Influence of Transformational Leadership and Organisational Culture on Business Performance

There are various types of leadership styles – the coaching leader, the authoritative leader, the democratic leader, and so on.

In this article, the focus is on the transformational leader and the influence on organisational culture and business success.

Leadership in a business is essential in influencing the success of that business, because no matter how competent, efficient and dedicated the workforce is, if wrong decisions and poor leadership prevail, the company is likely to ground to a halt or suffer significant losses at some point.

When persons with good leadership qualities lead a business or organisations, it is likely to achieve its purposes. Leaders who are role models have a positive impact on the workforce in an organisation, which lead to positive results.

 

 What is transformational leadership?

Transformational leadership is a leadership style that can inspire positive changes in those who follow.

Transformational leaders are generally energetic, enthusiastic, and passionate. Not only are these leaders concerned and involved in the process; they also put the focus on helping every member of the group succeed as well.

The leader works with teams to note what can be changed or what rules can be executed within members of a group/business/organisation to take the business forward.

 

Characteristics of transformational leadership.

Some of the significant aspects of transformational leadership are:

  • Visionary – a transformational leader is a visionary leader. He/she knows where the business is heading, and tries to steer it in that direction. With a clear vision of the goals to be met, a leader becomes more focused and less likely to make mistakes, and ultimately a maker of the right decisions.
  • Inspirational Motivation – leaders who bring about change are people who have the motivation and drive, a clear vision that they can articulate to followers. They love what they do, and they positively approach their jobs. They are personally invested in the business and have a strong desire for success.
  • Influence – The transformational leader serves as a role model for followers. Because followers trust and respect the leader, they emulate this individual and internalise his or her ideals.
  • Knowledgeable – A leader with a good grasp of the global and national economy level at his fingertips, as well as the performance of businesses, capital requirements, etcetera. Such a leader can compare the business policies and performance with other companies in a similar field, and thus establish a standard level of performance -This helps the leader identify areas that need a change in their organisations and in some way, act towards effecting the change.
  • Agreeable – A transformational leader is one whose aim is to push the business forward and ready to listen to his subordinates or fellow leaders. Instead of opposing or brushing aside ideas from workers or other leaders working with him or even customer, he or she should listen carefully and try to put into consideration the reason behind the suggestions.
  • Analytical – An analytical leader should be curious to know, for example, why the profit margin of their organisation is diminishing or why the working spirit of members is low and always crosschecking the system and processes and seeking improvement.
  • Ready to Adapt – A transformational leader is always prepared to adapt to changes, and to make decisions that fall in line with changing times. Such a leader keeps his eye on the competitors and changing market trends, always making the necessary changes to stay afloat.
  • Diligence – This is where a leader has conscientiousness, which means that they got an inner power to do their work thoroughly without much supervision.
  • These leaders are also able to help followers experience the same passion and motivation to fulfil these goals
  • Right, decision-makers – good decision-makers are those who are not afraid to make necessary, informed decisions when required.

Such characteristics form a combination of excellent leadership skills.

Transformational leadership is vital to steer a business in the right direction, make the right business decisions and maximise profits as a result. Not only does such leadership impact a business positively, but it also influences and shapes business’ organisational culture.

 

Organisational culture.

Organisational culture refers to how things get done in an organisation.

Corporate culture in an organisation depends on such things as leadership qualities and principles, company policy and values, business nature, as well as recruitment methods and requirements –  this has an impact on the corporate values and behaviour of the workforce in that organisation.

Organisational culture has an impact on the dress code, social interactions and beliefs of the workforce in that organisation.

 

Transformational Leadership and Organisational Culture

In addition to transformational leadership, no one group, business or society succeeds without teamwork. That is why organisational culture becomes vital in every prosperous society.

Organisational culture, as mentioned earlier, is how an organisation creates and executes policies, values and workforce ’ code of conduct as well as internal processes. This code of conduct, as well as rules and regulations, should be followed by every member of an organisation to create an enjoyable and productive working environment and performance. It also rebukes any form of vices. Probably, failure to coincide may lead to some punishment depending on different disciplines in different organisations. Organisational culture has got a lot to do also with leadership qualities, principles, company policy, business nature, as well as recruitment methods and requirements. Also, it affects dress code, social interactions and beliefs. For instance, a police force has a different organisational culture from a hospital. A hospital has a distinct corporate culture from a restaurant business or a manufacturing organisation.

Below are organisational culture examples:

Market Organisational Culture –  results-oriented culture that pushes for completion of tasks and accomplishment of goals. Leaders in this culture are demanding and always push for results. Making profits, having a significant market share and doing better than competitors are the main goals of such organisations. Owners, leaders and other workers in such organisations work together towards achieving these goals.

Clan Organisational Culture – sees the organisation as one big family. Members work closely together, forming a social group that encouraging mentoring and collaboration.

Adhocracy – creativity and risk-taking are encouraged. Innovation and experimenting is a large part of such an organisation. Such organisations include software developers, scientific research institutions and social media platform companies.

Hierarchy Organisational Culture – formal organisations where procedures are strictly followed, and there is a clear division between the leadership and the other workforce. Company policies are strictly adhered to, and control of costs and maximising of profits is sought through a predetermined mode of operation.  Control of processes, close monitoring and consistency are strict requirements in such organisations.

 

Principles of organisational culture

An excellent Corporate culture has much to do with the behaviours of people in an organisation based on the principles of the leader; these include:

  • Work with and within your current cultural situations: this means understanding your culture, how it can be advantageous to a business and trying to discern its traits to avoid losses.
  • Change in behaviour leads to a shift in mindset: this principle is based on the fact that a particular way of doing things will influence how people think. Empowering workers, setting up a system of collaboration and encouraging good relations between different workers, will change how they view things. On the other hand, trying to change or set up a new culture through meetings and communicating new rules may not be as effective, especially in regards to workers’ attitude.
  • Leaders should focus on just a few critical behaviour requirements: organisations should be very selective when it comes to picking a code of conduct. When executing rules, they should consider customers and workers as humans with flaws and not perfect beings.
  • Using workforce with certain qualities as allies in the change campaign: some employees with certain positive traits can be used to influence other employees when introducing a new culture. For instance, workers with excellent social skills can help launch a perception on how to deal with the customers, create social networks with the organisation, etcetera.
  • A new culture is for all workforce, not junior staff: Don’t let your senior leaders get away with breaking the rules. A culture cannot be entrenched in the system once the junior workforce discovers that the leadership is not devoted to it. Even if the junior workforce follows the new culture, they will have a negative attitude and will not be willing advocates of the same.
  • Culture should match business model and business goals: this means avoiding irrelevance in a way that ensures that the right values and principles are matched to the right business. One culture will be suitable for one type of business and not the other. For instance, an innovative company may not work well as a hierarchy model, where workforce are not encouraged to be creative and to come up with new ideas and products.
  • The results should be fast and evident: organisations should lay down values and principles that will give positive results quickly. The workforce may be discouraged or demoralised if a particular culture does not show any results or value. If there is a positive result, they are more likely to stick to it.
  • Encouraging workforce to share new ideas with friends and customers on email, social media: This works very well, especially if people like the original idea. For instance, a restaurant chain can offer a beautiful Thank You note to accompany every takeaway order. If that note is very beautifully written or visually attractive, sharing on social media may not only motivate the workforce but encourage customers as well and help in marketing.
  • Monitor the effect and success of your culture over time: Changes in the market and trends, adjustment to new business models and society may lead to changes in organisational culture over time. Corporate culture should have the ability to change their perceptions to more viable ones over time.

 

To sum things up, ethical leadership and organisational culture both have the power to move a business or organisation from one level to another. A good leader has a vision for the company, has good leadership qualities, and seeks to have all those who work under him/her follow suit in bringing the concept to fulfilment. The most effective way a leader can influence his subordinates is by introducing a fitting organisational culture and encouraging the workers to follow suit. By doing so, they embrace the leader’s vision, and that is a significant boost to any business. It is a recipe for proper management and success in business.

If you would like to discuss issues arising from this article please connect with Roy via roy@mmedu.co.uk or Tobi via info@thetacuk.com