The Concept of Leadership

Introduction
This session is about leadership, here you will introduce to the concept of leadership
and learn about the various forms of leadership, characteristics and the skills of a
transformational leader, how entrepreneurship and leadership are related and what it means to
be a servant leader, as you have learnt from the last study session that leadership is a core
attribute of an entrepreneur, here you will be able to see the reason why it is so.

Learning outcomes for Study Session

When you have studied this session you should be able to
2.1 Explain the concept ‘leadership’
2.2 Identify the different forms of leadership and their strengths and weaknesses
2.3 Define who a transformational leader is

1.1 What is leadership?

The concept of leadership is surrounded with a lot of complexities. This is because
people define leadership from various viewpoints and sometimes to suite the context of the
debate or discussion and so a holistic and comprehensive definition of leadership is rare.
However we can say that leadership is the skill of influencing people to work enthusiastically
towards goals identified as being for common good. The late Peter Drucker observed that the
only definition of a leader is someone who has followers. Leadership is the ability to inspire
or influence others towards the leader’s goal. While there might be no single comprehensive
definition of leadership, using these components we can say leadership:
 is a process;
 involves influencing others;
 is a group activity (followers and leaders);
 involves goal setting and goal attainment;
 is not a characteristic/traits endowed at birth

1.2 Forms of leadership

 Early theories and scholars have tried to look into the concept of leadership and
discovered that leadership has evolved from ‘great man’ to ‘trait’ and now to
‘transformational’ theories of leadership. There are different forms of leadership; these are
the authoritarian, the laissez-faire, the democratic/participatory, the transactional and the
transformational leadership.

1. Authoritarian Leadership: In an authoritarian form of leadership, leaders make sure

to create a distinct professional relationship, direct supervision is what they believe to
be key in maintaining a successful leadership, also all decision making power are
centralized in the leader as with dictators, leaders don’t entertain any form of
suggestions or initiatives from the followers, they engage in one-way and downward
communication, control discussion with followers and dominate interaction. This
form of leadership allows quick decision making and provides strong motivation to
the manager, but it under utilizes the skills and resource available to the enterprise by
excluding the followers or workers from decision making process.

2. Laissez-faire Leadership: In this form of leadership, decision making is passed on to

the followers. Followers are given all the rights and power to make decisions,
establish goals and work out problems. A laissez-faire leader lacks direct supervision
of employees and fails to provide regular feedback to those under his supervision, it is
only suitable when employees are well skilled, experienced and educated but this
leadership hinders the production of employees needing supervision, it can lead to
poor production, lack of control and increased costs.

3. Democratic Leadership: The democratic leadership style consists of the leader

sharing the decision making abilities with the group members by promoting the
interest of the group members and practicing social equality. It encompasses the
notion that everyone by virtue of their human status should play a part in the group’s
discussion. However, the responsibility of making the final conclusion rests with the
leader, democratic leadership style boost the morale of the followers, and when the
company needs to make changes within the organization, this leadership style helps
employee adjust to changes easily, it create higher productivity but it’s not suitable
when quick decisions are to be made, and it is preferable when group members are
skilled and are eager to share knowledge.
4. Transactional Leadership: This form of leadership style focuses on motivating
followers through a system of rewards and punishments, a transactional leader
identifies the needs of their employees and give rewards to satisfy those needs in
exchange of certain level of performance, he focuses on increasing the efficiency of
established rules and routines. The manager possesses the power to review results and
train or correct employees when they fail to meet the goals. It is important for
organizational development, but does not look after employees’ development, puts
little emphasis on employees’ personal growth and accomplishment which can lead to
low productivity, low morale and poor attitude to work.

1.3 Transformational Leadership

Transformational leadership is a process in which the leaders take actions to try to
increase their employees' awareness of what is right and important, to raise their
motivational maturity and to move them to go beyond the their own self-interests for the
good of the group, the organization, or society. Such leaders provide employees with a sense
of purpose that goes beyond a simple exchange of rewards for effort provided. The main
objective is to work to change or transform the employees’ needs and redirect their thinking.
Usually they challenge and inspire their employee with a sense of purpose and excitement.
According to Bernard Bass, transformational leadership occurs when a leader transforms or
changes his/her followers in three ways that leads to the followers trusting the leader
1. Increase subordinate awareness of the importance of their tasks and importance of
performing well
2. Make followers aware of their need for personal growth, development and
accomplishment
3. Motivate followers to work for the good of the organization rather than exclusively
for their own personal gain or benefit.
Transformational leadership occurs when one or more persons engage with others in
such a way that leaders and followers raise one another to higher levels of motivation and
morality. In this leadership style employees are highly motivated, and productivity and
efficiency are enhanced through communication and high visibility but sometimes it breeds
devotion and dependency, when the leaders leave everything falls apart, which is more
reasons why the goal is not just to have a leader, but to develop a leader-ful organization,
society and generation. Transformational leaders do not see leadership as a position but see
every individual as a potential leader. He is a leader that mobilizes himself and the others to
achieve a set goal irrespective of the obstacles. The transformed leader dos usually proactive
and listens for the sense in every contribution of the group members, he leaves by examples
and believes that everyone has a significant role to play in the success of a business endeavor.

1.4 Characteristics and Skills of a Transformational Leader

Characteristics and major features of a transformational leader are
 Transformational leaders are change agents.
 A deep sense of personal purpose with unshakeable self confidence in the ability to
realize the purpose.
 A strong desire to take charge and make things happen without being bossy.
 A willingness to take personal risks and make sacrifice for the vision.
 They have the ability to deal with complexity.
 They have sensitivity to how people feel and ability to connect.
 They are life-long learners and are value driven.
 A proactive listener
 They motivate and mobilize of themselves and the others in the business endeavor
 They believe in the achievement of set goals even in the face of huge obstacles

Skills of a transformational leader are

 Good communication of clear vision of the future along with the gap between that
vision and current realities.
 Helping people find purpose and meaning in life through the pursuit of the vision.
 Empowering staff with the authority to create innovative ways of realizing vision.
 Engages others in strategic and creative thinking.
 Using caring and coaching style of leadership in one-on-one setting.
 Recognizing staff achievements and desired behaviours in meaningful ways.

1.5 Entrepreneurship and Transformational Leadership

Leadership styles can affect entrepreneurial orientation in enterprises and so a
comparison of transactional and transformational leadership styles shows that an entrepreneur
who is transformational in his/her leadership style will have a higher productivity and better
performance because transformational leadership skills such as communication, motivation
of others and self motivation play important roles and are positive indicators in growth of
small scale business, usually transformational leaders are known to maximize their
performance through innovative approaches(creating new ideas and experimentation) in
getting a job done successfully which also makes them a successful entrepreneurs a
transformational entrepreneur has extraordinary changes in his direction.

1.6 Servant Leadership

Servant leadership is a philosophy that emphasizes the leader’s duty to serve his/her
followers, it is leadership arising out of a desire to serve rather than a desire to lead, it begins
with a natural feeling that one wants to serve first which then brings the aspiration to lead
which is different from one who is a leader first, perhaps because of the power or the material
benefits.
Servant leaders prioritize people’s need, and motivate people to change by helping to
remove obstacles that are in the way of their growth and development. They may or may not
hold formal leadership positions, but encourage collaboration, trust, foresight, listening, and
the ethical use of power and empowerment. Examples of servant leaders are mother Theresa,
founder of the missionaries of charity in Calcutta, India, Oprah Winfrey, chairman of Harpo
Inc, and Max dePree, CEO of Herman Miller office furniture company from 1980 to 1987.

Summary of Study Session

In this session you have learnt that
1. Leadership is the skill of influencing people to work enthusiastically towards goals
identified as being for common good.
2. there are different forms of leadership these are the authoritarian, the laissez-faire, the
democratic/participatory, the transactional and the transformational leadership
3. Transformational leaders are leaders who try to increase their employees' awareness
of what is right and important, to raise their motivational maturity and to move them
to go beyond their own self-interests for the good of the organization.
4. The best form of entrepreneur leadership is the transformational entrepreneur.