management skills. (Marquis and Huston 2009). They believe both sets of characteristics should be present in same person in different proportion. In Johnson’s (2005) research he suggested that highly effective managers require both vision as well as specific plan to carry out their plans for achieving goals.

Concept of leadership within the British National Health Service

The New Labour Government included leadership as the part of their modernisation of the NHS and has been enshrined in the work of the NHS Leadership Centre, created in 2001as a part of NHS Modernisation Agency (The NHS Plan, DH 2000). The centre launched the NHS Leadership Qualities Framework in 2002 (NHS Leadership centre 2003) the components of this framework contains 15 qualities organised in 3 clusters of setting direction, personal and delivering the service.

Components of NHS Leadership Qualities Framework

Setting direction

Personal qualities

Delivering the service

Broad scanning

Intellectual flexibility

Seizing the future

Political astuteness

Drive for results

Self belief

Self awareness

Self management

Drive for achievement

Personal integrity

Empowering others

Holding to account

Leading change through people

Effective and strategic influencing

Collaborative working

These qualities reflect the values and beliefs intrinsic within the Government’s political stance. Here the emphasis is on personal attributes and qualities as opposed to that of traditional source of authority and power or target driven incentives derived from business culture (Jumaa 2005). These qualities are considered as a ‘set of key characteristics, attitudes and behaviours that a leader must possess in order to deliver the NHS plan;

Setting the standard for leadership in NHS

Assessing and developing high performance in leadership

Integrating leadership across the service and related agency

Individual and organisational assessment

Adapting leadership to suit changing context.

Case studies to demonstrate effectiveness of leadership theories.

Case study 1.

To measure the effectiveness of the new leadership framework in NHS, healthcare commission (now-Care Quality Commission) conducted a NHS staff survey. It was conducted in October 2003 and is probably the largest workforce survey in world. Total 572 organisations took part and around 203,911 NHS employees responded to the survey questionnaire. (www.cqc.org.uk) Results were produced before Healthcare Commission Executive Anna Walker. According to the survey more than 200,000 staff people told they liked working with NHS. Most of them were satisfied with their jobs but some part of the staff reported poorer work-life balance and higher level of work related stress. Thus healthcare commission urged NHS organisations to investigate and address these issues and try to get solution for it through more effective leadership approach.

The fifth annual national survey of NHS staff was conducted between October and December 2007. In this survey 156,000 employees from all 391 NHS trusts in England responded to a questionnaire asking about their views and experience of working with the NHS. The aim of this survey was to look at the attitudes and experience of NHS staff so that the employers can review their own staff and take necessary action. The results of the survey showed that job satisfaction remained high among most of the staff. 75% of staff was satisfied or very satisfied as well as satisfaction with the amount of responsibility. While in terms of staff engagement mixed results were seen. Around only 23% i.e. less than quarter of staff agreed that senior managers involve staff in important decisions and only 22% agreed that communication between staff and senior management is effective. While only 26% of staff were satisfied, or very satisfied with the extent to which trust values their work. This was the single most common reason given by those thinking of leaving their jobs. Along with this 8% of staff said they had experienced some discrimination at work in the previous 12 months. About 3% said they had been discriminated against their ethnic background.

Thus it can be concluded from the above two studies that the NHS staff were generally satisfied with their jobs. However there were some areas where significant action is needed for improvement. The NHS should also make some effective plans to value staff and engage them successfully in important decisions-making. While NHS should also do more in order to improve the communication between staff and senior management.

Case study 2.

The Healthcare Commission also conducted 5 surveys in 2004 to find out patients overall experience about the new NHS. The questionnaires and methodology were designed by the NHS Surveys Advice Centre at Picker institute Europe. About 850 eligible people were identified from each trust that took part. A total of 568 NHS organisations and 312,348 patients took part. The response rate for the patients varied from 63% for the adult in patient survey and 42% for the mental health survey. Results were published in first week of august 2004 and the Commission reported that patients gave positive opinions about the high quality care they received at the NHS. Majority of patients said they have trust and confidence in the clinical staff. They are listened to and treated with lot of dignity. Thus a great improvement in communication between the NHS staff and patients was seen and people were allowed to give their own suggestions regarding the facilities they would like to see as an improvement for the organisation. (Jasper and Jumaa 2005)

Read also  Research Methodology On Employee Satisfaction

Case study 3.

The following case study is based on my experience of working at a Multinational Pharmaceutical company, Zydus-Cadila healthcare limited, India. It is an innovative global pharmaceutical company that discovers, manufacture and markets a wide range of healthcare products. It produces products like Active Pharmaceutical Ingredients (API) to formulations like tablets, capsules, syrups etc… Along with this it also manufactures various animal health products and cosmeceuticals. Headquarter of the company is located in Ahmedabad, India. It also has its offices spread across four continents and different countries including USA, Europe, Japan, Brazil, South Africa and 25 other emerging markets. They employ around 10,000 employees worldwide and have one of the best Research and Development centre for drug research. The motto of the group is ‘Improving people’s lives through innovation’.

I had an opportunity to work there as a trainee for my under graduation internship for a duration of 6 months. My role included looking after the process involved in operation of different departments like production, packaging, storage, marketing and submitting daily report to the manager. The whole company was perfectly organised and the management was distributed in a systematic manner depending on the type of department. There were different mangers according to the department like for Human-Resource department, Production department, Quality-control department, R&D (Research and development) department and the Marketing department. Each of the department had a head person above them under whose guidance all mangers used to work.

According to me, the leadership approach in this organisation contained both transactional as well as transformational concepts of leadership theories. The manager under whom I used to work was a ‘transactional’ leader. He was very particular about the work. Right from the first day of my training I found him a bit eccentric. He was not at all friendly with all of us working under him. He used to assign each of us a particular work for a day. For example- On the first day of my training I was told to go and check the ware house of the company where the finished goods were stored and to write the Standard Operating Procedure for dispensing the goods. Following his instructions we all went and did our report writing work. He came for a visit within 3 hours, gathered all of us and started asking questions about what we observed. Those who were unable to answer his question were scolded. He gave us first warning about our work and said those who will complete their work early and accurately will have the additional benefit i.e. they will be allowed to go home 1 hour early. This thing worked as an incentive amongst all of us and thus we became more enthusiastic towards our work. Slowly over a time it was realised that the way he was leading us was different from others. For him the sole purpose was getting the work done from us in such a way that each one of us feels excited about work. He was very professional at work while very jovial and friendly at home. He was totally task oriented and orderly person. He never accepted any ideas or suggestions from any of the followers. Thus he was more of a ‘transactional’ type manager.

The other type of manager under whom we were working is completely opposite of the above mentioned manager. He was our marketing department manager. He was a true example of ‘transformational’ leader. The way he used to lead us was truly inspirational. He used to explain us the complete process before handling any work. He was very supportive at work and had a vision for company’s success. His communication and motivation skills were excellent. Right from the first day of my training under him we liked working with him. He always welcomed new ideas and suggestions for marketing. He was very much focused about his vision and always strives hard to achieve it. He had good interactions with everybody in the team and always used to motivate us. He used to look at everybody’s work personally and if he will notice any mistake in our work would teach how to correct it on the spot only. He used to ask for the feedback about his new ideas from each of us and correct himself if the feedback was not satisfactory. This shows his eagerness to work with the team which created positive effects on each of the team members. He was never after rewards from the company. His only aim was taking company’s sales to the epitome of success. He was fully dedicated to the company and worked with whole heartedness. Thus all of us used to work with great enthusiasm under his leadership. So he can be described as a perfect example of ‘transformational’ leader. Hence the company ‘Zydus-Cadila Healthcare limited’ has a mixture of transformational and transactional leaders which ultimately results in the success of company.


The essay here explains about various leadership theories in healthcare and its effectiveness by the use of some case studies. Healthcare organizations are complex in nature. It requires a well balanced management and leadership approaches to effectively run the organisation. Each individual in organisation should share their knowledge with others. This synergy among workers is the key part for generation of new ‘ideas and concepts’ for the organisation. Many leadership theories have been developed since past and still it is continuously adapting a new change for the effective leadership theory. Considering leadership in healthcare it is seen from the example of NHS in the UK that the combination of both ‘transactional’ and ‘transformational leadership’ theory may be the most efficacious for an organisation. Thus the healthcare managers require leadership theories and put them in practice to make it work effectively. However, according to Grint (2005:105), ‘one of the top secrets of leadership is not a list of innate skills and competences, or how much charisma you have…but whether you have a capacity to learn from you followers’.

Order Now

Order Now

Type of Paper
Number of Pages
(275 words)