Is it possible to identify transformational leadership in a financial institution?
| Autor | Girardi, Gabriele |
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Introduction
The field of leadership studies focuses on the analysis of individuals' and groups' behavior within the organizational context, in addition to the effects of their action in the organization itself. Traditionally, leadership has been understood as a process that influences the activities of a group set to accomplish pre-established goals. Thus, the process of leading is seen as a set of behaviors that allow the manager to influence his/her team (Fonseca, Porto & Borges-Andrade, 2015).
Leadership can be defined as the practice that influences other people to understand, agree and to do what needs to be done--in other words, an individuals' set of competencies that gathers followers toward an objective (Yukl, 2002; Pelliciari, 2018). However, the concept of leadership evolves over time, always pursuing improvements in the performance of organizations (Daft & Pirola-Merlo, 2009). In addition to being a theme internationally investigated for about a century, it is a theme of particular interest to scholars and professionals, especially considering it evolves over time and the lack of good leaders in the world currently (Gil, 2011; Shahid, 2015).
Regarding leadership styles, literature brings several types, such as authoritarian, charismatic, situational, visionary, contingency, behavioral, transactional among others (Avolio, Walumbwa & Weber, 2009; Dinh et al., 2014; Fonseca et al., 2015). Among the 66 leadership styles indicated by Dinh et al. (2014), transformational leadership (TL) and transactional leadership are the most emphasized, which have been growing rapidly since the 1990s, especially in studies that investigate how these studies promote better performance in organizations (Bass, Avolio, Jung & Berson, 2003).
Considering the large number of different leadership styles found in literature, TL is the style that will be approached in this research, since it became a central issue in leadership according to scholars and professionals (Bass et al., 2003). Some studies relate TL to other constructs, such as performance, work satisfaction, innovation, beliefs, turnover, ethics, learning, socioenvironmental responsibility, depression, occupational efficacy, motivation, sustainability, commitment, among others (Eliyana & Ma'arif, 2019; Zuraik & Kelly, 2019). The theory related to this type of leadership presented results beyond expectations in several studies, with a strong positive impact (Bass, 1998; Avolio, 1999; Pelliciari, 2018). Thus, relating TL to the above-mentioned constructs results in positive outcomes, which justifies the choice of this leadership over the others and leads us to consider it as a positive leadership.
By assessing literature on TL, we verified a lack of research evaluating how employees perceive and identify TL in organizational environments. Fonseca et al. (2015) and Tabassi et al. (2016) affirm that the Brazilian scientific production on leadership is still at its early stage and may be considered obsolete. Regarding TL, despite being one of the most researched leadership styles internationally over the past twenty years, only a few studies were found in Brazil, especially in the banking industry, in which studies have been conducted on mental illness arising from deficient work conditions and stress (Barreto et al., 2013; Fonseca, Porto & Barroso, 2012; Maciel & Nascimento, 2013). We chose to further develop this research by investigating TL because it is innovative and promotes individual attention, empowerment of followers and intellectual stimulation (IS), in addition to exerting an idealized influence, stimulating growth and utilizing inspirational motivation (Jung, Chow & Wu, 2003).
There is a lack of good leaders (Gil, 2011; Sharid, 2015). According to the World Economic Forum (2015), 86% of the interviewees agree there is a leadership crisis in the world today. This information confirms the importance of investigating this issue for world economic growth, since there is a need for good leaders for the future. Thus, it is essential and relevant to study and spread awareness of good leadership, which is a characteristic of TL. In addition, there is a lack of this type of leadership in Brazil, which will be further explored later.
As research context, we chose a Brazilian financial institution, which undergoes several regulations, complexities in personnel management, and constant market changes. One may affirm that leadership plays a relevant role to achieve banking strategic objectives.
Considering the research gap previously mentioned and the importance of the theme to literature, our article analyzes the perception of TL in the institution through a descriptive, factor, variance and regression analysis in order to contribute to literature and present practical contributions to the institution under assessment regarding leadership. Therefore, the aim of this study is to analyze the perception of employees of a Brazilian financial institution on TL and compare the results amongst the different groups of respondents. The specific objectives are (1) to assess the perception level of TL in the context studied; (2) to identify explanatory factors through factor analysis; (3) to compare factors according to the profile of respondents through variance analysis; and (4) to identify the loading of each construct when determining respondents' general perception about TL.
Recent research indicates growing illness statistics of bank workers (Grisci, 2008; Freitas & Silva, 2019). Some studies suggest that bank workers' suffering may have reached its peak, which led some professionals to commit suicide (Grisci, Scalco & Kruter, 2011; Freitas & Silva, 2019). The causes for such behavior are usually attributed to strict performance requirements and pressure from upper management, which result in irritability, depression, tiredness, discouragement, physical exhaustion, dissatisfaction, lack of motivation, irritation, lack of patience, anxiety, anguish, fear and insecurity (Grisci & Bessi, 2004; de Freitas & de Carvalho Silva, 2020). Thus, the current scenario experienced by bank workers in Brazil is insecure and intensifies the suffering and illness of these professionals (Marques & Giongo, 2016). Even though the aim of our study is not to explore the banking sector, the positive leadership characteristics of TL and the number of studies on the precarious working conditions justify the development of the following hypotheses.
H1a. There are low levels of transformational leadership in the financial institution.
H1b. There are differences in the perception of transformational leadership among different hierarchical levels and departments.
This research is an empirical, descriptive and quantitative study in which the survey will be used as data collection technique. Previous research carried out by Gyensare, Anku-Tsede, Sanda and Okpoti (2016) on TL will be used as reference to elaborate the questionnaire applied to a national sample of 603 employees of the banking institution. In order to preserve the identity of the company investigated, we adopted the name Bank Research (BR).
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Theoretical framework
Leadership is a dynamic practice, in which the leader's performance changes according to different circumstances and peculiarities (Yukl, 1989; Tabassi et al., 2016). Historically speaking, leadership is essential for the success and survival of organizations and societies, as the leaders' decision influence their direction.
Amongst the leadership styles mentioned in literature, we chose to investigate herein TL, whose origins date back to the classic work of Burns (1978), later expanded by Bass (1990, 1995,1999,2003,2006,2008,2013) and Avolio, Walumbra and Weber (2009). Burns presents the differences between TL and transactional leadership considering the relationship between power and leadership. Literature on TL has been gaining more ground since the 1990s, especially on studies that analyze how these types of leadership promote greater performance in organizations (Bass et al., 2003).
Both leaderships represent two points of a continuum (Burns, 1978), in which the transactional leader is a negotiator who establishes arrangements in exchange for desired results and can either reward satisfactory performance or punish for unmet objectives (Fonseca et al., 2012). This type tends to lack results. In contrast, TL achieves superior levels of dedication and performance from employees, in addition to influencing commitment and attitude changes among employees towards the objectives and mission of the institution (Yukl, 1989).
Changes in the labor market over the past years have required leaders to become more transformational (Bass, 1999; Kim, 2014; Buil, Martinez & Matute, 2019). TL refers to the leader who mobilizes followers going beyond his/her personal interests through idealized influence, IS, inspiration and individualized consideration, elevating the follower's level of maturity, accomplishment and wellbeing of others, of the organization and of society (Bass, 1999). These characteristics provide a sense of work and belonging in the organization and in the group. Therefore, transformational leader is the one who stimulates intellectually, inspires, coaches, creates vision and mission, develops cooperation spirit, and is individually considered one of them (Opoku, Ahmed & Cruickshank, 2015).
Bass (1985a, b) classifies it as a leader who adapts to changes and is flexible; in other words, someone who works more efficiently in rapidly changing business environments. Moreover, TL is the style that enables the transformation of followers, becoming an important asset to face challenges in the competitive, fierce environment characterized currently by constant change and transformation. Thus, the main challenge faced by TL is to align the interests of the organization and its members to achieve the desired objectives in a transformative way (Opoku et al., 2015).
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