The transformational leader uses charisma, individualized consideration, and

intellectual stimulation to inspire employees to make extraordinary efforts.

Leadership:
Good, Betteu,Best

Bernard M. Bass

w
I
hat does Lee Iacocca have that many other ex-
ecutives lack? Charisma. What would have
happened to Chrysler without him? It proba-
been customary to see leadership as a method
of getting subordinates to meet job require-
ments by handing out rewards or punish-
bly would have gone bankrupt. Here are two ments.
more questions: How much does business Take a look at Barry Bargainer.
and industry encourage the emergence of Barry considers himself to be a good leader.
leaders like Iacocca? And how much effort He meets with subordinates to clarify ex-
has organizational psychology put into re- pectations- what is required of them and
search on charismatic leadership? The an- what they can expect in return. As long as
swers are that business and industry have they meet his expectations, Barry doesn’t
usually discouraged charismatic leadership bother them.
and that, for the most part, organizational Cynthia Changer is a different kind
psychology has ignored the subject. It has of leader. When facing a crisis, Cynthia in-

This article is a digest of portions of the author’s forthcoming book, Leadership and Performance Beyond Expectations,
26 to be published in March 1985, by The Free Press. 63 1985 The Free Press. All rights reserved.
spires her team’s involvement and participa- lations-oriented, and considerate leadership.
tion in a “mission.” She solidifies it with sim- Contingent rewards have been stressed in
ple words and images and keeps reminding training and research with somewhat limited
her staff about it. She has frequent one-to- results.
one chats with each of her employees at his In the past, we have mostly consid-
or her work station. She is consultant, ered how to marginally improve and main-
coach, teacher, and mother figure. tain the quantity or quality of performance,
Barry Bargainer, a transactional how to substitute one goal for another, how
leader, may inspire a reasonable degree of in- to shift attention from one action to another,
volvement, loyalty, commitment, and perfor- how to reduce resistance to particular ac-
mance from his subordinates. But Cynthia tions, or how to implement decisions. But
Changer, using a transformational approach, higher-order changes are also possible. In-
can do much more. creases in effort and the rate at which a
The first part of this article contrasts group’s speed and accuracy improve can
transactional and transformational leader- sometimes be accelerated. Such higher-order
ship styles and the results that are obtained changes also may involve larger shifts in atti-
when managers select each approach. The tudes, beliefs, values, and needs. Quantum
second section reports on surveys of person- leaps in performance may result when a
nel in the military and in industry and ex- group is roused out of its despair by a leader
amines factors in both approaches to leader- with innovative or revolutionary ideas and a
ship, as they emerged from the survey results. vision of future possibilities. Leaders may
Transformational leadership is presented as a help bring about a radical shift in attention.
way to augment transactional approaches to The context may be changed by leaders. They
management, since it is often more effective may change what the followers see as figure
in achieving higher levels of improvement and what they see as ground or raise the level
and change among employees. of maturity of their needs and wants. For ex-
ample, followers’ concerns may be elevated
from their need for safety and security to
A NEW PARADIGM their need for recognition and achievement.
The lower order of improvement-
For half a century, leadership research has changes in degree or marginal improve-
been devoted to studying the effects of ment-can be seen as the result of leadership
democratic and autocratic approaches. Much that is an exchange process: a transaction in
investigative time has gone into the question which followers’ needs are met if their perfor-
of who should decide - the leader or the led. mance measures up to their explicit or im-
Equally important to research has been the plicit contracts with their leader. But higher-
distinction between task orientation and rela- order improvement calls for transformational
tions orientation. Still another issue has been leadership. There is a great deal of difference
the need of the leader to “initiate structure” between the two types of leadership.
for subordinates and to be considerate of
them. At the same time, increasing attention
has been paid to the ability to promote TRANSACTIONAL LEADERSHIP IN ACTION
change in individuals, groups, and organiza-
tions. Transactional leaders like Barry Bargainer
The need to promote change and recognize what actions subordinates must
deal with resistance to it has, in turn, put an take to achieve outcomes. Transactional
emphasis on democratic, participative, re- leaders clarify these role and task require- 27
 ments for their subordinates so that they are
confident in exerting necessary efforts. Trans-
actional leaders also recognize subordinates’
needs and wants and clarify how they will be
satisfied if necessary efforts are made. (See
Exhibit 1.) This approach is currently stressed
in leadership training, and it is good as far as
it goes; however, the transactional approach
has numerous shortcomings.
First, even after training, managers
do not fully utilize transactional leadership.
Time pressures, poor appraisal methods, Bernard M. Bass is professor of organizational
doubts about the efficacy of positive rein- behavior at the State University of New York
forcement, leader and subordinate discom- at Binghamton. He is past president of the Di-
vision of Organizational Psychology of the In-
fort with the method, and lack of manage-
ternational Association of Applied Psychology.
ment skills are all partly responsible. How Dr. Buss is author of several hundred pub-
reinforcements are scheduled, how timely lications. Books that he has authored or co-
they are, and how variable or consistent they authored include Leadership, Psychology, and
are all mediate the degree of their influence. Organizational Behavior (Harper, 1960); Psy-
Some leaders, practicing manage- chology of Learning for Managers (American
Foundation for Management Research, 1964);
ment by exception, intervene only when Organizational Psychology (A12yn 0 Bacon,
things go wrong. In this instance, the 1965); Training in Industry: The Management
manager’s discomfort about giving negative of Learning (Wadsworth, 1966); Assessment of
feedback is even more self-defeating. When Managers: An International Comparison (The
surpervisors attribute poor performance to Free Press, 1979); People, Work, and Organiza-
tions (Allyn & Bacon, 1981); Stogdill’s Hand-
lack of ability, they tend to “pull their
book of Leadership (The Free Press, 1982); In-
punches” by distorting feedback so that it is terpersonal Communication in Organizations
more positive than it should be. (Academic Press, 1982); Organizational Deci-
Another common problem occurs sion Making (Richard D. Irwin, 1983); and
when supervisors say and actually believe Leadership and Performance Beyond Expecta-
tions (Free Press, 1985).
they are giving feedback to their subor-
The author has consulted with many of the
dinates, who feel they are not receiving it. For
Fortune 500 companies and has lectured and
example, Barry Bargainer may meet with his conducted management workshops in over 40
group of subordinates to complain that things countries.
are not going well. Barry thinks he is giving
negative feedback while his subordinates
only hear Barry grumbling about conditions.
Barry may give Henry a pat on the back for enced subordinates generally are likely to be
a job he thinks has been well done. Henry self-reinforcing. They may say: “If I have
may feel that he knows he did a good job, and done something well, I know it without other
it was condescending for Barry to mention it. people telling me so,” and “As long as I think
People differ considerably in their that I have done something well, I am not too
preference for external reinforcement or self- concerned about what other people think I
28 reinforcement. Task-oriented and experi- have done.”
 Subordinates and supervisors at- plary; in the top third of such Japanese firms
tach differing importance to various kinds of as Toyota, Sony, and Mitsubishi, employees
feedback. Many subordinates attach more and the companies feel a mutual sense of life-
importance than do supervisors to their own time obligation. Being a good family member
success or failure with particular tasks, and to does not bring immediate pay raises and pro-
their own comparisons with the work of motions, but overall family success will bring
others. Subordinates are also likely to attach year-end bonuses. Ultimately, opportunities
more importance than do supervisors to co- to advance to a higher level and salary will
workers’ comments about their work. Super- depend on overall meritorious performance.
visors tend to put the most weight on their When the contingent reinforcement
own comments to their subordinates, and to used is aversive (reinforcement that recipients
recommendations for rewards they, as super- prefer to avoid), the success of the transac-
visors, can make, such as raises, promotions, tional leader usually plummets. In the same
and more interesting assignments. not-for-profit organization studied by Pod-
Transactional leadership often fails sakoff et al., neither contingent reprimand,
because the leaders lack the reputation for be- disapproval, nor punishment had any effect
ing able to deliver rewards. Transactional on performance or overall employee satisfac-
leaders who fulfill the self-interested expecta- tion. The same results have been observed in
tions of their subordinates gain and maintain other organizations. Contingent approval
the reputation for being able to deliver pay, and disapproval by results-oriented leaders
promotions, and recognition. Those that fail did improve subordinates’ understanding of
to deliver lose their reputation and are not what was expected of them but failed to have
considered to be effective leaders. much effect on motivation or performance.
Transactional leadership may be In general, reprimand may be useful in high-
abandoned by managers when noncontingent lighting what not to do, but usually it does
rewards (employees are treated well, regard- not contribute to positive motivation, partic-
less of performance) will work just as well to ularly when subordinates are expected to be
boost performance. For example, in a large, innovative and creative.
nonprofit organization, a study by Phillip Even when it is based solely on re-
Podsakoff et al. showed that contingent re- wards, transactional leadership can have
wards (those given only if performance war- unintended consequences. When expounding
rants them) did contribute to employee per- on the principles of leadership, Vice Admiral
formance, but noncontingent rewards were James B. Stockdale argued that people do not
correlated almost as strongly with perfor- like to be programmed:
mance as contingent rewards. . . You cannot persuade [people] to act in their own
Noncontingent rewards may pro- self-interest all of the time. A good leader appreciates
vide a secure situation in which employees’ contrariness.
self-reinforcement serves as a consequence . . some men all of the time and all men some of
for good performance (for example, IBM’s the time knowingly will do what is clearly to their
straight salaries for all employees). An em- disadvantage if only because they do not like to be
ployee’s feeling of obligation to the organiza- suffocated by carrot-and-stick coercion. I will not be
a piano key; I will not bow to the tyranny of reason.
tion for providing noncontingent rewards
fuels his or her effort to perform at least ade- In working subtly against transac-
quately. The Japanese experience is exem- tional leadership, employees may take short- 29
w
0

Exhibit I
TRANSACTIONAL LEADERSHIP (L = LEADER; F = FOLLOWER)

F: confidence
L: recognizes what in meeting role
F must do to attain L: clarifies F’s role + requirements
designated outcomes (subjective probability
of success)
3 F: motivation to
attain desired
7 outcomes
(expected effort)
/I

L: clarifies how F’s F: valence of

need will be fulfilled in
L: recognizes designated outcomes
exchange for enacting
what F needs (need fulfilling
role to attain
value for F)
designated outcomes
cuts to complete the exchange of reward for ing the value of outcomes through expanding
compliance. For instance, quality may suffer his or her transcendental interests and level or
if the leader does not monitor it as closely as breadth of needs in Maslow’s hierarchy.
he or she does the quantity of output. The The need for more transformational
employee may begin to react defensively leaders in business and industry was illus-
rather than adequately; in some cases, reac- trated in an in-depth interview survey of a
tion formation, withdrawal, hostility, or representative national sample of 845 work-
‘game playing” may result. ing Americans. The survey found that while
most employees liked and respected their
managers, they felt their managers really
THE ALTERNATIVE: ADD TRANSFORMATIONAL didn’t know how to motivate employees to do
LEADERSHIP TO THE MANAGER-EMPLOYEE their best. Although 70% endorsed the work
RELATIONSHIP ethic, only 23% said they were working as
hard as they could in their jobs. Only 9%
James McGregor Burns, the biographer of agreed that their performance was motivated
Franklin D. Roosevelt and of John F. Kennedy, by transaction; most reported that there actu-
was the first to contrast transactional with ally was little connection between how much
transformational leadership. The transforma- they earned and the level of effort they put
tional leader motivates us to do more than we into the job.
originally expected to do. Such a transforma-
tion can be achieved in the following ways:
1. Raising our level of consciousness about REPORT ON A STUDY OF TRANSFORMATIONAL
the importance and value of designated out- LEADERSHIP
comes and ways of reaching these outcomes.
2. Getting us to transcend our own self- I set out to find evidence of transfor-
interests for the sake of the team, organiza- mational leadership and its effects at various
tion, or larger polity. levels in industrial and military organiza-
3. Raising our need level on Abraham tions, not just at the top.
Maslow’s hierarchy from, say, the need for I defined transformational leader-
security to the need for recognition, or ex- ship for 70 senior executives. Then, I asked
panding our portfolio of needs by, for exam- them to describe in detail a transformational
ple, adding the need for self-actualization to leader whom they had encountered at any
the need for recognition. time during their career. All respondents
Cynthia Changer is a transforma- claimed to have known at least one such per-
tional leader; Barry Bargainer is not. Exhibit son. Most cited a former immediate supervi-
2 is a model of transformational leadership sor or higher-level manager in the organiza-
that starts with a current level of effort based tion. A few mentioned family members,
on a follower’s current level of confidence and consultants, or counselors.
desire for designated outcomes. A transac- This transformational leader in-
tional leader contributes to such confidence duced respondents to work ridiculous hours
and desire by clarifying what performance is and to do more than they euer expected to do.
required and how needs will be satisfied as a Respondents reported that they aimed to
consequence. The transformational leader in- satisfy the transformational leader’s expecta-
duces additional effort by directly increasing tions and to give the leader all the support
the follower’s confidence as well as by elevat- asked of them. They wanted to emulate the 31
 Exhibit 2
TRANSFORMATIONAL LEADERSHIP (L = LEADER; F = FOLLOWER)

1 r I I

L: elevation of valence
of designated outcomes
subjective probabilities for F
of success

From Exhibit 1 F: heightened motiva-

F: current state of
tion to attain designated
outcome (extra effort)
I
4 +
I I I I
F: expected F: performance beyond
performance expectations
1 I I /
leader. The transformational leader increased change relationship between superior and
their awareness of and promoted a higher subordinate: contingent reward, by which
quality of performance and greater innova- subordinates earned benefits for compliance
tiveness. Such a leader convinced followers to with the leader’s clarification of the paths
extend themselves and to develop themselves toward goals, and management by exception,
further. Total commitment to and belief in the by which the leader gave negative feedback
organization emerged as consequences of for failure to meet agreed-upon standards.
belief in the leader and heightened self- Three of the factors dealt with transfor-
confidence. mational leadership - the broadening and
Many respondents (all were male) elevating of goals and of subordinates’ confi-
indicated that the transformational leader dence in their ability to go beyond expecta-
they could identify in their own careers was tions. These factors were (1) charismatic
like a benevolent father who remained leadership (leaders aroused enthusiasm, faith,
friendly and treated the respondent as an loyalty, and pride and trust in themselves
equal despite the leader’s greater knowledge and their aims); (2) individualized considera-
and experience. The leader provided a model tion (leaders maintained a developmental and
of integrity and fairness and also set clear and individualistic orientation toward subor-
high standards of performance. He encour- dinates); and (3) intellectual stimulation (lead-
aged followers with advice, help, support, ers enhanced the problem-solving capabilities
recognition, and openness. He gave followers of their associates). An interesting sidelight
a sense of confidence in his intellect, yet was was that more transformational leadership
a good listener. He gave followers autonomy was observed (by respondents) in combat
and encouraged their self-development. He units than in support units.
was willing to share his greater knowledge As expected, the three transforma-
and expertise with them. Yet he could be for- tional factors were more highly correlated
mal and firm and would reprimand followers with perceived unit effectiveness than were
when necessary. Most respondents, however, the two transactional factors. Parallel results
were inclined to see the transforming leader were obtained for subordinates’ satisfaction
as informal and accessible. Such a leader with their leader. Charismatic, considerate,
could be counted on to stand up for his subor- and intellectually stimulating leaders were far
dinates. Along with the heightened and more satisfying to work for than were those
changed motivation and awareness, frequent who merely practiced the transactions of
reactions of followers to the transforming contingent reinforcement. I obtained simi-
leader included trust, strong liking, admira- lar results from a survey of 256 business
tion, loyalty, and respect. managers, 23 educational administrators, and
In conducting a second survey, I 45 professionals. Moreover, in these latter
used the descriptions from the first to create samples, respondents reported that they
a questionnaire of 73 behavioral items. Re- made greater efforts when leaders were
sponses to each item were on a five-point fre- charismatic, individualizing, and intellectu-
quency scale. A total of 176 senior U. S. ally stimulating. Contingent reward was also
Army officers completed the questionnaire fairly predictive of extra effort, but manage-
describing the behavior of their immediate ment by exception was counterproductive.
superiors. Five factors emerged from a Further analysis of the data by my colleague,
statistical factor analysis of the data. Two David Waldman, supported the model shown
dealt with transactional leadership, the ex- in Exhibit 2. The analysis demonstrated that 33
 when a leader displayed transformational he or she is practicing management by excep-
abilities and engaged in transactional rela- tion. The rationale of those who use this prac-
tionships, extra effort made by subordinates tice is, “If it ain’t broke, don’t fix it!” The re-
was above and beyond what could be at- search studies I have completed with military
tributed to transactional factors alone. officers, business executives, professionals,
and educational administrators generally in-
dicate that as a steady diet, management by
TRANSACTIONAL FACTORS: CONTINGENT exception can be counterproductive. But con-
REINFORCEMENT AND MANAGEMENT-BY- tingent rewards yield a fairly good return in
EXCEPTION terms of subordinate effort and performance.
Nevertheless, in the aggregate, there will be
According to our questionnaire surveys, posi- additional payoff when the transformational
tive and aversive contingent reinforcement factors appear in a leader’s portfolio.
are the two ways managers in organized set-
tings engage in transactional leadership to in-
Charismatic and Inspirational L.eadership
fluence employee performance. Ordinarily,
contingent reward takes two forms: praise for Charisma is not exclusively the province of
work well done and recommendations for world-class leaders or a few generals or ad-
pay increases, bonuses, and promotion. In mirals. It is to be found to some degree in in-
addition, this kind of reward can take the dustrial and military leaders throughout or-
form of commendations for effort or public ganizations. Furthermore, charisma is the
recognition and honors for outstanding most important component in the larger con-
service. cept of transformational leadership. In my
Contingent punishment can take study I found that many followers described
several forms as a reaction to a deviation their military or industrial leader as someone
from norms-when, for example, production who made everyone enthusiastic about as-
falls below agreed-upon standards or quality signments, who inspired loyalty to the orga-
falls below acceptable levels. The manager nization, who commanded respect from
may merely call attention to the deviation. everyone, who had a special gift of seeing
Being told of one’s failure to meet standards what was really important, and who had a
may be sufficient punishment to change be- sense of mission that excited responses. Fol-
havior. Being told why one has failed can be lowers had complete faith in the leaders with
helpful, particularly to the inexperienced or charisma, felt proud to be associated with
inexpert subordinate, especially if the nega- them, and trusted their capacity to overcome
tive feedback is coupled with further clarifi- any obstacle. Charismatic leaders served as
cation about what kind of performance is ex- symbols of success and accomplishment for
pected. While other penalties-such as fines, their followers.
suspensions without pay, loss of leader sup- Charisma is one of the elements
port, or discharge-may be imposed, these separating the ordinary manager from the
are less frequently used and are less likely to true leader in organizational settings. The
promote effectiveness. leader attracts intense feelings of love (and
When the manager, for one reason sometimes hatred) from his or her subor-
or another, chooses to intervene only when dinates. They want to identify with the
34 failures, breakdowns, and deviations occur, leader. Although feelings about ordinary
managers are bland, relations are smoother In summary, as a consequence of his
and steadier. Like most intimate relation- or her self-confidence, absence of inner con-
ships, the relations between the charismatic flict, self-determination, and requisite abili-
leader and his or her followers tend to be ties, a leader will be held in high esteem by
more turbulent. followers, particularly in times of trouble. He
There may be a scarcity of charis- or she can generally inspire them by emo-
matic leaders in business and industry be- tional support and appeals that will trans-
cause managers lack the necessary skills. On form their level of motivation beyond origi-
the other hand, managers who have the skills nal expectations. Such a leader can sometimes
may not recognize opportunity or may be un- also inspire followers by means of intellectual
willing to risk what is required to stand out stimulation. The charismatic leader can do
so visibly among their peers. More charis- one or the other, or both.
matic leaders potentially exist in organiza-
tional settings; furthermore, they may be
Individualized Consideration
necessary to an organization’s success.
The ability to inspire -arouse emo- The transformational leader has a develop-
tions, animate, enliven, or even exalt-is an mental orientation toward followers. He
important aspect of charisma. Inspirational evaluates followers’ potential both to perform
leadership involves the arousal and heighten- their present job and to hold future positions
ing of motivation among followers. Followers of greater responsibility. The leader sets ex-
can be inspired by a cold, calculating, intellec- amples and assigns tasks on an individual ba-
tual discourse, the brilliance of a break- sis to followers to help significantly alter their
through, or the beauty of an argument. Yet it abilities and motivations as well as to satisfy
is the followers’ emotions that ultimately immediate organizational needs.
have been aroused. Followers may hold an in- Delegating challenging work and
tellectual genius in awe and reverence, but the increasing subordinate responsibilities are
inspirational influence on them is emotional. particularly useful approaches to individual-
Consider the specific leadership be- ized development. As General Omar Bradley
haviors Gary Yukl used to illustrate what he pointed out, there is no better way to develop
meant by inspirational leadership: leadership than to give an individual a job in-
volving responsibility and let him work it
My supervisor held a meeting to talk about how vital
out. A survey of 208 chief executives and sen-
the new contract is for the company and said he was
confident we could handle it if we all did our part. My ior officers by Charles Margerison reported
boss told us we were the best design group he had that important career influences on them be-
ever worked with and he was sure that this new prod- fore age 35 included being “stretched” by im-
uct was going to break every sales record in the mediate bosses and being given leadership ex-
company.
perience, overall responsibility for important
The inspiring supervisor was not dispassion- tasks, and wide experience in many func-
ate. The supervisor talked about how vital tions.
the new contract was to the company. He said The transformational leader will
he was confident in his people. He told them consciously or unconsciously serve as a role
they were the best group he had ever worked model for subordinates. For example, in the
with. He was sure the product would break Margerison survey, the executives attributed
every record. their own successful development as man- 35
 agers to having had early on in their careers management” promotes individual contact
managers who were models. and communication between those low and
Managerial training supports the high in the hierarchy.
idea that managers profit from role models. In another study of a high-tech com-
What may be different in what I propose, pany, Rudi Klauss and Bernard Bass found
however, is that the transformational leader that project engineers were most influenced
emphasizes individualism. Personal influence by and gained most of their information rele-
and the one-to-one superior-subordinate vant to decision making from informal con-
relationship is of primary importance to the de- tact and individual discussion rather than
velopment of leaders. An organizational cul- from written documentation. This company
ture of individualism, even of elitism, should did not believe that the aggregated data from
be encouraged; an organization should focus management information systems were the
attention on identifying prospective leaders most important inputs for decision making.
among subordinates. Rather, two-thirds to three-quarters of the to-
Individualized attention is viewed tal work time of managers was spent in oral
as especially important by the new military communication. It was the immediate, timely
commander of a unit. The commander is ex- tidbits of gossip, speculation, opinion, and
pected to learn the names of all those in the relevant facts that was most influential, not
units at least two levels below his and to be- generalized reports reviewing conditions over
come familiar with their jobs. Military a recent period of time. Individualized atten-
leaders need to avoid treating all subordinates tion of superior to subordinate provided this
alike. They must discover what best moti- opportunity for inputs of current and timely
vates each individual soldier or sailor and information.
how to employ him most effectively. They Managers are most likely to make
must be generous in the use of their time. But face-to-face contact with colleagues at their
as General Eugene Meyer notes, the leaders’ same organizational level (or by telephone for
interest must be genuine. such colleagues at a distance physically). For
Individualized consideration im- superiors and subordinates, written memos
plies that seniors maintain face-to-face con- are more frequently used. Yet regular, face-to-
tact or at least frequent telephone contact face debriefing sessions to disseminate impor-
with juniors. The Intel Corporation accepted tant information from superior to subor-
the fact that recently graduated engineers are dinate will provide a better basis for organi-
more up to date on the latest advances in tech- zational decision making and make the supe-
nology than are experienced executives of rior better equipped to deal with the erratic
greater power and status in the firm. There- flow of work and demands on his or her
fore, the firm has consciously encouraged fre- time and the speed that decision making often
quent contact and open communication be- requires. Unfortunately, unless personal con-
tween the recent college graduates and the tact becomes a matter of policy (such as walk-
senior executives through leveling arrange- around management), communications from
ments. Senior executives and junior profes- superior to subordinate are more likely to be
sionals are all housed in small, unpretentious, on paper - or now, no doubt, increasingly on
accessible offices that share common facili- computer-rather than face-to-face.
ties. The organization stresses that influence Individualized consideration is re-
is based on knowledge rather than power. flected when a manager keeps each em-
36 In other well-managed firms, “walk-around ployee fully informed about what is hap-
pening and why-preferably in a two-way of mentoring in business, government, and
conversation rather than a written memo. industry reflects the current interest on the
Employees come to feel that they are on the part of both individuals and organizations in
inside of developments and do not remain the career development of the individual em-
bystanders. Sudden changes of plan are less ployee.
likely to surprise them. If the interaction is
two-way, employees have the opportunity to
Intellectual Stimulation
ask questions to clarify understanding. At the
same time, managers learn first-hand their The statement, “These ideas have forced me
subordinates’ concerns. to rethink some of my own ideas, which I had
Individualized consideration is also never questioned before,” sums up the kind of
demonstrated when the senior executive or intellectual stimulation that a transforma-
professional takes time to serve as mentor for tional leader can provide. Intellectual stimu-
the junior executive or professional. A men- lation can lead to other comments like, “She
tor is a trusted counselor who accepts a guid- enables me to think about old problems in
ing role in the development of a younger or new ways,” or “He provides me with new ways
less experienced member of the organization. of looking at things that used to be a puzzle
The mentor uses his or her greater knowl- for me.”
edge, experience, and status to help develop Intellectual stimulation arouses in
his or her protege and not simply to pull the followers the awareness of problems and how
protege up the organization ladder on the they may be solved. It promotes the hygiene
mentor’s coattails. This relationship is differ- of logic that is compelling and convincing. It
ent from one in which a manager is suppor- stirs the imagination and generates thoughts
tive or provides advice when asked for it. and insights. It is not the call to immediate ac-
Compared with the formal, distant relation- tion aroused by emotional stimulation. This
ship most often seen between a high-level ex- intellectual stimulation is seen in a discrete
ecutive and a junior somewhere down the leap in the followers’ conceptualization, com-
line, the mentor is paternalistic or maternalis- prehension, and discernment of the nature of
tic and perhaps is a role model for the junior the problems they face and their solutions.
person. Executives should and can play a
A follow-up of 122 recently pro- role as transforming leaders to the degree that
moted people in business indicated that they articulate what they discern, compre-
two-thirds had had mentors. This popularity hend, visualize, and conceptualize to their

‘An organizafional culture of individualism,

even of elifism, should be encouraged;an
organizafion should focus aftenfion on
identifying prospecfive leaders . . .‘I 37
 colleagues and followers. They should articu- bright, but their focus is on how best to keep
late what they see as the opportunities and running the system for which they are respon-
threats facing their organization (or unit sible; they react to problems generated by ob-
within it) and the organization’s strengths, served deviances and modify conditions as
weaknesses, and comparative advantages. needed while remaining ever mindful of or-
Leadership in complex organizations must in- ganizational constraints.
clude the ability to manage the problem-
solving process in such a way that important
problems are identified and solutions of high TRANSFORMATIONAL LEADERSHIP:
quality are found and carried out with the full BENEVOLENT OR MALEVOLENT?
commitment of organization members.
The intellectual component may be Charismatic leadership, individualized con-
obscured by surface considerations. Accused sideration, and intellectual stimulation have
of making snap decisions, General George been clearly seen in the moving and shaking
Patton commented: “I’ve been studying the that took place between 1982 and 1984 in a
art of war for 40-odd years . . . [A] surgeon number of firms, such as General Electric,
who decides in the course of an operation to Campbell Soup, and Coca Cola. In each in-
change its objective is not making a snap deci- stance, the transformation could be at-
sion but one based on knowledge, experience, tributed to a newly appointed chief. These
and training. So am I.” transformational leaders were responsible for
The importance of a leader’s tech- iconoclastic changes of image, increased or-
nical expertise and intellectual power, partic- ganizational flexibility, and an upsurge of
ularly in high-performing systems, often is ig- new products and new approaches. In each
nored in comparison with the attention paid case, the transformational leadership of John
to his or her interpersonal competence. F. Welch, Jr. of General Electric, Gordon
Where would Polaroid be without Edwin McGovern of Campbell Soup, and Roberto
Land? What kind of corporation would Oc- Goizueta of Coca Cola paid off in invigora-
cidental Petroleum be without Armand tion and revitalization of their firms and an
Hammer? acceleration in business success.
In this intellectual sphere, we see Clearly, heads may be broken, feel-
systematic differences between transforma- ings hurt, and anxieties raised with the advent
tional and transactional leaders. The trans- of transformational leaders such as Welch,
formational leader may be less willing to ac- McGovern, or Goizueta. “Business as usual” is
cept the status quo and more likely to seek no longer tolerated. Such transformations
new ways of doing things while taking maxi- may be moral or immoral.
mum advantage of opportunities. Transac- For James Burns, transformational
tional managers will focus on what can leadership is moral if it deals with true needs
clearly work, will keep time constraints in and is based on informed choice. The moral
mind, and will do what seems to be most effi- transformational leader is one who is guided
cient and free of risk. by such universal ethical principles as respect
What may intellectually separate for human dignity and equal rights. The
the two kinds of leaders is that transforma- leadership mobilizes and directs support for
tional leaders are likely to be more proactive “more general and comprehensive values that
than reactive in their thinking, more creative, express followers’ more fundamental and en-
novel, and innovative in their ideas, and less during needs” (Leadership, Harper, 1978).
inhibited in their ideational search for solu- Moral leadership helps followers to see the
38 tions. Transactional leaders may be equally real conflict between competing values, the
inconsistencies between espoused values and dinary value and personal power. This is
behavior, the need for realignments in val- more easily done when subordinates have
ues, and the need for changes in behavior highly dependent personalities. On the other
or transformations of institutions. Burns ar- hand, subordinates who pride themselves on
gued that if the need levels elevated by trans- their own rationality, skepticism, indepen-
formational leaders were not authentic, then dence, and concern for rules of law and prece-
the leadership was immoral. dent are less likely to be influenced by a
The well-being of organizational charismatic leader or the leader who tries to
life will be better served in the long run by use emotional inspiration. Subordinates who
moral leadership. That is, transformations are egalitarian, self-confident, highly edu-
that result in the fulfillment of real needs will cated, self-reinforcing, and high in status are
prove to be more beneficial to the organiza- likely to resist charismatic leaders.
tion than transformations that deal with
manufactured needs and group delusions.
Organizational leaders should subscribe to a WHICH KIND OF LEADERSHIP SHOULD
code of ethics that is accepted by their society MANAGERS USE?
and their profession.
The ethical transformational leader Managers need to appreciate what kind of
aims toward and succeeds in promoting leadership is expected of them. Current
changes in a firm-changes that strengthen leadership training and management devel-
firm viability, increase satisfaction of owners, opment emphasize transactional leadership,
managers, employees, and customers, and in- which is good as far as it goes, but clearly has
crease the value of the firm’s products. But its limits. Transactional leaders will let their
transformational leaders can be immoral if subordinates know what is expected of them
they create changes based on false images that and what they can hope to receive in ex-
cater to the fantasies of constituencies. Firms change for fulfilling expectations. Clarifica-
can be driven into the ground by such leaders. tion makes subordinates confident that they
A transformational leader can lull employees can fulfill expectations and achieve mutually
and shareholders alike with false hopes and valued outcomes. But subordinates’ confi-
expectations while he or she is preparing to dence and the value they place on potential
depart in a golden parachute after selling out outcomes can be further increased, through
the company’s interests. transformational leadership. Leadership, in
Whether transformational or trans- other words, can become an inspiration to
actional leadership will take hold within an make extraordinary efforts.
organization will depend to some extent on Charismatic leadership is central to
what is happening or has happened outside of the transformational leadership process.
it. Welch, McGovern, and Goizueta all came Charismatic leaders have great referent
into power to transform firms that were in power and influence. Followers want to iden-
danger of failing to keep pace with changes in tify with them and to emulate them. Fol-
the marketplace. Transformational leader- lowers develop intense feelings about them,
ship is more likely to emerge in times of dis- and above all have trust and confidence in
tress and rapid change. them. Transformational leaders may arouse
The personalities of followers will their followers emotionally and inspire them
affect a leader’s ability to be transforma- to extra effort and greater accomplishment.
tional. Charisma is a two-way process. A As subordinates become competent with the
leader is seen as charismatic if he or she has mainly transformational leader’s encour-
followers who imbue him or her with extraor- agement and support, contingent reinforce- 39
 ment may be abandoned in favor of self- Managerial Reputation,” by Ann Tsui (Proceedings
reinforcement. of the Academy of Management, August 1982).
Clearly, there are situations in Admiral Stockdale’s quotation can be
found in “The Principles of Leadership” (American
which the transformational approach may
Educator, April 1981). General Patton’s comment
not be appropriate. At the same time, organi-
is in Before the Colors Fade: Portrait of a Soldier:
zations need to draw more on the resources of
George S. Patton (Houghton-Mifflin, 1964), by
charismatic leaders, who often can induce
Frederick Ayer, Jr. General Meyer’s comment is in
followers to aspire to and maintain much “Leadership: A Return to Basics,” by Edward Meyer
higher levels of productivity than they would (Military Review, July 1980).
have reached if they had been operating only For the seminal discussion on transfor-
through the transactional process. mational leadership, see Leadership by James
Burns (Harper & Row, 1978). For more on the im-
pact or potential impact of transformational
leadership, see In Search of Excellence, by Thomas

CD Peters and Robert Waterman

1982); Leadership
(Prentice-Hall,
in Organizations,
(Harper & Row,
by Gary Yukl
1981); “Managers and Leaders: Are
They Different?” by Abraham Zaleznik (Harvard
Business Review, May/ June 1977); and “Leadership
SELECTED BIBLIOGRAPHY Transforms Vision into Action,” by Warren Bennis
(Industry Week, May 31, 1982).
For more of the limitations of transactional leader- For more on communications between
ship, reliance on contingent reinforcement, and the executives and employees, see The Nature of
extent to which manipulative leadership is coun- Managerial Work, by Henry Mintzberg (Harper &
terproductive, see “Management Styles Associated Row, 1973) and Interpersonal Communication in
with Organizational, Task, Personal and Interper- Organizations, by Rudi Klauss and Bernard Bass
sonal Contingencies,” by Bernard Bass, Enzo (Academic Press, 1982). A discussion of the Intel
Valenzi, Dana Farrow, and Robert Solomon (low- Corporation appears in Klauss and Bass’ book.
nal of Applied Psychology, December 1975); Information on mentoring and man-
“Dimensionality of Leader-Subordinate Interac- agerial development may be found in Problem
tions: A Path-Goal Investigation,” by Janet Fulk Solving and the Executive Mind, Symposium:
and Eric Wendler (Organizational Behavior and Functioning of the Executive Mind by David Kolb
Human Performance, October 1982); “Evaluation (Case Western Reserve University, April 1982);
of Feedback Sources as a Function of Role and Or- The Seasons of u Man’s Life, by Daniel Levinson,
ganizational Development,” by Martin Greller Charlotte Darrow, Edward Klein, Maria Levinson,
(Journal of Applied Psychology, February 1980); and Braxton McKee (Knopf, 1978); How ChiefEx-
“Performance Attributional Effects on Feedback ecutives Succeed, by Charles Margerison (MCB
from Supervisors,” by Daniel Ilgen and William Publications, Bradford, England, 1980); “A Theory
Knowlton (Organizational Behavior and Human of Human Motivation,” by Abraham Maslow (Psy-
Performance, June 1980); “Applied Behavior Anal- chological Review, July 1943); and “Moving Up:
ysis:’ by Judi Komacki (The Industrial Psycholo- Role Models, Mentors and the Patron System,” by
gist, February 1981); “Effect of Leader Contingent Eileen Shapiro, Florence Haseltine, and Mary Row
and Non-Contingent Reward and Punishment Be- (Sloan Management Review, Spring 1978).
haviors on Subordinate Performance and Satisfac- Details about the impact of John F.
tion:’ by Phillip Podsakoff, William Todor, and Welch, Gordon McGovern, and Roberto Goizueta
Richard Skov (Academy of Management Journal, had on their companies can be found in the Sep-
40 December 1982); and “A Role Set Analysis of tember 17, 1984 issue of the Wall Street journal.