Interest in transformational leadership over the past three decades is the result of global economic changes from the early 1970s when organizations had to consider radical changes in their ways of doing business. Factors such as rapid technological change and changing demographic structures created a turbulent, unstable and competitive environment in which significant organizational change was imperative.
Due to the effects of globalization companies needed new approaches to leadership to resolve the apparently contradictory challenge of finding new ways of affecting change while simultaneously building employee moral (Congers, 1999). The theoretical base of work on leadership that prevailed in the 1970s was founded in explorations of traits, behaviors, and situations (contingency theories) and failed to account of some 'untypical' qualities of leaders. During the past few decades, great organizational, societal and cultural changes have occurred. Globalization and technology have caused a reorganization of the supply-chain and worker-chain with an accompaniment of new forms of learning and knowledge sharing. The changes and challenges led to various explorations on leadership theory in seeking for effective leadership models for the new era in which people ask for changes but do not have a clear track for doing that.
Leadership theories such as transformational leadership has been developed in an attempt to describe the new phenomena, predict what will happen, and suggest strategies for effective leadership. Transformational leadership theory among all the existing theories is the one that underscores the importance of changing the mindset of the subordinators, building trust for the willingness to internalize organizational values, and encourage the follower to become the leader. In today's fast-changing global environment the problems employees confront often did not exist before. There is a greater need for everyone to respond to one's unique problems properly and timely instead of waiting for instructions from the supervisors and transformational leadership is needed for facilitating the capability.
"Transformational leadership has traditionally been defined as the display of the following components: charisma, intellectual stimulation, and individualized consideration." This type of leaders instill pride, faith, and respect in subordinates, promotes intelligence and problem solving, and encourage subordinates to pursue innovative solutions to problems. Transformational qualities are needed in today's organizations because these leaders can motivate others to reach goals, have emotional intelligence, have self-control, zeal and persistence, and are able to self motivate. Personal performance vulnerabilities would be the inability to make quick changes in order to help an organization.
Due to globalization one can become vulnerable to the competition. In a changing global business environment leaders could feel powerless if an organization does not allow for change due to the structure. The sources of risk in today are less predictable and this becomes a challenge to leaders (Tamosiuniene & Saveuk, 2007). Leaders are always at risk because of the changing business environment. If an organization is decentralized or organic this will make things easier because a leader could react quickly to a changing global business environment. Not all organization are decentralized or have organic structures.
Globalization, technology, changing markets, and competition has created uncertainty (Tamosiuniene & Saveuk, 2007). Improving emotional intelligence is a strong requisite for effective leadership. In order to improve emotional intelligence one must find ways to incorporate emotional intelligence skills into one's personal toolbox for enhanced career success. According to Ashkanasy (2002) to improve one's emotional intelligence and the emotional intelligence of employee's five tips for better management of emotions are given. For example, one tip is managers should assess the emotional impact of employee's jobs, and design job assignments taking this into consideration. Applying leadership principles effectively would result in positive change in the strategies and effectiveness of an organization.
As a transformational leader increasing individual and team effectiveness, implementing innovation, boosting creativity, improving communication and problem-solving, being ethical would be necessary to bring positive change to an organization
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Conger, J.A. (1999) .Charismatic and Transformational leadership in organizations: An insider's perspective on these deeloping streams of research. The Leadership Quarterly. 10 (2), p. 146-179.
Tamosiuniene, R., and Saveuk, O. (2007). Risk management in lithuanian organization- Relation with internal audit and financial statements quality. Business: Theory & Practice, 8 (4), p. 204-213. Retrieved on February 16, 2008, from the EBSCOhost database.
Tucker, ML, Sojka, JZ, Barone, FJ, and McCarthy, AM (2000). Training tomorrow's leaders: Enhancing the emotional intelligence of business graduates. Journal of Education for Business, 75 (6), p. 331. Retrieved on February 27, 2008, from the EBSCOhost database.