Transformative Leadership (Change Agent) versus Transactional Leadership (Caretakers): Dr. Robert Weishan University College Cayman Islands Business Studies

Transformational vs. Transactional

Transformational leadership: as a process that motives people by appealing to higher ideals and moral values. changes organizational paradigms by defining new alternatives and by providing a compelling vision of the future. appeal to higher human motivations in order not only to better the organization (society) but to simultaneously add to the quality of life of its followers generate significant paradigm change through energy-producing actions (empowering the followers), which transactional leaders are unable to provide through operant conditioning or behaviour modification.

Transactional leaders: base their authority on their rank within the bureaucracy and their ability to maintain existing organizational standards. focus more narrowly on the organization’s tactical goals and immediate objectives. Transactional leaders strive for operational excellence, short-term results and work towards improving the status quo. checklists to prioritize their actions and rely on financial incentives to foster behaviors that lead to operational results. pride themselves as being problem solvers and crisis managers but they usually adhere to the management philosophy of, “If it is not broken, do not fix it,”. reactive rather than proactive let circumstances set the agenda for them.

President Bill Clinton Jack Welch

Characteristics of Transformational Leaders Communicating - compelling visions that evoke strong emotions Empowering- raise the followers’ idealized goals in order to “transcend” their own limited self-interests for the sake of a larger purpose, the greater good, and collective goals Motivation - ability to create shared vision, to articulate clear and meaningful common goals, and to empower followers/employees, based on the leader’s model of ethical and trustworthy behavior

Reward and Punishments - to gain compliance from their followers Extrinsic Motivators - that bring minimal compliance from followers. They accept goals, structure, and the culture of the existing organization Directive and Action-Oriented - work within existing systems and negotiate to attain goals of the organization. They tend to think inside the box when solving problems Characteristics of Transactional Leader

Transformational Leader “recognizes and exploits an existing need or demand of a potential follower… (and) looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower” … Burns

Transactional Leader: approaches followers with an eye to exchanging one thing for another … Burns

Cayman Islands

Today, more than ever, the Caribbean region needs home-grown transformational leadership to realign the economies of the Caribbean countries in order to confront a globalized economy with multi-polar power centres.

What is so bad about transactional leadership?

Creates the illusion of direction, purpose and control

What are the differences between Transformative Leaders and Transactional Leaders?

Transformational leadership  challenges conventional wisdom and questions existing paradigms  go right to the heart of the matter and they leverage new perspectives in order to produce new results heretofore considered impossible or unlikely  set in motion forces that shift the balance of power in a significant and enduring way

Who are Transformational Leaders: Warren Buffet: unconventional views on inheritance and his actions in line with those views Fidel Castro: he has kept Cuba free of US hegemony Martin Luther King Jr: steadfastly insisted on a non-violent social revolution Mohamed Yunus: he saw an urgent human need and he personally did something about it

Conclusions: Public organizations desperately need transformational leadership especially in these times of exceptional uncertainty, unchartered waters and sever economic stress.

 significant paradigm shifts  inspire people towards newer visions of the future  encourage businesses to pursue major organizational changes that are essential

“transformational leadership can be learned, and it can -- and should-- be the subject of management training and development”….Bass