Leadership which has been immensely researched over the last era has many classifications to define leadership; many definitions of leadership are concentrated on the process, skills, behavior approach, trait approach, situational approach and many others (Bennis, 1982). Leadership can be defined as a process which influences an individual or a group towards goal attainment (Hersey et al., 1979; Hersey & Blanchard, 1996; Blanchard, 2004). There are four central components to the leadership which are: (1) Leadership is a process of a transactional event between the followers and its leader, (2) Leadership transpires in group situations, (3) Influencing the followers, and (4) All effort is towards goal attainment (Northouse, 2007). In the last century, there have been many theories for leadership but all have their own pros and cons, the model of leadership has been growing due to the extensive research on these theories. This essay focuses on comparing and contrasting on Transformational (TF) leadership theory and Leader-member exchange (LMX) theory. Leadership is a process which is based on the interactions between leaders and their followers. TF and LMX are on a central approach that leaders can influence positively by various means, where the TF is focused on the ability of the leader to transform all its followers with an inspiring vision for a positive change, LMX sheds light on the significance of the relationship between the leader and its followers with a positive attitude and behavior. The contrasting and comparing of these two theories is essential because these theories have the ability to decide as to which theory is more impactful and can have prolonged effects on its followers.
The foundation of LMX theory is The Vertical Dyad Linkage (LDL) theory which progressed and polished in many occasions earlier studies. Dansereau et al (1975) investigated the promising advantages of the VDL approach where the relationship of a leader and its follower is unique and based on a vertical exchange. LMX Theory is all about the relationship between the leader and the follower which has evolved and grew over time based on many exchanges (Graen & Uhl-Bien, 1995). VDL theory had a limitation of vertical linkages, rather than a relationship with all their followers. For LMX theory previously the focus was set on the in-group (working relationships) or the out-group (limited or no working relationship) but recently the concept is enhanced by the focusing on the quality of exchanges between the leader and follower rather than segmenting in groups (Graen & Uhl-Bien, 1991; Graen & Uhl-Bien, 1995; Schriesheim et al., 2001). The concept of Transformational leadership was introduced by Burns (1978) for the political leaders but since then there has been some extensive research on this concept and is even labeled as the new leadership paradigm in today’s environment due to the fact that it inspires, energizes, and intellectually stimulates followers during times of uncertainty which is essential to any situation (Bass, 1990; Northouse, 2007). It can be defined as the leadership style which brings a change in the individual and systems, the end goal being to transform followers into leaders. LMX is where a leader should develop high-quality exchanges with all of its followers, focusing on building dyadic relationships throughout which are unique to all members as the leader cannot treat all the followers in the same manner (Graen & Uhl-Bien, 1995; Northouse, 2007). The leadership making process is based on (1) the characteristics of the leader, (2) the characteristics of follower, and (3) the maturity of the leadership relationship. There are three phases to the relationship building process between the leader and its followers, the first phase is where leaders and followers are strangers with low-exchanges purely as a working formal relation, the second phase is where leaders and followers have strengthened their relationship by increased social exchanges and are now acquaintance, the third and final phase is where the relationship is matured and there are a high level of trust, loyalty, respect, and obligations (Graen & Uhl-Bien, 1991, Graen & Uhl-Bien, 1995). TF boosts motivation, morale, and performance by focusing on the emotions, values, ethics, standards, and goals of the followers. This theory is embedded with the leader playing a crucial role in changing perception through this transformation phase. It is a process where the connection between a leader and follower raises the level of motivation and morality. This theory does not have a model in which leaders are told what to do it is a model which has a broad set of generalizations to work upon. TF has four dimensions first of which is idealized influence where a strong leader is a role model for all the followers, inspirational motivation is the second dimension of TF where leaders inspire and motivate to become committed on the vision, intellectual stimulation is the third dimension of TF where the leader pushes the followers to be creative and innovative and challenge their own limitations and beliefs, Last dimension of TF is individual consideration where a leader provides a supportive environment to understand the need of the followers. LMX has some strong points and some weak points like many leadership theories firstly the theory is a validation for the special relationship between the leader and its follower with a classification of the in-group and out-group. It emphasizes on the followers with a high contribution of work and also followers who do the bare minimum. The whole model is based on a dyadic relationship between the leader and its follower, which is unique in itself as compared to other theories. Furthermore, the quality of exchanges plays an important role in the communication process which results in trust, loyalty, respect, and obligations. It serves as a constant reminder for the leaders to be fair about who they let in the group which is purely based on work performance. It is evident that the LMX theory has showcased an increase in followers, efforts made by followers, organizational effectiveness, work performance, empowerment and job satisfaction (Graen & Uhl-Bien, 1995). The strong points of TF are that it has an intuitive appeal which is synchronized with the popular notion of leadership; it treats leadership as a process between the followers and its leader, it provides a broader platform which also augments other leadership models, there is a strong emphasis on the needs of the followers their morals and values. TF plays a vital role in triggering change while motivating followers to improve and reach their full potential (Northouse, 2007). TF leaders establish trust by an emotional relationship engaging followers into fully commit to the vision, increasing credibility helps individuals, groups, a system to overcome the challenge of building trust amongst them by creating and maintaining a responsive culture (Dittmar, 2007). LMX theory weak points are that the classification of members is being based on in-groups and out-groups results into inequities amongst all followers who may not feel privileged having a more negative effect (Scandura, 1999). The idea of high-quality exchanges is not fully developed and fails to explain how to attain these exchanges. The model lacks the understanding of the dyadic process associated with the theory and no part of research uses any dyadic measure to analyze the process (Schriesheim et al., 2001). LMX theory does not reflect that it is either one-dimensional or multi-dimensional (Graen & Uhl-Bien, 1995). The measurement scales are developed when required without any strong research or theory (Schriesheim et al., 1999). Where there are strong points TF also lacks in many areas firstly lack of clarity where it is difficult to set the parameters, it is difficult to measure and the four I’s are similar in concept generally. TF leadership style can also be seen as a personality trait rather than a behavior where followers are instructed. It points towards elitist due to the fact that the leaders are acting independently of the followers. It has great potential to take advantage of and can be used only in situations where change is required and may not be welcomed where the group is not open to change.
The theories in discussion here are both specific as to how the leader can influence the followers to achieve the goal where LMX is focused on the relationship of the leader and employee and the quality of exchanges between them to convert from a stranger phase to a mature phase, TF is focused on inspiring the followers to bring a positive change beyond their self-interest and attain the goal. Organizations require leaders who are able to obtain and maintain the competitive advantage which requires the ability to adapt and respond in a timely and effective way (Dittmar et al., 2007). TF outweighs LMX due to the fact that TF represents a more complete concept in changing the values and perception whereas LMX just focuses on the relationship aspect, to bring about a change in personality of an individual can have to prolong effects. LMX on the first stranger stage can be viewed as transactional however upon reaching the mature stage it can be transformational. LMX maybe TF at many stages under specific conditions but LMX is an exchange process but is not measured this way as the leaders do not put forward demands from the followers they convert into TF, they have more similarities than differences where LMX first stage may be the pathway for TF itself. Transformational leadership is a complete and ideal leadership concept which influences an individual to go beyond their self-interest for the greater good both the leader and followers are influenced by it and have the capability of changing the system and culture.
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