Question:

Research and reference transactional and transformational leadership (basic info) Also get information on how Stuart Rose made the change from transactional to transformational in M&S.

Answer:

M & S

Employee Benefit and Education Programs

Transactional leadership uses rewards and punishments as a way of motivating people within the organization. Those members of the organization who excel by meeting the goals and expectations of the transactional leader are rewarded for these efforts through incentives such as bonuses and salary increments (Hater, 1988). On the other hand, those who fail to achieve the expectations and goals of the leader may be punished through termination of employment or demotion.

Transactional leadership is commonly used in areas where employees work as salespersons. Salespersons who reach the target sales are rewarded through higher commissions and bonuses. However, for this form of leadership to work, there is a need for a common understanding to be shared by the leader and his employees regarding the importance of various expectations and goals.

Transformation leadership, on the other hand, uses a shared vision and the leader’s charisma to inspire all followers to work for the good of their organization by transcending their own self interests (Avolio, 1999). The powerful bond that the transformational leader establishes with his followers encourages dedication, confidence, and creativity in problem-solving.

Transformational leadership can work very effectively when the organization is facing great challenges or difficulties. At such times, transformation leaders are relied upon to use their charisma in energizing their followers with passion and vision so that they can maintain focus and determination while looking forward to a better future.

Stuart Rose became the head of Marks & Spencer at a time when the company was going through difficult times and steered it back to the path of profitability (Hamlin, 2005). At the take of taking over the company, performance was poor, employee morale was low, customers were switching to competitors, and investors were losing confidence in the brand. Stuart used transformational leadership skills to deliberately manage strategic stakeholder groups and to engage engaged with all employees across the organization. These transformational leadership decisions paid off when the company reverted to the path of profitability.

References

Avolio, B. (1999). Re-examining the components of transformational and transactional leadership using the Multifactor Leadership. Journal of Occupational and Organizational Psychology, 72(4), 441–462.

Hamlin, R. (2005). Toward Universalistic Models of Managerial Leader Effectiveness: A Comparative Study of Recent British and American Derived Models of Leadership. Human Resource Development International, 8(1), 5-25.

Hater, J. (1988). Superiors’ evaluations and subordinates’ perceptions of transformational and transactional leadership. Journal of Applied Psychology, 73(4), 695-702.