Which leadership model holds that an effective leader makes desirable rewards available?

The transactional style of leadership was first described by Max Weber in 1947 and then by Bernard Bass in 1981. This style is most often used by the managers.

It focuses on the basic management process of controlling, organizing, and short-term planning. The famous examples of leaders who have used transactional technique include McCarthy and de Gaulle.

Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest. The power of transactional leaders comes from their formal authority and responsibility in the organization.

The main goal of the follower is to obey the instructions of the leader. The style can also be mentioned as a ‘telling style’.

The leader believes in motivating through a system of rewards and punishment.

If a subordinate does what is desired, a reward will follow, and if he does not go as per the wishes of the leader, a punishment will follow. Here, the exchange between leader and follower takes place to achieve routine performance goals.

These exchanges involve four dimensions:

1. Contingent Rewards: Transactional leaders link the goal to rewards, clarify expectations, provide necessary resources, set mutually agreed upon goals, and provide various kinds of rewards for successful performance. They set SMART (specific, measurable, attainable, realistic, and timely) goals for their subordinates.
2. Active Management by Exception: Transactional leaders actively monitor the work of their subordinates, watch for deviations from rules and standards and taking corrective action to prevent mistakes.
3. Passive Management by Exception: Transactional leaders intervene only when standards are not met or when the performance is not as per the expectations. They may even use punishment as a response to unacceptable performance.
4. Laissez-faire: The leader provides an environment where the subordinates get many opportunities to make decisions. The leader himself abdicates responsibilities and avoids making decisions and therefore the group often lacks direction.

Assumptions of Transactional Theory

Implications of Transactional Theory

The transactional leaders overemphasize detailed and short-term goals, and standard rules and procedures. They do not make an effort to enhance followers’ creativity and generation of new ideas. This kind of a leadership style may work well where the organizational problems are simple and clearly defined. Such leaders tend to not reward or ignore ideas that do not fit with existing plans and goals.

The transactional leaders are found to be quite effective in guiding efficiency decisions which are aimed at cutting costs and improving productivity. The transactional leaders tend to be highly directive and action oriented and their relationship with the followers tends to be transitory and not based on emotional bonds.

The theory assumes that subordinates can be motivated by simple rewards. The only ‘transaction’ between the leader and the followers is the money which the followers receive for their compliance and effort.

Difference between Transactional and Transformational Leaders

Conclusion

The transactional style of leadership is viewed as insufficient, but not bad, in developing the maximum leadership potential. It forms as the basis for more mature interactions but care should be taken by leaders not to practice it exclusively, otherwise it will lead to the creation of an environment permeated by position, power, perks, and politics.

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Leadership plays a vital part in organizations. Along with motivation, it is a way to influence the behavior of people.

Leadership provides a means of influencing behavior in organizations

Influence is the ability to affect the perceptions, attitudes, and behaviors of others. Individuals, groups and entire organizations can be sources of influence. In fact , an organization can be thought of as a system of influence.

As mangers perform their tasks, they are influencing others. Influence can be attempted in a variety of ways. It can be obvious and direct or subtle and indirect. It can be directed at different groups and different organizational levels. Leadership is one major avenue through which influence is practiced.

Leadership is both a process and a property. Leadership as a process is the use on non-coercive influence to shape the goals of a group or organization, to motivate behavior toward the achievement of those goals, and to help define group or organizational culture.

Leadership as a property is the set of characteristics attributed to those who are perceived to be leaders. Leaders are people who are able to influence the behaviors of others without having to rely on threats or other forms of force.

Leadership and management, although related are different concepts. A person can be a good manager but not a good leader or vice versa. Effective organizations need both leadership and management. Leadership is needed to create change, but management is needed to create orderly results.

Leadership has been extensively studied. Two major approaches are the trait approach and the behavioral approach.

The assumption of the trait approach to leadership was that some basic traits or set of traits differentiates leaders form non leaders, and if those traits could be determined, potential leaders could be identified.

Numerous studies attempted to identify the traits that set leaders apart, but for the mast part results were disappointing. As researchers discovered that the qualities of leadership varied with the situation, the search for certain traits as predictors of leadership ability dwindled.

Leadership researchers next began to look at the behaviors or actions of leaders. The assumption was that the behaviors of effective leaders were somehow different from the behaviors of ineffective leaders.

Renis Likert and others at the university of Michigan identified two styles of leader behavior:

• Job centered behavior occurs when a leader pays close attention to the work of sub-ordinates, explains work procedures, and is keenly interested in performance.
• Employee centered leader behavior occurs when the leader is interested in developing a cohesive work group and in ensuring employees are satisfied with their jobs. These two styles of leader behavior are believed to lie at the ends of a single continuum. Likert found that employee centered leader behavior generally tended to be more effective.

Researchers at Ohio State were studying leadership found that their results suggested that there were two basic leader behaviors or styles.

• Initiating structure behavior occurs when the leader clearly defines the leader-subordinate role so that everyone knows that is expected, establishes formal lines of communication and determines how tasks will be performed.
• Consideration behavior occurs when the leaders shows concern for sub-ordinates and attempts to establish a warm, friendly, and supportive climate.

These two behaviors are viewed not as opposite ends of a continuum but as independent variables. Thus the leader can exhibit varying degrees of both initiating structure and consideration at the same time.

Both these studies played an important role in the development of contemporary thinking about leadership. Rather than concentrating of what leaders are, as the trait approach urged, the behavioral approach forced looking at what leaders do. The main shortcomings of the behavioral approach was its focus on finding a dependable prescription for effective leadership.

The main assumption of all contingency approaches is that the appropriate leader behavior varies from one situation to another. Contingency theories attempt to identify key situational factors and to specify how they interact to determine appropriate leader behavior. An early model that laid the foundation for subsequent developments is the Tannenbaum-Schmitt continuum of leadership behavior in the decision-making process.

The various categories of behavior are shown in Figure 1. The continuum of behavior moves from one extreme where the manager alone makes the decision to the other extreme where employees make the decision with minimal guidance. Although Tannenbaum and Schmitt identified the importance of contingency factors, their framework was merely speculative.

Other contingency theories have been developed.

The LPC model of leadership, developed by Fred Fielder, was the first true contingency theory of leadership. Fielder identified two styles of leadership, task oriented and relationship-oriented, and argued that the leader behavior is a refection of the leader's personality. He measured leader style by using a questionnaire called the least preferred co-worker (LPC).

A leader is asked to describe the characteristics of the person with whom he or she is able to work least well-the least preferred co-worker-by filling out a questionnaire that has pairs of positive and negative adjectives. A high total score is assumed to reflect a relationship orientation; a low score, a task orientation.

Favorableness of the situation is a key contingency factor in determining leadership behavior. The factor is determined by leader-member relations, task structure, and position power. Leader-member relation refers to the relationship between the leader and the work group. Task structure is the degree to which the group's task is well defined. Position power is the power vested in the leader's position.

Fielder and his associates directed several studies linking the favorableness of various situations to leadership style and group effectiveness. Figure 2 summarizes the results of these studies. When the situation is highly favorable or highly unfavorable, the task-oriented leader is most effective. When the situation is favorable, the relationship-oriented leader is most effective.

Fielder argued that the leader's style is essentially fixed and cannot be changed. A leader can not change his or her behavior to fit a particular situation. Rather, the leader must attempt to change the situation or the organization must change leaders to fit the situation.

Martin Evans and Robert House developed the path-goal model of leadership, which is a direct extension of the expectancy theory of motivation. The goal-path model suggests that the primary functions of a leader is to make valued or desired rewards available to the workplace and clarify for subordinates the kinds of behavior that will lead to goal accomplishment and valued rewards.

Four kinds of leader behavior are identified in the path-goal model, and it is assumed that leaders can change their style or behavior to meet situation demands.

• Directive leaders let subordinates know what is expected of them, give guidance and direction, and schedule work.
• Supportive leaders are friendly and approachable, show concern for subordinates' welfare, and treat all group members as equals.
• Participate leaders consult subordinates, solicit suggestions, and allow participation in decision making.
• Achievement oriented leaders set challenging goals, expect and encourage subordinates to perform at high levels, and show confidence in subordinates' abilities.

Two categories of contingency factors used in the path-goal model are:

• Personal characteristics of subordinates being their perception of their own ability and their locus of control.
• Environmental characteristics are factors outside the subordinate's control such as task structure, system of authority, and nature of the work group.

As shown in figure 3, different leader behaviors affect subordinates' motivation to perform. The interplay of personal and environmental characteristics determines which behaviors lead to which outcomes.

The model focuses on only part of the leadership process: how much decision making participation to allow subordinates.

The model contends that decision effectiveness is best gauged by the quality of the decision and by employee acceptance of the decision. To maximize the decision effectiveness, the model suggest that mangers adopt one of five decision-making styles.

There are two autocratic styles, two conservative styles and one group style. The situation is defined by a series of questions about the characteristics or attributes of the problem under consideration. To address the questions, the manager uses on of the four decision trees. A decision tree is used for problems that involve the entire group and in which time is important. The appropriate style is shown from that tree

Although most reviews of the model show much scientific support, its complexity represents a problem for many managers.

This model stresses that leaders have different kinds of relationships with different subordinates. Each manager-subordinate relationship represents one vertical dyad. The model proposes that leaders establish special working relationships with a handful of subordinates, the in-group, based on some combination of respect, trust and liking. Other subordinates that the leader does not respect, like or trust remain in the out-group.

This model suggests that the appropriate leader behavior depends on the maturity of the followers. Maturity encompasses motivation, competence and experience. The model proposes that as followers become more mature, the leader needs to move gradually from high to low task orientation. Since the model is both simple and logical, many mangers are familiar with it; however it has little scientific support.

Leadership research is very popular and three major new concepts have attracted attention.

This concept has been developed for situations where leadership is not needed. In this view, there are situations in which leadership behaviors are neutralized of replaced by characteristics of the subordinate, the task and the organization. Characteristics of the subordinate include abundant ability and experience, strong needs for independence, strong adherence to professional norms, and indifference to organizational rewards controlled by the leader. Task characteristics that may substitute for leadership include routiness, availability of feedback, and intrinsic satisfaction. Organizational substitutes include formalization, group cohesion, inflexibility, and a rigid reward structure.

This model describes leadership that transmits a sense of mission, stimulates learning experiences, and inspires new ways of thinking.

The keys to transformational leadership can be summarized by trusting your subordinates, developing a vision, keeping your cool, encouraging risk, being an expert, inviting dissent, and simplifying things.

Organizations are becoming increasingly diverse. Employees of various races, sexes, and ethnic origins are working throughout the organizational hierarchy. This increased diversity presents challenges to leadership.

As the strength of the concept of global economies increases, international leadership issues are becoming more important. Different approaches and processes are becoming more relevant. Different cultural factors may be viewed as important contingency factors.

These include the effects of gender, race and age differences on leadership.

Is the model in which an effective leader makes desirable rewards available clarifies how employees?

Which model of leadership is concerned with the leader's interactions and providing consideration for followers?

Which leadership approach focuses on providing increased service to others rather than to the leader?

What type of leadership represents normatively appropriate behavior that focuses on being a moral role model?