Transformation Or Transforming Leadership

Published Date: 02 Nov 2017

1. Introduction

1.1 Leadership

Leadership can be defined as the conducting the proper example or role model in order to bring differences in other lives although the action may not be a great deals (Ayres, 2004). Leadership means the process where the leaders and followers have interaction that involves influence (Northhouse, 2012). Bass (1998) and Burns (1978) mentioned that leadership have many perspectives and can come in many different disciplines, such as sociology, political science, and psychology.

Good leadership able to develop concepts, such as self-awareness and social interactive skills, among team members and bring good influence towards achieving objectives or goals (Barling, Slater, & Kelloway, 2000). A true leader will understand their desire, high self-awareness level and consists of moral leadership (Ladkin & Taylor, 2010). Wills (1994) mentioned that there was an existence of a list of the leader’s requirement long time ago such as determination, focus, a clear goal, a sense of priorities, and so on. According to Peters and Waterman (2004) the real role of leadership is to manage the values of an organization. All leadership is value-laden and whether good or bad leadership is moral leadership either at the descriptive or the normative level. One of the thing must be clear is leaders and followers are worked in a common enterprise is they are dependent on each other, their property rise and drop together (Burns, 1978).

Leadership style is different from one another because leaders adopt their leadership styles based on the culture from their origin (Nahavandi, 2006). Transformational leadership and transactional leadership both are differences and the differences can be proved by using the ethics of justice and the ethics of care (Simola, Barling, & Turner, 2010).

1.2 Types of Leadership

There are three common correlated leadership theories to ethical leadership was reviewed by Plinio, Young and Lavery (2010) which is transforming leadership, servant leadership, and authentic leadership. Transforming leadership is a first classical leadership theory that the link with ethical leadership (Burns, 1978). This theory increase the level of human conduct and ethical aspiration of both leader and led, and thus it has a transforming effect on both and ultimately becomes moral (Burns, 1978). The next theory is servant leadership which dedicates oneself to the ethical development of followers and emphasizes the need to assist the followers. Lastly, the nature of ethics is being true to oneself and authentic was noted by Phinio et al. (2010) in his authentic leadership theory.

1.2.1 Transactional Leadership

According to Shu (2011), transactional leadership theory is depending on transactions or exchange between leaders and subordinates. In order to achieve or reach expected goal, a team leader own the power to lead and use rewards or punishment to motivate his or her team member. Shu (2011) states that, employees are willing to obey on their leader in accomplishing a prearranged goal in exchange of something as return. According to Burns (1978), transactional leadership takes place when people take the initiative in making contact with another for the sake of an exchange of desired things. Leaders have authorities over their subordinates that will form an interaction between leaders and subordinates.

1.2.2 Transformation or Transforming Leadership

According to Burns’s (1978) theory, transforming leadership is rests on a form of moral assumptions about the relationship between leaders and followers. Furthermore, transformation leadership is a process that the leader raises their followers to achieve the highest standard of morality and motivation (Patzer & Voegtlin, 2010). Transformational leaders create significant changes to people and organization as they inspire and help subordinates to develop a vision and create opportunities for them to show their full potential. Hence, transformation leaders are people builders because they focus on enhancing quality of their subordinate and help people grow (Shu, 2011).

1.3 Ethical Leadership

Leadership and ethics both are important criteria of education for social responsibilities (Baley, 2004). Ethical leadership emphasizes the virtues of "prudence, courage, justice and temperance (Takala, 1998). In large organization, ethical leadership means an individual who have the positive value (Freeman & Stewart, 2006). The explanation on ethical leadership has a strong focus on character and therefore is determined by virtue ethics (Knights & O’Leary, 2006). Ethics also can conduct an image, a perspective, and a corporate self-understanding as well (Gabriele, 2011). Not only in organization, ethics leadership also played an important role in academic, professional and so goes to personal life (Gabriele, 2011). Leadership is importantly needed in order to create global ethics for global business (O’ Brien, 2009). Leaders have to be ethical and wary due to their position will affect one’s lives with their power and influence (Schminke & Ambrose & Neubaum, 2005).

The ethics of leadership defines as no matter they are good or bad, positive or negative also will affect the ethos of the workplace and thus help to form decisions of the workers and ethical choices in the workplace (Gini, 1998). According to Brown & Trevino (2006), there are two dimensions on ethical leadership theory. First of all, leader act as moral person who possess positive characteristics and value, such as, being trustworthy and honest, fair in decision making and cares someone else. Second, leader act as moral manager which mean leader hold the positive role morality that promote ethical conduct among his or her followers and disciplines unethical behavior. In addition, ethical leadership is a descriptive and prescriptive method that tries to explain and examine the special focus on ethical behavior on influence process between leader and followers and emphasizing virtues such as trustworthiness, honesty, or fairness (Patzer & Voegtlin, 2010).

Ethical leaders are people who will promote honesty and display their action through values and beliefs (Yukl, 2002). Ethical leaders normally had higher chance to reach higher senior leadership role play compared with those who are not categories as unethical leaders, (Northouse, 2012). Ethical leadership can be shown through interpersonal relationship and personal actions, during a two-way communication or decision-making process (Brown & Trevino, 2006). Ethical leaders can be reflected during their decision-making process (Monahan, 2012). The required of ethics in leadership had been focused by many knowledgeable people, from both Eastern and Western cultures (Hofstede & Bond, 1988). Strong moral and ethics within a character will bring him the key to leadership, as well as wealth (Ciulla, 2003). Nekoranec (2009) stated that an ethical leader would have three characteristics, such as "personifies espoused values", "builds relationships for harmony and purposes" and "works for mutually beneficial solutions".

1.4 Impact towards Working Organization

In the working organization, the main role play of a leader is to attract useful talent to the organization and utilize those talent, skills and abilities of the employees to work the business (Collins, 2001). Collins (2001) also mentioned that this responsibility also brings effect to the organizational culture, because employees will take their leader as their guide and mentor. In order to make an ethical choice, a leader should always able to identify goods and evil and make a decision that will bring long-term positive results (O’Brien, 2009). Bennett and Robinson (2000) and Dunlop and Lee (2004) stated that unethical behavior lead destruction on moral causing productivity level drops. Ethical behavior shown by employee in their working routine would enable the organizations enjoy preferable working chemistry and increase productivity (Podsakoff, MacKenzie, Paine, & Bachrach, 2000).

2. Content

2.1 The origin of Leadership

According to Humphreys (2005), leadership has existed start from the first connections between people. The term "leadership" is originated in Greek and Latin on dates back to 800 Common Era (Grace, 2003). The meaning "lead" was determined as reason or things done individually or takes along a person or animal to a place and it included a differentiation between leading and execution. The difference between "leading" and "execution" is that knowing what to do and doing it are two different things. In the year 1828, the concepts of applying an influence and exercising authority were introduced to the definition of "leading" (Grace, 2003).

Leaders are superior to followers and those in subordinate position (Barnard,1938; Zaleznik, 1977; Burns, 1978; Bennis & Nanus, 1985; Horner, 1997; Kotter, 2001; Novicevic & Davis & Dorn & Buckley & Brown, 2005; Von Krosigk, 2007). The verbal meaning of "leadership" is refer to categorization of people according to ability and includes the relationship between leader and followers.

2.2 Sociology and Leadership

The social study of the originated in leadership had changed since Rost (1991) claims that from 1900’s to late-1980’s, many literatures had failed to define clear, concise, understandable, researchable, persuasive and practically relevant with the term of leadership although Burn (1978) had stated 130 definitions of the term have been presented.

Moreover, according to Selznick’s (1957) sociology writing, leadership is best understood not as one comprehensive definition statement, but elements and functions of it which includes multiple forms of leadership such as creative, institutional and interpersonal. He concerned on leadership’s adaptive changes to organizational forms and leaders respond to social forces within and without the organization. He also stressed on myths, rituals and symbols as important role for leadership.

According to Baker (2002), who had reviewed all definitions and conclude that leadership consists of only two main things which is process and behaviours and not the first attempt to study whole of leadership as Rost (1993) revised the leadership definitions. The purpose is same with the social science research as he determined his work with a five-point definition of leadership. We can understand leadership differently as there are new findings occur in leadership research. But currently, the definitions has used up to date enable us understand the whole of leadership (Winston & Petterson, 2006).

2.3 Psychology and leaderships

Leadership is one of the most discussed issues in the social science (Avolio, Sosik, Jung, and Berson, 2003; Bass, 1990; Bennis, 2007). The psychological theory of active coping is used to determine the theoretical link between personality structure and effective leadership (Shanan, 1990). Research has revealed that followers who perceive a leader to be similar to themselves cause stronger identification with the leader and give that leader more favourable appraisals (Engle & Lord, 1997; Liden, Wayne, & Stilwell, 1993; Turban & Jones, 1988). It has been claimed that social learning through observing moral exemplars will enhance observers’ moral perceptions and their moral courage. (Walker & Henning, 2004). Exemplary leader behavior is important because leaders serve as role models for followers and set standards and expectations that effect the judgements and behaviours of followers. (Walker & Henning, 2004). Collected research has shown that leaders have a powerful influence on followers’ self-systems, with the prime avenue of impact being through social learning. (Bandura, 2001).

In more than 120 studies conducted by researchers, leaders and followers were associated on various measures of psychological traits believe to be linked with successful leadership. Measures ranged from extraversion, intelligence, physical appearance, and dominance (Pratch, & Jacobowitz, 1997). A large body of research showed that hypothesis of interpersonal actions and decisions are a function in which events are interpreted in the minds of leaders and followers (Binning, Zaba, & Whattam, 1986; Lord, 1985). Certain individual factors bring impact towards ethical leadership such as personality traits, a leader’s locus of control, Machiavellianism, and moral development (Brown and Trevino, 2006). Reliable leaders are perceived by followers, which is high in moral viewpoint, self-awareness, fair decision making, honesty, and transparency (Avolio & Luthans, 2006).

2.4 Behavioural and leaderships

Analysis of the leader trait model encouraged researchers to investigate on leader traits and study how leaders’ behaviours predicted effectiveness (Jenkins, 1947; Mann, 1959; Stogdill, 1948). Not only the leader behaviour model deliver the foundation for new theory, but statistical analysis results from different studies also proposes that leader behaviours are important predictors of leadership effectiveness (Judge & Piccolo, 2004; Judge, Piccolo, & Illies, 2004). According to Van Iddekinge, Ferris & Heffner (2009), leader behaviours are nearest to the act of leadership than traits, thus, it will be more predictive of leadership.

According to Bass & Bass (2008), transactional leadership emphasis on task-oriented leader behaviours, while transformational leadership focus on relational-oriented leader behaviours. The leadership behaviours can be divided into four categories: task-oriented behaviours, change-oriented behaviours, relational-oriented behaviours, and passive leadership behaviours (Derue, Nahrgang, Wellman, and Humphrey, 2011). According to Derue et al. (2011), task-oriented behaviours describes as defining job roles, managing group members’ actions, determining standard of task performance, and ensuring group members perform better. On the other hands, leaders with high relational-oriented behaviours are show more respect and concern for every group members, friendly and open-minded, and treat all group members as colleagues (Bass, 1990). According to Yukl, Gordon, & Taber (2002), change-oriented leader behaviours involve actions such as developing a vision for change, risk taking, and encouraging innovation thinking. Passive leadership refer to inactive leaders, when a problem does not exist then the leader does not actively get involved in task (Avolio, Bass, & Jung, 1999). With respect to passive leader behaviours, it is clear that there is a negative relationship between passive leader behaviours and leadership effectiveness (Judge & Piccolo, 2004).

2.5 Theories

There are several theories that explain how ethical leaders are influence their subordinates’ attitude and behavior, which involve social learning theory and social exchange theory (Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009).

2.5.1 Social Learning Theory

According to Bandura (1977, 1986) study, social learning theory clarifies the impact of ethical leadership on follower moral identity. Basically, social learning theory can be explained as the idea that individuals learn by paying attention to and imitate the attitudes, behavior, and value of attractive and believable role models.

In an organization, leader play an important role in communicates the organization ethics, because peoples just can understand the expectation on them and behave themselves (not only learn from experience, but also observing others) (Bandura, 1977, 1986). Besides, social learning theory also explained the underlying influence mechanism through which perspectives affects by ethical leadership (Zhu, 2008). According to social cognitive theory, followers look to their leaders’ ethical guidance (Kohlberg, 1969; Trevino, 1986). According to cognitive theory of Bandura, followers’ moral judgment will be influenced by leader’s symbolic modelling in portraying what is acceptable and suitable behavior in an organization.

According to Brown, Trevino, and Harrison (2005); Trevino, Hartman, and Brown (2000), ethical leader manipulate their followers act in ethically in two ways. Firstly, to the degree that decision making and the action of leaders are noticeable by others in organization. Thus, leaders display in ethical behavior, meanwhile provide an example of ethical behavior for followers to imitate. Secondly, the degree leaders reward helpful behaviours or punish unethical behaviours to influence followers to behave in ethical or unethical ways by rewarding helpful behaviours or punishing unethical behaviours. When the followers learn over time that positive behavior are rewarded and unethical behaviour are punished, then they will engage in such behavior (Brown eth al., 2005; Trevino et al., 2000).

2.5.2 Social Exchange Theory

Ethical leadership will be influenced the followers through social exchange theory social, exchange theory able to provide understanding about how ethical leaders influence an organization outcome (Blau, 1964). In addition, social exchange theory is "based on the norm of reciprocity" (Gouldner, 1960), which assumes that if one party does something beneficial or valuable for other party, that will generates a responsibility to exchange good faith behavior (Cropanzano & Mitchell, 2005).

According to Blau (1964), there are two distinction of social exchange theory, which is transactional (exchange in economic term, such as money or resources) and socio-emotional (exchange in interpersonal treatment, such as fairness and trust), it is important to know how ethical leadership is related to social exchange theory. Ethical leadership is likely to influence the behaviours of followers in a work group via socio-emotional exchange because ethical leader is expected to create high level of trust and fairness to employees (Brown & Trevino, 2006). Hence, employees willing to exchange the treat by behaving in the ways that will benefit to the entire work group if the ethical leaders treat employee in the fair manner (Mayer et al., 2009).

In the early stage of leader-subordinate relationships is based on economic exchanges which portrayed by low trust and tight control, however over time, the outcome of positive experiences resulting from mutual risk-taking (Mayer et al., 2009; Brower, Schoorman, & Tan, 2000). Therefore, social exchange relationships can ultimately develop, created by high levels of trust, lower level of control, and long term obligation (Hansen, Dunford, Boss, Boss, & Angermeier, 2011). Last but not least, social exchange relationship are extremely related to ethical leadership, since social exchange require an important level of trust on the exchanging parties (Brown & Trevino, 2006; Brown et al., 2005; Mayer et al., 2009).

2.6 Effects on society and organizations

Based on the national survey by Shaw (1996) 68% of the surveyed believed that the main cause of decline in business standards, productivity, and success is the unethical behavior of executives. The workers feel justified in responding in kind –through indifference, stealing money, absenteeism, and a generally poor performance on their job is because of the perceived low ethical standards of the executive class (Robin & Reidenbach, 1989; Shaw, 1996; Maremont & Barnathan, 1995; Morin, 1995; Hartman, 1996; Jones, 1997).

Thoms (2008) mention that ethical leadership is dependent on how leaders influence their organizations and employees through their great potential. While Green and Odom (2003) mention that the lack of ethical leadership will endangers thousands of employees, government needs to implement greater effort in regulation, and reduce consumer confidence in the financial industry. The examples of unethical behavior that perform by organizations have affected businesses to reconsider their strategic direction, educate them about the ways which lead to profitability is ethical leadership (Moss, 2002).

A survey completed by Plinio, Young, and Lavery (2010) found that one of the most serious problem that organizations today facing is the poor ethical behavior and extinct of ethical leadership. Hence, these authors note that there is decline of trust in leadership and a weak economy is worsened the situation. Besides that, they also noted there is a horrible rises in misconduct by employees at all a level. No matter how effective or persuasive formal communications of ethics is, the greatest influence to an organization will always be the actions of corporate leadership. Graff (2005) stresses that an organization’s staff will take personal interest in take care of the organization’s reputation if their leaders can bring them the message about the importance of ethics in the organization more effectively.

Referring to Sison (2005) the close relationship between devolution of a corporate and leadership failure affected a lot of cases of organization breakdown within the world of business. Sison argues that the main key to the long-term success of business is the moral capital, and that "without moral capital, all other forms of capital could easily turn from the source of a firm’s advantage to the cause of its downfall’ (2004, p.42).

3. Conclusion

Leadership is hard to be defined whether it is good or bad. There are many styles for leadership and past researches shows that every individual have different perception towards leadership. The same perception and view from most of the researchers stated that leadership definitely able to bring influence and changes towards one’s life or organization. Therefore there is no doubt that the concept of leadership played a crucial role in the society.

Leadership would occurs if there is more than two individual occurs and it had been exists for a long time. By having a leader, other individuals would follow the leader instruction in order to achieve certain objectives. In generally leadership can be in two categories (transactional and transformative) but there are more styles or types of leadership occur since everyone had different perceptions. In order to be categorized as an ethical leader, most of the researchers mentioned that it is important that the leader must have positive and healthy mind concept. By having a proper mind concept, charisma skills of the leader would probably increase and able to influence others to follow his orders or command.

Being an ethical leader is more preferable by the society since it brings positive and preferable influence to the society. For an example, an ethical leader in a business organization will increase the trustworthy from others and lead to organization to achieve long term success. It able to boast follower’s confident level and bring the organization to a safety zone in the market, or the economy. That’s why nowadays multinational organizations leaders are learning and practising ethical leadership due to the stated purpose. It able to boast their employee productivity, increase trust level and most important, the profit level may increase due to the loyalty from the employers. Leaders can bring both positive and negative influences throughout the organization layouts. In any multinational organization, they demand a leader who able to generate profit to the organization in an ethical way in order to fulfil the demand of stockholders and for the sake of the company image as well.

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