Leadership In Sustainable Organisational Change Management Essay

This report outlines the effective management of change through different leadership styles. The role of leadership has been viewed in the process of organisational change in this essay. Organisational change is referred to the process of intentionally inducing change in the organisation by altering its structure, processes, systems, products or any other component. The role of leadership has remained vital in bringing the change to organisation. Thus, this assignment tends to explore the role of different leadership styles in exploring the process of change in the organisation.

There are two leadership styles that have been studied in this essay. These are transactional leadership styles and transformational leadership style. The transactional leadership cannot emphasise on the expressive aspects that are present in the organisation namely innovation, cultural changes and technological changes. The transformational leadership is more oriented towards participative and charismatic form of leadership. It values the participation and cooperation of the employees. Thus, both the leadership styles have been critique from different source after which conclusion has been made.


Organisational change is referred to the process of intentionally inducing change in the organisation by altering its structure, processes, systems, products or any other component. This change is usually induced to help the organisation in accomplishing its goal more efficiently and effectively (Lines, Sáenz&Aramburu, 2011).Davies (2007) asserted that the role of leadership has remained vital in bringing the change to organisation. However the scope of the leadership has been broadened to incorporate the sustainable leadership. Sustainable leadership is basically based on the moral purposes that envision the success as the feature for all i.e. organisation as well as the society.

Thus, this essay tends to explore two different sustainable leadership approaches towards organisational change. The role of these leadership approaches would be critically analysed from different theoretical sources. How these approaches help to make and sustain change in the organisation will be discussed with the help of few examples.

An Overview of Leadership vs. Management

Gill (2003) enunciated that the fundamental and primary component in successfully integrating change in the organisation is the effective leadership accompanied by the true organisational values and beliefs. The change is not a single day process rather it is a complete journey from the current state to the desired state. It also involves handling the issues and hurdle that come under the way of change institution. This requires a proper and pragmatic leadership approach therefore leadership has given a lot of importance in the context of organisational changes.

The effective leadership theory encompasses a multi-track approach towards the organisational change that is used by many leaders. These tracks are based on the cognitive intelligence (rational and logical thinking processes), spiritual intelligence (attaching meaning to the work and lives of people), emotional intelligence (feeling and sentiments) and behavioural skills (action oriented leadership) (Gill, 2002).

On the other hand, Pettinger (2004) narrated that management of the organisation is also effective while introducing change in the organisation. Sometimes, the failure of the change programs is attributed to the poor management, lack of proper management planning, absence of managerial control, inefficient use of resources by the management and unreliable managerial policies and practices. Like the leadership approach, management also focuses on behavioural, cognitive and committed style for embarking the change in the organisation. However, too much emphasis on any single component or approach may lead to produce deficiencies in the change program.

Chenhall and Euske (2007) signified that an effective change management can be instituted if the change encompasses a skilful, knowledgeable, action oriented and intellectual approach towards the organisational processes. Therefore, a successful change is the indicator of effective management and leadership of the organisation. Without proper leadership and management, change cannot achieve the successful results in the organisation.

An Overview of Sustainable Organisational Change

The concept of sustainable change as mentioned by Cameron (2008) has emerged from the increasing use of technologies and the emerging globalisation. The sustainable change is a change that is introduced to serve the benefits for the organisation and for the society as well. The purpose of introducing sustainable change in the organisation is to improve the overall organisational performance. Andrews, Cameron and Harris (2008) Affirmed that this change is performance is expected to bring positive results for the company and for the society as well. The increasing awareness of the customer and the high variation in their demands has caused the companies to take a sustainable look of the change. This means that a change should be favourable for the both the organisation and the society as well.

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Nevertheless, when the company fails to successfully integrate change, many problems emerges. These problems require the company to take some immediate measures to rectify the change process. For example, the development of the new automaker subsidiary “Saturn” by the General Motors (GM) is the witness of the dramatic change that resulted from the company’s exposure to huge losses in the market share. The bureaucracy was deeply rooted in the GM’s culture. However, when it set to change its patterns for overcoming the potential losses of share it had to change its deep rooted cultural practices. This eventually resulted in developing new technologies, structures, relationships and policies in the Saturn. One of the most important changes that were made to Saturn was the appointment of new and talented people. The purpose of these appointments was to make the employees and people feel that GM is constantly engaged in upgrading its system and policies to integrate with the technological changes and advancements of the world (Higgs & Rowland, 2006).

Two Different Approaches to Leadership for Sustainable Change

In Leadership, the transformational and transactional styles have remained subjected to huge debates over the period of time in social sciences. However, both the styles are being adopted by leaders while seeking the develop change programs in the organization. The distinction between these leadership styles set the whole change program is the different dimension. Therefore, leadership styles are deemed to be an important predictor of type of organizational changes (Bennett, 2009).

There are certain other forms and styles of leadership as proclaimed by Bennett (2009) such as goal oriented leadership, task oriented leadership, authoritative leadership, participative leadership, etc. that has also been debated in comparison with the transformational and transactional leadership styles. Thus, leadership consists of different dimensions and approaches through which leaders pursue the change oriented mechanism of the organization.

However, the transactional and transformational leadership styles are two broad categories of leadership that encompass all the other leadership styles. The transactional leadership is often called as instrumental leadership. There are various benefits associated with this approach to leadership. Nevertheless, it cannot work in times of accelerating change. The transactional leadership cannot emphasise on the expressive aspects that are present in the organisation namely innovation, cultural changes and technological changes. Thus, when the production becomes unstandardized then the institution of transactional change does not fit with accomplish of organisational change objectives (Leybourne, 2011).

The most important factor in the transactional style of leadership is the vision and mission set by the leader that helps him in reaching to the change goals and objectives. On the other hand, the transformational leadership is perceived to be more expressive in nature. The transformational leadership style as articulated by Ismail, Mohamed, Sulaiman, Mohamad and Yusuf (2011) can be well-understood in terms of differentiating it with the transactional leadership. The business organisation often incorporates a mix concept of transformational and transactional leadership styles. However, for their proper understanding, it is important to have a look at each from contrasting perspective.

Purvanova and Bono (2009) determined that the transformational leadership is more oriented towards participative and charismatic form of leadership. It values the participation and cooperation of the employees. However, a transactional leadership style is based on the principle of exchange among the leader and the sub-ordinates (followers). This differentiation between the two leadership styles is depicted from the political view. The followers are being valued by the leaders or given certain rewards and incentives when they follow the leader’s direction and orders.

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Thus, the conflicting status of both the theories is set to thoroughly examine in this essay from the behavioural perspective. The reason for choosing the behavioural perspective is that both the theories encompass behavioural differences in the leadership styles. However, these styles will be explored in the context of organisational change (Leybourne, 2011).

The transactional leadership has always been viewed from the perspective of cost-benefit relationship analysis. It follows strict rules and procedures towards judging the quality of outcomes. The followers are only benefitted when they seem to fulfil leader’s interest. Thus, a pure exchange process exists between the leaders and the followers characterised by the behavioural intentions of the leader toward change. The instrumental leadership usually embrace the concept of providing a direction and order to the followers that should be achieved by the way leaders have designed for them. Any discretion and authority is not entertained among the followers in the organisation (Boseman, 2008).

The leaders pursuing transactional leadership approaches usually compromise the value of motivation, team orientation and employee satisfaction in their work and goal setting. However, these three components are the most important driver of change in the organisation. The compromise of these three factors can lead to compromise in the change program of organisation. However, the critique argued that the transactional leadership approach set the context for the social exchange process among the leaders and the followers where both the parties involved in the pure exchange process. The leaders set the goals and aims and influence the followers to accomplish these goals and objectives. In such instance, the norms and the values of the organisation are sustained and the followers assert their wills to the leadership goals and objectives (Boseman, 2008).

The leader has the power which he emphasise on his follower to get the work done. In return, the followers also get the valued outcomes in terms of incentives and wages. Thus, this signifies the presence of social exchange process in the transactional leadership approach. However, the control, structure and conditions of the organisation play an equally important role in transactional leadership style. Organisations that are pursuing change programs use transactional leadership because the leaders are responsible to take important decisions regarding the company’s structure and culture and these decisions cannot be handed over to the followers (Leybourne, 2011).

Generally the leaders emphasise more on the structures and goals of the organisation in transactional leadership approach that is very helpful in instituting change in the organisation. Sir Alan Sugar represents a true example of the transactional business leader. He was renowned for making gradual changes in business over a period of time. He did not support the radical change rather he embarked upon the practices of continuous change by using the potential dimensions for change. He led Amstrad to the peak of success through his string commitment to the transactional leadership style. He has been regarded as the one of the most successful entrepreneurs of today’s world (Bennett, 2009).

The transactional leaders often use contingent reward and management-by-exception (MBE) approach for enhancing the performance and attaining the coordination of the followers in the change process. The followers are promised rewards by the leaders on achieving outcomes and objectives that help them to boost their performance level. This beholds the concept of contingent rewards in transactional leadership style (Bennett, 2009).

Management-by-Exception (MBE) usually has less impact on the employees as compared to the contingent rewards approach.The MBE helps the leaders to constantly watch and monitor the performances of employees and then take corrective measures. This approach is less used in the transactional leadership style. The most avoided form of leadership is the Laissez-Faire Leadership (LF) that the transactional leaders do not follow. LF is actually the process of delegating authorities to the followers for achieving the outcomes and goals. They set their own direction and take important decisions whenever needed. However, the transactional leadership style totally opposes this form of leadership style (Boseman, 2008).

Burns (2003) asserted that the transformational style of leadership envisions the charisma and coordination as the main components of the leadership style. It is based on the concept of transformational changes and great environmental variations. It can work in the difficult times when the balances and stability in the company’s processes seem to be missing. In such instances, the transformational leadership could help the organisation in beating the crises. The transformational leader is able to motivate the employees through encouraging their participation and by influencing them through charisma rather than power. The followers tend to follow the leader because of his charismatic personality.

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Ismail et al. (2011) mentioned that the transformational leadership witnesses huge changes and transformation in the goals and objectives of the company.The major difference between the transactional and transformational leadership style can be seen in terms of coordination, control and self-interest. The followers under the influence of transformational leaders are more encouraged to participate in the decision making, exhibiting their self-interest and getting aware of the values outcomes as compared to the transactional leadership style. The employees are motivated by means of self-esteem and their self-interest rather than monetary factors such as money and wages.

The esteem of the followers is being values by the transformational leaders. The transformational leader contains a shared vision and perspective of the organisational values and norms and pursues a future oriented and team oriented approach towards the organisational outcomes. With these shared beliefs and values, transformational leaders are prone to change the whole organisation for making it competent in the global market (Gumusluoglu&Ilsev, 2009).

Some of the most prominent examples of transformational leaders include the name of Bill Gates Bill Gates has pursued a transformational leadership style throughout his tenure. He has always encouraged the participation of his sub-ordinates and followers in the decision making. He values the thinking and opinions of his followers and this is the reason why Microsoft has been able to reach the heights of success in such a global and competitive market. He envisions the future in his mind and leads a whole team towards the accomplishment of that mission. The changes that have been taking place in the Microsoft are the true reflection of the collective efforts of the employees and the Bill Gates that has led the Microsoft to the peak of the success (Gumusluoglu&Ilsev, 2009).

Thus change is a dynamic process that requires the use of both the styles of leadership by the leaders. However, transformational leadership style is often viewed as more appropriate since it values the outcomes and participation of employees.


Summarising all the above discussion and examples, it can be said that the transactional leadership rest on the concept of social exchange between leaders and followers. They actively take part in this exchange process as leaders being the goals setter and followers being the goals follower. This approach is usually pursued when the organisation undergo some strategic and corporate changes in their businesses. At that time they demand the proper rules and policies and enforce the employees to follow their direction to achieve the goals and outcomes. They often need to take some immediate decision therefore incorporating Laissez-Faire Leadership would not be the best choice for transactional leaders. In summary, the employees are supposed to work with the change program in the organisation regardless of their wills and they are to follow the directions set by the leaders for them.

However, the transformational leadership style has been recognised as the best approach for the transformational changes. It demands the participation and coordination of the followers in the changes process. Without their participation and coordination the change cannot work well in the organisation. Since employees are the one who work with these changes and modifications therefore, their participation is extremely important for the leaders. The transformational leadership also envisions this concept as the best approach for achieving organisational outcomes. However, critique suggests that the mixture of both the transactional and the transformational leadership style can serve the best in the change process.

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