Leadership approaches are more effective than others for bringing about change in organization. Three types of leadership than can have a substantial impact are transactional, transformational and charismatic leadership. These types of leadership are briefly explained below.
- Transactional Leadership Approach: Transactional leaders clarify the role and task requirements of subordinates, initiate structure, provide appropriate rewards, and try to be considerate to and meet the social needs of subordinates. The transactional leaders excel at management functions. They are hardworking, tolerant, and fair minded. They take pride in keeping things running smoothly and efficiently. Transactional leaders often stress the impersonal aspects of performance, such as plans, schedules and budgets. They have a sense of commitment to the organization and conform to organizational norms and values. In other words, Transactional leadership is important to all organizations, but leading change requires a different approach, Viz. Transformational leadership.
- Transformational Leadership: It have a special ability to bring about innovation and change. They encourage the followers to question the status quo. They have the ability to lead change in the organization’s mission, strategy, structure and culture as well as promote innovation in products and technologies. Transformational leaders do not rely solely on tangible rules and incentives to control specific transactions with followers. They focus on intangible qualities such as vision, shared values, and ideas to build relationships and find common ground to enlist in the change process.
- Charismatic and Visionary Leadership: Charismatic Leadership goes beyond transactional and transformatrional leadership. Charisma is a “fire that ignites followers’ energy and commitment, producing results above and beyond the call of duty”. The charismatic leaders have the ability to inspire and motivate people to do more than what they would normally do, despite obstacles and personal sacrifice. Followers transcend their own self-interests for sake of the leader.