Introduction
This paper will discuss transformational leadership, which is an established and modern approach that is used in numerous organizations worldwide. It will attempt to apply the framework in practice by analyzing two leaders, one of whom comes from the United States while the other is Chinese. The first leader is Lisa Su, the current President and CEO of Advanced Micro Devices Inc., who has managed to rescue the business from financial struggles. The second one is Jack Ma, the co-founder and former executive chairman of the Chinese e-commerce giant Alibaba Group. The following paper will critically evaluate transformational leadership and discuss its application to each organization and its respective leader.
Transformational Leadership Critical Analysis
First, it is necessary to define transformational leadership and establish the guidelines in which it operates. Johansson and Styhre (2016) claim that it was first introduced in 1978 and incorporates the introduction of fundamental changes into how the organization operates at all levels. A transformational leader should be ready to lead initiatives that make the organization work significantly different than it was before and convince the rest of the members and leaders to adopt them. While this requirement implies a significant amount of charisma on the part of the leader, Johnson and Hackman (2018) note that transformational and charismatic leadership are distinct, even though they overlap somewhat. The primary difference between the two is how they approach the management of followers.
Charismatic leader uses their competencies to direct their subordinates and convince them to follow the directions provided. The difference in the case of the transformational leader, as described by Rosenbach (2018), is that they motivate employees toward self-actualization by approaching them individually and reflecting on themselves. To successfully help others improve themselves, the transformational leader has to understand his or her limitations and overcome them. Etukuru (2018) claims that they have to be confident but also listen to their followers, stimulating creativity and innovation and inspiring others to perform excellently. As a result of this approach, the organization works organically and productively, with the leader directing its operations rather than driving them.
The numerous advantages of transformational leadership have led to its widespread adoption since the original increase of popularity in the 1980s. Peña-Acuña (2017) highlights benefits such as social skills growth, setting an example, worker self-esteem improvement, reduced costs due to lower turnover, increased innovation, and organizational learning. The transformational leader drives themselves to excel alongside others, improving their abilities and setting a target that others can emulate in the process. The subordinates also experience growth and have the opportunity to contribute to the organization, which increases their performance and self-estimation (Buil, Martinez and Matute, 2019). They also become more suitable for their positions and comfortable there, and there is less incentive for them to leave.
The topic of innovation is particularly noteworthy for this paper, as it is increasingly being recognized as essential for long-term organizational success. As Zuraik and Kelly (2019) find, CEO transformational leadership fosters innovation both directly and indirectly, contributing to exploration as well as exploitation. The reason, according to Verburg (2019), is that leaders that use this approach are vision-oriented and motivate their followers to implement that vision, using innovative methods if necessary. Moreover, the active participation of every organization member ensures that there is a widespread understanding of how its processes work. As a result, the approach enhances organizational learning by guaranteeing that information is recorded and applied.
With that said, transformational leadership has also been the target of several criticisms throughout its history, mostly ones that involve its mostly theoretical nature. As Dugan (2017) highlights, transformational leadership does not account for all leader behaviors, provides limited evidence of the transformations that it promises, and focuses on the leader excessively to the exclusion of follower agency. A leader cannot rely solely on the transformational paradigm in their work, as there are some scenarios that it does not cover. Moreover, partially due to this non-comprehensive nature of the approach, it is challenging to find evidence of the appropriate application of transformational leadership that has led to organizational improvement (van Knipperberg, 2017). While well-known transformational leaders exist, it is unclear how much the approach was responsible for their success.
The treatment of one’s followers is among the more problematic areas of transformational leadership because of the vagueness of the method’s recommendations. As Norris and Norris (2019) note, the style recommends leaders to employ individualized approaches and develop positive relationships with their subordinates. However, this advice is vague and demands high interpersonal competency from the leader. There is no template for a link that would be considered acceptable, and the person is expected to judge their progress in the matter themselves. As such, the transformational style may not be suitable for every leader, depending on specific inherent characteristics. However, if the person has the necessary competencies, they can produce excellent results using the paradigm.
Throughout the existence of the transformational style, new approaches have emerged that attempt to use it as a foundation for additional developments. Hoch et al. (2018) describe ethical, authentic, and servant leadership, three more recent varieties of positive direction that are somewhat similar to transformational leadership, but only find the third style to differ significantly from it in performance. Banks et al. (2016) supplement the finding by also identifying authentic leadership as similar in both construction and results to transformational leadership. Overall, while modifications to the paradigm have likely happened over the years, they have not been sufficiently decisive to invalidate the original definition.
Overall, transformational leadership appears to be a valid and useful paradigm for various organizations, particularly those with a focus on the long term. It enables the leader to create an environment where every employee is a valuable contributor that aims to excel in their tasks. The approach is particularly useful if the person seeks to foster persistent and productive innovation in the organization. However, transformational leadership can be challenging to achieve because it leaves many matters to the leader’s judgment without giving them any guidance. Next, this paper will attempt to provide examples of two successful leaders and analyse their use of the paradigm.
Practical Applications of Transformational Leadership
AMD
Advanced Micro Devices, Inc., more commonly known as AMD, is a well-known American company that produces electronic devices. It is one of the oldest businesses in the industry that has been an established leader for a long time. However, as Moorhead (2016) describes, by 2012, the company was struggling financially due to a variety of poorly informed managerial decisions, losing revenue and entering increasingly massive debt. At that time, Lisa Su joined the corporation as senior vice president and general manager, transitioning to the chief operating officer in 2014 and becoming the CEO and president in the October of the same year (AMD president and CEO Dr. Lisa Su, n.d.). Since then, the company has been able to change its strategy dramatically and achieve considerable success, an achievement in which the new leader likely played a significant role.
Dr. Su has had a lengthy history of promoting innovation before starting to work for AMD, creating many new products in her time as an engineer. Bozzone (2018) describes her involvement in industry-changing initiatives, such as the shift to copper from aluminium, which led to her rapid rise to the IBM CEO Lou Gerstner’s technical assistant and director of emerging products. She would remain at the company in leadership positions before moving to Freescale Semiconductor, Inc. in 2007, where she remained until her AMD appointment (AMD president and CEO Dr. Lisa Su, n.d.). During these periods, Dr. Su had the opportunity to become acquainted with various aspects of high-level management, managing technologies as well as strategy and marketing. As such, her competencies warranted the eventual appointment to AMD’s highest position, where she proved adequate to the challenges that were facing the company.
Dr. Su’s leadership approach aligns closely with transformational leadership with its focus on developing the team. In her interview with Bryant (2017), she mentioned that leaders are “supposed to make the team better than they thought they could possibly be” by approaching everyone individually and helping them succeed. Her preferred approach to a task is to set a challenging goal and work with the team to develop a way to achieve it, valuing the input from various members. All of these notions are consistent with the definition of transformational leadership, though they do not necessarily encompass the entirety of the meaning. In particular, the interview does not mention Dr. Su’s attitude toward organisational change and transformation. However, her actions once she became the CEO of AMD and the changes that occurred after that indicate that she embraced the approach entirely and used it to considerable effect.
The rescue of AMD from its dire financial state would be a significant challenge, particularly for a person who would be taking the position of CEO for the first time in their lives. However, according to Molinaro (2017), Dr. Su treated the problem as an exciting challenge rather than a severe threat and shifted the company’s focus to innovation, eventually succeeding in reversing the trend and quadrupling the company’s stock, which returned it to the status of a powerful competitor. AMD’s various divisions grew and developed until they became valid competitors in different markets, catching up to current leaders. Dr. Su had the courage and charisma to engineer a dramatic organisational transformation as well as the vision to perceive promising areas and capitalise on them.
The new CEO used her technical background to help the company begin designing superior products. Moorhead (2016) claims that before Dr. Su’s CEO appointment, AMD was distracted by unfavourable markets, where it would fail and have to change its roadmap, but under the new leader, it chose new focus areas and streamlined its product offerings into a more straightforward and consistent cycle. The new approach enabled project teams to set and achieve consistent goals, enabling various members to exercise their competencies fully to build high-quality products. As a result, the professionals who worked for AMD could focus on developing their skills while refining the company’s offerings.
Another aspect of the transformation that has led to AMD’s current success was the change of its overall approach to critical customers and organisational partnerships. Moorhead (2016) notes that the corporation entered close relationships with massive companies such as Microsoft and Sony, securing large and lucrative contracts for itself in both the short and the long terms, and contrasts these efforts to AMD’s prior reliance on the PC market. By establishing close relationships with large consumers of semiconductor products, the business can secure future business through the cooperation mechanisms they create, which ensure that the partners are highly suitable for each other. However, to use these mechanisms effectively, Dr. Su had to reorganise the company significantly.
The overall focus of the organisational transformation that was led by the new CEO was to simplify and streamline the company’s operation to make it easier to assess challenges and respond to them. As Moorhead (2016) describes, the process involved the creation of a new structure, hierarchy rearrangements, and increases in transparency and communication that served to improve employee trust. AMD emerged from the change process with a different set of priorities and competencies than before it, becoming significantly better oriented to capitalise on the market and start growing. Moreover, Dr. Su appears to be responsible for both the design of the changes and the subsequent success of the new strategy.
Overall, Lisa Su appears to have applied transformational leadership during her time at AMD as well as before it to lead the company to success. She had to address a variety of significant issues that led to long-term weak performance by the business and did so by transforming the business’s operations. Dr. Su focused on the competencies of the various departments within the company and let them exercise their abilities by providing them with a streamlined roadmap that they can help adjust as needed. Moreover, she improved AMD’s vertical structure and advanced the trust between management and ordinary workers. As a result, the company is now significantly improved from its state before 2014 in both organisation and success.
Alibaba
The Alibaba Group, usually shortened to Alibaba, is a Chinese e-commerce business that was founded in 1999. It deals with a variety of business tasks and concepts directly as well as through subsidiaries such as AliExpress and Taobao. Since its inception, Alibaba has grown massively, setting a record with its $25 billion IPO in 2014 and growing further since then (#17 Jack Ma, 2020). Throughout most of this period, the organisation was led by one of its co-founders, Ma Yun, who is better known in the West as Jack Ma. According to #17 Jack Ma (2020), he stepped down from the executive chairman position in 2019, though he retains a significant portion of the company’s shares, which make him the wealthiest man in China and the 17th person in the world by net worth. Much of Alibaba’s success can be attributed to Jack Ma’s vision and leadership.
The Chinese entrepreneur’s leadership cannot necessarily be entirely defined by any paradigm that is formally recognised in scholarly management research. Muenjohn et al. (2018) highlight how his only higher education achievement is a Bachelor of Arts degree in English, in which he was interested since his youth. As such, his approach to leadership is mostly likely self-designed, incorporating elements from personal experience as well as encounters with other prominent leaders throughout his life. Nevertheless, it likely includes some aspects of transformational leadership or different approaches in a unique combination. As such, Alibaba’s former CEO can be a noteworthy subject for an investigation into successful leadership practices and outcomes.
Jack Ma has earned a reputation for his unique and sometimes eccentric behaviour and leadership practices. Fernando (2016) claims that he has earned the nickname “Crazy Jack Ma” due to acts such as his performance of an Elton John song in an eccentric outfit to his employees (p. 2). Overall, Mr. Ma appears to be highly interested in Western culture, especially that of English-speaking countries, though he also values the unique circumstances and practices of China. The prominence of Jack Ma’s personality may be associated with transformational leadership, which involves leaders as inspirational and well-known figures that use their image to motivate followers (Mumby and Kuhn, 2018). His eccentricities may be an expression of his personality as well as an intentional effort to gain publicity for this purpose.
However, Mr. Ma appears to disagree with this assessment, claiming to support a different set of values. Muenjohn et al. (2018) describe him as a proponent of authentic leadership that values the unity of employees in service to a common goal over the implementation of a single leader’s vision. With that said, as mentioned above, authentic leadership shares a significant portion of its paradigms with transformational leadership. While transformational leadership attributes a vital role to the leader, it also requires them to be open to the suggestions of other organisation members. As such, in the best-case scenario, the overall resulting structure would incorporate both the leader’s vision and those of their followers. As such, Jack Ma’s behaviour and opinions appear to be consistent with transformational leadership.
Mr. Ma has been responsible for a considerable amount of change and adaptation during his tenure as Alibaba’s leader. One of his most significant contributions was the focus on learning rather than established knowledge as the source of organisational strength (Pistrui and Dimov, 2019). To that end, Alibaba has been interested in new developments and technologies since its inception. According to Muenjohn et al. (2018), the business began as a result of Ma’s recognition of the Internet’s potential, which led him first to start another company and succeed in it, then direct another before founding Alibaba proper. Moreover, the business would later expand to match services such as PayPal and eBay. Instead of becoming failed copies, these services managed to match the Western analogues and force them out of the Chinese market.
The focus on novel developments is a part of Mr. Ma’s overall strategy concerning management and innovation. In the interview that he gave to Zhang, Chen and Tsui (2017), he mentioned that he was focused on transformations that would suit the Chinese culture and that he viewed himself as a teacher whose goal was to see his subordinates surpass him. Both of these claims are highly consistent with the concepts of transformational leadership, which is focused on change by definition and seeks to lead followers to grow. Moreover, Alibaba’s rapid growth and success serve as indicators of the success of the approach. The company continued performing well after his departure, suggesting that his subordinates had been ready to replace him.
Overall, while Jack Ma’s approach may not be entirely transformational, it shares many similarities with the theory. The leader focuses strongly on followers in terms of both motivation and feedback. At the same time, Mr. Ma himself was a prominent figure that tried to be memorable and represent the company to the workers and the community during his tenure at the company. He introduced Internet-based services to China and created a suite of prominent companies under the Alibaba umbrella. As such, he can be considered a leader who demonstrates the benefits of transformational leadership, even if he believes himself to be an authentic leader.
Work in a Diverse Team
The first experience of teamwork in diverse conditions that is featured in this paper has been cross-cultural when the author had to work in a multicultural team. They used the approach described in Gibbs’ reflective cycle (2019) to understand their experience. The team had some coordination issues because of the accents and occasional miscommunications from some members who did not have English as their native language. The author felt somewhat frustrated at the lack of understanding, which may have led them to act irritably. As such, they evaluated themselves to have contributed negatively to the team. An analysis yielded the findings that by gaining a better understanding of other cultures’ nonverbal cues, the author would become able to understand them better. They concluded that they should learn more about the gestures that different cultures’ members use. As such, they formulated an action plan of interacting more with culturally diverse people.
In another scenario, the author was working on a problem as a member of a multicultural team once again. However, that time, the work went smoothly, with members contributing ideas that they claimed to have learned back in their home countries. The author felt impressed with the overall quality of the work and curious about those cultures and their unique business and work practices. They evaluated the work to have gone well because of their and the others’ novel and uniquely suitable contributions. Their analysis was that the progress was smooth because the team’s diverse experiences created a broad pool of possible solutions. The author concluded that work in a diverse team could produce excellent results once necessary communications were established. As such, their action plan involves trying to learn about the different group members’ strength in the future and learn communication skills to bring the group together.
Conclusion
Transformational leadership is a highly popular approach that is well-researched and broadly applied in practice. It has numerous advantages, such as increased employee engagement and growth or improved innovation. However, at the same time, it is challenging to implement in practice because of its vagueness and reliance on charisma. With that said, as Jack Ma and Lisa Su demonstrate, transformational leadership can be applied in real scenarios at a massive scale to significant effect. Their successes demonstrate that it can be used at all levels to lead both small new companies and old massive businesses to success despite various possible issues.
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