Question

An example of a manager exhibiting transformational leadership is Kathy Savitt, founder and chief executive officer of Lockerz. The company operates an e-commerce website that uses social networking tools to engage teens in shopping online. Teens who visit the site can help themselves and their friends earn points toward discounts on the merchandise by clicking images of the items and viewing various kinds of promotional content. The company grew out of Savitt’s passion for serving this young demographic group. Savitt has a vision not only for the company’s place as an Internet marketer but also for the kind of company it should be for its employees. Her vision is of a business in which the employees respect one another and are fearless about innovation. In hiring, Savitt seeks people who not only are highly intelligent but also listen attentively, demonstrate respect for others, and can laugh at themselves. She models her vision of the workplace by addressing problems and setbacks frankly and with a focus on solutions, saying it takes courage to work through failure. Savitt expresses confidence that by bringing in people who have talent plus a drive to contribute, she can create a company culture that avoids cynical practices she has experienced at other companies in the past. For example, she has seen business meetings that play a kind of stump-the-chump game, in which if one employee tries to answer a question or offer an idea, others pile on with criticism. Savitt believes she can avoid that by communicating the values of courage, innovation, and results.

1) What kind of behaviour does Savitt exhibit in her actions?

Transformational leader or a transactional leader?

What effects does it have on her team?

2) What is the difference between transformational leadership and transactional leadership

3) What are different types of powers? Explain each with an example

Answer 1

1. Savitt exhibits the qualities of a transformational leadership. Transformational leadership is a theory of leadership in which a leader works with his team members to identify changes needed, creating a vision to guide the change through inspiration and motivation and executing the change in tandem with committed members of a team.

Effect of transformational leadership on her team

(i) Transformational leadership enables her group to search for new opportunities, helps them create a common vision and motivated and guides the employees.

(ii) Transformational leaderhsip enables her team to be more responsible and a search for more knowledge results in great exploitation of tactic knowledge at work.

(iii) Transformational leaders guide the employees and gives them greater liberty in their tasks by allowing the employees to make greater intellectual decisions based on knowledge which enhances their decision making abilities.

(iv) Transformational leaderhsip creates an environment of innovation within the organization which in turn encourages the employees to think critically by enhancing their abilities and promoting it.

2. Difference between transformational and transactional leaderhship

Transformational Leaderhsip	Transactional Leaderhship
1. It is a proactive type of leaderhsip.	1. It is a responsive type of leaderhship.
2. It focuses to bring a change within an organizational culture by implementing new ideas	2. It focuses and works within the culture of organization.
3. Employees achieve their objectives by higher moral values and higer ideals.	3. Employees achieve their objectives through punishment or rewards set by the leader.
4. It motivates the employees to make their own decisions and encourages them to put the interests of group first.	4. It motivates employees by focusing om self interest and the followerd are pre assigned their tasks to do.

3. The five types of power are divided in two different categories:

Formal Power

(i) Coercive Power: Coercive power is conveyed through fear of being demoted, losing one’s job, having major projects take away, receiving a poor performance review, etc. This power is can be used for threatening others junior employees. For example, the team head of Sales department who threatens his team members to meet their goals or get replaced.

(ii) Reward Power: Reward power is conveyed by rewarding individuals to do their tasks for the company. This may be done by giving raises, bonuses, a promotion, extra time off from work, etc. For example, the supervisor who provides the employee of the month with a round trip of foreign country.

(iii) Legitimate Power: Legitimate power comes from being in a positional power in an organization, such as being a key member of a leadership team or being the boss. This power represents the authority of an individual over other employees. For example, the CEO who is responsible for determining the overall direction of the company and the resource needs of the organization.

Personal Power

(iv) Expert Power: Expert power comes from one’s skills, experiences or knowledge. As employees gain experience in particular areas within an organization, and become thoughtful leaders in those areas, employerd begin to gather expert power that can be utilized to get others to help us meet their personal goals. For example, a Project Manager who is an expert at solving challenging problems to ensure a project stays on track possesses expert power.

(v) Referent Power: Referent power comes from being respected and trusted by others. Leaders can gain referent power when others start trusting and respecting them for how they handle critical situations. For example, the HR Associate who is known for ensuring that employees are treated fairly and is always there to the rescue of those who are not, possesses referent power.