The main focus of this paper is an evaluation of the impact of the transformational leadership style on entrepreneurial management. It therefore synthesises different literatures and past study reports that have been generated about the theme.
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The Impact of the Transformational Leadership Style on Entrepreneurial Management
The transformational leadership style was first coined by MacGregor Burns (Bryan, 2009). A number of researchers have acknowledged that transformational leaders are often motivated by the need to transform people, teams, and companies by going beyond the status quo (Grant, 2012; Kwon, 2013; Biswas, 2012). In so doing, such leaders are said to have the objective of enhancing the ability of their companies to be innovative (Yitshaki, 2012; Jung & Chow & Wu, 2003).
As such, scholars who have studied the transformational leadership style have contended that such leaders must possess certain specific characteristics: charisma, which is about the creation and presentation of an attractive vision with regard to the future of a company; ability to inspire followers through motivations; the ability to intellectually inspire followers to view problems from different perspectives; ability to provide individualised considerations in which the leaders are supposed to develop the capacities of their followers (Gill, Flaschner & Bhutani, 2010).
A scholar, in a research study, has argued that a company that is headed by a transformational leader is more likely to engage in corporate entrepreneurial activities, which include the sum total of a company’s business ventures, strategic renewals and, most importantly, product innovations (Iqbal, 2011).
Researchers who have done further studies on the transformational leadership style have focused on job satisfaction, effectiveness and performance (Burpitt & Bigoness, 1997; Howell & Avalio, 1993). In this regard, the researchers have managed to establish a link between the concept of transformational leadership style and creativity in organisations (Burpitt & Bigoness, 1997).
Another researcher conducted a quantitative study to determine whether or not there was a link between the transformational leadership style and entrepreneurship in SMEs (Simon, 2008). The results of the study showed that there was a positive relationship between the two variables.
This implies that the transformational leadership style is important for businesses (Simon, 2008). This finding has been elaborated by other studies in which researchers identified different leadership styles that were suitable for encouraging innovation in firms (Wart, 2012; Halldorsson, 2007).
The researchers established that successful entrepreneurial businesses were associated with transformational leaders, who were supportive, innovative, creative, and visionary (Wart, 2012; Halldorsson, 2007); moreover, the transformational leaders of the studied organisations were able to motivate their followers to be committed to the goals of the organisations.
In other studies, researchers conducted comparative studies to determine how transformational and servant leadership styles influenced the performance of profit-oriented organisations (McClelland, 2008; Bryan, 2009). The results of the studies showed that the transformational leadership style was more influential in terms of organisational innovation, creativity and commitment by employees than the servant leadership style (McClelland, 2008; Bryan, 2009).
The results of this study are in agreement with other comparative studies that have revealed that the transformational leadership style is one of the most effective styles that enhance the entrepreneurial capacities of corporate organisations (McClelland, 2008; Bryan, 2009).
Despite the findings of these studies, there are not adequate studies that have examined the weaknesses of the transformational leadership style with regard to the performance of enterprises (McClelland, 2008). Other studies have noted that there are other factors that influence the way leaders run organisations. This suggests that the transformational leadership style may not act in isolation to enhance organisational performances (Muterera, 2008).
Biswas, S. (2012). Impact of Psychological Climate & Transformational Leadership on Employee Performance. Indian Journal of Industrial Relations, 48(1), 105-119.
Bryan, J. D. (2009). Team Development Social Networking and Its Impact on the Encouragement of Spiritual Leadership. Ann Arbor, IN: ProQuest.
Burpitt, W. J., & Bigoness, W. J. (1997). Leadership and Innovation among Teams: The Impact of Empowerment. Small Group Research, 28(3), 414-423.
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Gill, A., Flaschner, A., & Bhutani, S. (2010). The Impact of Transformational Leadership and Empowerment on Employee Job Stress. Business & Economics Journal, 1(1), 1-11.
Grant, A. M. (2012). Leading with Meaning: Beneficiary Contact, Prosocial Impact, and the Performance Effects of Transformational Leadership. Academy of Management Journal, 55(2), 458-476.
Halldorsson, F. (2007). Leadership Style, Employee Job Performance, and Organisational Outcomes. Ann Arbor, IN: ProQuest.
Howell, J. M., & Avalio, B. J. (1993). Transformational Leadership, Transactional Leadership, Locus of Control, and Support for Innovation: Key Predictors of Consolidated-Business-Unit Performance. Journal of Applied Psychology, 78(6), 891-902.
Iqbal, T. (2011). The Impact of Leadership Styles on Organisational Effectiveness: Analytical Study of Selected Organisations in IT sector in Karachi. Munich, Germany: GRIN Verlag.
Jung, D. I., Chow, C., & Wu, A. (2003). The Role of Transformational Leadership in Enhancing Organizational Innovation: Hypotheses and some Preliminary Findings. The Leadership Quarterly, 14, 525-544.
Kwon, S. S. (2013). The Impact of Transformational Labor Leadership on Members’ Willingness to Participate in Union Activities in Korea: Exploration of Universality and Substitutability for Antagonism. International Journal of Human Resource Management, 24(2), 265-284.
McClelland, J. R. (2008). Leading a Volunteer Organisation: Impact of Leadership Styles on the Performance of Boy Scout Councils. Ann Arbor, IN: ProQuest.
Muterera, J. (2008). The Relationship between Leadership Theory Behaviours, Follower Attitudes and Behaviours, and Organisational Performance in United States County Governments. Ann Arbor, IN: ProQuest.
Simon, M. (2008). An Investigation of Bass’ Leadership Theory on Organisational Performance of Small and Medium Enterprises in Trinidad and Tobago. Ann Arbor, IN: ProQuest.
Wart, M. (2012). Leadership in Public Organisations: An Introduction. New York, NY: M.E. Sharpe.
Yitshaki, R. (2012). How Do Entrepreneurs’ Emotional Intelligence and Transformational Leadership Orientation Impact New Ventures’ Growth? Journal of Small Business & Entrepreneurship, 25(3), 357-374.