Developing Leaders: Examining the Role of Transactional and Transformational Leadership Across...

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Abstract

Leaders:

ining the Role of

Michae l B. Hargis

John D Watt

Chris P iotrowski

Mic hael B. Hargis Ph.D.

is an

Assistant Professor of Management

and Innovation at the University of

Central Arkansas. His research inter-

ests focus on understanding how

person- and situation-based factors

inf luence both funct ional

(e.g.,

task

persistence, innovation, goal setting)

and dysfunct ional

(e.g.,

unethical

His research appears in jou rna ls such as

Psychology

ournal of Vocational

Behavior

an d

Relations. Dr. Hargis serves as a member of the

act Inform ation

Over the p ast 20 years, the Multifactor Leadersh

Theory MLT) has become one of the m ost

dominant theories of leadership. This popularit

is due, in part, to the broad range of leadership

behav iors included in the theory. Bass 1985) an

colleagues conceptualized leadership as consist-

ing of three prima ry factors i.e., transform ationa

transacfional, and passive/laissez-faire leadershi

and p rior research has clearly linked transforma

tional and transactional leadership to important

outcomes, such as employee commitment and

organizational performance. Furtherm ore, prior

research has established that these behaviors can

be developed throug h training. How ever, it is

less well understood how the importance of thes

behaviors changes across organizational settings

The purpo se of this study, therefore, is to exam in

across two data sets) the relative importance of

these leadership factors across various outcomes

i.e., team potency/efficacy, team cohesion, and j

performance) and organizational contexts i.e.,

military and healthcare). Results indicate that

transformafional leadership behaviors are

critically important for team cohesion and team

potency/efficacy Data Set 1) and lead er

effectiveness Data Set 2), and that transac tional

leadership becomes particularly salient with

regard to actual task performance and extra effo

Data Set

and 2). Implications of these results

for practitioners are discussed, and a useful tax-

onomy to guide leadership development is pro-

vided.



Introduction

John D. W att Ph.D. is an Associate

Professor of Organizational Behavior

and Hum an Resources OBHR) in the

Department of Management at the

University of Central Arkansas. His

research interests center around the

influence of cognitive and personality

variables on organizational behavior.

He is particularly interested in the areas

of boredom proneness, individual att i tude strength

e.g.,

affective-cognitive consistency), employee engagement,

perceived organizational support, and underem ployme nt.

His research appears in journals such as Journal of Applied

Psychology, Journal of Business and Psychology, and

Journal o f Research in Personality. Dr. Wa tt curre ntly serves

as Executive Editor of The Journal o f P sychology:

Interdisciplinary and Applied.

Contact Information

Department of Marketing and Management

University of Central Arkansas

201 Donaghey Avenue

Conway, AR 72035

Chris Piotrowski

has s erved as a

research consu ltant at the University of

West Florida since 1982. He has

authored over 200 peer-reviewed pub-

lications, including book chapters over

the past 30 years. He has a research

focus o n da tabase s earching , assess-

ment issues, and the study of disasters.

His work has appeared in the

ncydopedia of

Stress

Chris also serves as a reviewer for

journals in psychology, me dicine, and business.

Contact Information

Chris Piotrowski

504 Concordia Blvd.

Pensacola FL 32505

Effective leade rship h as bee n rec ognize d as

tral determinan t of growth a nd success with

organizational settings ranging from profit s

ing enterprises to amateur and professional

letics, religious organizations, and military

(Judge Piccolo, 2004; Low e, Kroeck,

Sivasubram aniam, 1996; No rtho use , 2007).

recognition has resulted in increasing intere

leadership development, with organizations

investing greater and greater resources into

ership development and succession plannin

(Bolt, 2007; Carter, Ulrich, Go ldsm ith, 200

Hernez-Broom e H ug he s, 2004; Riggio, 20

Across settings, transformational leadership

behaviors have become o ne of the most dom

approaches to understanding leadership effe

ness (Lowe Gardn er, 2001) an d certain tra

mational leadership beha viors are included

leadership development programs from com

nies operating in industries ranging from on

retail (e.g., Zappos .com ) to finance (e.g., GE

tal; Hsieh, 2010). Furthermore, there is sub

tial evidence that transformational leadersh

behaviors lead to important individual-level

comes such as employee commitment, motiv

and task performance and organization-leve

comes such as firm performance (Barling, W

Kellow ay 1996; Bono Judge, 2004; Byc

Hackett, Allen, 1995). Finally as describe

the Multifactor Leadership Theory (MLT), e

dence suggests that transformational leader

behaviors augment, or build upon, transacti

leadership behaviors such as utilizing contin

rew ard s (Judge Piccolo, 2004).

Thus, the extant research provide s reasonab

strong sup port for the theoretical predicatio



ved from the MLT (cf.. Hou se Sham ir, 1993;

Avolio, 1993; Jud ge Piccolo, 2004;

et al., 1996). Nam ely, transac tional leader-

behaviors and transform ational leadership

iors are necessary to effectively perform as a

emental value to mo re tradition al transaction-

rship behav iors. W hile prior research has

ly supp orted the theoretical tene ts outlined

he MLT, lea dership scholars ha ve b egu n to rec-

l context, imp act w^hat leader beh avio rs are

Hall,

Shamir How ell, 1999). That is, the trans -

ps) may no t trans late to effective perform ance

Office). The sam e is true across different

ormance criteria (Jud ge Piccolo, 2004). In

2003; Den

og et al., 1999) clearly ind icates tha t the

of other criteria (e.g., creativity, com mitm ent,

en the role of leadership in creating and sus-

ing a competitive a dva ntage , an d the role

leader beh avio rs (Parry Sinha, 2005),

de rsta nd the specific factors

impact organization al success. Furthe rmo re,

important to exam ine how the im portanc e of

nization. Thus , the purp ose of this stud y is

end prior research by exploring the relative

t performan ce across a variety of

zationally v alued criteria (e.g., team pote n-

cy/efficacy, job performance, team cohesion) and

organizational contexts (e.g., private healthcare

and m ilitary). This is particularly im portan t

because prior research has relied on faulty meas

ures to assess predictor importance, and there is

some data suggesting that leadership behaviors

change in impo rtance across contexts (Den Ha rt

et al., 1999; Johnson LeBreton, 2004; LeBreton

Hargis, Griepenti-og, Oswald,

Ployhart, 2007).

Additionally, these data will help practitioners

create leadership development approaches that

are more cost and time-effective, and context sen

sitive, due to the increased aw areness of which

behaviors are most related to desired outcomes

across different organizational settings.

In the text that follows, we: 1) outline the leader-

ship behaviors includ ed in the multifactor leade

ship theory, 2) present the results of a study

designed to examine how the relative importanc

of these leadership behaviors change across dif-

ferent organ izational settings (military and med -

ical) and across outcomes such as team

potency/efficacy, team cohesion, and job perform

ance, and 3) presen t a leadership developm ent

taxonomy (based on the results of the current

study and a review of best practices) designed to

aide practitioners in the development and chang

process.

Multifactor Leadership Theory

The multifactor leadership theory developed by

Bass (1985) has received a great deal of theoretic

and empirical attention over the past nearly thre

decades (Bass Avolio, 2000; Judge Piccolo,

2004; Lowe, Kroeck, Sivasub ramaniam, 1996).

This popularity is due, in part, to three primary

factors. First, the model of leadership introduce

by Bass encompasses a broad range of leader



and non -lead ersh ip (or laissez-faire). Second,

entific literature has generated substantial

use Shamir, 1993, How ell Avolio, 1993;

ride, 2006; Lowe et al., 1996). Third, this

(Parry Sinha, 2005) and these behav -

have been linked to impo rtant ind ividual,

Howell Avolio, 1993; Lowe et al.,

W aldman, B ass,

Yammarino, 1990). For

et al. (1996) presen ted meta-ana-

correlations of .73 and .30, respecfively.

hat transformational leadership impacts creativi-

ty and innovation (Avolio et al., 1999) and com-

mitment (Bass

Riggio, 2006). Finally, Dvir,

Eden, Avolio, and Shamir (2002) presented evi-

dence suggesting that transformational leadership

resulted in better unit performance relafive to

group s that did not receive transformational lead-

ership train ing. In the following text, each of the

factors included in the MLT will be discussed.

Transformational leadership.

Transformational

leaders are described as being capable of m otivat-

ing followers to transcend their self-interests to

accomplish collective goals (Bass, 1985).

Transformational leadership includes four distinct

actors:

ide lized influence inspir tion l

motivation

ntellectu l stimulation nd individu lized considera-

(Bass Avolio, 2000). The ide lized influence

ed at influencing followers' perc eptions of

accomplishing stated goals, as well as leader

behaviors that are directed towards goal atta

ment and developing a sense of mission amo

followers. Key beh avio rs inclu de demo nstra

high levels of competence and the effecfive u

power to enhance group performance (Kirkb

2006). The inspirational motivation factor foc

on behaviors directed towards energizing an

motivafing followers, such as communicafing

vision and mak ing emotional app eals that h

followers strive towards future goals.

Inspirational behav iors include presenting o

mistic (yet attainable) visions for the future a

creafing a unified sense of mission and purp

(Kirkbride, 2006). The intellectu l stimul ti

tor focuses on encouraging followers to crific

examine their assumpfions, values, and belie

effect, the intellectual sfimulafion factor is vi

as the degree to which leaders favor new wa

doing things and encourage followers to dev

the skills necessary to think through and sol

problems for themselves. Finally, the individ

ized consider tion factor focuses on leader

behaviors that are aimed at understanding t

needs of individual followers and encouragi

them to develop to their full potential in the

suit of challenging goals (Avolio, Bass, Ju

1999;

Bass Avolio, 2000).

Transactional leadership.

The notion of tra

tional leadership grew^ out of the exchange-b

theories of leadership that dominated the lea

ship literature until the 198O's. Bass (1985)

defined fransactional leaders as leaders who

tify the needs of their followers and engage

exchange relationships with them based on o

tives to be m et. The high er ord er factor of t

actional leadership includes: contingent

rew

active mana gement by exception and passive

m

ment by exception. Contingent rew ard lead er



Avolio, 1993). With this style of leader-

the leader sets clear goals and objectives and

ncial) can be expected for achiev ing g oals.

ctive

an d passive management by exception are

red beh avio r from followers. The differ-

when one c onsiders the m onitoring patte rn of

leader. Active ma nag em ent by exception is

racterized by the lea der s c ontinued observa-

of followers to en sure that agreed up on stan-

3). In contiast, passive ma nag em ent b y excep-

eaders only interv ene w^hen mistakes hav e

ady occurred (Antonak is et al., 2003).

The last leadership factor

or, which is labeled laissez-faire lead ersh ip.

follower. In essence, this type of leade rsh ip

ing decisions an d w ho fail to take interest

there are eight factors represe nted in

current form of the m ultifactor leade rship the-

Avolio, 1993) suggests that

this proposition. For instance, there is evidence

that transactional leadership behaviors lead to

effective leadership (Hater Bass,

1988;

Waldm

et al., 1990). Prior research also dem onstia tes th

after controlling for the effects of transactional

leadership, transformational leadership behavior

account for incremental variance in ratings of

leader effectiveness (Hater Bass, 1988) and sat

isfaction with the leader

Podsakof,

MacKenzie,

Moorman, Fetter, 1990). Additionally, the

results of a meta-analytic investigation of the

MLT, conduc ted by Lowe et al. (1996), sugg ested

that the same leader might exhibit behaviors asso

ciated with transactional and transformational

leadership, which is consistent with the theory

postulated by Bass (1985). This meta-analysis als

demonstrates that both types of leadership are

associated with leader effectiveness.

JVIethod

To examine ho w leader behaviors change in

importance across different criteria and organiza

tional contexts, we reanalyzed the correlation

matrices from two published studies using two

relative im portance indices that are increasingly

being used in the organizational science literatur

Dom inance Analysis and Relative Weights

Analysis - both of which are intioduced in more

detail in the da ta analysis section below. The use

of these relative importance statistics is becomin

more common in the organizational sciences (cf.

Baltes, Parker, Young, Huff, Altinan n, 2004;

LeBreton, Ployhart, Ladd, 2001). These data

sets were chosen because: (1) these two datasets

allow u s to examine the relative importance of th

factors and sub-factors included in the MLT

across diverse sam ples (military vs. registered

nurses) and performance criteria, and (2) the var

ables, as a group, explained a significant and



end ent variables. These selection criteria are

: The first data set came from a study

by Bass, Avolio, Jung, a nd Berson

es: team potency/efficacy (represen t-

orm its mission) and team cohesion (repre-

ng whether team mem bers pulled together to

ion usin g a sample of 78 platoon leaders and

t

Set 2: The second data set came from a

These authors utilized a sample of nurses

1,376 to examine the impa ct of transforma-

Analysis Relative Importance Indices

bined with other variab les. Traditionally, a

) have been used to evaluate predic-

impo rtance. While each of these meth ods ha s

Darlington (1968) notes that most measures o

predictor importance are often misleading w

variables are co rrelated, wh ich is often the ca

the organizational sciences (LeBreton et al., 20

This is very useful when considering the ML

because transactional leadership and transfor

tional leadership behaviors are often highly c

lated. For instance, Bycio, Hac kett, and Allen

(1995) presented evidence demonstrafing tha

contingent reward behaviors usually correlat

strongly with transformational b ehaviors w it

intercorrelations rang ing from .63 to .70.

Furthe rmo re, Lowe et al. (1996) repo rted unc

rected correlations between the transformatio

factors th at ran ged in ma gn itud e from .68 to

To overcome these lim itations, two stafistical

approaches have been introduced: dominanc

analysis (Budescu, 1993) and relative w eights

analysis (Johnson, 2000). These stafisfics hav

recently been used in the organizafional scien

literature in areas ranging from employee sel

fion (Van Iddeking e & Ployhart, 2008) to un d

standing percepfions of fairness (Schleicher et

2006). For exam ple, LeBreton et al. (2007) an

Van Idde kinge and Ployh art (2008) bo th utiliz

relative imp ortance indices to examine which

employee selecfion tests best predicted job pe

forman ce. Addifionally, Schleicher et al. (200

utilized relative importance indices to examin

how selection procedures that provided the

opportunity to perform job related tasks posit

ly influenced subsequent applicant reactions

the organiza fion. Finally, Behso n (2005) dem

strated, via dominance analysis, that certain m

ageme nt practices (e.g., supervisory suppo rt,

autonomy, etc.) predicted a number of import

outcom es such as job safisfaction, wo rk stress

and intenfions to quit. W hile relative importa

indices have been used to examine a num ber



arch has u sed these statistics within a leader-

ntext.

Analysis Dom inance analysis was

in the presen ce of co rrelated predic tors.

tive importance of m ultiple p redicto rs by

nance weigh t represents the average useful-

imp ortance. Statistically, for each var iable (j),

this weight represen ts the average useful-

of a variable across all subset regressions

Budescu, 2003). Thus, dominance analy-

on a variable's direct effect (i.e., w hen con-

), and partial effect (i.e., condi-

l on all subsets of pre dic tors ) (Budescu,

p. 544). Furthermore, general dominance

lysis examines patte rns of a pre dictor's dom i-

specif

tern of a variable's relative impo rtance

s regression m odels. Full dom inance occurs

n a variable is consistently m ore imp ortan t

y other va riable across all subset regres-

The second method.

ive Weights A nalys is (Johnso n, 2000), pro-

s a measu re of the relative im portan ce of

iple predictors by using a principal com po-

predictors that are maximally correlated with th

original set of predictors yet are orthogonal

(uncorrelated) to one another. The criterion vari

ables are then regressed on the transformed pre-

dictors yielding s tanda rdized regression coeffi-

cients. These coefficients are then squared and

combined with the squared standardized regres-

sion coefficients to calculate importance estimate

Both methods provide estimates of predictor

importance based on the proportion of the mode

R-̂ that can be attributed to each indepe nde nt pr

dictor. Furthermore, all of these independent

components add up to the model R^. Because

these methods provide estimates of importance

that sum to the mo del R^, it is possible to evalua

predictors using the metric of their proportionate

contribution to the model R^. Additionally, it is

possible to calculate rescaled relative importance

estimates for both dominance and relative

weights by dividing each raw estimate by the

model R^. These

rescaled importance estimates

in

cate the percentage of total explained variance

contributed by each independent predictor, whic

is a helpful metho d to comm unicate results.

Results

Bass et al. (2003) examined the predictive validit

of transformational and transactional leadership

behav iors of platoon leaders for ratings of unit

potency (i.e., group efficacy), unit cohesion, and

task performance by examining data collected

from 72 platoon leaders. When considering

unit/tea m potency (see Table 1), which represen t

the belief that the team can carry out the mission

successfully, our data indicate that transforma-

tional leadership behaviors are most important

(ranked #1) and account for approximately 42%

the predicted variance and transactional leader-



r j Y

0.41

0.37

-0.37

ß j

0.28

0.04

-0.13

R S - C J

0.42

0.28

0.30

Tí

1

2

2

2 ßj2

1

3

2

C j

1

3

2

Importance Estimates Relative Rank ings

Variables

atoon Leader TF >D> Platoon Leader PA, Platoon Leader TA

te: Data are from the Platoon Leader Sample described in Bass et al. (2003). rry

zero order correlation; ßj

rescaled (RS) importance estimate, whicr\ is calculated by dividing the do

) by mo del R^. RS-Cj can be interpreted as the percentage of total explained variance c ontribu te

Importance Estimates Relative Rankings

Variables TTX, ß j RS-Cj r jy ^ ßj2 C j

onal Leadersh ip 0.48 0.26 0.39 1 1 1

Leadership 0.46 0.15 0.33 2 2 2

BE/Passive Leadership -0.43 -0.11 0.28 3 3 3

te: Data are from the Platoon Leader Sam ple described in Bass et al. (2003). rjy

zero order correlation; ßi

ized regression coefficient; RS-Cj

rescaled (RS) imp ortance estímate, which is calculated by d ividing the d

ight (Cj) by mod el R^. RS-Cj can be interpre ted as the perce ntag e of total explained varianc e contribu te



ip behaviors an d man agem ent by exception

28

and 30 of the variance, respec-

l leadersh ip fully dom inates transactional

mportance (which is a comm on practice in the

izational sciences and deve lopm ent litera-

we would likely make the attribution that a

ationship w ith a .04 mag nitu de is practically

nd mean-

39 of predicted vari-

ce followed by 33 for transactional and 28

for manag emenf by excepfion. Finally, in ferms

of performance during a full-scale training exer

cise (see Table 3), transform ational lead ersh ip

behaviors became relatively less important.

More specifically, transactional behaviors accou

for

36

of predicted variance and passive leade

ship/management by exception accounted for

33 of predicted variance. Both variables fully

dominated transformafional leadership, which

accounts for 31 of predicted variance.

However, by examining the re-scaled importanc

estimates (which reflect percentages) we see tha

each variable accounts for roughly equal portio

of predicted variance.

The Bycio et al. (1995) stud y allows us to look a

the relative effectiveness of the sub-factors of fh

MLT across different criteria (i.e., leader effec-

tiveness and extra effort fiom employees). As

presented in Table 4, idealized influence (or

charisma) was the most important predictor wit

regard to leader effectiveness accounting for 41

ndent Variable = Platoon Performance (R^ = .11 )

Importance Estimates

Variables RS-C

0.30 0.06 0.31

0.31 0.16 0.36

-0.30 -0.14 0.33

Relative Rankings

2 3 3

1 1 1

2 2 2

tals 1.00

nance Results: Platoon Leader TA, Platoon Leader PA >D> P latoon L eader TF

: Data are from the Platoo n Lea der Sa mple described in Bass et al. (2003). r w


sta

RS-CT

rescaled (RS) importance estimate, whicli is calculated by dividing the dom

ce weigh t (Cj) by m ode l R^. RS-Cj can be inter prete d as the percentage of total explained variance contributed b



= Leader Effectiveness (R ̂= .41)

Importance Estimates

Relative Rankings

Idealized Influence

Individualized Consideration

Intellectual Stimulation

Contingent Reward

Management-by-Exception

RS-C

0.63 0.57 0.41

0.56 0.15 0.25

0.51 -0.03 0.18

0.42 -0.07 0.11

-0.26 -0.04 0.05

4

5

4

5

3

4

5

1.00

min ance Results: Idealized Influence >D> Indiv idua lized Co nside ration >D> Managem ent-by-Exc

Data are from

Bycio

et

al.

(1995). rjy


=

standardized regression coefficient;

R

(RS) importance estimate, which is calculated by dividing the dominance weight (G) by model R^. RS

as the percentage of total explained variance contributed by each predictor.

the pred icted variance. Taken together, these

variables accoun ted for a combined 66 of

variance in the criterion (41 and 25 ,

18 or less

f predicted variance.

s of extra effort (see Table 5), again, ideal-

e (ranked

1

and accounting for 32 of

27 of the predicted variance in extra effort.

both accounted for 18 of predicte d vari-

ance,

but contingent reward dominated ind

alized conside ration. One of the mo st intere

findings here relates to individualized consid

tion. Exam ining the regression we ight (or st

dardized beta weight) it appears th at individ

ized consideration is not important (see Table

However, relative weights analysis suggests

it actually accounts for 18 of the predic ted

ance and is tied with con tingent reward lead

ship in terms of predictor impo rtance.

Discussion

Taken as a whole, the results from the curren

study clearly indicate that transformational l

ership behaviors are critically im portan t whe

considering team cohesion and team potency

cacy (Data Set 1) and leader effectiveness (D

Set 2). While transformational leadership is



me mo re salient. This finding is consistent

es of leadersh ip accounting for 36 of the

(see Table 3) and 18 of the

across samples and criteria, our results fur-

rly indicate that effective lead ers need to hav e

l range of leader beha vio rs to dra w from. For

y, transformational be hav iors a ppe ar mo st

pen den t Va riable = Ex tra Effort (R^ = .72)

transacfional behaviors take the forefront. We

observed this pattern of relafionships across bo

samples used in this study.

From a practical standpoint, the results of the c

rent study have implications for leadership trai

ing and deve lopm ent program s. The results of

this study provide more information regarding

the impact that contextual factors have on shap-

ing leadership processes. Addifionally, through

the use of dom inance analysis, the results inform

us which factors are most important for predict-

ing outcomes in a particular context. Given tha

training time is expensive, this last piece of info

mation could really facilitate the development o

training protocols geared towards developing

leaders for specific contexts.

Idealized Influence

Individual ized Considerat ion

Intellectual Stimulation

Confirigent Reward

Management-by-Except ion

Resu lts: Idealize d Influence

Impor tance

0.82

0.70

0.78

0.68

-0.33

0.46

0.00

0.27

0.16

-0.06

>D> Intellectual

Estimates

RS-Cj

0.32

0.18

0.27

0.18

0.04

1.00

Stimulation

Relative

3

2

4

5

1

5

2

3

4

Rankings

1

4

2

3

5

>D> Contingent R ew ard >D>

vidualized Consideration, M anagem ent-by-Exception

Bycio et al. (1995). rjy

=

zero o rder correlation; ßj

=

standardized regression coefficient; RS-C

timate, which is calculated by d ividin g the d om inance w eight (Cj) by m odel R^. RS-Cj can be in

) impo rtance estima te,



f baby-boom generation retire-

ent (Avolio, Avey & Quisenberry, 2010;

1997; Riggio, 2008). Inde ed, in the 2009

d retaining effective leaders at

. As a consequence,

t is viewed as a growth

arly ma ny different mea ns to

leadersh ip, effective leadersh ip devel-

ntation tha n w ith the actual choice of the rele-

2001;

Day Ha lpin, 2001;

Ruderman, 2010). One

l and strategic imperative for op timal organiza-

fectiveness is the emergence of best prac-

with regard to leader and leadership devel-

ent. Yet, a review of the literature sh ow s th at

are applied in business organizations

• Aligning leadership compe tencies with

business strategy

• Fostering innov ation, creativity, and

continuous improvement

• Recruiting, identifying and deve lopin

future talent and succession

• Executing and prom oting organizatio

strategy and change

• Building custom er and em ploye e loya

• Engaging in a suppo rtive organization

culture

• Eva luating the efficacy of leadersh ip

development initiatives and programs

Although this study represents a useful exten

of previous research, there are research quest

that remain unad dress ed. For example, the c

rent study, as well as the previous investigati

examining the impact of context on the leade

process, has only considered one variable at

time. Given that hu m an behavior is determi

by multiple elements, a useful area for future

research would be to examine the impact of m

tiple contextual variables concurrently.

Additionally, most of the research examining

transformational leadership process has focu

on the positive outcomes associated with tran

mational leader behaviors. While this work

incredibly useful, it does not consider the cau

of this behav ior. Thu s, anoth er area of futur

research could explore the various intraindiv

causes (e.g., personality, m otivation, values)

transforming behaviors.

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B.

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