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African Journal of Business Management Vol.3 (7), pp. 272-280, July, 2009
Available online at http://www.academicjournals.org/AJBM
ISSN 1993-8233 © 2009 Academic Journals
Full Length Research Paper
Comparing transformational leadership in successful
and unsuccessful companies
Gholamreza Jandaghi, Hasan Zarei Matin and Ali Farjami
Faculty of Management, University of Tehran, Qom Campus, Tehran, Iran.
Accepted 15 June, 2009
In this article, while it is attempted to describe the problem and its importance, transformational
leadership is studied by considering leadership theories. Issues such as the definition of
transformational leadership and its aspects are compared on the basis of the ideas of various
connoisseurs and then it (transformational leadership) is examined in successful and unsuccessful
companies. According to the methodology, the method of research, hypotheses, population and
statistical sample are investigated and research findings are analyzed by using descriptive and
inferential statistical methods in the framework of analytical tables. Finally, our conclusion is provided
by considering the results of statistical tests. The final result shows that transformational leadership is
significantly higher in successful companies than unsuccessful ones P<0.0001).
Key words: Idealized influence, individualized considerations, inspirational motivation, intellectual stimulation,
transformational leadership, Iran.
INTRODUCTION
Leadership is an issue drawn by researchers since old researchers and practitioners have continued to lament
times. Because of their unique traits, leaders influence that very little data exist on the actual processes and
the organization and society overall. In the organizations, mechanisms through which this leadership model
transformational leaders could be a competitive advan- impacts positively on outcomes (Avolio et al., 2004; Zhu,
tage to increase the efficacy and performance of such Chew and Spangler, 2005).
organizations. These organizations have to pose some The effective role of managers and leaders in radical
changes in order to adopt themselves with environment. changes and transformations is unavoidable in the orga-
These changes could be occurred in areas such as hu- nizations. Leadership and management are not identical.
man resources, aims, strategies, structures, etc. Some- To influence over others, management is depended on
times, the need to radical and fundamental changes is formal power while leadership is resulted from a social
felt in the organizations. It should be noted that radical influence process. Leaders may change and develop
changes are not only prescribe to treat internal problems organizational culture. In other words they make cultures
but also this approach could be applicable for successful and their fundamental role is affecting others (Morgan,
organizations in order to achieve higher performance and 1999). Transformational leaders try to make changes that
using present and future environmental chances is effec- increase organizational efficacy and performance. These
tive and inspirational. Empirical evidence has consistently are changes that cause higher aim and expectations to
demonstrated that transformational leadership could the organization. One of the results of transformational
produce positive results such as leadership effectiveness, leaders is organizational performance improvement.
development of organizational citizenship behavior, fol- Transformational leader provides a ground for long-term
lower commitment to the leader and the organization, as organizational changes which facilitate the access of
well as follower satisfaction on the job (Bass and Avolio, organizational system to higher objectives. Regarding the
1994; Pillai et al., 1999; Gilespie and Mann, 2004; necessity of making fundamental changes in the organi-
Rowold and Heinitz, 2007). But, at the same time, both zations and the effective role of organizational leadership
and management in such changes, it is necessary to do
some researches in this field. Owing to the fact that
transformational leadership is, inter alia, a new applied
*Corresponding authors E-mail:jandaghi@ut.ac.ir. theory in organizational behavior and has achieved to
Jandaghi et al. 273
valuable results in those organizations that have utilized it you can do for your country while transactional leaders
so far, in this research, the researcher tries to explain the focus on what the country can do for you (Ozgoli, 2004).
situation of transformational leadership in successful and Transformational leaders change their followers, empo-
less successful organizations. It is noteworthy that the wer them to develop and create new needs, tendencies
radical model in this research is Bernard Boss's transfor- and values because that their requirements are met.
mational leadership model. Ngodo (2008) set out to de- Therefore, the followers may grow, develop and change
sign a testable hypothesized model linking transforma- to leaders (Barker, 1992). Transformational leaders are
tional leadership through the possible mediating influen- facing with values, ethics, standards and long-term aims
ces of procedural justice and trust to the personal atti- and focus on their followers' performance and develop-
tudes and behaviors in organizations, specifically organi- ment in order to increase their capabilities. Often, trans-
zational citizenship behavior, organizational commitment formational leaders have strong internal ideals and
and job satisfaction. values (Northouse, 2001).
Burns (1978) emphasizes that transformational leaders
have a vision and challenge others to do extraordinary
TRANSFORMATIONAL LEADERSHIP works. He believes that transformational leaders are able
The initial concept of transformational leadership was to draw new necessary routes for modern organizations
provided by Burns in his researches about political lea- because that they are the source of changes. In other
ders. According to Burns, transformational leadership is a word, transformational leaders have complete influence
process in which leaders and followers promote each over organizational changes. This kind of leadership can
other to higher levels of morality and motivation. Trans- draw a clearer and better picture for future, define its
formational leaders help their followers to look at old vision for employees more effectively and the employees
problems via a new perspective. They stimulate their will accept their vision as a fact interestingly.
followers to attempt higher than usual levels. Transforma- In 1985 and following to Burns' studies, Boss intro-
tional leaders inspire their followers to think more than duced a model of leadership that prescribed transactional
their own aims and interests and to focus on greater and transformational leaderships for organizational stabi-
team, organizational, national and global objectives. By lity and transformation respectively. In 1996, Boss and
providing future perspective, such leaders influence over Alive expanded this model, defined the aspects of tran-
their followers in a manner that they assume that sactional and transformational leadership and even ope-
perspective as their own aim and show high efforts to rationalized it in questionnaire called "Multifactor Leader-
achieve it. These leaders are able to move the organiza- ship Questionnaire (MLQ)." In this model, the aspects of
tion toward the ideal perspective by coordinating the transformational leadership include idealized influence,
employees and integrating all system components (Ca- intellectual stimulation, inspirational motivation and indivi-
cioppe, 1997). Transformational leaders are referred to dualized considerations. The aspects of transactional lea-
those ones who try to show the organizations a new route dership include conditional incentives and exception-
for improvement and progress by generating new ideas based management. In this study, the researcher has
and perspectives. They also mobilize the organiza-tion by used this model.
motivating managers, employees and members of the In 1978, Burns provided a description of transactional
organizations to radical changes, transforming organi- leadership on the basis of a changing profitable relation
zational pillars to achieve necessary readiness and capa- between leader and follower. Transactional leaders influ-
bilities to move in this new route as well as achieving ence over their followers by incentives or punishments
higher levels of idealized performance (Sanjaghi, 2000). according to their performance. Transformational leader-
Many authors (House and Baetz, 1990; House and ship is a dynamic and complicated process in which the
Podsakoff, 1996) have shown that transformational lea- leaders influence over followers' values, beliefs and aims.
ders demonstrate symbolic and meaningful leadership Changes in followers' behaviors cause changes in lea-
behaviors such as emphasizing the importance of a task, ders' behaviors. Burns believed that transactional trans-
advocating ideological values and articulating a great formational leaderships are two separated points in
vision. The theory of transformational leadership, there- leadership styles continuum (Moghali 2002).
fore, is concerned with values, ethics, standards, opi- Boss believes that transformational leadership model is
nions and long-term goals of people or group (Bass, applicable in a universality manner which encourages the
1985). In both theoretical and empirical literature, there followers to neglect individual interests for group or orga-
has been evidence that these activities necessarily make nizational interests and stimulates them to work more
organizations more effective (Bass, 1997; Dvir et al., than usual. Transformational leaders create an extraor-
2002; Zhu et al., 2005). dinary motivation by confirming the employees' ideas and
Transformational leaders increase their followers' values and inspiring them to think about various problems
creativity, motivation and spirituality while transactional by utilizing modern methods. Transformational leaders
leaders address to personal and future interests of their change the society by their own words and behaviors.
followers. Transformational leaders emphasize on what Their followers have a feeling of respect, dignity and
274 Afr. J. Bus. Manage.
loyalty toward them. The influence of transformational and trusted persons. Followers recognize themselves via
leaders is based on their capabilities to inspire others him/her and try to mitigate him/her. Such leaders "per-
through their words, conversation, insight and initiatives. form right works" and possess high human and moral
Transformational leadership occurs when leaders im- behaviors. Such leaders are not using their leadership
prove their employees' interests toward themselves. The power and capacity to achieve personal aims. They try to
leaders create the awareness and acceptance of aims achieve organizational objectives by conducting and
and mission of the group. guiding their followers. Charisma explains those indivi-
Boss believes that transformational leadership influen- duals who are special and stimulates others to follow
ces over followers' traits and behavior. Transformational their own perspectives (Northouse, 2001).
leadership is a process in which the leader determines
the followers' needs and demands as well as meeting
such needs through a comprehensive effort in achieving Inspirational motivation
deter0mined aims. Transactional process addresses
needs and demands to perform the tasks (Bass and Inspirational motivation is one of the capabilities of trans-
Avolio, 1993). formational leadership that introduces the leader as a
figure who encourages the followers to suitable behaviors
inspirationally. When transformational changes should be
THE FACTORS OF TRANSFORMATIONAL posed in the organization, the leader shall encourage the
LEADERSHIP followers to accept new belief and idea (change) conti-
nuously. Therefore, transformational leaders should be-
Bass (1985, 1995) and Bass and Avolio (1991, 1997) have in a special way and stimulate their followers.
conceptualized the transformational leadership model as Implicitly, such behavior shows the tendency and optimi-
having four components: idealized influence, inspirational stic and encourages team working. Inspirational motive-
motivation, intellectual stimulation and individualized tion is another component of transformational leadership
consideration. as conceptualized by Bass (1985) and Bass and Avolio
(1991, 1997). Inspirational motivation is a process
through which the transformational leader motivates his
Charisma (idealized influence) or her followers to become committed to and a part of the
shared vision in the organization.
Charismatic leadership is a component of transforma- Senge (1990) believes that inspiration is the basis of
tional leadership and idealized influence includes idea- motivation. It is this kind of motivation that stimulates the
lized traits and idealized behaviors. Inspiring the honor followers' commitment to perform organizational aims.
and proud to followers and their contribution to group Actually, in inspirational motivation, leaders create a
interests are, inter alia, most obvious idealized characteri- shared insight for followers. The individuals learn when
stics of a leader. Followers' exaltation, dignity, respect there is a factual vision not because the leaders tell them
and unquestioned obedience transmit an idealized feel- but because they themselves like to do that and not be-
ing. Talking about the most important values and a strong cause that the leaders command them but because that
feeling to aims as well as spiritual and moral results of they themselves want to act in this manner. This insight is
decisions is among idealized behaviors indicators. Idea- higher than needs hierarchy levels and is inspired among
lized influence causes that leader be a behavioral model followers by stimulating a shared insight of organizational
for followers. Idealized influence from a leader functions aims. Generally, inspirational motivation consists of:
to transform followers by creating changes in their goals,
values, needs, beliefs, and aspirations (Rowold and 1. Optimistic speaking of future.
Heinitz 2007; Yukl, 2002). 2. Enthusiastic speaking about what needed to be done.
Idealized influence shows the capability of trust making 3. Expressing an attractive perspective of future.
and understanding the leadership by followers. It is a 4. Stating the confidence to the fact that the aims will be
radical factor in accepting changes in the organization. met.
Without such trust and braveness, any effort to conduct 5. Drawing an excited picture of what should be
the organization in order to achieve its aims will be considered.
fruitless. A man can lead others when they are ready to 6. Taking up challenging problems (Moghali, 2002).
be led by him/her. Others will believe and appreciate
such person if he/she performs his/her duties well (poten-
tial followers). In other words, a man is a leader when he Intellectual stimulation
has idealized influence and has expressed it to their own
followers. Basically, the followers will try to obey the Intellectual stimulation is one of the capabilities of
leaders because of their idealized influence. However, transformational leaders which play an important role in
the most successful leaders are achieving to a high level diversifying process of the organizations (change).
of trust and understanding because that followers miti- Transformational leaders try to encourage their followers
gate them. Leaders with idealized influence are respected to creativity and innovation. Such leaders encourage
Jandaghi et al. 275
changing in thinking methods about problem solving and growth (Moghali, 2002).
use metaphors and examples. Therefore, they may use
new and creative ideas to resolve the problems. Intellec- Effective utilization of transformational leaders' skills will
tual stimulation is a process through which the transfor- indicate following traits of these leaders:
mational leader stimulates followers intellectually. The
leader may do this by engaging in activities that stimulate i. Creativity.
followers to be creative and innovative and challenge ii. Team-orientation.
their own beliefs and values, including those of the leader iii. Appreciation of others.
and the organization. iv. Teaching (learning).
Boss believes that intellectual motivation is a driving v. Responsibility.
force that stimulates the followers to think about beliefs
and values as well as being aware of problems and their Individualized consideration, the final component of
resolutions. In this line, transformational leadership pro- transformational leadership as described by Bass (1985)
motes the followers' capabilities to understand the orga- and Bass and Avolio (1991, 1997), the transformational
nizational nature and difficulties. What is considered here leader provides supportive climate in which the individual
more is paying further attention to creative and developed group member is carefully listened to. This makes it
ideas rather than rapid reactions. The leader creates a possible to pay particular attention to the individual
challenge for followers in order that they think about what members particular needs.
they are doing. Also, this factor is recognized as a tool to
generate learning organization. Transactional leadership
Overall, intellectual stimulation consists of:
According to Burns, transactional leadership is a kind of
1. Reinvestigating basic assumptions and questioning leadership based on transacts between leader and
them. follower in a way that mutual personal tendencies are
2. Looking for various perspectives when resolving the met. In other way, he believes that in this school, any-
problems. thing is observed from what persons are gaining and the
3. Enforcing others to look at the problem from different relationship between leader and follower is profit-oriented
views. and based on exchanging one thing to other thing.
4. Encouraging nontraditional thinking to address Transactional leadership points out the relation between
traditional problems. leader and follower to provide their personal interests.
5. Encouraging revising the ideas that are not questioned This approach to leadership emphasizes on the
yet (Moghali, 2002). importance of relations between leader and follower as
well mutual advantages that are generated via a contract.
Based on this contract, leader grants followers the incen-
Individualized consideration tives and cognition in lieu of their commitment and loyalty
(Robbins, 2003).
Individualized consideration is another characteristic of Burns believes that transactional leadership is the
transformational leadership. Paying attention to others is common leadership style in the organizations which con-
one of the most important aspects of transformational sists of exchanging the stimulations and incentives by
leadership. Individuals are supported by leaders and lea- leaders to attract the support of followers. The aim of
ders are concern about their personal feelings and needs such leaders is to agree about some actions that will
(Podsakoff et al., 1990). meet separated and immediate aims of both leaders and
Transformational leaders help their subordinates in followers.
fulfilling their potential talents and increasing their respon- On the other hand, the aim of transformational leader-
sibilities in the organization. Transformational leaders ship is more than meeting immediate needs. According to
differ from transactional leaders in diagnosing the needs Burns, transformational leaders are looking for followers'
because that transactional leader tries to meet lower potential motivations. The distinguished trait of transfor-
needs than higher needs such as development and mational leaders is a common and shared objective. This
maturity. objective links leaders and followers. Burns believes that
Overall, individualized consideration consists of: transformational leadership is mainly superior to transact-
1. Spending time in teaching and coaching. tional leadership. He believes that transformational lea-
2. Behaving others as persons not just group members. dership is motivational, supreme and ethical in which
3. Paying attention to others as persons who are the ow- human behavior and leaders/followers' ethical tendencies
ner of different needs, capabilities, dreams and wishes. will grow up.
4. Helping others to develop and grow their own On the other hand, transactional leadership with its own
capabilities. static traits will cause the self-attraction and controlling
5. Listening to others demands and interests. over subordinates. It tries to meet follower's lower needs.
6. Developing individuality and facilitating individuals' Transformational leadership tries to satisfy Maslow high
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