The emerging role of transformational leadership

This paper presents a literature review of leadership over the years and the emerging role of transformational leadership. We also argue that this form of leadership is appropriate in the context of globalized markets, where there is increasing diffusion of goods, services, values and technologies globally, which results in the convergence of societies toward a uniform pattern of economic, political and cultural organization. There are various issues and consideration existing in the leadership literature as “the core of the criticism in the literature is that organisations of all sorts (corporations, government agencies, and not-for-profit organisations) tend to be over-managed (and/or over-administrated) and under-led” (Mills 2005, p.19). Mills (2005) highlights the vital importance of leadership in both political and business areas, and argues that organisations in both areas, in the absence of effective leadership, are not capable of effectively implementing changes at the organisational level. This paper adopts a conceptual approach aiming to convey the importance of transformational leadership amongst other styles. In this paper, we review the role of leadership in the business area and establish the need to investigate transformational leadership, as an ideal leadership form in enabling firms to accomplish sustainable competitiveness as they operate in global markets. Based on the various leadership theories discussed be further argued that leadership is highly essential for business organisations to achieve a sustained change and eventually higher degree of effectiveness, especially when operating in global markets. Transformational leadership, comprising characteristics of idealised influence, individualised consideration, intellectual stimulation, and inspirational motivation has been found to have implications for higher leadership effectiveness in new market environments and production locations. Various empirical studies highlighted transformational leadership as an enabler of innovation. To demonstrate the role of transformational leadership in organizational innovation, it can be argued that these leaders facilitate the generation of new knowledge and ideas through applying intellectual stimulation aspect that motivates employees to approach organizational problems in a more novel approach. Accordingly, we establish the appropriateness of transformational leadership as a managerial-based, output-based as market-based competency for firms in globalized markets. We conclude by providing suggestions and scope for empirical investigation into local organizations to evaluate the extent of transformational leadership apparent and how effective they can be in globalized markets. The findings from empirical studies could provide managerial and research implications on a Nation’s competitiveness in today’s dynamic and globalized environments.