Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness

Given a relative stagnation in organizational structure and management, a new relatively bold theory emerged in recent years known as shared leadership. It was driven by the need of change public and corporate leadership in thinking about management structures. The significant changes to how firms operate in the 21st century impacts employees, consumers, and leadership alike, requiring new ways of thinking, defining new assumptions and establishing new values.

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New leadership management paradigms are defined by culture of a globalised, interconnected world which is both constantly changing and driven by greater demands for ethics and corporate social responsibility. As corporations grow larger, often operating in various sectors or in geographically diverse areas, companies often rely on multiple management talents which emerge in teamwork. In contexts of greater awareness of individuals’ psychological profiles and traits and how these can impact styles of management, it became evident that team members can offer unique qualities that others don’t have which may be fitting for certain situations or roles.

Shared leadership attempts to challenge traditional notions of centralized hierarchy in management and build a foundation of broadly sharing power among a small group of individuals which then create mutual downward influence on subordinates as well as shared responsibility as they work together towards an objective.

Background

Shared leadership has evolved as an alternative approach to leadership as a method to enable firms with teams to effectively operate in globalized and complex business environments. An interest in shared-leadership is influenced by trends emphasizing team-based structures and projects, increased complexity and multiple knowledge expertise on projects, and the need for perpetuating organizational change in rapidly evolving markets.

Furthermore, this pairs with general societal cynicism regarding motivations of individual business leaders and concerns regarding a leadership capacity or reliance on a single individual in modern organizations. Shared approaches to leadership is directly addressing these concerns. Shared leadership can be defined as “a dynamic interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals or both” (Sweeney, Clarke and Higgs, 2018, p. 115).

Modern clarifications to shared leadership theory have focused on defining the complex adaptive process which occurs between leaders and followers. Taking into account the nature of contemporary work and organizational structures, leadership is identified as an emergent and dynamic process which arises as individuals take on leadership roles in accordance to their talents and the unique needs of an organization or team in a given situation (D’Inncenzo, Mathieu and Kukenberger, 2014, p. 1965).

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Shared leadership can be described as fluid, ambiguous, distribute, and transient, signifying a transition from traditional vertical approaches to leadership. Shared leadership is not as popular in commercial organizations as in non-commercial sectors such as education or healthcare where the approach has shown promising results. Shared leadership in commercial applications has some setbacks due to organizational ownership structure, the primary drive of increasing financial goals, and established practices of leadership and responsibility to shareholders that are challenging to adopt to a team of leaders (Sweeney, Clarke and Higgs, 2018, p. 116).

There are a number of benefits that have been identified in adopting shared leadership. It is advantageous since it is difficult for a single leader to have all the necessary knowledge, skills and abilities necessary to manage a large taskforce, department, or firm. Furthermore, shared leadership has been found to yield better team-level performance than traditional hierarchical structures. Certain formats of work such as virtual teams often used in global firms, have shown better performance in shared leadership frameworks.

In comparison to traditional hierarchical leadership where authority and control is accrued by a leader, in shared leadership, managers see themselves as facilitators of team members’ initiatives and talents, fostering trust in capabilities, increasing potential, and contributing to the execution of strategies which emphasize dispersed collaboration (Hoegl and Muethel, 2016, p. 11).

Impact on Managers

Shared leadership introduces an interesting context to management by creating the need for a balance between consensus and performance. Managers must work around factors that influence and promote at, especially at the managerial level where strategic issues may arise. Management teams are often influenced by leadership styles of top executives, and dynamics of a team can be heavily influenced by actions and words of top leaders.

On a management team, shared leadership indicates to managers mutual responsibility and participation in setting common goals. Managers must adopt appropriate communication channels and practices that contribute to the performance of a team in such context. Enhanced communication among managers in a shared leadership environment enables them to better identify strengths, weaknesses, opportunities, and threats to the organization (Jabarzadeh et al., 2019, p. 225).

Shared leadership implies the importance of funnelling leadership functions to middle- and low-level managers. Managers in organizational settings must adopt measures to facilitate shared leadership. Managers must redesign the job structure and enrich functions in the workplace that will motivate employees to engage in teamwork, thus enabling the process of team leadership and benefiting an organization a whole. Second, a psychological environment must be created where it will be risk-free for employees to speak up, share knowledge, and take initiatives. Finally, it is vital to enhance self-efficacy in employees so that they are willing to cultivate their leadership skills and strengths for the benefit of the project or organization (Hans and Gupta, 2018, p.741).

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Management in shared leadership is distributed, resulting in the sharing of influence. It is a significant change from old authoritarian models. However, innovative and growing companies are rapidly embracing this model, which is also inspired by social media, and considered the ‘modern’ approach to management. The model suggests that the best companies have quick access and utilize the collective intelligence of its workforce.

There is still usually one person in charge in terms of an executive or department manager, but in a shared leadership model, the power is distributed and there is inherently more autonomy and open exchange of ideas. Shared leadership is built on transparency and autonomy which challenges most traditional notions of management (Sweeney, Clarke and Higgs, 2018, p. 124).

Impact on Organizations

Strategic shared leadership is a concept which also impacts the dynamic capabilities of an organization. Dynamic capabilities refer to a company’s capacity to create, extend, or modify their resource base reliably. As mentioned earlier, the complexities of the modern global economy can put significant pressure on an organization and overextend its leadership. Shared leadership can alleviate many of such aspects, both at the top and at lower levels of leadership and management.

By forming a shared leadership team around individual specializations ranging from technology to working with stakeholders and competition, organizations can significantly benefit from such structures. Furthermore, shared leadership produces systems which are meritocratic, allowing for the best ideas to arise and drive the next project or initiative. The success of the model stems from the concept that the best ideas rise from the ground up instead of top down approaches. Shared leadership leads to an inherently decentralized system of management in an organization which fundamentally changes operational norms, communication measures, and strategic decision-making (Jones et al., 2018, 83).

Another impact that the shared leadership has on modern organizations is helping to fill leadership capacity that is missing in many companies. Companies are able to become more adaptable and flexible in shifting global influences. (Sweeney, Clarke and Higgs, 2018, p. 126). In other words, it is a realistic and practical leadership strategy which can powerfully benefit a company when executed properly. A number of empirical studies demonstrate that there is a relationship between shared leadership and performance which include aspects such as work function, work autonomy, and task complexity.

Team performance increases for knowledge-intensive projects, but notable has a negative impact on manufacturing type teams (Jones et al., 2018). Composition and structures of companies change, with reintegration of teams. In some areas this has led to decreased bureaucracy and other barriers and improved efficiency. Shared goals and commitment that will be discussed in the next section often lead to organizational changes, similarly to the concept of shared leadership of building from the ground up. In the long-term this can offer significant competitive advantage to companies which choose to adopt this model.

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Impact on Employees

Shared leadership models inadvertently affect employee relationships and communication. Implementing shared leadership is challenging, as anecdotal evidence suggests that despite many firms welcoming the idea, the culture does not easily flourish in a vertical hierarchical business environment. Research found that for top executives, shared leadership did not do much to alleviate the workload, but it changed the nature of the job from making decisions based on interpreted information to managing emotional relationships between team members and various other aspects such as cultural clashes, international issues and others that may arise in global company.

These aspects trickle down to the lower levels of management as well. However, top managers will begin relating differently across traditionally boundaries, particularly with managers one or two levels below (Fitzsimons, 2016).

Nevertheless, relationships change in the model as authority shifts for managers at all levels to hold each other accountable instead of instantaneously reporting to a higher executive. At first this causes unease, but eventually relationships tend to manage their dysfunctions and develop a system of delivering bad news and supporting each other as well as distributing workload. It will also affect relationships between managers and employees, where a project team may be missing the decisive authority, and stumble in decision-making. However, with time it also allows teams to grow cohesively and develop a shared leadership which is appreciative for the autonomy (Fitzsimmons, 2016).

As mentioned in the organizational impacts, performance increases in instances of shared leadership, largely due to improvements to employee’s task performance at the individual level. Employees feel more autonomy and flexibility, which has the effect of keeping the workforce more engaged in the project in comparison to routine tasks where they feel nothing more than being a cog in a machine. Employees are motivated, encouraged to communicate and collaborate that greatly benefits the organizational culture and social aspects.

Employees’ psychosocial needs are addressed through the socialization, providing mental stimulation through infusion of new ideas or communicating with other employees or managers that act as role models. Shared leadership is directly associated with improved group satisfaction which helps to generate collective effort and efficacy (Choi, Kim and Kang, 2017, p. 278-279).

Discussion

Most of industrial-era leadership models which are prevalent to this day draw a stringent line between leaders and followers, with theories such as transformational or transactional leadership. The aura of heroic leadership is seen by leaders at the top bending followers to their will either through forced compliance or virtue of their charisma. Conventional change management theory usually reflects and defines followers poorly, as employees which are dug into complacency and their comfort zones.

Reality demonstrates that such leadership models are unsustainable and often has the opposite effect of disengaging employees. Contingent reinforcement that rewards production leads to lesser innovative thinking and creativity. Leadership models such as shared leadership offer change-friendly designs to organizations which allow to utilize the insights and talents of the numerous employees to improve functions and operations.

Success in complex knowledge-based environments with multiple problem-solving needs which have defined virtually every sector of the modern economy, depends less on the actions of a innovative leader at the top but interdependent and coordinated leadership initiatives which offer value from group members (Tams, 2018). In a context of business or public organizations where collaboration is absolutely crucial, shared leadership is a vital concept as the focus shifts to latent leadership capacities distributed through social networks within an organization.

Conclusion

Shared leadership is an emerging model of leadership and management which emphasizes a horizontal distribution of power and influence, open exchange of ideas, and transparency. It can be implemented at any level, ranging from project teams to virtually an entire organizational structure. While strongly challenging traditional notions of leadership, the model offers significant benefits, fosters creativity and communication, and leads to improved organizational performance. Many modern companies are embracing this approach which capitalises on collective intelligence to quickly adapt in a complex business environment of a globalized world.

Reference List

Choi, S.B., Kim, K. and Kang, S-W. (2017) ‘Effects of transformational and shared leadership styles on employees’ perception of team effectiveness’, Social Behavior and Personality: An International Journal, 45(3), pp.377–386. Web.

D’Innocenzo, L., Mathieu, J.E. and Kukenberger, M. R. (2014) ‘A meta-analysis of different forms of shared leadership–team performance relations’, Journal of Management, 42(7), pp.1964–1991. Web.

Fitzsimons, D. (2016) ‘How shared leadership changes our relationships at work’, Harvard Business Review. Web.

Hans, S. and Gupta, R. (2018) ‘Job characteristics affect shared leadership: The moderating effect of psychological safety and perceived self-efficacy’, Leadership and Organization Development Journal, 39(6), pp. 730–744. Web.

Hoegl, M. and Muethel, M. (2016) ‘Enabling shared leadership in virtual project teams: a practitioners’ guide’, Project Management Journal, 47(1), pp.7–12. Web.

Jabarzadeh, Y. et al. (2019) ‘Examining the environmental characteristics of shared leadership in a sport-for-development organization’, Organizational Management Journal, 16(4), pp. 220-234. Web.

Jones, G. J. et al. (2019) ‘Examining the environmental characteristics of shared leadership in a sport-for-development organization’, Journal of Sport Management, 32, pp. 82-95. Web.

Sweeney, A., Clarke, N. and Higgs, M. (2018) ‘Shared leadership in commercial organizations: a systematic review of definitions, theoretical frameworks and organizational outcomes’, International Journal of Management, 21(1), pp.115–136. Web.

Tams, C. (2018) ‘Bye-bye, heroic leadership. here comes shared leadership’, Forbes. Web.

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NerdyRoo. (2022, February 12). Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness. Retrieved from https://nerdyroo.com/transformational-leadership-styles-effect-on-employees-perception-of-team-effectiveness/

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"Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness." NerdyRoo, 12 Feb. 2022, nerdyroo.com/transformational-leadership-styles-effect-on-employees-perception-of-team-effectiveness/.

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NerdyRoo. "Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness." February 12, 2022. https://nerdyroo.com/transformational-leadership-styles-effect-on-employees-perception-of-team-effectiveness/.

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NerdyRoo. 2022. "Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness." February 12, 2022. https://nerdyroo.com/transformational-leadership-styles-effect-on-employees-perception-of-team-effectiveness/.

References

NerdyRoo. (2022) 'Transformational Leadership Styles Effect on Employees’ Perception of Team Effectiveness'. 12 February.

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