Introduction
Uchenwamgbe conducted a study in leadership and shown that there exist numerous definitions of leadership, and scholars have not come with a common definition. Although all definitions seem to point at the same thing and use similar concepts, there is not a universally agreed definition of leadership. As a result, there exists considerable controversy regarding the conceptualization of leadership based on meaning, measure, and categorization of leadership. To clarify this, Uchenwamgbe looked at both the autocratic and participative leadership styles and their influence on the leadership of an organization. Sam et al. also looked at managerial and entrepreneurial leadership styles and how they impact the running of organizations. Additionally, Arhan conducted a study on transactional and transformational leadership styles in small and medium enterprises.
This is an indication that there are various means into which leadership styles are categorized. Additionally, scholars choose to study different leadership styles based on their interests. Despite this diversity, there is a clear indication upon closer scrutiny that leadership has mainly to do with the influence of a leader to the followers. As such, the way a leader interacts with the followers determines how they achieve the organizational goals. This is pegged on the realization that employees are the people who can make an organization to either fall or rise. Some of the major leadership styles are transformational leadership and transactional leadership. Due to their commonality, this study will assess their impact on the success or failure of small and medium enterprises. These two leadership styles are considered the most recent leadership styles and have extensively used in many corporations. Besides, many researchers have looked at these styles extensively.
Definition of Leadership
The literature-based on leadership shows that there inconsistencies and ambiguities in the definition of the term leadership. There are very many definitions of the term leadership and this has been as a source of conflicts between an author who wishes to delve into the meaning of the term. Despite this, this study will look at various definitions of leadership and develop a concise definition from them to direct the study. Bass looked at the definition of leadership and cited that the term leadership is defined based on purpose. He cited that anytime the term leadership is mentioned, there follows the notion of followers.
As such, leadership means that there must be a person and a group of followers behind them. The leaders determine the direction that the followers are supposed to take. As a result of this, Northhouse looked at leadership as a process that involves the art of influencing people and directing in a certain direction to achieve certain goals. This means that people behave the way their leader directs them to behave. Ensley et al viewed leaders as having the ability to influence the behavior of their followers. Other than the behavior, they also have the ability to influence their behaviors, beliefs, and feelings, and this determines how they work together to achieve the organizational goals.
The definition above shows clearly that there is no single universally accepted definition of leadership. Different scholars have always come with different definitions of leadership. However, in all these definitions, there are some common components that appear. One of the components is where leadership is seen as a process. The other one is where leadership is seen as a means of influencing others. Leadership is also regarded as the events that happen within the scope of a certain group.
Additionally, leadership is termed as involving goals that need to be attained. Lastly, leadership is seen as involving goals that are shared by both the followers and the leader. All these components will be found in any definition of leadership. Although all of them may not be found in one definition, at least one or two of the elements must be found in any definition about leadership.
For the purpose of this study, it is essential to streamline the definition of leadership that does not appear too broad. As such, in this context, leadership will be defined as a process that involves a person leading other people to accomplish the set-out objectives and directs the organization in a manner that results to an improved coherence and cohesiveness. This definition is considered the best and most applicable for this paper as it captures all the components listed above. Additionally, it is right to argue that leaders are able to lead others in an organization guided by their leadership attributes such as knowledge, values, ethics, skills, and beliefs.
Leadership Styles
A majority of the leaders share such functions as planning, coordinating, directing and reviewing. As a result, this leads to the categorization of leadership based on how it is performed. It is also noted that leadership styles vary from one country to another and from one culture to another. For instance, research has shown that managers who are born and worked in European countries tend to be more people-oriented and humanistic as opposed to American and Japanese managers who are less humanistic. Different authors have cited different leadership styles and where their impact on organizations. Uchenwamgbe looked at the authoritative leadership style, democratic leadership style and participative leadership styles. Robbins concentrated on contemporary and classic leadership styles. He further looked ta some other leadership styles such as bureaucratic leadership, consultative leadership, charismatic leadership, participative leadership, and dictatorial leadership. Each of these leadership styles has its benefits and demerits. Additionally, one can be applied in one organization and fail while another can be applied in the same organization and flourish. Yusuf studied transactional leadership style and transformational leadership styles and stated that both leadership styles are recent phenomena that have gained wider usage and prominence in the recent past.
Since there exists as many leadership styles as the ones stated above, this study will rely more on transformational and transactional leadership styles. The reason for this is that these leadership styles have, in the past, consistently and positively been used to predict a wide variety of performance outcomes in different settings.
Transactional and Transformational Leadership Styles
These two leadership styles are almost similar and their application is also almost similar. However, there lies a difference between the two in the sense that they have different ways of motivating others. The methods suggested by transactional leadership for motivating others is different from the ones proposed by transformational leadership. As Arif and King stated, transformation leadership rests on the assumption that leaders within an organization inspire the team by giving direction and sharing with the vision with the others in a bid to achieve the organizational goals. As such, leaders explain to the subordinates about the plan that they have for the organization, and through this, they are able to work together for the attainment of the goal. This functions through changing the attitude of the subordinates and shaping it to align with what the leaders want to be achieved.
As Bass observed, the behavior of transformational leadership emanates from the personal attributes and the beliefs of the leader. The personal attributes and the beliefs of the leader serve a key role in the motivation of the subordinates and this helps to do more than they are required to do. This helps an organization to achieve set-out goals and objectives. When an organization has a motivated and committed team, then there is nothing that they cannot achieve. This also makes the work of the leader easier as he or she does not have to keep on following the employees to do as expected. Peterson et al. (2009) looked at transformational leaders as those leaders who have the ability to look into the future of an organization and assist in the improvement of the self-confidence of the employees by assisting them in realizing their capabilities and potential.
According to Akeke, transformational leadership is composed of four components which are charisma, inspirational motivation, intellectual stimulation and personal attention. Charisma, also known as idealized influence, refers to the ability to envision the future and develop strategies that care for the future as well as the ability of the leader to use emotional arguments that tend to elicit loyalty and respect from the subordinates. The second component, which is inspirational motivation, refers to the ability and willingness of the leader to motivate the subordinates to follow a certain direction to be able to fulfill the set goals and objectives. Personal and individual attention refers to the ability of the leader to mentor every individual and also attend to the needs of every individual in the group. Individuals are more productive when their needs are addressed, and their presence appreciated in any group setting.
Transformational leadership is mostly concerned about rewarding the best performers and punishing the poor performers. As such, transformational leadership is based on the principles of punishment and reward. In the case of this form of leadership, the leader has the ability to manipulate the working of the followers based on the consequences of the outcomes. The leader may promise something valuable to the best performing employee. This may include rewards such as promotions and increased wages. Such kind of motivation allows the employees to do beyond what they are expected to do and this helps to sustain the organization. As Arham put it, transactional leadership is a form of leadership where the leader and the followers agree on what needs to be done, and the leader promises a reward to the followers upon the completion of the task. He also cited that the leader puts incentives or punishments in place and also stipulates the work requirements, and this makes the subordinates put all their effort to achieve the goals.
According to Armstrong, there are various components of transactional leadership. These are a contingent reward, management-by-exception passive mode, and management-by-exception active mode. The first component which is a contingent reward refers to the extent to which leaders go to tell the follo...
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