Home Business & Finance Distance Leadership in International Corporations: Why Organizations Struggle when Distances Grow
Literature reviews on Full Range Leadership revealed that more studies have been published on transformational and charismatic leadership than on any other popular leadership theory (Furtner, 2010; Judge & Piccolo, 2004). Transformational leadership can be seen as a matter of directed influence belonging to the New Leadership paradigm (Furtner & Baldegger, 2013, p. 136). The dimension focuses on proactive and inspirational components of organizational leadership. Transformational leaders strive to elevate subordinates’ awareness by providing vision and emphasizing collective interests over self-interest. Furtner (2010) proposes that transformational leadership carries traits of soft and emotional leadership characteristics.
Transformational leadership as a higher-order factor includes five behavioral subfacets: (1) idealized influence (attributed), (2) idealized influence (behavior), (3) inspirational motivation, (4) intellectual stimulation, and (5) individualized consideration (Bass & Avolio, 1995). The original term for idealized influence was charisma. Therefore, definitions of the facet still include annotations referring to the early terminology (Antonakis, 2012, p. 266).
Idealized influence (attributed) describes the socialized charisma of leaders, e.g., whether followers perceive a leader as powerful and confident, pursuing higher- order ideals (Antonakis et al., 2003).
Idealized influence (behavior) builds on leaders’ charismatic actions considering strong inner values and beliefs. Leaders are admired for their extraordinary capabilities and determination (Bass & Riggio, 2006). The main differentiator between attributed and behavioral idealized influence is the focus entirely on attributions and perceptions by followers for the first facet, whereas behavioral aspects are determined by observation (Antonakis, 2012). The two dimensions lead in the best case scenario to identification with the leader.
Inspirational motivation encompasses behaviors that inspire followers by providing vision and practicing role modeling (Michel, Lyons & Cho, 2011). These result in the specific engagement of subordinates by sparking enthusiasm and optimism (Bass & Riggio, 2006). Providing confidence, leaders raise followers’ expectations to achieve ambitious goals that may have seemed unreachable (Bass, 1985). As with idealized influence, inspirational motivation is strongly linked to perceptions of charismatic leadership (Bass & Avolio, 1993).
Intellectual stimulation refers to leaders taking actions that activate subordinates’ logical thinking, strengthen their creative behavior, and encourage them to take on new perspectives and be more flexible (Antonakis et al., 2003; Michel et al., 2011; Sosik, Kahai & Avolio, 1998). It is the only non-emotional facet of transformational leadership (Antonakis, 2012, p. 266). The leader raises followers’ awareness of problems and stimulates them to solve the issues (Bass, 1985, p. 99).
The last component of transformational leadership, individualized consideration, contains attributes helping followers to reach their potential by providing socio?emotional support (Bass, 1985; Yammarino & Bass, 1990). Leaders pay attention to subordinates’ individual needs allowing for personal development. Providing constant support and coaching, followers are encouraged to perform in order to meet organizational goals. Individualized consideration is characterized by frequent contact and feedback (Bass, 1985; Bass & Avolio, 1990).
Early considerations on transformational leadership raised assumptions that leaders inhibiting strong transformational attributes might be hindered in building relationships and impacting the performance of their followers (Kerr & Jermier, 1978). Since then, it has been confirmed that transformational leaders are instead the relationship builders who are associated with high effectiveness and are perceived as effective by subordinates (Neufeld et al., 2010). Individuals trust transformational leaders and display a high degree of satisfaction (Hoyt & Blascovich, 2003). Transformational leaders apply mentoring and coaching techniques, encouraging followers to solve problems creatively and to challenge traditional processes. Effective leaders tend to use more metaphors, symbols, and imagery-based argumentation when communicating (Bass, 1985). Fostering personal growth, transformational leaders augment the relationship between individuals and the team they belong to. Transformational leaders identify themselves with their work and display a high degree of self-efficacy which in turn may lead to improved individual performance (Walumbwa et al., 2008). An earlier study links transformational leadership to business unit performance, pointing out that leaders must develop transformational skills in order to lead effectively (Howell & Avolio, 1993). Research suggests that transformational leaders can stimulate intrinsic motivation in follower behavior and expect them to perform because of the nature of the task (Kahai & Avolio, 2008). Those leaders have the power to promote intrinsic value in followers in order to achieve goals and might in turn foster organizational commitment (Avolio, Zhu, Koh & Bhatia, 2004). Transformational leaders can guide followers to envision a better future and to achieve their goals. With their optimistic attitude they give meaning to followers’ work. Those leaders are further projected to empower people through their optimism and integrity (Bass & Avolio, 1994). Yet, differentiation exists between group and individually focused transformational leadership. A study by Tse and Chiu (2014) discovered that transformational leadership focused on the individual significantly strengthens creativity but is less effective in encouraging organizational citizenship behavior. Conversely, citizenship behavior is enhanced when transformational leadership is directed to the group.
Results of the Global Leadership and Organizational Behavior Effectiveness (GLOBE) Research Program initiated by Robert House in 1991 indicate that outstanding leaders display characteristics associated with transformational leadership, such as being trustworthy and honest, and showing integrity. Being dynamic, decisive, dependable, and a team builder further figured among the highest-ranked attributes (Den Hartog, House, Hanges, Ruiz-Quintanilla & Dorfman, 1999, p. 239). On the contrary, being dictatorial, asocial, and non-cooperative were viewed as undesired features. The researchers’ proposal that numerous characteristics related to transformational leadership are universally validated as contributing to successful leadership, were confirmed. Den Hartog et al. (1999) name them as “motive arous- er, foresight, encouraging, communicative, trustworthy, dynamic, positive, confidence builder and motivational” (p. 250). Furthermore, findings suggest that leadership competence means more than displaying a set of attributes - rather, it denotes that adaptation to each individual culture is necessary (Den Hartog et al., 1999).
Whereas transformational leadership and follower performance have often been the subject of interest, only little attention has yet been paid to the impact of transformational leadership behavior on follower leadership potentials (Cole et al., 2009). In their meta-analysis of the effects of transformational and transactional leadership on effectiveness, Lowe, Kroeck and Sivasubramaniam (1996) found transformational leadership to appear more frequently at lower hierarchy levels. Transformational leadership further revealed higher team effectiveness than transactional leadership (Howell et al., 2005; Lowe et al., 1996). It doesn’t matter whether transformational leadership is applied in a vertical or shared way; both conditions influence team effectiveness positively (Pearce & Sims, 2002). Particularly individualized consideration and charisma were revealed to predict business unit performance (Howell & Avolio, 1993). Evidence was found that transformational leadership is also perceived as more efficient by followers than transactional leadership (House & Shamir, 1993). Mihalcea (2014) discovered particularly attributed idealized influence and individual consideration to be significantly positively related to subordinates’ performance.
Despite empirically tested direct effects (Birasnav, 2014; Judge & Piccolo, 2004; Mihalcea, 2014) some scholars searched for underlying indirect effects of transformational leadership on work-related outcomes. One of these studies investigated the role of positive mood in the leadership-performance relation. Tsai, Chen and Cheng (2009) highlighted that followers’ positive mood can contribute to a favorable work-performance when transformational leadership is executed. In other words, it functions as mediator suggesting that followers with a positive mood generally show an increased task performance. Another study tested for mediation effects of basic-needs satisfaction and work engagement on the leader- ship/performance relation. Kovjanic, Schuh and Jonas (2013) articulate that trans?formational leadership is positively linked to followers’ satisfaction of needs for competence, relatedness, and autonomy. Needs for competence and relatedness mediated the influence of transformational leadership on work engagement which in turn led to increased performance quality, quantity, and task persistence. Identification with the leader further appeared to potentially enhance the influence of transformational leadership on work performance (Cavazotte, Moreno & Bernardo, 2013).
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