Leadership

Leadership is the process of influencing the behaviour of others to work willingly and enthusiastically
for achieving predetermined goals.

Following important features of leadership:

• Leadership indicates ability of an individual to influence others.
• Leadership tries to bring change in the behaviour of others.
• Leadership indicates interpersonal relations between leaders and followers.
• Leadership is exercised to achieve common goals of the organization
• It is a continuous process of behaviour.

Functions of a Leader

[IIT wale GARMA Garm candidates hote hai recruitment k liye]

1. I - Initiative
2. I - Interpreter
3. T - Team Work
4. G - Group Goals
5. A - Arbitrator
6. R - Represent organization
7. M - Manage organization
8. A - Assign reason for his actions
9. Garm - Guide and Direct

1. To take the initiative: A leader initiates all the measures that are necessary for the purpose
of ensuring the health and progress of the undertaking in a competitive economy. He should
not expect others to guide or direct him. He should lay down the aims and objectives,
commence their implementation and see that the goals are achieved according the
predetermined targets.

2. To interpret: He interprets the objectives of the organization and the means to be followed
to achieve them; he appraises his followers, convinces them, and creates confidence among
them.

3. To encourage team work: A leader must try to win the confidence of his subordinates. He
must act like the capital of a team.

4. He identifies group goals: A leader must always help the group identify and attain their goals.
Thus, a leader is a goal setter.

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5. He acts as an arbitrator: When groups experience internal difference, whether based on
emotional or intellectual clashes, a leader can often resolve the differences. He acts as an
arbitrator to prevent serious group difference.

6. He represents the organization: A leader represents the organization and its purpose, ideals,
philosophy and problems to those working for it and to the outside world. In other words,
leaders are true representative of the entire organization.

7. He manages the organization: Last, but not the least, he administers the undertaking by
arranging for the forecast, planning, organization, direction, coordination and control of its
activities.

8. To assign reasons for his action: It is a delicate task of leaders to assigns reason to his every
command. He has to instruct things in such a way that they are intelligible to all concerned
and their co-operation is readily forthcoming.

9. To guide and direct: It is the primary function of the leader to guide and direct the
organization. He should issue the necessary instructions and see that they are properly
communicated.

Qualities of a Good Leader

[IIM wale CCD SE PK aatey hai coffee]

1. I - Initiative
2. I - Integrity
3. M - Motivation skills
4. C - Communication skills
5. C - Confidence
6. D - Decisiveness
7. SE - Social skills
8. P - Physical features
9. K - Knowledge

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1. Initiative: A leader should have courage and initiative. He should not wait for opportunities
come to his way, rather he should grab the opportunity and use it to the advantage of
organization.

2. Integrity: A leader should possess high level of integrity and honesty. He should be a role
model to others regarding the ethics and values.

3. Motivation skills: A leader should be an effective motivator. He should understand the needs
of people and motivate them through satisfying their needs.

4. Communication skills: A leader should be a good communicator. He should have the capacity
to clearly explain his ideas and make the people to understand his ideas. He should be not
only good speaker but a good listener, teacher, counsellor and persuader.

5. Self Confidence: A leader should have high level of self-confidence. He should not lose his
confidence even in most difficult times. In fact, if the leader lacks self-confidence, he cannot
provide confidence to his followers.

6. Decisiveness: Leader should be decisive in managing the work. Once he is convinced about
a fact, he should be firm and should not change opinions frequently.

7. Social skills: A leader should be sociable and friendly with his colleagues and followers. He
should understand people and maintain good human relations with them.

8. Physical features: Physical features like height, weight, health, appearance determine the
physical personality of an individual. It is believed that good physical features attract people.
Health and endurance help a leader to work hard which inspires others to work with same
tempo.

9. Knowledge: A good leader should have required knowledge and competence. Only such
person can instruct subordinates correctly and influence them.

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 Types of Leadership Styles

Autocratic or Participative or Laissez-faire or

Task Management Leadership Democratic Leadership Free-rein Leadership

Autocratic or Task Management Leadership

Autocratic or Task Management Leadership: The autocratic leader gives orders which he
insists shall be obeyed. He determines policies for the group without consulting them,
and does not give detailed information about future plans, but simply tells the group
what immediate steps they must take. In other words, an autocratic leader is one who
centralizes the authority in himself and does not delegate authority to his subordinates.

An autocratic leader operates on the following assumptions:

1. An average human being has inherent dislike for work and will avoid it if he can.

2. If his subordinates were intelligent enough, they would not be in subordinate positions.

3. He assumes that unintelligent subordinates are immature, unreliable and irresponsible

persons. Therefore, they should be constantly watched in the course of their work.

4. As he has no regard for his subordinates, he gets the work done by his subordinates through
negative motivation, that is, through threats of penalty and punishment.

Types of Autocratic Leadership

1. Strictly autocratic leaders: A strictly autocratic leader relies on negative influence and gives
orders which the subordinates must accept. He may also use his power to dispense rewards
to his group.

2. Benevolent Autocrat: The benevolently autocratic leader is effective in getting high

productivity in many situations and he can develop effective human relationships. His
motivational style is usually positive.

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3. Manipulative Autocrat: A manipulative autocratic leader is one who makes subordinates feel
that they are participating in decision making process even though he has already taken the
decision.

Participative or Democratic Leadership

Participative or Democratic Leadership: A democratic leader is one who consults and

invites his subordinates to participate in the decision-making process. He gives orders
only after consulting the group, sees to it that policies are worked out in group decisions
and with the acceptance of group.

A participative leader operates on the following assumptions:

1. Subordinates are capable of doing work independently and assuming the responsibility for
proper execution if they are given opportunities and incentives.

2. Subordinates are supervised, guided and aided rather than threatened and commanded to
work.

3. Mistakes are not viewed seriously. The assumption is that disciplinary action breeds
discontent and frustration among employees and creates an unhealthy work environment.

Laissez-faire or Free-rein Leadership

Laissez-faire or Free-rein Leadership: A free-rein leader does not lead, but leaves the
group entirely to itself. The leader avoids using power and entrusts the decision-making
authority to his subordinates. He does not direct his subordinates, thereby giving them
complete freedom of operation. Groups of members work independently and provide
their own motivation. The manager exists as a facilitator and buffer contact man between
the team and outsiders, while bringing for his group the information and resources it
needs to accomplish its job.

A free-rein leader operates in the following manner:

1. He follows the rule of minimum exposure to accountability.

2. He relieves himself of responsibilities and is ready to blame his subordinates if something

goes wrong.

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3. He has no clear idea of the goals to be attained.

4. He is more security conscious than status conscious.

This mode of direction can produce good and quick results, if the subordinates are highly
educated and brilliant people who have a sincere need to go ahead and discharge their
responsibility.

Paternalistic Leadership

1. It is a managerial approach that involves a dominant authority figure who acts as a patriarch
or matriarch and treats employees and partners as though they are members of a large,
extended family. In exchange, the leader expects loyalty and trust from employees, as well
as obedience.

2. A shortcoming of paternalistic leadership is the possibility that the parent figure may
inadvertently upset the hierarchical structure of the family, especially during times of crisis.

3. If a parental leader is perceived to unfairly favor some members over others, jealousy and
resentment can poison the workplace environment and the patriarch or matriarch will no
longer have the loyalty, trust, and obedience he or she requires to be an effective leader.

Narcissistic Leadership

1. Narcissistic leadership is a leadership style in which the leader is only interested in

him/herself. Their priority is themselves – at the expense of their people/group members.

2. This leader exhibits the characteristics of a narcissist: arrogance, dominance and hostility. It
is a sufficiently common leadership style that it has acquired its own name.

3. Narcissism is most often described as unhealthy and destructive. It has been described as
"driven by unyielding arrogance, self-absorption, and a personal egotistic need for power
and admiration".

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 Theories of Leadership

1. Trait Theory of Leadership

2. Behavioural Theory of Leadership

3. Contingency Theory of Leadership

4. Management Grid or Leadership Grid

5. Situational Theory of Leadership

6. Great Man Theory of Leadership

7. Path-Goal Theory

8. Participation Theory of Leadership

9. Servant Leadership

10. Bureaucratic Leadership

11. Likert’s Management System

12. Three-Dimensional Grid

13. Charismatic Leadership Theory

14. Transactional Leadership Theory

15. Transformational Leadership Theory

Trait Theory of Leadership

[Dog k Trait achey hotey hai]

The Trait Theory Ralph M. Stogdill proposed the trait theory of leadership in the late 1940s; he
explained that an individual must possess the key personality traits and characteristics to be an
effective leader and these traits are inherent by birth.

Trait Theory of Leadership: Trait theory seeks to determine personal characteristics of effective
leaders. It points out that the personal traits or personal characteristics of a person make him an
effective or successful leader.
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Some of the core leadership traits based on this theory can be categorized as follows:

1. Physiological traits: Height, weight, structure, color, appearance and so forth.

2. Socioeconomic characteristics: Gender, religion, age, occupation, literacy and earnings.

3. Personality traits: Extraversion, self-confidence, patience, agreeable, reliable, honesty and

leadership motivation.

4. Intellectual traits: Intelligence, judgmental ability, knowledge and emotional attribute.

5. Task-related traits: Attainment drive, dedication, initiative, determination and business

expertise.

6. Social characteristics: Socially active, cordiality and cooperation.

7. Some of the other traits being charisma, adaptiveness, creativity, uniqueness.

This theory was criticized since it neglected the environmental factors which may not always remain
the same. The list of traits is quite vast and keeps on changing from time to time. It was unable to
explain failures despite possessing the certain traits specified in the theory. Moreover, of the
identified traits can be acquired through learning and training.

Behavioural Theory of Leadership

[Ohio and Michigan k logo ka Behaviour acha nai hai]

The behavioural theory of leadership evolved in the 1950s. After understanding that the personal
traits of a leader are essential for effective leadership, the researchers were now keen to know that
what leaders do to become effective leaders. Thus, they now focused on the leader’s behaviour
rather than traits.

To study the behaviour of leaders, two major research programs were started by two different
universities:

1. The Ohio State Leadership Studies

2. The University of Michigan Studies.

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 The Ohio State University Studies

A group of researchers at Ohio State University prepared a questionnaire to be surveyed in

military and industrial setups, to determine the perception of the subordinates for the actual
behaviour of their leaders.

From their findings, the researchers identified two major categories of leader behaviour:

1. Consideration
2. Initiating structure

1. Consideration behaviour - The leaders are attentive towards their subordinates and
build up an excellent inter-personnel relationship with them. They are very supportive
and friendly. This was termed as ‘people-oriented behaviour’.

2. Initiating structure behaviour - The leaders are majorly concerned about the
achievement of goals and schedule and structure work accordingly. For such leaders,
subordinates are just resources, and they have to make the optimal utilization of them.
This was termed as ‘task- oriented behaviour’.

The University of Michigan Studies

The researchers at the University of Michigan conducted extensive interviews with managers
and the employees who reported to them. After studying numerous industrial situations, the
researchers concluded that two leadership styles – employee-centered and production or
task centered – influenced employee performance and satisfaction

1. Task-Centered Leader Behaviour: An effort to lead employees by focusing on work and

how well employees perform. The task-centered leader pays close attention to
employees' work, explains work procedures, and is deeply interested in performance.

2. Employee-centered Leader Behaviour: An effort to lead employees by developing a

cohesive work group and ensuring employee satisfaction. The employee-centered leader

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 Contingency Theory of Leadership

[Cricket mai fielder catch pakadna contingent hota hai on its difficulty]

Fiedler's contingency model is one of the most serious and elaborate situational theories in
leadership literature. Fiedler is probably the first researcher who recognized the need for a
broader explanation of leadership phenomena anchored on situational variables.

Fiedler's model is called a 'contingency' model because the leader's effectiveness is partially
contingent upon three major situational variables.

1. Leader-member relations: It refers to the degree of confidence, trust and respect followers
have in the leader. It indicates the degree to which group members like the leader and are
willing to accept the leader's behaviour, as an influence on them.

2. Task structure: It measures the extent to which the task performed by subordinates is
routine or non-routine. In other words, task structure refers to how routine and predictable
the work group's task is.

3. Leader position power: It refers to the degree to which the leader has at his disposal various
rewards and sanctions, his authority over group's members, and the degree to which this
authority is supported by the organization.

4. Favorableness of the situation: Thus, depending on the 'high' and low' categories of these
situational variables, Fiedler developed eight possible combinations ranging from highly
favorable to unfavorable situations.

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 Managerial Grid or Leadership Grid

[Lord Mountbatten Indians ko Grid mai rakhtey thy jinse uki Parvarish achi nai hui]

Improvised Management

Robert R Blake and Jane S Moulton have designed an organization development program
emphasizing the importance of the two basic leader behaviours (concern for people and
concern for production) originally identified in the Ohio State and Michigan studies.

Managerial Grid, is also called as a leadership grid. The leadership styles to be followed can
be identified on the basis of manager’s concern for people and production.

1. Concern for people means the degree to which an individual is committed towards
the goal achievement, maintaining self-esteem to workers and satisfying
interpersonal relationships.

2. Concern for production means an attitude of superiors towards the quality of

procedures and policies, creativeness of research, effectiveness of staff, work
efficiency and volume of output

1. Improvised (1,1) Management: Minimal concern for production or people. This style of
management results in employees doing the minimum required.

2. Authority-Compliance (9.1) Management: High concern for production and low concern
for people. This style of management tends to result in efficient operations.

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3. Country Club (1,9) Management: Low concern for production and high concern for
people. This style of management creates a working environment where employees feel
comfortable.

4. Middle-of-the Road (5,5) Management: Moderate levels of concern for both people and
production. This style of management balances needs through compromise, resulting in
adequate performance.

5. Team (9,9) Management: High levels of concern for people and production. This style of
management results in superior performance from committed employees.

Situational Theory of Leadership

[Kieron Pollard hamesh galat situation mai fasta rehta hai]

Situational leadership is a model by Paul Hersey and Ken Blanchard.

It talks about the relationship between the leadership styles and the subordinate’s maturity.
Maturity means the ability and willingness of the subordinate directing his own behaviour
towards the job fulfillment.

Thus, following are the two main considerations in Hursey and Blanchard’s model:

1. Leadership style
2. Subordinate maturity

The leadership style can be determined on the basis of two considerations

1. Relational Behaviour
2. Task Behaviour

The relational behaviour refers to the interpersonal relationship between the leader and his
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subordinates, while the task behaviour refers to the amount of guidance and direction a
leader gives to his subordinates.

1. High-task/low-relationship leader behaviour (S1) is referred to as “telling” because this

style is characterized by one-way communication in which the leader defines the roles of
followers and tells them what, how, when, and where to do various tasks.

2. High-task/high-relationship behaviour (S2) is referred to as “selling” because with this

style most of the direction is still provided by the leader. The leader also attempts
through two-way communication and socioemotional support to get the followers
psychologically to “buy into” decisions that have to be made.
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3. High-relationship/low-task behaviour (S3) is called “participating” because with this
style the leader and followers now share in decision making through two-way
communication and much facilitating behaviour from the leader, since the followers have
the ability and knowledge to do the task.

4. Low-relationship/low-task behaviour (S4) is labeled “delegating” because the style

involves letting followers “run their own show.” The leader delegates since the followers
are high in readiness, have the ability, and are both willing and able to take responsibility
for directing their own behaviour.

Great Man Theory of Leadership

[Great man ne car banai thi]

That is the foundation upon which the Great Man Theory was established in the 19th century
by proponents such as historian Thomas Carlyle, who put forth the idea that the world's
history is nothing more than a collection of biographies belonging to great men.

The theory asserts that leaders are born and not made. This is especially so with great leaders
who are natural leaders. Leadership calls for certain qualities like commanding personality,
charm, courage, intelligence, integrity, persuasiveness, tenacity and aggressiveness. These
qualities are of such a nature that they can't be taught or learnt in a formal sense. The
implementations of this approach are:

1. Leaders have certain inborn leadership qualities.

2. Inborn qualities are sufficient for a leader to be successful.
3. Ordinary people cannot become leaders.
4. Leadership qualities cannot be acquired.

Limitations of Great Man Theory of Leadership

1. The theory is now regarded as almost obsolete and absurd because it has little scientific
and empirical basis.

2. The theory does not explain who are leaders, how they emerge, how they behave and
what exactly it is that makes for their effectiveness.

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 Path-goal Theory

[Har Indian ka ka goal hota hai apne House lena]

Developed by Robert House, the Path Goal theory is one of the most respected
approaches to leadership. The essence of the theory is that it's the leader's job to assist
his or her followers in attaining their goals and to provide the necessary direction and/or
support to ensure their goals are compatible with the overall objectives of the group or
organization. According to this theory, leaders attempt to influence their subordinate's
perceptions of the payoff for accomplishing their goals and show them ways to achieve
the goals.

A leader's behaviour is motivational to the degree it:

1. Makes subordinate need satisfaction contingent on effective performance, and

2. Provide the coaching, guidance, support and rewards that are necessary for effective
performance.

To test these statements, House identified four leadership behaviours or styles:

1. Directive Style: The leader tells subordinates what is expected of them, gives them
guidance about what should be done, and also shows them how to do it.

2. Supportive Style: The leader shows concern for the well-being and needs of his or
her subordinates by being friendly and approachable.

3. Participative Style: The leader involves subordinates in decision making, consults

with them about their views of the situation, asks for their suggestions, considers
those suggestions in making a decision, and sometimes lets the subordinates make
the decision themselves.

4. Achievement-Oriented Style: The leader helps subordinates set goals, rewards the
accomplishment of these goals and encourages subordinates to assume
responsibility for their attainment.

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 Participation Theory of Leadership

Vroom-Yetton-Jago Decision-Making Model

[Victor vroom krke apni ko leke phillip k ghar gya or bola Jago hume Race mai participate
krna hai]

Victor Vroom, Phillip Yetton and Arthur Jago developed a leader participation model that
related leadership behaviour and participation to decision making. They assume that leaders
use four basic styles in making decisions:

1. Autocratic (AI): The leader solely decides with the available information.

2. Autocratic (AII): In this leadership style the leader takes the opinion of group members
to gather more information but may or may not share the final decision with the group
members.

3. Consultative (CI): The leaders consult with the group members to explore opinions but
solely takes the decision.

4. Consultative (CII): The leaders consult with the group members to explore opinions and
also invites suggestions but solely takes the decision.

5. Collaborative (GII): The leader allows the group to take their own decisions collectively
and plays a supportive role in the process.

Servant Leadership

[Servant garden mai leaf kaat tey hai]

Robert K. Greenleaf first coined the phrase "servant leadership" in his 1970.

“…The great leader is seen as servant first…” – Robert K. Greenleaf

A new kind of leadership model – a model which puts serving others as the number one
priority. Servant-leadership emphasizes increased service to others; a holistic approach to
work; promoting a sense of community; and the sharing of power in decision-making

Each of these central tenets is explored individually below, to present a fuller picture of the
servant-leadership framework.

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1. Service to Others. Servant-leadership begins when a leader assumes the position of
servant in their interactions with followers. Authentic, legitimate leadership arises not
from the exercise of power or self-interested actions, but from a fundamental desire to
first help others.

2. Holistic Approach to Work. Servant-leadership holds that “The work exists for the person
as much as the person exists for the work”. It challenges organizations to rethink the
relationships that exist between people, organizations and society as a whole. The theory
promotes a view that individuals should be encouraged to be who they are, in their
professional as well as personal lives.

3. Promoting a Sense of community. Greenleaf lamented the loss of community in modern

society, calling it “the lost knowledge of these times”. Servant-leadership questions the
institution’s ability to provide human services, and argues that only community, defined
as groups of individuals that are jointly liable for each other both individually and as a
unit, can perform this function.

4. Sharing of Power in Decision-Making. Effective servant-leadership is best evidenced by

the cultivation of servant-leadership in others. By nurturing participatory, empowering
environments, and encouraging the talents of followers, the servant-leader creates a
more effective, motivated workforce and ultimately a more successful organization.

Bureaucratic Leadership

[Bureaucracy k web Ki wajha se output aane mai Max time lagta hai]

This theory was first initiated by Max Weber in 1947.

1. In this leadership the leader goes by the rules means that leader follows certain rules
which are already written somewhere to make each and every decision.

2. If for some reason the bureaucratic leader runs into a situation where there are no
formal rules, policies or procedures to consult, he or she will seek the advice from his or
her manager.

3. Decisions are typically slow paced and they ensure adherence to the principles of the
organization by practicing routine methods for problem solving, as there is no room to
explore new ways to solve problem.

4. Bureaucratic leaders expect their employees to follow the regulations they impose
because of their formal role in the organization and the authority bestowed onto them.

5. The employees who conform to the bureaucratic leader are often rewarded.
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6. Bureaucratic leadership is useful in organizations where there are serious risks, such as
what you would expect at a nuclear power plant, a police station, a bank or other
financial institution that deals with large amounts of money; or when working with
dangerous machinery.

Likert’s Management System

[Sushant ne rhea ko bola I love you and rhea ne reply kia I like you]

Likert along with his associates studied the patterns and behaviour of managers to identify
the leadership styles and defined four systems of management.

These four systems are:

1. Exploitative Authoritative
2. Benevolent Authoritative
3. Consultative system
4. Participative system

1. Exploitative Authoritative

• The responsibility lies with the people in higher positions in the hierarchy.
• The subordinates are not involved in the decision-making process.
• The superior has no trust & confidence in his subordinates & imposes decisions.
• The communication flows downwards, and lacks of communication & teamwork.
• The management is only concerned with the completion of work.
• It uses any means or threats to get the work completed through the subordinates

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2. Benevolent Authoritative System

• Here as well the responsibility lies with the people at the upper hierarchy and the
difference is that the motivation is based on the rewards, not on fear & threat.
• The superior has that much trust and confidence in his subordinates which is
required in a master-servant relationship.
• The communication flows upward, restricted to what the superior wants to hear.
• The subordinates do not feel free to discuss job-related issues with the superior.
• This results in the lack of communication and a little teamwork.

3. Consultative System

• In this, the superior has substantial but not complete, trust and confidence in his
subordinates and constructively uses the views and opinions given by them.
• Here, the motivation is based on rewards and the amount of the individual’s
involvement in the decision-making process. The consultative system is
characterized by a great flow of information both horizontally and vertically.
• The subordinates feel free to discuss job-related issues with the superiors and
hence, the upward flow of communication is more into the consultative system
than a benevolent system. But still, the decisions are made by the senior people in
the hierarchy.

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4. Participative System

• In the system, the management has full confidence in his subordinates &
encourages them to participate actively in the decision-making process.
• The subordinate feels free to discuss any issue related to a job with his superior.
• It is characterized by a good teamwork and teams are linked with people, who are
the members of more than one team and such people are called as “linking pins”.
• The subordinates get motivated through rewards for their participation in the
decision-making process.

Three-Dimensional Grid

[Reddin k name mai 2D hai or theory di hai 3-D Theory]

The three-dimensional grid is also called as a 3-D leadership model given by W.J.Reddin.

Reddin included the effectiveness dimension along with the task-oriented and relationship-
oriented dimensions to study how a leader behaves in a given situation and a specific
environment. The concept talks about the way in which the leader must behave to be most
effective. Thus, three-dimensional axes represent the “task-orientation”, “relationship
orientation” and “effectiveness”.

1. Task orientation means the extent to which the superior directs his
subordinate’s efforts towards the goal attainment.

2. The relationship orientation means the extent to which the manager has
personal relations with his subordinates.

3. The effectiveness means the extent to which the manager is successful. When
the leadership style meets the demands of the situation, then the leadership is
said to be effective else ineffective.

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1. The Separated Manager is the one who is engaged in correcting deviations. He is the person
who formulates the rules and policies and imposes these on others.

2. The Related Manager is the one who likes to work with others and see an organization as
a social system where everyone works together. He does not worry about the time and
accepts others as they are and do not try to change them.

3. The Dedicated Manager is the one who is task oriented and is only concerned with the
production. He does not like to mix up with the subordinates and cannot work without
power and responsibility.

4. The Integrated Manager is the one who mixes up with the subordinates and facilitate two-
way communication. His major emphasis is on building a strong teamwork and effective
communication network.

Charismatic Leadership Theory

Charisma means God Gifted pow

This theory believes that a leader must possess some extraordinary and exceptional
qualities to
become an effective leader.

1. Envisioning/Foreseeing: Leaders foresees future possibilities and create a vision

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 accordingly, usually having high expectations and dreams.

2. Energizing/Empowering: Leaders are highly enthusiastic, proactive, energetic and

confidently aiming towards success.

3. Enabling/Guiding: Leaders provide complete support and guidance and show

compassion and trust in followers. Such leaders are highly focused and committed
towards their goal accomplishment

Transactional Leadership Theory

• It emphasizes the realization of a desired outcome and result. The leaders motivate the
followers by way of a reward system, i.e., rewarding the performers and punishing the
non-performers.

• The theory emphasizes maintaining a cordial relationship with the followers, leaders
and followers must work mutually to meet organizational goals.

• Transactional leadership, also known as managerial leadership, is a leadership style

where the executive relies on rewards and punishments to achieve optimal job
performance from his or her subordinates.

• As such, transactional leadership is based on an exchange, or transaction: The leader

rewards workers who perform their tasks to the specified levels and punishes workers
who do not perform to those set standards.

• The theory also postulates that workers will perform their tasks as the transactional
leader wants them to do in exchange for the leader's offering something that the
workers want, such as pay.

Transformational Leadership Theory

The transformational theory states that a leader is effective only if he can transform or
change the perceptions, behaviour and expectations of the followers and direct them
towards a common goal which will lead to the accomplishment of the leader’s vision. Such
leaders have a charismatic and influential personality.

Following are the key factors behind Transformational Leadership:

• Psychological transformation: Bring about a change in the perception and mindset

of the follower.

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• Influential: Creates a strong impact on the followers.
• Motivational: Generates positive energy within followers.
• Inspirational: Encourages them to achieve something.
• Individual impact: Creates a powerful effect on the behaviour and perception of
the followers.

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