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Contemporary Leadership Theories - Old, bureaucratic leadership styles must give way

Much has changed in organizational understanding and application of leadership models since the days of top-down, military-influenced leadership styles. Given that there are an estimated one hundred separate and unique definitions of leadership alone, the leader in the knowledge economy today is in need of a clear and compelling leadership roadmap. This paper examines the current thought among leadership researchers and practitioners regarding contemporary leadership theories. These theories use common and proven leadership models as a foundation to chart a new roadmap for today’s leader. The contemporary leadership framework discussed here involves five basic topics, including transformational leadership, charismatic leadership, visionary leadership, authentic leadership, and a complexity leadership theory model. Transactional leadership is discussed as a contrast between it and transformational leadership. While this list of contemporary theories is not exhaustive, it will enable the leadership learner to learn more about where current thought on leadership is headed, and how this journey will be of benefit to the leader leading in a chaotic, changing, and challenging marketplace. The research will also explore current measurement tools used in the marketplace to determine leadership traits, behavior, styles, and models, and to see if these tools are effective at equipping organizations with effective performance measurement systems to determine bottom-line correlations.

Contemporary Leadership Theories

Contemporary leadership theories move the leadership lexicon well beyond the autocratic, democratic, and team-based approaches still popular in many organizations. The pace of change in the economy today, particularly as it relates to technology and communication, requires a more people-centered approach to leading, and requires the leader of the twenty-first century to be bold, skillful, and courageous. Old, bureaucratic leadership styles must give way to newer, more appropriate leadership forms that can help organizations thrive in global markets and in the knowledge era where information flows so fast and so freely. Contemporary leadership models help the leader navigate the changing business landscape, each in their own unique way. Each of these contemporary leadership models discussed below will add to our knowledge of contemporary thinking on the subject of leadership.

Transformational Leadership

Transformational leadership expands upon the normal leader-follower relationship by creating a collective interest among organizational members, enabling the organization to achieve collective goals, performance, and innovation through tapping into the emotions, values, and creativity of employees (Garcia-Morales, Jimenez-Barrionuevo, and Gutierrez-Gutierrez, 2011). In this way, transformational leaders attempt to create emotional linkages with followers to inspire higher values and moral behavior. A transformational leadership model finds its foundation in morality and ethics, and creates a synergistic effect between the employee and the organization (Caldwell, et al, 2012). These moral foundations, according to Caldwell and his team, are comprised of idealized influence, inspirational motivation, intellectual stimulation, and individual consideration.

Transformational leaders lead from the connection made with followers based on shared values, shared interests, and shared standards. These connections allow the transformational leader to develop creative insights and to develop a unique sensitivity to those they lead (Yitshaki, 2012). When these personal connections are made with followers, the transformational leader becomes a model of integrity and fairness, sets high expectations and goals, and gets people to focus on performance beyond their personal self-interest (Warrick, 2011). Transformational leaders focus on “transforming” others. The theory is based on changing one person at a time and the entire organization will change, (Williams, 2013). In a transformational organization, followers who feel trust, loyalty, and respect for the leader are more willing to work beyond expectations, (Liang, 2013). These transformational leaders, therefore, lead as change agents in times of chaos and dynamic change. Beyond these observations on transformational leadership, transformational leaders emphasize a collective, compelling vision among team members to achieve superior results (Wang & Howell, 2012). Although not always correctly applied or implemented during organizational change, transformational leadership is a popular buzzword for organization pursuing change, (Epitropaki, 2013).

In "The Fifth Discipline", Peter Senge introduced the concept of the learning organization to the world. He stated that "organizations need to adapt to their changing environments" (Senge, 1990). Norfolk Naval Shipyard (NNSY), the largest of the Navy's four (4) government owed shipyards, has embraced the "Learning Organization" concept and has dedicated substantial manpower and other resources to ensure every one of the 10,000 government employees at NNSY thoroughly understands the learning organization philosophy and transformational leadership. The ultimate goal is to empower every employee in the organization whether silo departments, branches or groups. Under this new construct of transformational leadership, employees are now motivated to engage and guide the organization and its members are prepared to learn and adapt to changes. This concept of organizational behavior educates employees to embrace change and question routine processes and beliefs. The search for excellence is a transformational way of doing business in learning organizations. The culture of a learning organization is constantly adapting to various situations and changes. Transformational leadership is focused on the greater good of the learning organization, (Bradford, 2011).

While transformational leadership is widely discussed and written about, little is known about how to ascertain whether transformational leadership practices produce measurable results. Although some speculate due its communal focus, transformational leadership may be particularly effective in collectivistic cultures as well as cultures with a low power distance (Paulienė, 2012). Also, many of the goals within transformational leadership fit well with the postmodern values (Green, Robert, 2012). One variable considered to help the effectiveness of transformational leadership is self- sacrificial behavior (Bambale, Shamsudin, Subramaniam, 2011). The transformational leader leads by example and followers who see a self- sacrificial spirit in their leader are likely to emulate this spirit. Though the measurable impact of transformational leadership remains uncertain, many speculate implementing this theory in a collectivistic and postmodern culture while demonstrating a self- sacrificial attitude will enhance the effectiveness of this leadership style.

One of the most widely used devices to measure transformational leader behavior is the Multifactor Leadership Questionnaire (MLQ). The measurement tool is used to determine leader effectiveness in all the dimensions of transformational leader behavior, including charisma, influence, inspiration, and individual considerations (Tejeda, Scandura, & Pillai, 2001). It is interesting to note that the MLQ measures leader behavior, and as such can be a good tool to determine if a leader is exhibiting transformational leadership behavior. The assumption made is that the presence of positive, transformational leadership qualities will lead to more effective followership. What is not determined by the measurement tool is the effectiveness of transformational leadership on key performance metrics of the organization, such as profitability, margin management, revenue growth, turnover, employee retention, and succession planning.

Transactional Leadership

Transactional leadership seeks to create motivation for its followers by offering rewards or punishment for an action. These leaders exchange benefits for influence, authority, prestige as well as other management benefits. Transactional leadership employs not just the carrot, such as pay raise and promotions for positive behavior but also the stick such through disciplinary actions such as job termination for poor behavior (Bambale, Shamsudin, Subramniam, 2011). Because of this, the main focus of a transactional leader is to clearly link the connection between performance with reward while providing constructive feedback through the process (MacDonald, Sulsky, Brown, 2008). But it is also important for the leader to help the followers identify what must be done to achieve the desired goals. This theory may be particularly beneficial in individualistic cultures. But on the other hand may become more difficult if the leader does not have control over the rewards (Bambale, Shamsudin, Subramniam, 2011).

Many draw a comparison between transactional and transformational leadership. Both theories are widely studied and considered the best for interacting with followers. In addition, both focus on motivation, the belief in a person’s own self- control, and the emphasis on harmony, collaboration and integrity (Iqbal, Ijaz, Zahid, 2012). Although these theories share these things in common, they have sharp contrasts. Transactional leadership works within the framework of the self- interest of the followers through a reward system. While transformational, on the other hand, tries to change or transform the follower’s framework into the common interest or goal of the group. Moreover, a transformational leader will often ask the followers to transcend their own self-interest for the good of the group (Green, Roberts 2012). Essentially both theories rely on motivating the followers. Transactional leadership creates that motivation through the carrot and stick while transformational leadership creates motivation through a transformed team- focused attitude.

Charismatic Leadership

Closely tied to the definitions and concepts involved in transformational leadership is charismatic leadership. Where other leadership theories lean heavily on the tasks or social aspects of leadership, charismatic leadership is much more aligned with specific leadership behaviors (Rowold & Laukamp, 2009). The charismatic leader behavior researched by Rowold and Laukamp demonstrates a correlation to corporate profit as well. Some research on charismatic leadership and its affecting role in organizations signals a close relationship to features found in religious and political leadership environments (Sandberg & Moreman, 2011). This body of research also shows that where charismatic leadership is present, workers tend to be more engaged. Behaviors central to charismatic leadership involve three core components: envisioning, empathy, and empowerment, and these components lead to higher levels of task performance, greater job satisfaction, stronger group cohesiveness, and stronger self-leadership (Choi, 2006).

Charismatic leadership has been found to work only where there exists strong value congruence between the leader and the follower (Hayibor, et al, 2011). Hayibor and her team have found that value congruence occurs between charismatic leader and follower where there is strong social identification, internalization of the charismatic leader’s core values, and a continuing reinforcement of shared values through vision, and symbolic action. Finally, research on charismatic leadership has found that it can influence external support for the organization, particularly in attracting outside investors and gaining investment strength (Flynn & Staw, 2004).

Charismatic leadership, like transformational leadership, is measured by researchers using the Multifactor Leadership Questionnaire. For charismatic leadership, researchers use the specific charisma scale to assess inspirational motivation and idealized influence (Towler, 2005). The questions on the survey ask such things as “Displays a strong sense of power and purpose”, and “Acts in ways to build trust.” While these assessments tell us things about leadership behavior, they do not give us clues about how results or performance are enhanced from charismatic leadership.

Charismatic leadership, and its complementary models transformational and visionary leadership, has been measured as well by a leadership feedback mechanism known as the Global Leadership Life Inventory (GlobeInvent). (de Vries, 2004). This leadership measurement tool tries to measure the inner workings of a leader – in other words – what makes them tick, or their behavior related to how they interact with followers. The Globeinvent tool is a 360 degree feedback instrument, and attempts to understand not just how leaders behave, but what they do. As in other measurement tools, the GlobeInvent does not clue us in to the correlation between leader performance and organizational performance.

Visionary Leadership

A major factor separating managers from leaders is vision. Leaders look forward and have the ability to bring others along to see and achieve a vision. Numerous studies have led to the conclusion that visionary leadership is a model of leadership unto itself, and these studies assert that creating and communicating a compelling vision is the primary function of the contemporary leader (Manning, 2012). Beyond communicating visions, Manning sees that effective visionary leaders also mobilize support for the vision, build effective teams that support the vision, and get clarity from teams on goals and plans to achieve the vision. Visionary leaders have the skill to use vision casting to overcome resistance to change in the organization (Manz, Bastien & Hostager, 2012).

Visionary leadership is increasingly being seen as a process with specific steps, with those steps being 1) vision-casting, 2) vision communication, and 3) empowerment (Westley & Mintzberg, 1989). Visionary leadership in this study shows that this process requires crafting and repetition in order to become effective. In a study of success factors for business, a key differentiating factor in successful companies has been found to be visionary leadership combined with action (Valentine, 2003).

There have been many gifted individuals who were visionary leaders. President Abraham Lincoln, President J. F. Kennedy, and President Reagan are three good examples of visionary leaders. They all had the ability to see what they wanted the future to be; they possessed the ability to communicate and inspire others. They were not just leaders of words, but leaders of emotion, spirit, and deed. They made tough decisions that made them unpopular with some of their constituencies. A visionary leader has more than just goals. They have "a vision" and can describe exactly what it looks like, (Mocini, 2011). All three of these men transformed people's minds during speeches. Vision must be communicated with emotion and clarity. Visionary leadership must provide a clear view of what the vision (end state) is that one is pursuing. A vision must be relevant to the team, achievable and ethical.

One of the timeless examples of visionary leadership was Martin Luther King. In the midst of the American Civil Rights movement, Doctor King played a pivotal role. A Baptist minister and social activist, he inspired people from all races and ethnic groups to peacefully protest for racial equality. His "I have a dream speech" is memorized in schools throughout the world and stands as a memorial to the man who was slain for his beliefs. During a time of great civil strife, Doctor King provided an achievable vision, which inspired the leaders of America to listen to the voice of change.

Authentic Leadership

A relatively new aspect of leadership theory is known as authentic leadership. It is described by leading researchers in the field of leadership as a pattern of transparent and ethical leader behavior that leads to openness, sharing, and greater follower input in decision-making (Avolio, Walumbwa, & Weber, 2009). Key qualities of authentic leaders are passion, decisiveness, conviction, integrity, adaptability, emotional toughness, emotional resonance, self-knowledge, and humility (Nazari & Emami, 2012). Authentic leaders are routinely described in research as leaders who take responsibility for employee rights and moral obligations. The concept of authentic leadership is known to have gained prominence during the somewhat recent corporate scandals involving firms such as Enron, Worldcom and other firms, much like the increase in enthusiasm for moral leadership following the Great Depression (Novicevic et al, 2006). In such an ethically deprived corporate environment created by unscrupulous leaders, a need for authentic leadership is great, and is encouraged by a large number of people in government, business, and education. Early on it was thought that leadership behavior dictated the organizational climate, (Rego, 2013). Through research data, scholars have learned that authentic leadership is a function of a leader's ability to reduce conflicts and uncertainty through their leadership behavior. In military organizations, we call this filtering the trash from above by changing the tone of orders and ensuring subordinates that what they do matters. Authentic leaders enhance morale by ensuring that their team understands how the job they are doing, no matter how small, impacts the big picture (Laschinger, 2012).

Authentic theory moves toward a genuine leadership model (Elliot, 2011). It also extends transformational theory by positive psychological qualities in the followers that increase satisfaction and commitment such as confidence, optimism, and other positive emotions. An authentic leader is defined as “The authentic leader is true to him/her self and his/her exhibited behavior positively transforms, and develops employees into leaders.” (Schyns, Kiefer, Kerschreiter, Tymon, 2011). Moreover, authentic leaders are guided by self-regulation and self- awareness (Zhang, Everett, Elkin, Cone, 2012). This is considered a necessary precondition for developing positive emotion essential before instilling them into others.

Authentic leadership in action has been shown to drive performance and follower commitment through proven and consistent behavioral integrity on the part of the leader (Leroy, Palanski & Simons, 2011). Authentic leadership research has provided evidence that moral courage and ethical behaviors on the part of followers is strengthened through authentic leadership practices (Hannah, Avolio, & Walumbwa, 2011). Authentic leadership has evolved in the last decade into a four-component model, as described by Walumbwa, and these components are 1) balanced processing, 2) internalized moral perspective, 3) relational transparency, and 4) self-awareness (Peus, et al, 2012). These are all required in order for a leader to be recognized as an authentic leader. The application of authentic leadership in the workplace is modeled rather than taught. Authentic leadership is a learned behavior, and is useful for modeling best practice ethical behavior among subordinates, improving customer service through values and honesty, and creating long-term stakeholder value for every employee (Khan, 2010).

As with the emergence of every new leadership models, the researcher or practitioner can find detractors. Some naysayers to authentic leadership believe that it does not consider how social and historical contexts affect leadership ability, and that authentic leadership ignores so-called power inequities that affects who moves into leadership roles (Gardiner, 2011). While some research indicates a negative bias toward authentic leadership, on balance authentic leadership models are positive forces for organizational leaders in today’s tumultuous times.

Complexity Leadership Theory

An emerging leadership theory is known as Complexity Leadership. It is rooted in the complexity thinking science, and views leadership as a process evolving from simple cause-and-effect relationships to embracing more dynamic interactions between people (Houglum, 2012). Complexity leadership theory investigates the role of leadership as a dynamic process that transcends the individual, and is instead a product of interactions among groups of people, leaders and followers alike (Lichtenstein, et al, 2006). Complexity Leadership relies on the use of complex adaptive systems (CAS), and merges three separate aspects of leadership; adaptive leadership, administrative leadership, and enabling leadership, all designed to foster organizational creativity, learning, and adaptability (Uhl-Bien, Marion, & McKelvey, 2007).

Complexity leadership is being driven by the belief that postmodern organizations of today must find a way to balance leadership in the form of efficiency and control with leadership in the form of learning and adaptability (Schreiber & Carley, 2006). Where traditional leadership theories have applicability to older, bureaucratic models of organization, postmodern organizational models are in need of a new leadership dynamic, and complexity leadership theory is proposed by many researchers as the answer. Schreiber and Carley see the uncertainty and turbulence from all the globalization and technology revolution requiring a leadership model such as complexity leadership theory to be implemented. Organizations have to be able to learn faster, change quicker, and comprehend massive amounts of information in the new economy, and complexity theories aid the leader in handling these new responsibilities. Schreiber and Carley see complexity leadership theory being composed of three separate but equal roles: managerial leadership, adaptive leadership, and enabling leadership. In concluding their research, Schreiber and Carley offer a measurement instrument known as Dynamic Network Analysis to quantify complexity leadership theory. Measurement devices such as this will need to be perfected in order for complexity leadership theory to gain a foothold in leadership circles.

Complexity theory has grown in popularity and in print through management training literature and leadership academics. With the relative newness, this complex leadership theory lack the supporting data or a proven track record giving fair reason for concern and skepticism, (Fenwick, 2010). While the complexity leadership theory appears to offer opportunities to leadership and management education and training, skeptics take caution in accepting this theory too readily due to may concerns; novelty idealism; perceived problems in its advocacy of self promoting organization, concerns relative to ethical and emotional aspects forces on leadership and management; and risks from reasonable expectations and accountability for schools and management. Even with all the concerns and cautions, complexity leadership theory offers useful challenges for school leadership and management alike. As time passes and more date supporting this theory is developed complexity leadership theory will continue to grow in popularity, (Psychogios, 2012).

Contemporary leadership theories will continue to evolve over time, and new theories will spring up. This paper examines the core of current contemporary thinking on the subject of leadership in an attempt to bring clarity to the researcher or practitioner. The theories of transformational, charismatic, and visionary leadership appear to be intertwined, so more in-depth study will need to be done to understand the subtle nuances between the three approaches. The authentic leadership theory and the complexity leadership theory need much more investigation and clarity in order for the leadership practitioner to be able to practically apply the concept to the shop floor, so to speak. In looking at current measurement tools on these leadership theories, all the assessment devices simply help leaders determine what kind of leader they are, or they help leaders to assess potential weaknesses. The idea is that if leaders are measured, they can become more effective leaders to their followers. The assumption is that effective leaders make organizations more effective. This is probably true.

However, what is most important is this: Do effective leaders produce better results for their organizations, and if so, how can that be measured? In other words, does leadership development correlate to better bottom-line performance? Does leader training help organizations become more profitable, have less turnover, more employee and client retention, better customer service to customers, and better succession planning? Is there a significant return on investment for companies that develop their talent and their leaders? The research of the moment does not give us much information that companies can use to measure the effectiveness of the leadership development efforts on bottom-line performance. Future research should work to solve this issue. Much more research can be done and will need to be done in order to see these theories become practical reality in the workplace.


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