Ethical values of transactional and transformational leaders

Canadian Journal of Administrative Sciences, Dec 2001 by Rabindra N Kanungo

Abstract

Ethical leadership literature (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) suggests that authentic transformational leadership must be based on some moral foundation. Such literature is not as clear, however, on whether transactional leadership can have moral foundation as well. The paper argues that transformational and transactional leadership behaviours are judged to be ethical based on two different sets of values, motives, and assumptions. These values, motives, and assumptions are grounded in two types of ethical perspective for understanding the behaviour of the two types of leaders. Transformational leaders have an organic worldview and moral altruistic motives grounded in a deontological perspective. Transactional leaders, on the other hand, have an atomistic worldview and mutual altruistic motives grounded in a teleological perspective.

Resume

La litterature sur le leadership ethique (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) suggere que le leadership transformationnel authentique doit etre base sur des fondements moraux quelconques. Par contre, la litterature ne precise pas si le leadership transactionnel doit aussi avoir des fondements moraux. Cette etude demontre que les comportements de leadership transformationnels ainsi que transactionnels sont juges comme etant bases sur deux differents groupes de valeurs, motifs et suppositions en ce qui attrait a l'ethique. Ces valeurs, motifs et suppositions sont fondes sur deux types de perspectives ethiques de facon a comprendre le comportement des deux types de leaders. Les leaders transformationnels ont une perception organique du monde ainsi que des motifs moraux altruistes bases sur une perspective deontologique. A l'oppose, les leaders transactionnels ont une perception atomiste du monde et des motifs mutuels basis sur une perspective teleologique.

Every organization has a purpose and it is the desire to achieve this purpose efficiently and effectively that creates the need for leadership. Organizational leaders plan, organize, provide direction, and exercise control over organizational resources, material and human, in order to achieve the organization's objectives. The main aim of leadership behaviour, however, is to influence organizational members' actions because it is through the behaviour of the members that organizations' goals are attained.

The analysis of leadership behaviour in organizations and the nature of leaders' influence on followers has led researchers in the area to identify two major forms of leadership: transactional and transformational (Bass, 1997; Burns, 1978; Conger & Kanungo, 1998). A transactional leader is more concerned with the routine maintenance activities of allocating resources, monitoring, and directing followers to achieve task and organizational goals. A transformational leader, on the other hand, is more concerned with developing a vision that informs and expresses the organization's mission and lays the foundation for the organization's strategies, policies, and procedures. The transactional leader influences followers through the use of rewards, sanctions, and formal authority or position power to induce followers' compliance behaviour. The transformational leader, on the other hand, uses influence strategies and techniques that empower the followers, enhance their self-efficacy and change their values, norms, and attitudes, consistent with the vision developed by the leader (Bass, 1985; Conger & Kanungo, 1998).

Although the two forms of organizational leadership have been researched extensively in the past two decades, the role of the morality of leadership behaviours and influence processes has only recently emerged as an issue (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996). Both academic scholars and management practitioners recognize that all forms of leadership behaviour gain their legitimacy and credibility from the leader's moral standing and integrity. When the leader's moral integrity is in doubt, then all attempts by the leader to influence followers-however noble, well crafted, and articulated-fail to move them to achieve organizational objectives. Without ethical leadership, organizations lose their long term effectiveness and become soulless structures.

The presence of ethical leadership is often noticed in organizations, but its nature, dimensions, and relationship to transactional and transformational leadership forms have not been explored in depth. Some recent works (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) on transformational and charismatic leadership suggest that authentic transformational leaders' (as opposed to pseudo-transformational and negative charismatic leaders) behaviours and influence strategies have to meet high moral or ethical standards. But the answer to the question of whether a transactional leader's behaviours and influence strategies should require equally demanding ethical standards remains equivocal. In other words, while authentic transformational leaders who exert long term transformational moral influence over followers are seen to be providing ethical leadership, one is not sure whether transactional leaders can also provide such sustained moral influence in organizations. For instance, Bass and Steidlmeier (1999) discuss the moral components of transactional leadership by pointing out that the moral legitimacy of this leadership style "depends on granting some liberty and opportunity to others that one claims for oneself, on telling the truth, keeping promises, distributing to each what is due, and employing valid incentives and sanctions" (p. 185). But they also suggest that transactional leadership is "grounded in a worldview of self-interest," and that "pursuit of self-interest is found wanting by most ethicists" (p. 185).