The modern business world is increasingly becoming competitive. Therefore, it is becoming progressively more indispensable for organizations to reshape and suit the demands of the rapidly changing world. The resistance to change is a dead end to both the management and the organization. Clients are not only demanding exceptional services, but are also demanding more from the modern corporation. Thus, it is becoming increasingly necessary for the organizations to reshape and meet the ever-changing needs of their clients. The top management of various organizations understands the value of committed and flexible workers in effecting organizational change. However, leaders need to emphasize on actions that will produce a quick and smooth transition. Various leadership styles and models are available for effecting organizational change.
Various leadership styles and models for change management exist; however, transformational leadership is the most popular approach for many organizations. Transformation leadership is a leadership approach, which is focused on effecting change at both the individuals and the social systems. The approach is effective for the effective management of change for various reasons. The approach aims at creating valuable and positive change in the adherents with the ultimate goal of transforming the adherents into leaders. The approach is reliable in effecting change since it employs various strategies to boost the motivation, confidence, and performance of the adherents (Bass, 1985). The strategies include linking the adherent’s sense of identity and character to the organization’s mission and collective identity. The approach acts as the role model for the adherents thus inspiring them and challenges the adherents to take greater responsibility for their actions. Additionally, the approach understands the strengths and weaknesses of the adherents; thus, the leader responsible for the change process is able to assign different adherents the responsibilities that optimize their performance.
Transformational leaders implement new ideas. Transformational leaders are always changing themselves; they are both flexible and adaptable and are continuously improving the people around them (Auster, Wylie & Valente, 2005). These leaders engage with their adherents, focus on the higher order fundamental needs, and raised the awareness of the significance of specific results and develop new methods of achieving these results (Gellis, 2001). The effectiveness of transformational leadership in effecting change was tested by the global economic changes that occurred from the early 1970s. These changes required large corporations such as GM and AT&T to implement radical changes in their ways of conducting business. Rapid technological changes, heightened competition among firms, unpredictability of OPEC oil prices, and the varying demographics created an unstable and chaotic business environment. Organizational change was inevitable; organizations needed to downsize and to adopt new forms of organization management. These changes took toll on the worker satisfaction and morale severed the conventional long-term contracts in exchange for employee loyalty (Bryant, 2003). Thus, companies faced the need to effect change and to improve employee morale; transformational leadership came in handy.
On the other hand is the transactional leadership approach. The leadership approach is based on theory of exchanges that take place between the leaders and their adherents. The approach is often contrasted with the transformational leadership approach. Leaders provide their adherents with the resources and rewards in return for inspiration, improved productivity, and efficient task execution. The emphasis is placed on the leader under the approach; he sets the goals, establishes the targets, identifies the performance gaps, and motivates through various rewards (Kotlyar & Karakowsky, 2007). Transactional leaders have proved to be quite effective in vision implementation. A valuable characteristic of the transactional leaders in effecting change include their comprehensible performance expectations and goals, and a strategy that links the achievement of the goals to the rewards. These leaders are also effective in monitoring and implementing changes as they occur (Auster, Wylie & Valente, 2005). The leaders have excellent critical thinking abilities; this is proven by their capability to establish functional organizations. They achieve change through the process of social exchange that includes reward-based transactions.
In conclusion, change is inevitable in the modern business world; ignoring change is futile for both the management and the company. There are two major approaches to change management, the transactional and transformational approaches to change management. However, the transactional approach is more conventional and thus may not be an effective strategy in the modern business world. Therefore, transformational leadership approach is more suitable for effecting organizational change. The effectiveness of the approach arises from the fact that both the leaders and the adherents are in constant change; new approaches for effecting organizational change are constantly being developed.