Leadership is essential for fulfilling the mission, vision and objectives of the organisation, allowing individual interests to be reconciled with the strategic designs of the organisation.
According to Yukl (1998), leadership has taken on different perspectives over time:
Leadership is an increase in influence over and above a mechanical submission with the organisation’s procedures;
Leadership is a process of influencing the activities of a group in pursuit of a goal;
Leadership is a process of giving meaning and direction to a collective effort and provoking a desire to channel efforts towards that goal.
In the perspective of Vries (1997), leadership is the ability to have people execute actions that they do not enjoy while enjoying performing them. McGregor (cited in Motta and Vasconcelos 2002) addresses the difference in assumptions about human nature and its motivations corresponding to different leadership styles and compares the profile of those led: (a) in “Theory X”, where people are lazy and indolent, avoid work and need to be watched (there is practically no leadership and the hierarchical administrative posture prevails); (b) in “Theory Y” where people enjoy work and are creative and competent (the actions related to leadership prevail).
However, leadership is not the exclusive function of people who occupy hierarchically superior positions in organisations (Kouzes and Posner 1997) because it occurs whenever someone tries to influence the behaviour of a person or a group of people, regardless of their purpose (Ngodo 2008; Sofi and Devanadhen 2015; Akparep et al. 2019). Quintella (1994) presents some basic requirements for effective leadership (Table 1).
Table 1. Evaluation of the leadership style.
(1)Knowledge of the industry and your organisation (a. broad knowledge of the industry: market, competition, products, technology; b. broad knowledge of the company: key executives and their interests, the culture, the history, and the systems);
(2)Relationships in the company and the sector (broad set of solid relationships in the company and in the industry);
(3)Reputation and record of achievement (excellent reputation and convenient record of achievements in a wide range of activities);
(4)Capabilities and skills (a. sharp mind (analytical ability, sufficiently strong common sense, judgment, aptitude for reasoning, and strategic and multi-dimensional thought); b. strong interpersonal skills: the ability to develop good working relationships quickly, empathy, ability to “sell”, sensitivity towards people and human nature);
(5)Personal values (high integrity (widely values all people and groups));
(6)Motivation (a. high energy level; b. strong propensity to lead: power and achievements must be supported by self-confidence).
After examining the works of several authors, we present the models of transformational leadership and transactional leadership. Researchers in the area of leadership (Burns 1978; Bass 1985, 1997, 1998; Avolio and Bass 2002; Adair 2003; Crawford et al. 2003; Armstrong 2012; Xenikou 2017) have classified the different models according to the type of interaction that exists between the leader and the other members of the group.
Transactional leadership advocates the existence of a transaction between the leader and the members of the group, who accept the leader’s influence whenever they provide them with an advantage.
Followers are motivated by the leader’s promises, rewards, and/or threats” (Bass 1997).
The transformational leadership style invites the other members of the group to abandon their own interests for the benefit of the group’s, and therefore the organisation’s, interests (Gonçalves 2008; Góis 2011). In the 1980s, new ways of understanding leadership in organisations were developed. The leader is now seen as a sense manager of the organisation, the one who
…defines the organisational reality through the articulation between a vision (which is a reflection of the way he defines the organisation’s mission) and the values that serve as its purpose (Costa et al. 2000, p. 22).
Transformational Leadership
We can consider that leadership aims to induce or persuade subordinates or followers to contribute and want the organisational goals for themselves, striving their utmost to make to happen (Jabbar and Hussin 2019). Thus, transformational leadership emerges as fundamental in this context (Marasinghe and Anusha 2018; Norena-Chavez et al. 2021).
This model explains that leadership causes followers to change their needs, beliefs, and values. Crawford et al. (2003, p. 12) stated that “…a transformational leader acts by stimulating the whole organisation to move towards higher-order needs”. In this sense, Burns (1978, p. 425) stated that “…the motivation of the transformational leader is the personal development of the follower”. Bass and Avolio (1990) and other authors who have studied transformational leadership have stated that this leadership style can be an extension of transactional leadership, although transactional leaders cannot perform it transformationally.
This transformational paradigm promotes placing high value on employees’ own personal growth as a tool for increasing organisational benefit (Crawford 1995).
The transformational leadership style prevails people’s motivations to exceed expectations and lead to higher performances (Jyoti and Bhau 2015; Bhargavi and Yaseen 2016; Al Khajeh 2018; Akparep et al. 2019; Choi 2021; Wang and Huang 2022). This leadership style means “…leadership exercised by leaders who introduce profound changes in society and in organisations, leaving indelible marks” (Rego 1997, p. 392).
Burns (1978) distinguished between transactional leaders who improve existing action plans and transformational leaders who change strategies and actions, underlining the current need for an evolution of authoritative leadership towards mobilising and transformational leadership. This requires the leader to possess a combination of theoretical, technical, and methodological competencies grounded in management and leadership skills.
In this leadership style, leaders act to fuse the focus on the vision and the mission. The leader uses motivating and challenging expectations and displays trust and respect for subordinates, seeking to reinforce the vision and mission through their actions.
In the transformational leadership style, leaders provide an environment to employees that promotes the spirit of freedom to innovate and share experiences and achievements with others in the hope that the organisation will gain from this process (Bryant 2003).
According to Muchinsky (2004), this type of leader is not limited to exchanging information or making agreements with their followers but is concerned with achieving organisational results through the use of one or more components that underpin transformational leadership and enable the achievement of a state of well-being.
This type of leadership is characterised by a vital personal component of the figure of the leader, as it motivates followers, introducing changes in their attitudes, and creating inspiration for the achievement of objectives based on values and ideals that interest the organisational environment (Prameswari et al. 2020). This leadership style has four components, as stated by Castanheira and Costa (2007): charisma, inspiration, respect for subordinates, and intellectual stimulation. For Heitor(2006), transformational leadership has four dimensions: idealised influence, inspirational motivation, intellectual stimulation, and individual consideration.
In the first dimension, idealised influence (charisma), leaders are admired and respected, and their followers identify with the leaders. The leader shares risks with the followers and is consistent in his or her way of acting, namely in the respect for ethical principles and values. In inspirational motivation, through different forms, leaders motivate their followers by promoting individual and team spirit, with enthusiasm and optimism being always very present, i.e., the leader encourages his/her followers to strive towards an attractive future, appealing to the vision, using symbols to lead followers in their efforts, and modelling the type of behaviour desired by him/her, thus giving meaning to the effort of the workers (Kankisingi and Dhliwayo 2022).
In the dimension of intellectual stimulation, leaders stimulate the effort of their followers to be creative, question all assumptions, and debate problems in order to find new solutions to frequent problems (Wang and Huang 2022). Additionally, considering individuals, leaders act as coaches; they pay attention to the needs of each individual to help them grow, and eventually, followers can quickly reach higher levels and greater potential, and the leader supports, encourages, and accompanies followers (Lan et al. 2019; Kankisingi and Dhliwayo 2022).
A study by Cui et al. (2022) conducted in China based on a sample of 417 respondents concluded that transformational and transactional leadership styles have an impact on organisational learning and innovation performance. On the other hand, the study considered that organisational learning has a direct impact on innovation performance, being a mediator of the relationship between leadership styles and business innovation performance.
In turn, Wang and Huang (2022) found evidence that transformational leadership positively (negatively) moderated the relationship between control culture and innovation ability, whereas transactional leadership positively moderated the relationship between control culture and innovation ability.
Findings from the Lan et al. (2019) study show that transformational leadership has a positive impact on external job satisfaction, whereas patriarchal leadership has a positive impact on internal job satisfaction. The authors highlight the importance of encouraging employees with positive and inspiring speeches, as well as with praise in order to promote satisfaction and interaction with colleagues. Training employee behaviour can create a sense of accomplishment with the job.
However, the results of the study by Gutu et al. (2022), developed in the IT&C industry in Romania, revealed that transformational leadership instruments lose importance and effectiveness in exclusively online work environments. Thus, transformational leadership tools (idealized influence attributes, idealized influence behaviour, inspirational motivation, intellectual stimulation, and individual consideration) must be reformulated and adapted for the online work environment so that employees understand the actions and attitudes of leaders. As a result of this reformulation, it is possible to increase job performance and employee well-being and reduce turnover intention.
Transactional Leadership
For Castanheira and Costa (2007), this type of leadership style focuses on the existence of a system of rewards and punishments applied by the leader as a result of the fulfilment, or not, of contracted objectives. The transactional leader points out the behaviours to be adopted and the objectives to be achieved without influencing or motivating the employees to any great extent in order to achieve the desired goals (Mwesigwa et al. 2020).
Transactional leadership emphasises a dichotomy between the leader as a superior and the follower as a dependent, based on a perspective of conformity with the organisation’s reality (Armstrong 2012; Silva and Mendis 2017; Mahfouza 2019). In contrast to transformational leadership, transactional leadership occurs when one person takes the initiative in making contact with others for the purpose of exchanging valued things (economic, political, or psychological “things”, for example) (Kemunto et al. 2018).
The transactional leader directs and motivates their followers towards the objectives set by the organisation by clarifying the roles and the demands that fall to each employee according to each particular task (Silva and Mendis 2017; Mahfouza 2019), i.e., “…seeks only to make compatible and harmonise the objectives of those led, through simple exchange and negotiation of conflicts; incentives and status are exchanged for performance” (Ferreira et al. 1996, p. 253).
In this leadership style, followers are led by the established reward system as well as the punishment system (Suprapti et al. 2020). In this way, the leader interacts with their followers so that they continue work and accomplish what they both agreed to and transacted for in order to achieve the organisation’s objectives. Burns (1978) contrasted transactional leadership with transformational leadership, as the latter bases its actions on the followers by appealing to the interest of each of its followers, whereas transactional leaders base their power on the authority that comes from their hierarchical position in the organisation (Kalsoom et al. 2018).
Laissez-Faire Leadership
This type of leadership is characterised by a certain apathy that the leader shows towards the organisation’s problems and strategic vision (Puni et al. 2014; Al Khajeh 2018). Its influence is more noticeable when problems get worse and require some type of intervention. However, non-leadership behaviours are also evident: “the leader does not show typical leadership behaviours, avoiding making decisions and abdicating his responsibility and authority” Castanheira and Costa (2007, p. 144).
Leaders with the laissez-faire style avoid becoming involved in important matters and avoid making decisions. As Castanheira and Costa (2007, p. 149) stated, they “avoid getting involved in important matters and avoid making decisions, delay responding to urgent issues, wait for things to go wrong before acting, let problems drag on before taking any action”. With this type of leadership, it is not possible to find a work environment with defined goals because the leader does not take action plans and postpones making important decisions, ignoring their responsibilities (Puni et al. 2014; Giao and Hung 2018; Thanh and Quang 2022), contrary to the transformational and transactional leadership style types (Dantas 2013).
The dimensions that characterise laissez-faire leadership are (Bass 1985; Bass and Avolio 2000; Bass and Riggio 2006): (a) management by passive exception—an aspect of laissez-faire leadership characterised by certain inactivity in the face of problematic situations on the part of leaders who only act when problems take on too severe a dimension—and (b) the absence of leadership behaviour...
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