MGT2019: Leading for change

Individual Assignment
1 Front Page
Name: Prunella Yap Ming Ru
Student Number: 40376536
Word count: 2046 words
Chosen Question: Option 2

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 Table of Contents
1 Front Page---------------------------------------------------------------------------------------------------- 1
2 Introduction------------------------------------------------------------------------------------------------- 3
2.1 Definition of organisational change, transactional, and transformational leadership
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3 Body----------------------------------------------------------------------------------------------------------- 3
3.1 Importance of gaining employee buy-ins and commitment into organisational
change.---------------------------------------------------------------------------------------------------------- 3
3.2 Positive and negatives of transactional and transformational leadership--------------5
4 Conclusion--------------------------------------------------------------------------------------------------- 8
5 Appendix A: Figures & Diagram-------------------------------------------------------------------------9

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2 Introduction
To further our understanding on what it takes for companies to excel in organisational
change within the cooperation. In a world that is filled with hyper-competitive and
continuously developing business environment and where successful organisational
transformation is not a trivial task to achieve, with around 70% of firms failing to achieve
such change (Beer & Nohria, 2000). Therefore, we must first understand where the study of
leadership has been and the effects of differential leaderships.

2.1 Definition of organisational change, transactional, and transformational

leadership
According to one definition of organisational change, it is "the process of continually
updating an organization's direction, structure, and skills to fit the ever-changing demands
of external and internal customers." (Todnem, 2005). The focus on interactions between
leaders and followers is the second feature of transactional leadership. Through these
encounters, leaders may achieve their performance objectives, uphold the status quo within
the organisation, motivate followers through binding agreements, and then influence
followers' behaviour to accomplish predefined goals (McCleskey, 2014). The
transformational leader inspires, stimulates the mind, and values individuals individually in
contrast to the transactional leader who relies on followers' contingent reinforcement.
Depending on the situation, transformational leadership may be either participative or
directive (Bass, 1999). Hence, in this essay I will be analysing and presenting two different
leadership methods known as transactional and transformational leadership, and the impact
it holds over organisational change.

3 Body
3.1 Importance of gaining employee buy-ins and commitment into organisational
change.
The beginning of any process in organisational change, takes place within the employees
and administration that are a part of the organisation. Usually employee’s experiences
dread, cynicism, disengagement, and a reluctance to participate in the organisational
change process due the unpredictability and complexity associated with organisational

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change (Brown and Cregan, 2008). Researchers and practitioners have also emphasised the
crucialness for workers and employees to be supportive and fully on board for
organisational change to occur successfully (Islam, Furuoka and Idris, 2020) Therefore it is
crucial to find methods to gain the employees within any organisation’s trust and
commitment before proceeding with any sudden big changes. Research studies showed that
in the context of organisational change, transformational leadership (TL) is seen to be the
best style for cultivating followers' beliefs (Sharma and Krishnan, 2012). (e.g., Refer to figure
1). An example being, in October 2012, BBC Worldwide announced a structural
reorganisation that saw the company shift from divisional to regional management lines.
The goal was to promote growth from overseas markets while also becoming closer to
clients (CIPD, 2015). The entire company had to adjust to the new business strategy.
However, many staff were impacted by the reorganisation, which caused some
redundancies. A few driver for change within the company was raising people’s awareness,
helping employees understand the need for change and lastly, adopting a long range broad
perspective while building trust in the process. BBC built trust overtime via the
'Commitment'. which was a kind of quasi-contract between leaders and others in the
organisation, outlining what to expect from a senior management but also what others
were expected to provide in return, done through conference and staff workshops (CIPD,
2015). Furthermore, there was also a mass convention for approximately 1,800 employees.
Going by order with the CEO and senior leaders first, then cascaded down to team leaders
and teams in the form of a workshop where everyone could voice their individual opinions
on working with BBC worldwide and provide feedback on any improvement that can be
made moving forward. In turn, employees feel significantly more appreciated with having
their voices heard and hence being more passionate working for BBC worldwide and more
accustomed to embrace the upcoming organisation change. BBC ultimately won the trust of
their thousands of employees in which many companies can follow as a prime example of
successful organisational change.

Another question many seek to comprehend is why, there is great emphasis placed for the
level of commitment employees have towards the organisation their working for? Most
researchers found that strong commitment is a psychological condition that describes an

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employee's engagement with the organisation for which they work for and implies for
whether the employee decides to continue working for the company. Employees who are
deeply dedicated to the organisation are more likely to stay than those who are less
engaged (Allen and Grisaffe, 2001), Commitment construct is placed through a three-
component model outlined by (Allen and Meyer, 1990). According to that model, the
psychological state that distinguishes an employee's relationship with the business is
composed of three distinct components that emerge separately and have distinct
ramifications for employee behaviour (Meyer and Allen, 1991). First, we have, affective
commitment which dictates employee’s emotional ties to the organisation. Secondly,
continuance commitments determine the extent employee’s fear of leaving the organisation
due to the costly repercussion. It can even be said they are forced to stay due to the risk
their unable to take. Lastly, strong normative commitment employee’s sticks with the
organisation as they feel the strong sense of obligation to do so. Since they hold a significant
belief that, that is the correct and most logical thing to do (Meyer and Allen, 1997). Thus, we
might find different organisations potentially strategizing or even manipulate, one of these 3
component models to assure their employees remain committed to them for as long as
possible.

3.2 Positive and negatives of transactional and transformational leadership

Both leadership methods have been proven to work in different ways under different
organisational environments. Based on a meta-analysis research method, studies revealed
that transformational leadership had a significant relationship with employees' responses to
organisational change, excluding support for change, such as improving workers' willingness
to undergo change, openness to change, and readiness for change while significantly
reducing their resistance to change and cynicism about change (Peng et al., 2021). These
comprehensive findings are consistent with the findings of previous research in terms of the
value (positive or negative) and strength of the association between transformational
leadership and organisational change reactions. However, the expected positive relationship
between transformational leadership and employees' willingness to change was not
warranted, revealing that, in contrast to positive psychological reactions (such as
commitment to change, flexibility to change, and willingness to undergo transformation),

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transformational leadership was unable to quickly shape employees' behavioural support
for change (Peng et al., 2021). Furthermore, transformational leadership encourages
followers to identify with the company. Affective commitment, or the follower's emotional
connection and involvement with the organisational unit, is another benefit of
transformational leadership. It is clear that having a strong and powerful relationship
between the leader and the follower may also provide the outcomes of a long-lasting
relationship. Instead of merely meeting transactional demands, a transformational leader
fosters deep relationships with their followers by addressing their moral growth and
influencing their value systems (Sharma and Krishnan, 2012). For example, in Santander.
The values and emphasis they place on inclusivity with their employees voices and in an
environment where they can foster a freedom of speech and thoughts among themselves or
with the company, they were even recognised by top Employers Institute and Great Place to
Work as one of the best companies to work for. 86% of Santander workers, according to a
2021 global engagement survey, agrees that the bank treats them equally, regardless of
their age, marital status, gender, disability, ethnicity, colour, religion, or sexual orientation
(www.santander.com, n.d.). Lastly also providing flexibility and an appropriate work-life
balance with a hybrid work style, they had also known to reduce employees working hours
when family-related responsibilities gets in the way to ease their employee’s stress. This is a
prime example of a company that is run by transformational leadership.

However, transformational leadership hasn’t always be universally agreed upon or

welcomed. In fact, one of the main criticisms of the particular leadership style is the
possibility and capacity for abuse of authority (Hall et al., 2002). Transformational leaders
force followers by appealing to strong emotions, regardless of the effect on followers, and
they are not always concerned with respecting moral values. (Stone, Russell, and Patterson,
2004) claim that followers of transformative leaders are more inclined to respect and trust
them. In which certain leaders with narcissistic tendencies who live on manipulation and
control could use it to their advantage or personal gain. We may also observe how
transformative leadership can enslave individuals through its addictive consequences (e.g.,
refer to figure 2). A dictatorship or the persecution of a minority by a majority cannot be
prevented because of the lack of opposing interests, influences, and power throughout the

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overall leadership style. It demonstrates how transformational leadership may be abused by
a leader who lacks moral integrity for less-than-desirable social goals (Hay, 2006).What
about transactional leadership? According to research, transactional leadership outperforms
transformational leadership in terms of bringing about organisational change. For instance,
empirical study conducted in Yemen revealed that transactional leadership was superior to
transformational leadership in terms of effectiveness (Ahmad & Gelaidan, 2011). According
to this survey, employees at publicly traded firms in Yemen preferred working with
transactional CEOs than revolutionary ones. The results showed that transactional
leadership had a stronger effect on employees' emotional commitment to change than
transformational leadership. (Hoxha, 2019). Also, it has been shown that transactional
leaders are more successful at getting employees to perform better by having a greater
impact on employee performance and dedication to their jobs (Suryanarayana, 2011)
Indicating that transactional leaders are more successful in inspiring people to provide
effective performance. Also, the leadership approach has demonstrated to possess a greater
influence strategy than the transformational leadership approach. (Hoxha, 2019).

Although some researchers argue that organizational performance is adversely impacted by

transactional leadership rather than being beneficial (Behery, 2008). Example, past research
conducted in Malaysia have revealed that Malaysian leaders have a more directive and
authoritarian connection with their followers, implying that there is less possibility for
employees to engage in or be involved in decision-making. In other words, employee
innovation and the impact of transformational and transactional leadership styles on
employee performance were previously quite limited, but despite the circumstances. This
leadership style was reported to be more effective still (Ansari et al., 2004). Although it was
determined that transactional leadership had a significant impact, transformational
leadership was shown to be more effective in building bonds between employees and
employers (Bass, 1985) examined this with a sample of 117 workers from a manufacturing
company. It was found that the transformational leadership strategy led to more positive
relationships between managers and staff. Whereas transactional leaders are more focused
on giving orders, offering rewards, or carrying out other tangible transactions,
transformative leaders develop followers' loyalty and trust (Hoxha, 2019). (E.g., can be seen

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from figure 3), where it distinguishes a clearer picture of the differences between the two
leadership styles on work performance.

4 Conclusion
Bass anticipated that events and personal characteristics of the two different leadership
styles will both continue to be important in leadership. He argued that as modern leaders
grow more imaginative, sensitive, flexible, and adaptive. Purely transactional businesses
would slowly dissipate, and transformational leadership could soon be the majority or the
“norm” (Bass, 2008). So, transactional leadership may be a useful model to assist task-
focused leadership, even when the objective is to foster social skills like communication. It is
possible to dispute that transactional leadership is ineffective for creating long-term goals or
for leading when results are not predetermined. Fundamentally, transactional leadership for
organisational change can be perfect for assuring certain qualities depending on abilities
and actions made in specific situations or environments. Yet, it might not be the best option
for developmental needs (Brymer & Gray, 2006) To shape desired outcomes based on their
own personal satisfaction, leaders must also be aware of what may be considered a reward.
Yet, the assumption that transformational leadership may be used for organisational change
suggests that leadership is more than just a collection of abilities. Focusing primarily on the
skills component of transformative leadership is short-lived and potentially vulnerable to
exploitation, according to research in other fields.

Hence research on the relationships between growth and effectiveness, organisational

change and results, and between leaders and followers must continue to be thorough and
vigorous as there is still much to learn between the correlation of organisational change and
the two types of leadership.

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 5 Appendix A: Figures & Diagram

Figure 1. Transformational leadership model

Source: Islam, Furuoka and Idris (2020, p.2).

Figure.2 Addictive patterns of Transformational Leadership

Source: Hall, Johnson, Wysocki and Kepner (2002, p. 2).

Figure 3. Leadership’s Effect on Knowledge and Performance

Source: Bryant (2003, p. 38)

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