Bill gates as a transactional leader

Leadership Theories Learner’s Name Capella University Fundamentals of Leadership Leadership Theories June, 2018

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LEADERSHIP THEORIES 2

A leader is instrumental in the development and success of an organization. An effective leader must be familiar with various leadership theories to be able to develop strategies for people management. Several theories attempt to explain what constitutes an ideal leader. This paper explores three theories of leadership and the methods of application, as well as how leadership theories can be used to develop interpersonal skills that build trust. Additionally, real- life examples will be provided to illustrate the topic.

Situational Leadership

Hersey and Blanchard, who developed the situational leadership model in 1979, suggested that there is no right or wrong leadership style and that every situation demands a response. A leader must choose a style according to the needs of a situation, which are based on his or her followers’ willingness and ability to complete a task (as cited in Wright, 2017). Application of the

Depending on the degree of support warranted, a leader can influence his or her followers in four styles: telling, selling, participating, and delegating. The telling leader instructs and directs followers who are incapable of and unwilling to complete a task. A follower who is willing, but incapable, of completing a task can be approached with the selling style; the leader “sells” the idea to the follower and may set objectives to help him or her. A participating leader supports followers who are willing and capable but need encouragement to complete a task (Wright, 2017). According to Schermerhorn and Bachrach, the delegating approach can be used for a follower who is willing and able to complete the task. The leader’s involvement is limited to delegating tasks and being responsible for the encouragement of his or her team (as cited in

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Comment [A1]: I like your introduction to this assessment.

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Comment [A2]: Consider breaking this section into two separate sections, one for influencing followers, and one for interpersonal skills that build trust

Leadership Theories

Theory

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Wright, 2017). The situational approach helps a leader understand when to nudge followers in the right direction and when to take a step back. When a leader takes an interest in the well-being of his or her followers and modifies the approach to suit their needs, he or she is likely to earn their respect and .

The following instance from the life of Jack Stahl, former president of The Coca-Cola Company, can be used to illustrate the situational leadership model. During his early days at Coca-Cola, Stahl was asked to prepare a prospectus by his mentor, Doug Ivester. This project was planned as a team effort, and Stahl delegated it to his followers without any surveillance. Upon reviewing the early draft, Stahl realized that there were glaring errors, and he worked with Ivester late into the night to rectify them. Stahl learned that in the delegating style, the leader should have high-level oversight and be able to delve into details when necessary. He continued to guide his followers without micromanaging them (Prewitt, 2007).

Transformational Leadership

The transformational leadership model was first introduced by Burns in 1978. It was later extended by Bass and Avolio, who wrote about four approaches that a leader can use to influence his or her followers—idealized influence, inspirational motivation, individual consideration, and intellectual stimulation (as cited in Mujkić et al., 2014). Bass stated that a transformational leader can influence his or her followers by broadening their goals and motivating them to perform beyond minimally acceptable expectations. According to Avolio et al., a transformational leader gains trust from his or her followers because he or she empowers and encourages them to make decisions (as cited in Chou, Lin, Chang, and Chuang, 2013).

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Comment [A3]: Why does this happen?

Comment [A4]: For what type of work environment do you think the situational leader would be a best fit?

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trust

Example

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Jung and Avolio have stated that the transformational leadership model affects team performance through trust and value congruence (similarities in the values of the members and their leader). According to Kanawattanachai, Yoo, and McAllister, members of a team led by a transformational leader perceive a high level of team cognitive trust, which will enable them to see each other as able and reliable Application of

The idealized influence mechanism inspires followers to identify with the leader and respect and trust him or her. Inspirational motivation occurs when a leader expresses optimism about the future and shares a compelling vision about the same with his or her followers. In individual consideration, a leader mentors his or her followers and acknowledges their unique needs and abilities. The leader can use intellectual stimulation to help his or her followers identify their problems and solve them from a new perspective (Breevaart et al., 2013). Transformational leaders are capable of aligning the values and goals of their followers with those of the organization. Leaders can improve their followers’ productivity and efficacy as well as inspire them to transform into leaders.

The chairman of Starbucks, Howard Schultz, is a prominent example of a transformational leader. In 1991, he announced Bean Stock, a stock ownership program to reward employee performance (Sharf, 2015). By investing in his employees, encouraging them to perform beyond minimum expectations, and giving them a sense of ownership, Schultz has displayed the transformational leadership style.

Leader–Member Exchange

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(as cited in Chou et al., 2013).

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Theory

Comment [A5]: You have uncovered some interesting research regarding trust. What does it all mean, in layman’s terms? How can it help you as a transformational leader?

Comment [A6]: Consider breaking this section into two separate sections, one for influencing followers, and one for interpersonal skills that build trust

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Example

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Comment [A7]: For what type of work environment do you think the transformational leader would be a best fit?

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According to Dansereau, Cashman, and Graen, the leader–member exchange (LMX) theory is based on the vertical dyad linkage model. In this model, a leader develops a distinctive dyadic (two-way) relationship with each follower and the quality of his or her relationship determines the follower’s behavior (as cited in Park, 2016). Dansereau, Graen, and Haga state that in LMX, a leader enters a transaction in which he or she provides the follower with an opportunity to negotiate roles. The follower reciprocates by performing well and accepting more responsibilities than before (as cited in Sheer, 2014). Application of

In the LMX approach, a leader cultivates a close relationship with a few followers who become a part of his or her in-group, which receives crucial responsibilities and resources. The leader and his or her followers share a relationship of mutual trust in the in-group. The rest of the followers constitute the out-group (Sheer, 2014).

The process of LMX occurs in three stages—role-taking, role-making, and role routinization. In role-taking, a leader delegates tasks to his or her followers according to their capabilities. Next, followers discuss their responsibilities and ask for modifications in the role- making stage. In role routinization, the parties solidify the followers’ roles. Followers who successfully meet the leader’s expectations join the in-group and receive more significant tasks, whereas those who fail become a part of the out-group. Members of the in-group tend to experience higher job satisfaction than those in the out-group as they receive several benefits (Uhlig, n.d.).

In the LMX model, it is assumed that a leader favors a few followers in the organization and may provide them with growth opportunities not available to other followers. However, the

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Comment [A8]: Consider breaking this section into two separate sections, one for influencing followers, and one for interpersonal skills that build trust

Theory

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model may also help a leader understand whether he or she has any biases and work toward overcoming them. It is easy for a leader to receive trust and respect from followers in the in- group because of the mutually beneficial relationship they share. However, the leader has to work toward earning the trust and respect of followers in the out-group by providing adequate support and being understanding of their needs and difficulties.

Bill Gates’s leadership style displays features of several styles, mostly transformational and transactional. He was task-oriented and liked to hire hard workers. When Gates felt that cofounder Paul Allen’s contribution to their company was inadequate, he took the drastic step of sidelining Allen (“Bill Gate’s transactional leadership style,” 2016). Gates’s action is demonstrative of the LMX style, in which followers who do not live up to the expectations of the leader do not get to be a part of the in-group.

Conclusion

The situational, transformational, and transactional leadership styles are just a few of the several options that guide a leader on how to approach his or her followers. These theories facilitate communication between leaders and their followers, and this results in effective leadership. Aspiring leaders can draw inspiration from the lives of leaders such as Jack Stahl, Howard Schultz, and Bill Gates, who have demonstrated several leadership styles in the real world.

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Comment [A9]: For what type of work environment do you think the transactional leader would be a best fit?

Example

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LEADERSHIP THEORIES

References Bill Gate’s transactional leadership style. (2015). MirrorBusiness. Retrieved from

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http://dailymirror.lk/75949/bill-gate-s-transactional-leadership-style Breevaart, K., Bakker, A., Hetland, J., Demerouti, E., Olsen, O. K., & Espevik, R. (2014). Daily

transactional and transformational leadership and daily employee engagement. Journal of Occupational & Organizational Psychology, 87(1), 138–157. Retrieved from http://library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&d b=bth&AN=93794997&site=ehost-live&scope=site

Chou, H.-W., Lin Y.-H., Chang, H.-H., & Chuang, W.-W. (2013). Transformational leadership and team performance: The mediating roles of cognitive trust and collective efficacy. SAGE Open, 3(3), 1–10. Retrieved from https://doi.org/10.1177/2158244013497027

Choy, J., McCormack, D., & Djurkovic, N. (2016). Leader-member exchange and job performance: The mediating roles of delegation and participation. The Journal of Management Development, 35(1), 104–119. Retrieved from http://library.capella.edu/login?qurl=https%3A%2F%2Fsearch.proquest.com%2Fdocvie w%2F1759963652%3Faccountid%3D27965

Diane, M. (n.d.). What effect does leadership style have on subordinates? Houston Chronicle. Retrieved from http://smallbusiness.chron.com/effect-leadership-style-subordinates- 54296.html

Mujkić, A., Šehić, D., Rahimić, Z., & Jusić, J. (2014). Transformational leadership and employee satisfaction. Ekonomski vjesnik: Review of Contemporary Entrepreneurship,

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