Two Types of Leadership & Business Examples The line between leader and manager

The line between leader and manager is ill-defined and difficult to quantify. Leaders are not necessarily good managers, and managers do not always possess leadership characteristics. Both leaders and managers are required in successful organizations. Leaders provide the long-term vision for the organization, while managers possess the talent for putting that vision into concrete action and managing day-to-day activities that accomplish that action. To some degree, all managers must provide leadership to their subordinates, and two types of leadership, transactional and transformational, have been identified as prevalent in today's workplace. This research examines these two types of leadership and considers them in light of managerial objectives, using real-world business examples.

Transactional leadership suggests that leaders respond to lower level subordinate basic and security needs (Deluga & Souza, 1991, p. 50). Leaders and subordinates are viewed as bargaining agents where relative power regulates an exchange process as benefits are issued and received. There are two types of behavioral patterns used in transactional leadership: passive and active. The passive style is described as management by exception where employees do not receive notice for their positive contributions to the organization, but instead are paid attention by their manager only when an error or problem arises. Punishment or disciplinary action is often the mediu

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ty among employees. Threats and warnings are not used; instead, the employee is given an oral reminder at the time of the first disciplinary action. If the poor behavior or performance continues, a second reminder is issued in written form. The final step uses a paid suspension day in which the employee is given time off to re-evaluate his commitment to the organization. In this way, the nonpunitive approach demonstrates an organization commitment to and desire for the employee to become productive in the organization, eliminating the need for punitive action. This discipline without punishment approach has been implemented at companies such as Union Carbide, General Electric and American Telephone and Telegraph, and has resulted in declines in employee turnover, disciplinary action and absenteeism (Howell & Avolio, 1993, p. 894). The Transformational Leader as an Agent of Change Today's managers have a more complex role than managers of previous eras. They must balance a highly regulated work environment with the needs of a diverse group of workers, many of whom have conflicting personal and career goals. Added to this is the high pace of technological change and the large amount of information which must be generated an

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