Transformational Leadership and Organizational Culture

TLDR: The four Is of Transformational Leadership as mentioned in this paper are idealized influence, inspirational motivation, intellectual stimulation, individualized consideration, and personal responsibility for the development of the followers of a leader.

Abstract: The organization's culture develops in large part from its leadership while the culture of an organization can also affect the development of its leadership. For example, transactional leaders work within their organizational cultures following existing rules, procedures, and norms; transformational leaders change their culture by first understanding it and then realigning the organization's culture with a new vision and a revision of its shared assumptions, values, and norms (Bass, 1985). Effective organizations require both tactical and strategic thinking as well as culture building by its leaders. Strategic thinking helps to create and build the vision of an agency's future. The vision can emerge and move forward as the leader constructs a culture that is dedicated to supporting that vision. The culture is the setting within which the vision takes hold. In turn, the vision may also determine the characteristics of the organization's culture. Transformational leaders have been characterized by four separate components or characteristics denoted as the 4 Is of transformational leadership (Avolio, Waldman, and Yammarino (1991). These four factors include idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Transformational leaders integrate creative insight, persistence and energy, intuition and sensitivity to the needs of others to "forge the strategy-culture alloy" for their organizations. In contrast, transactional leaders are characterized by contingent reward and management-by-exception styles of leadership. Essentially, transactional leaders develop exchanges or agreements with their followers, pointing out what the followers will receive if they do something right as well as wrong. They work within the existing culture, framing their decisions and action based on the operative norms and procedures characterizing their respective organizations. In a highly innovative and satisfying organizational culture we are likely to see transformational leaders who build on assumptions such as: people are trustworthy and purposeful; everyone has a unique contribution to make; and complex problems are handled at the lowest level possible. Leaders who build such cultures and articulate them to followers typically exhibit a sense of vision and purpose. They align others around the vision and empower others to take greater responsibility for achieving the vision. Such leaders facilitate and teach followers. They foster a culture of creative change and growth rather than one which maintains the status quo. They take personal responsibility for the development of their followers. Their followers operate under the assumption that all organizational members should be developed to their full potential. There is a constant interplay between culture and leadership. Leaders create mechanisms for cultural development and the reinforcement of norms and behaviors expressed within the boundaries of the culture. Cultural norms arise and change because of what leaders focus their attention on, how they react to crises, the behaviors they role model, and whom they attract to their organizations. The characteristics and qualities of an organization's culture are taught by its leadership and eventually adopted by its followers. At one extreme a leader accepts no deviation from standard operating procedures, managing-by exception in a highly transactional fashion while at the other extreme another leader rewards followers when they apply rules in creative ways or if they break them when the overall mission of the organization is best served. How leaders react to problems, resolve crises, reward and punish followers are all relevant to an organization's culture as well as how the leader is viewed both internally by followers and externally by clients/customers. To reiterate, the culture affects leadership as much as leadership affects culture. For instance, a strong organizational culture, with values and internal guides for more autonomy at lower levels, can prevent top administration from increasing its personal power at the expense of middle-level administration. …