Transformational vs. Democratic Leadership Styles

Leadership style refers to the approach and manner of implementing plans, providing directions and motivation of employees by the leaders within an organisation. According to the mentioned statement, transformational leadership which creates positive change among the followers with the end goal of turning them into leaders is referred to as the most effective leadership style. However, there are many other leadership styles being used by successful leaders to establish effective business by the organisation with which they are related. Therefore, the aim of the assignment is to compare and contrast two different leadership styles with transformational leadership to identify which of them is the most effective one in managing proper leadership within any organisation.

The Transformational leadership has the key approach to create change in individuals and social system where the leaders through consideration, motivation, stimulation and being idealised influence executes the change (Tepper et al. 2018). The fact is evident from the leadership style of Jeff Beoz who is called best transformational leader where he is the CEO of Amazon inspired and motivated employees to work efficiently by being an idealised influence on them on a regular basis regardless of their function, domain, role, target market or business model (hbr.org, 2017). This resulted Amazon to make profit by $3 billion with growth in revenue by 31% (www.annualreports.com, 2017). Therefore, it shows concept of transformational leadership within Jeff Beoz that led Amazon to achieve increased profit.

In contrast to transformational leadership style, the democratic leadership style is regarded to be an effective approach in leading organisation. As mentioned by Iqbal et al. (2015), in democratic leadership style the employees are seen to play a more participative role in helping the leaders finalise the decision. This feature is similar to democratic leadership style and it acts as an advantage as it boosts the morale of the employees because their inputs are valued by the leaders in making decision. It can be proved from the leadership account of Carlos Ghosn who being a democratic leader is seen to make final decision regarding way to resolve issues at work by consulting and exchanging opinions with the employees to develop better ideas and plan (group.renault.com, 2018).

The Autocratic leadership style is referred to be another potential approach to lead employees apart from transformational or democratic leadership style. As mentioned by Lopez and Ensari (2014), the autocratic leadership style is the approach in which all the decisions are controlled by the leaders and the team members or employees rarely have any inputs. In the case of Travis Kalanick, it is seen that while being the CEO of Uber he took decisions to run the organisation on his own without consulting with the subordinates or employees. This is because he thought the skills to take decision required to be remained with the specialists (Miller and Kendall, 2018). Therefore, this informs that Travis Kalanick follows autocratic leadership style in managing the organisation as he avoids involving subordinates in decision-making.

The advantage of being a transformational leader is that they create increased team engagement by inspiring the subordinates to be more productive at work therefore promoting enthusiasm at work. This means transformational leaders focus to inspire subordinates and leaves the details of decision-making for the workers (Engelen et al. 2015). This is seen in the work nature of Jeff Beoz who inspired teamwork within Amazon and inspired the subordinates to help them team of workers to take decisions regarding the way to work more productively in the organisation (www.forbes.com, 2013). It resulted to create enthusiasm among employees to work more effectively to deliver improved outcomes which is evident as Amazon earned $3 billion profit in 2017 (www.annualreports.com 2017). In contrast to this, in democratic leadership the leaders consult the employees before taking decision-actions and leave the authority of finalised actions for them (Smolović Jones et al. 2016). This is evident as Carol Goshn informed that he effectively consulted with the employees and others in the organisation to ensure the decision to enter the market of China is viable for them (asia.nikkei.com, 2017).

The transformation leadership has the advantage for the leaders in formulating quick vision as they are able to quickly assess the current situation of the organisation (Qu et al. 2015). The work of Jeff Beoz shows similar nature where he by continuously assessing the consumer’s needs and demands regarding products develops vision for the organisation and communicates them directly to the employees (www.cnbc.com, 2018). This helps the employees of Amazon to get informed about the goals to be fulfilled through their work. As asserted by Amanchukwu et al. (2015), Democratic leadership has the limitation of creating slow decision-making which is able to negatively affect business efficiency. In case of leadership by Carlos Ghosn, it is seen that since he prefers to consult with the employees before taking final decision which is the aspect of democratic leader delay in decision-making is experienced. It is evident from the account of entry into China market where Carlos Ghosn himself informed that their plan to enter the market is delayed due to time taken in restructuring the business actions to enter China (asia.nikkei.com, 2017). The aspect is negative in comparison to transformational leadership where the vision and decision by the leaders are developed in a faster way.

The limitation of transformation leadership is that subordinates doubt that the leaders may lack proper leadership skills in leading practical situation and need assistance from the staffs (Boehm et al. 2015). This is because in the transformational leadership the leaders are seen to inspire subordinates and leave the final decision to be taken by the employees at work. However, in case of Jeff Beoz, he is seen to have excellent managerial and leading skills due to which he takes faster and better decision with the help of the employees and do not leave the entire decision to be taken by his subordinates. This had helped him to maintain an innovative business environment within Amazon in all condition as reported by Forbes (www.forbes.com, 2015). In comparison to this aspect of transformational leadership, in the Democratic leadership style, the employees believe the efficiency of their leaders which help to make easier changes within the organisation (Kaiser, 2017). This is evident as in Renault-Nissan Carlos Ghosn is seen to be able to easily implement changes in the company in an easier way as the employees show better consideration to adapt to the changes and believe the efficiency of the leaders (group.renault.com, 2018). This aspect of leadership has lead Renault-Nissan to adapt quickly to the changes in the automobile industry which led them to execute record sales of 3.76 million vehicles in 2017 (group.renault.com, 2017). Therefore, in this respect though the theoretical aspect shows that the transformational leadership is in a disadvantageous position in comparison to democratic leadership yet the practical implementation of leadership by the leaders shows both of them to achieve success.

In comparison to transformational leadership, where leaders accepts inputs as well as include employees in decision-making in the autocratic leadership style the leaders avoids taking inputs from employees and subordinates. This acts as a disadvantage because it results employees to feel lack of value which develops a bad relation between leaders and employees (Amah, 2017). Travis Kalanick being an autocratic leader is seen to avoid input from employees in making decision which results him to face lack of support and conflicting relation with the employees (www.npr.org, 2017). Therefore, in this aspect, transformational and democratic leadership are better than autocratic leadership because they allow input from employees and approves teamwork which results in selecting the best decisions to manage business. In transformational leadership, the work culture is developed on the basis of the leader and the employees (Smolović Jones et al. 2016). However, in the autocratic leadership style the work culture is developed on the basis of the leader (Lopez and Ensari, 2014). (Refer to Appendix 1)

Therefore, on comparing the aspects of transformational, democratic and autocratic leadership style it can be perceived that transformation leadership is the best style of leadership. This is because using authoritative leadership leads to lack of value to the employees and negative work culture. However, transformational leadership leads to offer proper value to the employees that help them to provide more efficiency at work and trust the leader that the person is directing them in a proper way as seen from the leadership account of Jeff Beoz. Transformational leadership is better than democratic leadership style because it helps the leaders in making quick decision and vision regarding way to execute business. This is evident from the leadership account of Jeff Beoz where being a transformational leader he was able to making quick vision for the organisation to make faster decision in executing business activities. However, Carlos Ghosn being a democratic leader was making slower decision as he required involving all employees while making decision that led him to make slower entry into China reducing their business efficiency. Therefore, the given statement is true that the transformational leadership style is the best leadership form for leaders in business.

References

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