Transformational Leadership Theory in the Health Sector


Over the last two to three decades, there has been extensiveresearch into the transactional-transformational theory led by JamesMcGregor Burns and Bernard M. Bass. Burns was the first to come upwith the concepts of transactional and transformational leadership inlate 1970s as he tried to propose the best styles in politicalleadership (5, p. 755). Bass (1985) revised the theory and provedthat transactional and transformational leadership were two distinctconcepts. He proposed that the transformational leadership theory hasfour different components idealized influence, intellectualstimulation, individualized consideration and inspirationalmotivation (5, p. 756). Transformational leaders are viewed asvisionary leaders, who seek to satisfy the followers’ higher orderneeds. They often go beyond the social exchange and try to satisfythe followers’ needs for competence, ownership and affection.

I chose the topic of leadership in the healthcare sector becausemany healthcare organizations across Europe usually spend lots ofmoney in developing the facilities in hospitals and laboratories but,spend less time and effort in assessing the leadership and managementstyles adopted by the managers in these organizations. Therefore,I thought that conducting an assessment of leadership theoriesapplicable in any healthcare organization would help in identifyingwhat is needed in improving the healthcare sector. I also chose thistopic because leadership theories keep on changing especially in thedynamic world characterized by mergers and acquisitions.Transformational leadership theory caught my attention because itseems to be an improved fashion of the so-called charismaticleadership, which now out of fashion.

Positive Aspects of the Transformational Leadership Theory

Transformational leadership approach is beneficial for anyorganization in the health sector ranging from nursing homes,pharmaceutical companies to community-based health careorganizations. This is because it has significant positiveimpacts in times of organizational changes (6, p. 1032). While thetransactional leadership approach emphasizes on the social exchangebetween the leader and the followers, transformational leadershipapproach goes beyond that “transaction” and stimulates theintellectual capacities of the employees. As indicated earlier, thiskind of approach seeks to satisfy the higher order intrinsic needsand realize the full potential of each follower (5, p. 755).

The last few decades has seen an increased need for visionary andinspirational leaders due to the complexity of organizationalactivities in a fast-changing world. The transformation leadershipapproach seems to meet these needs because it provides a framework onwhich leaders and managers can use their innovativeness andcreativity to respond to the changes brought about by thefast-changing world. The approach emphasizes on getting leaders, whocan inspire and share their vision with their subordinates whileeliminating their self-interests (7, p. 18). These leaders can aswell co-operate with the team members in formulating the strategiesof an organization, and has proven successful in orchestratingbusiness mergers and leading virtual teams.

Negative Aspects

Besides the good side of the transformational leadership approach,there are negative aspects brought forward by other theorists inmanagement, who claim that it can cause organizational destruction orharm. The critics argue that if the leader in this type of frameworkis underpinned by ‘emotional intelligence’ to guide the employeesthrough the risky organizational issues such as change, it is morelikely that the organization will fail rather than succeeding. Thefour components of the transformational leadership theory are said tobe the potential domains of organizational failure. For example, thethree aspects of transformational leadership inspirationalmotivation, idealized influence and individualized influence areassociated with emotional intelligence. These critiques coupled withthe debates about the effectiveness of the transformationalleadership style, which have lasted for decades make the approach notdesirable for some organizations (2, p. 39).

Additionally, there are some limitations of the transformationalleadership theory starting with the arguments that transformationalleadership cannot survive alone if higher levels of efficiency in anorganization are needed. This is a major limitation of the theorybecause it creates the need to integrate transactional leadershipqualities and the day-to-day management skills together with thetransformational leadership qualities in order to achieveorganizational success. For instance, Bass (1993)argues that a transformational leader will automatically fail,if he/she does not have the traditional managerial skills. Otherscholars of the contemporary management theories believe that bothsets of leadership qualities and skills should be manifested by thesame person in different proportions. The incorporation of these setsof skills and qualities creates a big challenge to the leaders, andhence the transformational leadership style is viewed as a complexform of leadership.

Relevance of the Transformational Leadership Approach

The approach contributes to the contemporary management theoriesbecause it seems to be an improvement of the transactional leadershiptheory. Although Bass (19) argues that transactional andtransformational leadership are two separate concepts, it is evidentthat the latter is an improved fashion of the former.Transformational leaders usually motivate the team members by goingbeyond their self-interests, sharing their vision with the followersand elevating their higher order needs. In transactional leadership,the leader gives the followers what they need in exchange for whatthe leader wants. However, the transformational theory recognizesthat there is niche/gap in the social exchange, and introduces thesatisfaction of other needs. Transformational leaders often seeks tosatisfy self-actualization needs such as the need for achievement andpower after they identify that the esteem and safety needs of theemployee has been satisfy. In this way, they stimulate innovationamong the workers and hence improving the performance of healthcareorganizations in delivering care. (5, p. 755)

Therefore, transformational leadership styles are considered superiorto the transactional leadership styles since the entire team isdeveloped to form part of the central process, which helps inachieving the organizational objectives. The approach enablesidentification of the workers’ needs and capabilities, which inturn allows intellectual stimulation. As a result, the leadershipstyle yields higher levels of job performance and satisfaction thateventually leads to organizational success. According to Bass (1985),the transactional leadership approach is concerned with thetransaction between the leader and the follower,the transformational leadership styles focuses on makingradical changes, which can lead to growth or present challenges.

The transformational leadership style is often compared to theold-fashioned charismatic leadership style. Thus, the theory, whichwas developed in the late 20th century, is an improvedfashion of the charismatic style of leadership. For instance, leaderssuch as Churchill, Hitler, The Reverend Moon and Mao Tse Tung aresome of the charismatic leaders recognized in the past (8, p. 14).Today, it is difficult for these people to be called transformationalleaders, and thus, the transformation theory of leadership plays agreat role in the transition from charismatic to transformationleadership. Charismatic leaders are said to have strong admirablepersonalities that attract followers. They are often good in sharingtheir imaginary ideas with the followers and encouraging them to worktowards a common objective. In this new era, the set ofcharacteristics of charismatic leaders can only be described by thetransformational theory making it a strong pillar in managementknowledge.

Also, charismatic leadership was the basis of the distinctliterature of the transformational leadership theory. Weber was thefirst theorist to give insights about how charismatic leadershipcould benefit organization in the 1940s (2, p. 34). Then, House(1977) developed the theory of charismatic style of leadership in the1970s, and used the concept in organizational research. Numerousstudies of the charismatic approach to leadership have been conductedsince that time, and it is clear that the transformational leadershiptheory borrows concepts from charismatic leadership theory and theyboth share much in common (5, p. 755). The modern revised version ofthe transformational theory of leadership thus, has concepts incharismatic and transactional leadership approaches.

Application of the Transformational Leadership Theory

In the assessment of how the theory of transformational leadershipis applied in the health care sector, I took a slightly differentapproach to try and consider the manufacturers of drug, who alsocontributes much to the health care sector. The application of thetheory is based on my experience during the internship that lastedfor six months at Zydus-Cadila healthcare limited. It is aninternational pharmaceutical company, which is based in Ahmedabad,India. The global company manufactures a wide range of products suchas the Active Pharmaceutical Ingredients APIs,which are sold in form of tablets, syrups and capsules. Thisinnovative company also produces and markets several animal healthproducts around the world. Its headquarters are in India but, it hasoffices in the United States, Europe, Brazil, Japan, and South Africaamong other emerging markets (4, p. 5).

The company employs nearly 10,000 employees around the world, andconducts extensive research in one of their most recognized researchand development centre. I was compelledto explore the leadership styles adopted in this company due to itscomplexity and dominance in the drug market across Europe (4, p. 10).The supply of drugs to the healthcare organizations in the UK issignificant activity in promoting the health and safety of people inthat region, and thus, examining their leadership styles also givesinsights on how to improve the healthcare sector. During theinternship, the manager of the marketing department manifested ahandful of characteristics attributed to transformational leadership.He is inspirational when delivering speech and giving instructions tothe workers. He articulated and communicated a clear vision to theworkers, and that is why the company is on the world stage in drugsupply. Before the work commenced, he normally explained to us thecomplete process to be following in executing the tasks andactivities.

I also found out that the manager was very supportive, had goodcommunication skills, and welcomed new ideas in the marketing field.The manager had the tendency of remaining focused despite anyconflicts in the company. His good interpersonal relationships withthe team members, he could easily check everybody’s work in thedepartment and assist in correcting any mistake on the spot. Based onthe case study, it is clear that the manager’s aim was to heightenthe success of the company in terms of the sales made per year. Hisdedication to the company encouraged the workers to follow the sametrend by being enthusiastic and optimistic about the company’ssuccess. Other leaders in the production, R&ampD, quality controland human resource departments demonstrated other leadership stylesbut, the success of the company was attributed to the mixture oftransformational and transactional leaders guiding the day to dayoperations (4, p. 60).

Literature Review

As stated earlier, there have been several studies conducted tounderstand how the concepts of transactional and transformationalleadership can be applied in organizations. When Burn firstintroduced the idea of having transformational and transactionalleadership in politics, he argued that the latter is more familiarthan the latter (3, p. 59). I disagree with Burns becausetransformational leadership has its roots in charismatic leadershipit is only that it appears in different fashion in the modern world.This is because during the days of Winston Churchill and AdolfHitler, transformational leadership was already in practice, unlike,the transactional leadership, which came into the limelight in thelate 1970s. Also, the inspirational leadership qualities gainedimportance in the twentieth century than the transactional leadershipstyle, and hence one cannot say the transactional leadership is morefamiliar to the world than the transformational leadership approach.The argument is supposed to be the other way round because eventoday, transformational leadership is yielding better and outstandingresults than transactional leadership.

Bass (91) responded to Burn’s arguments by using his concepts todevelop the theory of transformation in leadership. Bass (92) did notagree with the idea that both types of leadership represent thecontrasting ends of a single continuum. He added thattransformational and transactional leadership are two distinctconcepts. I agree with Bass’ arguments because his discoveries gaveinsights on how the two concepts of leadership could be applied inorganizations. With the distinction between transactional andtransformational leadership it is now possible to identify thecomponents of each style that needs to be improved in the attempt toenhance the organizational success. Based on the case study, it isevident that some leaders can portray purely transactional ortransformational leadership qualities, and this shows that the twotheories are related but, distinct from each other. I also supportthe argument that the best leaders should have both transformationaland leadership qualities. The success of multinational companies suchas Zydus-Cadila is attributed to the combination of these twoleadership styles either in one person or in a single organization(4, p. 51).

Challenges Associated with Transformational LeadershipImplementation

Transformational leadership is key aspect in achievingorganizational success but can also be challenging during itsadoption or implementation in any organization. First, the leaderimplementing the vision in a healthcare organization may experienceresistance to change (7, p. 79). Some healthcare workers, forexample, in a nursing home, may be negative about change broughtabout when a new physiotherapist, who is believed to be atransformational leader, is introduced in the organization. The careassistants working at the nursing home may not welcome the proposedchange in operations because they think that change comes with morework. Adoption of a different style of leadership may also createconflicts between the new leader and the team members. Usually,transformational leaders seek to implement the vision of theorganization even without concrete definitions, unlike, the formerleaders, who led the workers using the clearly defined goals andobjectives. In other words, these leaders often have innerconvictions about the company’s success, which unless communicatedin a clear manner, they may promote rebelliousness among the workers.The only solution to the problem of resistance to change is todevelop, articulate and communicate a clear vision to the followersto eliminate ambiguities and uncertainties in the minds of thesefollowers.

Another problem that may arise due to the adoption of thetransformational leadership style is the lack of teamwork in theorganization’s groups and teams. Teamwork might be lost when theworkers feel uncomfortable with the change or the leader poses tointimidate them while carrying out the day to day operations (7, p.80). Transformational leaders usually try to avoid asking the workershow, where, what and when the job will be done. This provokes theteam members to be reluctant in performing the tasks assigned to themsimply because the manager is not following up on their performance.As a result, teamwork is lost and the subordinates are given too muchresponsibility since their leader is seemingly not a ‘dictator’(6, p. 1036) However, this challenge can be overcome by helping theteam members realize that if they fail to perform the tasks assignedto them, the organization might fail.

Personal Reflection

I liked conducting the assessment of the transformational leadershipaspects evident in Zydus-Cadila, a global pharmaceutical companybecause the supply of drugs is often left out when it comes to thehealth sector of the UK and Europe at large. In this era of majororganizational changes such as mergers and acquisitions,understanding the leadership organizations is extreme important toensure job satisfaction and job performance. What I disliked aboutthe evaluation of the leadership style is that one must go throughall the management styles used by the manager of each department toform a conclusion of how a company operates in terms of leadership.This makes it even harder when proposing the best course of action incase there is need for change in leadership style because therecommendations must incorporate all the aspects gathered from allthe departments.


The extensive research conducted into the transactional andtransformational leadership theory in the past few decades hassignificantly contributed to the contemporary theory of management.Additionally, the fact that transformational leadership is viewed asa different concept from transactional leaders has provided insightson how the former can be applied in healthcare organizations.Transformational leadership, which is often compared to theold-fashioned charismatic leadership, is a fundamental aspect inachieving success in any organization. The approach is only limitedby the fact that highly effective leaders are those couple thetransformational leadership qualities with transactional leadershiptraits but, not those managers/leaders, who use a single style. Thiswas evident in Zydus-Cadila, a global pharmaceutical company, wherethe mixture of transactional and transformational leaders achievedsuccess regarding the supply of drugs/medicines around the world.

Reference List

  1. Bass BM &amp Avolio BJ. Transformational leadership: A response to critiques. San Diego, CA: Academic Press 1993.

  2. Bass BM. Leadership and performance beyond expectations. New York: Free Press 1985.

  3. Burns, J M. Leadership. New York: Harper &amp Row 1978.

  4. Cadila Healthcare Limited. Cadila Healthcare Limited Annual Report 2013-14. Ahmedabad: Cadila Healthcare Limited 2014.

  5. Judge TA and Piccolo RF. Transformational and Transactional Leadership: A Meta-Analytic Test of Their Relative Validity. Journal of Applied Psychology. 2004 89(5): 755–768.

  6. Kovjanic S, Schuh SC, Jonas K, Quaquebeke NV and Dick RV. How do transformational leaders foster positive employee outcomes? A self-determination-based analysis of employees’ needs as mediating links. Journal of Organizational Behavior, Journal of Organizational Behavior. 2012 33, 1031–1052.

  7. Smith R. Doctoral Dissertation: Advantages and Barriers to Transformational Leadership Implementation in a Scientific Laboratory. Minneapolis: Applied Management and Decision Sciences Faculty, Walden University Press 2015.

  8. Downton J. (1973). Rebel Leadership. New York. Free Press.