What are the critical factors in understanding the nature and dimensions of leadership?


Many people do not differentiate between leader and manager. Indeed, in the writer’s view, there is a big overlap betweenleadershipand management especially in his country.

Up to date, there is still no full understanding of what leadership is, nor is there an agreement on what good or effective leadership should be. The most popular leadership theories that have been discussed by researchers include charismatic, transactional, transformational and servant leadership (Smith, Montagno & Kuzmenko, 2004).

Boehnke et al, (2003) stated that it is essential to make a distinction between the concept of leadership and the concept of management. Also, “ the convergence of a series of contemporary forces, theglobalizationof markets, the increasing rates of competitive pressure, and the flattening of organizational structures has increased the distinction between leadership and management” (Steingraber, 1996, cited in Ahn, Adamson & Dornbusch, 2004, p. 114).

Kotler, (1990, 1996) (cited in Ahn, Adamson & Dornbusch, 2004, p. 114) argued that a leader defines “ what the future should look like, aligns the organization with a common vision, and provides inspiration to achieve transformationalgoals”. Kotter (1988) (cited in Barker, 2001, p. 477) defined leadership as “ the process of moving a group (or groups) of people in some direction through (mostly) noncoercive means”. He acknowledged that the word leadership sometimes refers to people who occupy the roles where leadership by the first definition is expected. He then characterized good or effective leadership as a process that moves people in a direction that is genuinely in their real long-term best interests.

Zaleznik, 1977 (cited in Boehnke et al, 2003, p. 5) viewed the influence of leaders as “ altering moods, evoking images and expectations, and in establishing specific desires and objectives”.

Gemmill and Oakley (1992) (cited in Barker, 2001, p. 491) defined leadership as “ a process of dynamic collaboration, where individuals and organization members authorize themselves and others to interact in ways that experiment with new forms of intellectual and emotional meaning. This definition was offered as a remedy to the view of leadership based on the traits of the leader, which functions as a means for followers to avoidresponsibilityand initiative”.

Nicholls, 1987 (cited in Boehnke et al, 2003, p. 5) defined management by saying that “ Management can get things done through others by the traditional activities of planning, organizing, monitoring and controlling without worrying too much what goes on inside people’s heads”.

Conversion of knowledge into competitive advantages, can be facilitated if leaders provide vision, motivation, systems and structures at all levels of the organization (Bryant, 2003).

“ Managing knowledge requires a conscious effort on the part of leaders at all levels of organization to manage three key knowledge processes: creating, sharing and exploiting knowledge. Transformational leadership theory and transactional leadership theory provide a foundation for understanding how leaders impact the cultivation of knowledge” (Bryant, 2003, p. 32).

“ Organizations can produce exceptional performance through effective leadership” (Boehnke et al, 2003, p. 14).

The aim of this assignment is to look at the nature and dimensions of leadership. Leadership will be critically analysed in order to present the respective merits of various way of understanding leadership, beginning with a Literature on transactional and transformational leadership approaches will be reviewed, compared and contrasted. Then look at the role theory model, in order to illustrate the nature of leaders and to understand transactional-transformational continuum along which managers position themselves. Covey and Collin’s perspective on leadership will be explained in order to give a clear idea of the nature of leadership.

Transactional and transformational Leadership

Burns (1978) stated that the transactional leader uses rewards and punishment to motivate his followers and focuses on routine performance which is agreed between him and his followers. The transformational leader, in contrast, is charismatic and inspirational motivating his team to strive to achieve a shared vision. He is concerned for his followers’ interests, stimulates awareness and acceptance of the purposes and mission of the group and helps his followers to set aside their own self interest for the sake of the wider goal (Yammarino et al 1997).

According to Boehnke et al (2003, p. 5) “ Transactional leadership is described as a series of exchanges and bargains between leaders and followers, transformational leadership goes beyond exchanging inducements for desired performance by developing, intellectually stimulating, and inspiring followers to transcend their own self-interests for a higher collective purpose”.

“ Transformational leadership is associated with strong personal identification with the leader, the creation of a shared vision of the future, and a relationship between leaders and followers based on far more than just the simple exchange of rewards for compliance. Transformational leaders define the need for change, create new visions, mobilize commitment to these visions and transform individual followers and even organizations. The ability of the leader to articulate an attractive vision of a possible future is a core element of transformational leadership. Such leaders display charisma and self-confidence. While a leader’s charisma may attract subordinates to a vision or mission, providing individualized consideration and support is also needed to gain desired results and helps individual subordinates achieve their fullest potential. Individualized consideration implies treating each individual as valuable and unique, and aiming to aid his or her personal development. It is in part coaching and mentoring provides for continuous feedback and links the individual’s current needs to the organization’s mission” (Keegan et al, 2004, p. 609).

In Burns’ (1978) view, the old style of transactional leadership is no longer appropriate and that today’s organizations need transformational leadership.

A transformational leader tends to have a charismaticpersonalitywhich he uses to install vision and a sense of mission. He gives subordinates pride in their work and organization, and earns theirrespectand trust. He motivates employees by communicating high expectations, uses symbols to focus efforts, and simplification for important purposes. He also offers intellectual stimulation, encouraging intelligence, rationality, and problem-solving skills (Bass, 1990).

In contrast, the managing style transactional leaders are more tied to the prevailing system orculture. They tend to avoid risk, and focus more on process than substance as a means for maintaining control (Bass, 1990; Bryant, 2003).

In the writer’s opinion this has advantages and disadvantages. The positive side is that it avoids any attempt to breech the procedures and could prevent unethical behaviour. On the other hand, it deprives employees of the right of self-thinking and creativity, which could have a great impact on organization goals.

Yukl (1989) asserted the need for leaders to have a certain amount of power, because if they do not have enough position power to make necessary changes, or to reward or punish subordinates, it will difficult for them to achieve a high performance. Therefore, it is preferable for a leader to have at least a reasonable amount of position power and some capacity to influence the group by offering benefits and facilitating their work.

Leader Behaviours

Many leaders within the same objective context demonstrate different levels of transformational and transactional leadership, according to Shivers-Blackwell (2004). He stated that leadershipbehaviour couldbe influenced by objective organizational context, and interpretations of context shape leader behaviour. Therefore, he used Merton’s (1957) role theory model in examining how managers assimilate context as creating expectations for their role as leaders and how to understanding their use of transformational and transactional leadership behaviours.

Organizational Structure

Burns & Stalker (1961) (cited in Shivers-Blackwell, 2004) suggested that organization structure could make a difference in leader behaviours. Bass (1985) (cited in Shivers-Blackwell, 2004) argued that transformational leadership is suitable for organic organizations with less bureaucratic environments, whereas managers in mechanistic environments are preferred to engage in more transactional behaviours. Shivers-Blackwell (2004, p. 43) summarized that “ the more a manager interprets structure as organic, the more likely the manager is to interpret transformational leadership role requirements, and the less likely he/she is to interpret transactional leadership role requirements”.

Organizational Culture

According to Schneider & Gunnarson (1991) (cited in Shivers-Blackwell, 2004) many different cultures can exist in organizations, because practices, procedures and rewards can be focused on various goals and objectives.

Bass & Avolio (1994) (cited in Shivers-Blackwell, 2004, p. 44) stated that “ a purely transactional culture is one that focus on explicit and implicit contractual relationships. Job assignments are defined along with conditions of employment, disciplinary codes, and benefit structures. Commitments are described as being short-term, and individual rewards are contingent upon performance. Management-by-expectation is actively practiced, and employees work as independently as possible from their colleagues”.

In contrast, a purely transformational culture has a general sense of purpose and a feeling offamily. Employees have the role of sharing destiny and interdependence across vertical hierarchies and commitments are seen to be long-term. Superiors serve as mentors, role models and leaders, and there is much talk at all levels within the organization about purposes, vision, and meeting challenges (Shivers-Blackwell, 2004).

Shivers-Blackwell (2004, p. 44) summarized that “ the more a manager interprets culture as a transformational, the more likely the manager is to interpret transformational leadership role requirements, and the less likely he/she is to interpret transactional leadership role requirements”.

Role Expectations andCommunicationby Superiors

Bass (1985) (cited in Shivers-Blackwell, 2004) affirmed that leadership is a two-way process between leaders and followers. He pointed out that Leaders’ behaviours are affected by the degree that a manager identifies with his reference group (superiors, subordinates and peers). Dienesch and Liden (1986) (cited in Shivers-Blackwell, 2004) stated that due to the hierarchical nature of organizations, the manager’s immediate supervisor is likely to be an extremely influential role sender. Thus, the manager is more likely to conform to his/her role expectations.

In the writer’s view, the above argument is consistent with the view that: transformational leaders usually work towards increasing the level of knowledge and awareness of their subordinates. Also, learning, mentoring and support are included. These leaders considere this as a core transformational behaviour, because it enhances subordinates’ skills and self-efficacy (Yukl, 1999). Moreover, their followers would be motivated in order to give more than expected, by increasing their sense of the importance and value of their tasks, stimulating them to sacrifice their own interests and direct themselves to the interests of the team (Burns, 1978; Bass, 1985, 1995).

Shivers-Blackwell (2004, p. 45) summarized that “ the more a manager interprets superior role expectations to be transformational, the more likely the manager is to interpret transformational leadership role requirements, and the less likely he/she is to interpret transactional leadership role requirements”.


Leaders’ personality may result in the formation of either transformational or transactional leadership styles (Shivers-Blackwell, 2004).

Pillai (1995) (cited in Shivers-Blackwell, 2004) argued that personality characteristics (e. g., locus of control, narcissism, self-monitoring, risk-taking, need for power) and organizational context may influence leader behaviours.

Self-monitoring has a moderating impact on leader behaviour (Shivers-Blackwell, 2004).

Anderson & Thacker (1985) (cited in Shivers-Blackwell, 2004) stated that whether the exhibited behaviour is congruent with inner feelings, attitudes, or emotions, a high self-monitoring manager has an effective role and the ability to adapt his behaviour according to role. In contrast, low self-monitoring managers are likely to use internal beliefs as behaviour guidelines and they are unaware that such behaviour is against their effectiveness. They are insensitive to structural and cultural role expectations and pressures exerted by the organization. Therefore, it is conceivable that low self-monitoring managers in more organic structures and transformational cultures will exhibit transactional behaviours (Shivers-Blackwell, 2004).

Shivers-Blackwell (2004) summarized that when self-monitoring is high rather than low the relationship between interpretations of structure, culture and superior’s expectations and perceived leadership role requirements will be stronger. Also, he mentioned that when locus of control is external rather than internal, the relationship between interpretations of structure, culture and superior expectations and perceived leadership role requirements will be stronger.

This role theory explains how the impact on leaders’ behaviours of organizational context, the sensitivity of leaders’ personalities to various contexts, leaders’ tendency to adjust their leadership behaviours regardless of context and why different leaders within the same context do not behave in the same way. Specifically, for managers who possess an external locus of control orientation and managers who are high self-monitors the way they interpret their role requirements along the transactional-transformational continuum may be influenced by their perceptions of the organization’s objective context (see figure 1) (Shivers-Blackwell, 2004).

S-M: Self-Monitoring, LOC: Locus of Control

Figure 1 A Role Model of Transformational and Transactional Leader Behaviour

Cited fromShivers-Blackwell, 2004, p. 48

The Writer’s Experience:

Transactional leaders accept and do not change the culture of an organization, and work within the prevailing belief system, language, rules, regulations and procedures, while, transformational leaders change the culture by presenting new values and goals (Eisenbach et al, 1999).

Transactional leaders usually use disciplinary threats to increase employees’ performance. This technique is ineffective and, it may cause loss of morale and have a negative impact on followers (Burns, 1978; Bass, 1985). On the other hand, a transformational leader are inspires subordinates with his/her personality and vision, stimulating then to exert performance that exceeds expectation (Epitropaki & Martin, 2005).

The writer has experienced similar differences of leadership style in his company. The previous managing director (who came from anacademicbackground) kept the company’s existing culture. He used rewards and punishment to motivate the employees, and focused on work routine by concentrating on rules, regulations and procedures. His approach was to concentrate on a target to be achieved by whatever means (transactional culture). Therefore, most of the company’s managers became transactional leaders, (supporting the view of Shivers-Blackwell (2004) that leadership behaviour could be “ influenced by objective organizational context”) and that a transactional culture is one that focuses on explicit and implicit contractual relationships. Most of the times he puts employees under pressure, using disciplinary threats in order to achieve a high level of performance. Therefore, employees lost morale and confidence and this affected the progress of the company. However, the new managing director changed company’s culture by lunching new beliefs and goals. He created a new atmosphere, a culture of shared decision making, and new ideas on how to lead the company in an attractive way. He displayed charisma and self-confidence. By this charisma, he attracted subordinates to the required tasks. Therefore, a transformational culture was generated. This supports what Shivers-Blackwell’s (2004) argument, that transformational culture has a general sense of purpose and a feeling of family. Employees have the role of sharing destiny and interdependence across vertical hierarchies and commitments are seen to be long-term.

Some writers (e. g., Bass 1990) suggest that organizations are less effective if their leaders are transactional and those whose leaders are transformational are more effective.

Shivers-Blackwell (2004) claim that leadership behaviour could be influenced by objective organizational context, and by leaders’ interpretations of that context, can be illustrated by what happened in one of the projects in the writer’s company. The project manager of one of the company’s projects used a transactional leadership approach (because he was influenced by the previous director). He used power based on his position and the ability to reward and punish. He exchanged something that he wanted for something the followers wanted. On many occasions, he focused strictly on rules, standards, procedures and specifications and was inflexible, allowing no divergence. This was at the expense of most of the project’s employees, who lost morale and self-creativity. Therefore, the project’s progress was affected. The project manager’s leadership behaviour was affected by the company’s situation, as he was put under pressure to increase project progress in order to gain competitive advantage against the company’s rivals. Also, it could be said that the company culture was responsible for this leader behaviour, because he was driven by company goals.

Therefore, Shivers-Blackwell (2004, p. 46)argued that “ some persons will experience organizational role expectations and role pressures differently from others, which ultimately leads them to utilize different leadership behaviours within the same context”.

Collins, View:

Collins argues that “ the key ingredient that allows a company to become great is having a Level 5 leader: an executive in whom genuine personal humility blends with intense professional will” (Collins, 2005, p. 136).

Collins discovered keys for turning a good company into a great one, like the type of leadership needed, the importance of transcending the curse of competence, the results that come from combining a culture of discipline with an ethic of entrepreneurship and the dangers of radical restructurings (Collins, 2002).

He stated that “ Smith’s turnaround of Kimberly-Clark is one the best examples in the twentieth century of a leader taking a company from merely good to truly great” (Collins, 2005, p. 136).

Darwin Smith was a good example of a Level 5 leader who combines extreme personal humility with intense professional will. Smith shunned the spot-light, preferring to direct attention to the company and its people. He was shy and self-effacing. He made the big decisions required to make the company great. During his tenure as a CEO, his company, Kimberly-Clark, became the number one paper-based consumer products company in the world, and owned outright its previous main competitor, Scott Paper. Collins stated that other persons did the same thing to their companies as Smith did. They acquired all the five levels of leadership, plus an extra dimension, a paradoxical blend of personal humility and professional will. They are self-effacing individuals who deflect adulation, yet who resolve to do anything towards the greatness of their companies, channelling their ego needs away from themselves and into goal of building a great company.

Collins ascribed this success to level 5 leaders and stated that level 5 leadership is essential to take companies from good to great (Collins, 2002).

Collins stated that in order for company to gain level 5 leaders, it has to: (Collins, 2002, p. 3).

Stop looking for outsized personalities and egocentric celebrities, and instead to scrutinize for results.
Look inside to see where extraordinary results are being produced but where no single person is taking excessive credit for those results.

In addition to the above, level 5 leaders must have the following traits:

Catalysts in creating superb (professional will).
Compelling modesty, shunning public adulation and never boasting (personal humility).
Unwavering resolve to do whatever must be done to produce the best long-term results (professional will).
Act with quite, calm determination and rely principally on inspired standards-not an inspiring personality-to motivate (personal humility).
Set the standard of building an enduring great organization and be prepared to settle for nothing less (professional will).
Channel ambition into the organization and its work, setting up successors for even greater success (personal humility).
Look in the mirror, not out of the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck (personal humility).
Look out of the window, not in the mirror, to apportion credit for the success of the company-to other people, external factors, and good luck (professional will).

In Collins’s (2002, p. 3) view “ Virtually everything our culture believes about the leadership required to transform our institutions is wrong and dangerous”.

He warned against what he saw as a prevailing problem in our culture, the adoptation of the idea of the celebrity CEO. In this culture, it is behaved that a high-profile, larger-than-life leader is required to make a company great. Our culture has evolved away from level 5 leadership. In the 1990s the idea of irrational exuberance was embraced and people were encouraged to think that they could-indeed should-amass a fortune quickly by creating companies not built to last. He argues that culture was neither right nor healthy, and we should have rejected it.

Misguided confusion of celebrity and leadership still exists, but Collins argues that if we allow the celebrity rock-star model of leadership to triumph, we will see very few enduring great organizations(Collins, 2002, p. 3).

Covey’s View:

According to Covey (2006), about 90 percent of the problems in organizations are ascribed to bad systems and only about 10 percent are specific problems with people. Many managers have misconstrued this, supposing that if they correct the structure and systems, the problems with people (programmers) will go away. The reverse is actually true: If the 10 percent are corrected first, the other problems will go away. This is because people are the programmers, and the systems and organizational structure they design are the superficial expressions of their own character and competence, their own paradigms of management.

People are essentially seen as things needing to be controlled, managed and supervised. Good management skills are still very important for the day to day, but successful management of any organization must begin with effective leadership. He developed a framework of the 4 Roles of Leadership, which, he argued, delivers the tools, processes, and context to lead successfully even in a time of turbulent change. (www. depts. ttu. edu)

The globalization of markets andtechnologyhas exponentially increased competition and the need for speed and innovation. Succeeding in a world of change and competition can be challenging. New technology and services are important to adapt to change and to challenge the competition. Before technology, however, comes leadership, the guide to set the required direction and get results that meet changing circumstances and needs and not only to sacrifice emotional and spiritual connection, but to enable people to tap into and employ them at greater levels to become increasingly relevant in today’s world of enormous challenge and opportunity. The 4 Roles of Leadership are designed to help today’s managers on day-to-day business. The model provides them with real, practical tools which can be used in the everyday leadership challenges that face a manager. These tools strengthen leadership behaviours, transforming capable managers into leaders whom others trust and want to follow (Covey, 2006). The four roles of Covey’s model are as follow:


Building Trust with Others. The first step of modelling is for the leader to develop his/her own personal mission statement, and start living by it inside his/her small circle of influence. Modelling means living and leading by principles, sharing competence and integrity in order to inspire character and competence in others. Leaders should build high levels of interpersonal trust, by modeling ethical behaviour and personal integrity, inspiring others to follow by their example. People will only trust those who understand and live by principles (Heffes, 2006)


The second role is Pathfinding. Pathfinding is the ability to link what the organization is passionate about delivering with what customers are passionate about getting. The leader needs to focus on working with his/her team to develop a mission statement. Covey (2006) urges leaders to find voice and strength, and also be aware of weakness so it can be compensated with the strength of others, so a complementary team will be developed. This means the leader has to be humble and open, and also be strong and courageous (Covey, 2006)


The third role is Aligning. The leader has to structure his systems and processes to be totally in harmony with the strategic criteria of the pathfinding. He or she must work with others to translate important organizational strategy into the essential work that must be done. Also, the leader has to remove obstacles which prevent others from executing their highest priorities. Aligning really means that a leader has to look at how he or she recruits, selects, trains, develops and compensates. It is about how the leader organizes the structure to make these principles sustainable(Covey, 2006)


The fourth role is empowering. The role of empowering means releasing the talent, energy, and contribution of people so leaders can travel the path. Trust could be achieved by true empowerment, where people have found their voice and are empowered and accountable. One of the systems leaders must align isaccountability, and then people are given “ directed autonomy”. The leaders should then create the conditions that foster and release subordinates’ creativity, ability and potential. Good leaders build strong teams, encourage productive communication between individuals and teams and manage performance effectively (Covey, 2006).


The writer concludes that leadership style is based on the leader’s personal relationship with the followers, the degree of structure in the task and the power and authority inherent in the leader’s position (Tannenbaum and Schmidt, 1973 (cited in Toff, 2001).

It is concluded that managers should be equipped with transformational leadership techniques in order to identify subordinates’ strengths, set accurate and reasonable expectations, develop and motivate followers to perform beyond their expectations.

It is said that transactional leaders usually do not interfere or take any action until things go wrong (Bass, 1985). However, in the writer’s experience and the cases described above, transactional leaders do interfere in the work processes.

Keely (1995) said that as transformational leadership has a positive side to influence the organization, it also has a negative side, as such leaders can drive people who believe in them to achieve their personal goals or towards unethical routes, because of the abuse of power.

In Collins’ view, skills and personality traits are necessary for effective leaders in order build strong organizations and direct them on the right way.

Covey’s approach shows that leadership also requires establishing high trust in the team or organization, following principles and well-defined goals, to achieve integrity.

According to Covey’s concept, a very important thing that each organization must consider is when people make their personal interest their priority; the goal of personal achievement replaces a sense of contribution. Therefore, ego will be raised.

By adopting Covey’s four role of leadership, organizations can create a good blueprint for action and leaders can ensure that their plans have integrity before they act.



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Burns, J. M. (1978), Leadership, New York, Harper & Row.

Toft, A. (2001), Corporate Leadership and Change Management, MBA Study Guide. The Business School, University of Hull. UK

Journal Articles:

Ahn, M. J., Adamson, J. S. A. & Dornbusch, D., (2004), ‘ From Leaders to Leadership: Managing Change’, Journal of Leadership & Organizational Studies, 10, 4, 112-123.

Barker, R. A., (2001), ‘ The Nature of Leadership’, Human Relation, 54, 4, 469-494.

Bass, B. M., (1990), ‘ From Transactional to transformational leadership: Learning to Share the Vision‘, Organizational Dynamics, 18, 3, 19-31.
Bass, B. M., (1995), ‘ Transformational Leadership Redux’, Leadership Quarterly, 6, 4, 463-478.

Boehnke, K., Bontis, N., DiStefano, J. J. & DiStefano, A. C., (2003), ‘ Transformational leadership: An examination of cross-national differences and Similarities’, Leadership & Organization Development Journal, 24, 1/2, 5-15.

Bryant, S. E., (2003), ‘ The role of transformational and transactional leadership in creating, sharing and Exploiting Organizational Knowledge’, Journal of Leadership & Organizational Studies, 9, 4, 32-44.

Collins, J., (2005), ‘ Level 5 Leadership: The Triumph of Humility and Fierce Resolve’, HarvardBusiness Review, 83, 7/8, 136-146.

Collins, J., (2002), ‘ The Misguided Mix-Up’, Executive Excellence, 19, 12, 3-4.

Covey, S., (2006), ‘ Power to the People’, Business Source Premier, 43, 4.

Heffes, E. M., (2006), ‘ Stephen Covey on Managing Yourself and Others’, Financial Executive, 22, 1, 22-25.

Eisenbach, R., Watson, K. and Rajnandini, P., (1999), ‘ Transformational Leadership in the Context of Organization Change’, Journal of Organizational Management Change, 12, 2, 80-88.

Epitropaki, O. & Martin, R., (2005), ‘ The Moderating Role of Individual Differences in the Relation Between Transformational/Transactional Leadership Perceptions and Organizational Identification’, The Leadership Quarterly, 16, 4 , 569-589.

Keegan, A. E., Deanne, N. & Hartog, D., (2004), ‘ Transformational Leadership in a Project-basedEnvironment: a Comparative Study of the Leadership Styles of Project Managers and Line Managers’, International Journal of Project Management, 22, 609-617.

Keely, M., (1995), ‘ The Trouble with Transformational Leadership: Toward Federalist Ethic in Organizations’, Business Ethics Quarterly, 5, 1, 67-96.

Shivers-Blackwell, S. L., (2004), ‘ Using Role Theory to Examine Determinants of Transformational and Transactional Leader Behavour’, Journal of Leadership & Organizational Studies, 10, 3, 41-50.

Yammarino, F. J., Dubinsky, A. J., Comer, L. B. and Jolson, M. A., (1997), ‘ Woman and Transformational and Contingent Reward Leadership: A Multiple –Levels of Analyses’, Academy of Management Journal, 40, 1, 205-218.

Yukl, G., (1999),‘ An Evaluation of Conceptual Weaknesses in Transformational and Charismatic Leadership Theories’, Leadership Quarterly, 10, 2, 285–305.


, accessed 10/04/07.