40

SERVANT, TRANSFORMATIONAL, AND TRANSACTIONAL LEADERSHIP JOHN C. RONQUILLO

I

University of Georgia

n every nonprofit or socially beneficial organization, leadership is a quintessential element. Although many organizations fit the classification of nonprofit when they are being distinguished from government and commercial counterparts, they are exceptionally diverse in terms of directives, goals, and missions. Each organization has objectives and goals, and the various methods by which these objectives are achieved (or not achieved) are often a direct result of leadership styles and attributes of the people in charge. Many, if not most of the prominent leadership theories applied to public and business organizations can be applied as well to nonprofit organizations. Along similar lines, leadership traits among CEOs, executive directors, and individual board members entrusted to lead and manage nonprofit organizations also vary greatly, and the methods and techniques they employ in guiding their organizations to achieve tangible outcomes are often related to their personal leadership styles. There have been many case studies and scholarly articles on leadership traits and qualities in charitable organizations, philanthropic foundations, religious organizations, or other organizations classified as nonprofits, yet there is no singular successful leadership theory or practice. To date, each theory offered by leaders and researchers alike has demonstrated both positive and negative attributes. Some of these theories have more success in practice than others, and often, leaders must demonstrate flexibility in displaying their leadership skills, sometimes shifting from one practice to another depending on the situation. The premise of this chapter is to specifically focus on

three of those concepts: servant leadership, transformational leadership, and transactional leadership. This chapter will survey literature that has examined the theories and practices surrounding these concepts of leadership and their relationship to the nonprofit sector. The first section is devoted to the topic of servant leadership, its conceptual origins, a brief review on some recent scholarly research, critiques, and suggestions for future directions of servant leadership in nonprofit organizations. The subsequent section focuses on transformational and transactional leadership and how these theories of leadership may be related, intersect, or vary from each other. A brief review of the literature on transactional and transformational leadership is also included, along with some critiques. The chapter then concludes with some final remarks on these theories and offers suggestions for future research and practice in the nonprofit context.

Servant Leadership Conceptual Origins

The concept of servant leadership is one that has attracted substantial interest among many leaders over the past few decades.1 Many scholars attribute the concept of servant leadership to Robert K. Greenleaf, a notable management consultant who, prior to entering that field of work, spent a significant number of years at AT&T working in management development, research, and education (Spears, 2004).

345

346 • V. LEADING THE NONPROFIT ORGANIZATION

Greenleaf (1977) posited that “the servant-leader is servant first. . . . It begins with the natural feeling that one wants to serve” (pp. 27–28, emphasis in original). In this sense, leadership begins with a commitment from the potential leader to serve others rather than pursuing his own selfinterest, and this essentially is what is central to a leader’s greatness (Spears, 2004). Greenleaf believed the primary purpose of business organizations should be to create a positive impact on their employees and surrounding community (Schermerhorn, Hunt, & Osborn, 2008). Yukl (2006) sums up additional attributes of servant leadership: The servant leader must stand for what is good and right, even when it is not in the financial interest of the organization. Social injustice and inequality should be opposed whenever possible. Even the weak and marginal members of society must be treated with respect and appreciation. Greenleaf pro posed that providing meaningful work for employees is as important as providing a quality product or service for the customer. He advocated that business organizations should consider social responsibility as one of the major objectives, and the board of directors should take primary responsibility for evaluating and facilitating progress on this objective. The servant leader must empower followers instead of using power to dominate them. Trust is established by being completely honest and open, keeping actions consistent with values, and showing trust in followers. . . . People should pre pare themselves to lead and accept the opportunity when offered. The result will be more people who serve as moral agents in society. (p. 420)

Spears (1998, 2004) perhaps best summarized the main tenets of servant leadership into 10 core characteristics from studying Greenleaf’s original writings (although this list is not exhaustive, by any means). Spears listed them as follows:2 1. Listening. Leaders are often valued for their communication skills. Servant leaders listen intently to others and help reinforce the will of their followers by using this skill. An effective leader is also an effective listener.

2. Empathy. Servant leaders seek to identify with their followers and often go out of their way to help others feel accepted and valued in an organization.

3. Healing. Servant leaders often assist others in overcoming emotional difficulties; they seek ways in which they can help others to realize their full potential by overcoming personal grief or distress.

4. Awareness. This characteristic aids the servant leader in understanding issues involving ethics and values. Servant leaders who are self aware (i.e., aware of their role and how it works in sync with the organization and others in it), and aware of their organizational environs become stronger and more effective.

5. Persuasion. Servant leaders often rely on persuasion rather than authoritative positional authority when making decisions and leading an organization. Helping others see

the rationale behind certain organizational motives without oppressive force is a key element in servant leadership.

6. Conceptualization. The ability to examine and eventually solve problems requires servant leaders to take a thoughtful and holistic approach to the entirety of a situation and not just the elemental steps of a given moment. In essence, they are required to focus simultaneously on both the “here and now” elements of their organization and the “big picture.” 7. Foresight. Servant leaders must rely to a certain degree on intuition based on experiences from the past and elements of the present.

8. Stewardship. This characteristic is intricately tied to the greater concept of servant leadership, as it centers on the commitment to serving the needs of others. This element of stewardship conveys that leaders “invest” in those they serve in order to yield advantageous organizational progress and achieve goals on behalf of the organization. 9. Commitment to the growth of people. Servant leaders are nurturers and place great emphasis on ensuring that their followers realize their worth and overall value in an organization and individuals.

10. Building community. Servant leaders often set examples for others so that, in turn, others become servant leaders themselves. Servant leaders build smaller communities in the institutions where they work. This power of diffusion is also an important element of servant leadership.

Russell (2001) studied the role of values in servant leadership. He stated that values are an important part of every individual’s psyche as they are the “underlying thoughts that stimulate human behavior. . . . Since values are prescriptive, they play an important role in determining the choices we make. Values are enduring standards that collectively form the value systems of our lives” (p. 76). Russell also noted that servant-leaders assert important placement of values, beliefs, and principles in leadership and that values are the core elements of the practice, which eventually incite servant leadership behavior in others. Furthermore, Russell identified several other attributes of servant-leaders, such as vision, credibility, trust, service, modeling, pioneering, appreciation of others, and empowerment. In terms of servant leadership affecting organizational performance, he wrote: Leader values significantly affect followers and ultimately influence organizational performance. In order to establish sound leadership practices, leaders must first examine their own belief systems. Thereafter, leaders should examine the values of their organizations. “Not until we have considered our leadership model at the level of its values, assumptions, and principles, can we discern to what extent we are leading from a power or a servant base” (Rinehart, 1998, p. 30). Such evaluations could spur leaders to challenge their personal beliefs and their organizational cultures. In so doing, they might initiate a revolution of servant leadership . . . may it be so. (Russell, 2001, p. 81)

Recent Research on Servant Leadership

40.

Russell and Stone (2002) composed a very thorough literature review on the topic of servant leadership and acknowledged its growing popularity in terms of the various forms and styles of leadership. They noted that in Greenleaf’s (1977, 1978) earlier work, he argued that colleges, universities, and seminaries fail in preparing young people for leadership roles in society and that leadership among a new generation is needed to address “the leadership crisis” Greenleaf describes. In addition to the attributes listed by Spears (1998, 2004) and others above, Russell and Stone noted the importance of the following traits in servant leadership based on trends from other research. They include: communication, competence, visibility, influence, encouragement, teaching, and delegation. Joseph and Winston (2005) explored the relationship between employee perceptions of servant leadership, leader trust, and organizational trust. They found that perceptions of servant leadership were positively correlated with both leader and organizational trust; organizations that were perceived as “servant-led” exhibited higher levels of leader trust and organizational trust than organizations that were perceived as “non-servant-led.” These findings supported Greenleaf’s (1977) view that servant leadership is an antecedent of leader and organizational trust. Barbuto and Wheeler’s (2006) work was devoted to developing and validating an instrument that measured 11 potential dimensions of leadership, which included calling, listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, growth, and community building—characteristics very similar, if not identical, to those previously mentioned in this chapter. They acknowledge the previous research completed since Greenleaf’s original introduction of the concept, but they assert that there has been no consensus construct for empirical research. They believe that while most articles on servant leadership have stand-alone qualities, the work has not evolved, and the literature has now provided more differentiation than integration. They used data from 80 local leaders and asked 388 raters to test internal consistency, to confirm the factor structure, and to assess convergent, divergent, and predictive validity. From this, the results produced five servant leadership factors: altruistic calling, emotional healing, persuasive mapping, wisdom, and organizational stewardship. These factors had significant relations to transformational leadership, leadermember exchange, extra effort, satisfaction, and organizational effectiveness. These five factors, in effect, become even more concise than previous listings of the various qualities of servant leadership, without losing any of Greenleaf’s (1977, 1978) original intent.

Critiques of Servant Leadership

Despite natural assumptions that tend to lend credence to the concept and its purported popular and positive view

Servant, Transformational, and Transactional Leadership • 347

in practice, the concept of servant leadership is not without criticism. Though scholars have analyzed servant leadership in business, leadership studies, and organizational behavior, servant leadership studies in nonprofit organizations are virtually absent from top academic journals in the nonprofit and voluntary field. Many researchers believe that more empirical studies are needed to help validate the concept (Russell & Stone, 2002; Sendjaya & Sarros, 2002). Russell and Stone (2002) claim that it is systematically undefined and that the existing literature on servant leadership is predominantly philosophical. While the introduction of the concept of servant leadership is most often attributed to Greenleaf, several others (including scholars) have helped servant leadership achieve its relative prominence. After calls to further substantiate and legitimize servant leadership as an important leadership theory and practice, more research of an empirical nature subsequently materialized (see Barbuto & Wheeler, 2006; Dennis & Bocarnea, 2005; Dennis & Winston, 2003; Joseph & Winston, 2005; Page & Wong, 2000). The relative lack of diffusion of servant leadership research among other academic fields and the absence of publications in other journals have most likely delayed the wider acceptance of servant leadership, although it continues to permeate audiences in additional fields, thus lending some credence to the theory and practice. Many schools of business and other academic programs in organizational behavior and theory have some instruction on the concept, although most texts (e.g., Schermerhorn et al., 2008; Yukl, 2006) relegate its coverage to just a few paragraphs. In very few cases, some colleges and universities place a distinct emphasis on servant leadership in academic training,3 and many religious congregations and organizations also place a heavy emphasis on servant leadership.4 Nevertheless, the trend of continued research on servant leadership is still emerging. The growth of servant leadership in practice can be attributed to continued work by organizations such as the Greenleaf Center for Servant Leadership,5 continued academic research, and written works from the popular press. In addition, leadership consultants and intraorganizational training programs that educate individuals and groups also provide a way for the diffusion of the servant leadership concept among practitioners, which largely makes up for the lack of work done by academicians.

The Future of Servant Leadership in Nonprofit Organizations

What does the future hold for the concept of servant leadership as it pertains to nonprofit organizations? The seemingly absent research on servant leadership within nonprofit organizations should be of some concern. More than anything, it presents an opportunity to expand research and practice in servant leadership in an area many see as a natural fit. The caveat, however, is that servant leadership is not necessarily the natural leadership style for

348 • V. LEADING THE NONPROFIT ORGANIZATION

many individuals, nor is it the best practice for every organization. Like many situations in organizations, a contingency or situational approach—where one seeks ways to meet the needs of different management situations based on environmental factors—may be best. Different situations may require different approaches to leadership at different times. The concept of servant leadership seems reasonably relevant to the many nonprofit organizations that have a human services focus. In fact, many of them embody servant leadership. Nonprofit organizations that have a central mission focused on social responsibility seem to be a logical fit, as Greenleaf (1977, 1978) placed heavy emphasis on social responsibility in his original concept of servant leadership. Nevertheless, this theory of leadership merits further exploration within the nonprofit sector, as do the following theories: transformational and transactional leadership.

Transformational and Transactional Leadership Transformational leadership and transactional leadership, like the theory of servant leadership, can be directly applied to the context of nonprofit and socially beneficial organizations. In the preceding section, servant leadership was defined as the commitment from a leader to serve others rather than pursuing his or her own self-interest. The theory posits that service to followers is the paramount Nature of theory Role of leader

responsibility of leaders and the “essence of ethical leadership” (Yukl, 2006) and that servant-leaders are those who attend to the needs of their followers, help them become more willing to accept the responsibilities entrusted to them, and often learn about their followers’ needs and are willing to share in their difficulties and frustrations (Schermerhorn et al., 2008; Yukl, 2006). Transformational and transactional leadership, however, vary in approach from the concept of servant leadership as illustrated in Table 40.1. Although transformational and transactional leadership are different from each other, they are often described in tandem because transactional leadership often extends into transformational leadership. This section will explain the two theories through a review of previous literature on the subject and will conclude with a discussion on their relation to nonprofit organizations.

Transitioning to Transformational and Transactional Leadership

Rainey (2003) credits political scientist, James McGregor Burns (1978), as one of the first social scientists to develop the distinguishing characteristics of transformational and transactional leadership. Bernard Bass (1985b, 1998), an academician trained in industrial psychology who was influenced by Burns and by Robert House’s theory of charismatic leadership,6 is largely credited with further developing and influencing the theory of transformational leadership (Rainey, 2003; Miner, 2005; Schermerhorn et al., 2008;

Servant Leadership

Transformational Leadership

To serve followers

To inspire followers to pursue organizational goals

Normative

Role of follower

To become wiser, freer, and more autonomous

Outcomes expected

Follower satisfaction, development, and commitment to service and societal betterment

Moral component

Individual level

Interpersonal level Group level

Organizational level Societal level Table 40.1

Explicit

Desire to serve

Leader serves followers

Leader serves group to meet member needs Leader prepares organization to serve community

Leader leaves a positive legacy for the betterment of society

Normative

To pursue organizational goals Unspecified

Goal congruence; increased effort, satisfaction, and productivity; organizational gain Desire to lead

Leader inspires followers

Leader unites group to pursue group goals Leader inspires followers to pursue organizational goals Leader inspires society to pursue articulated goals

Comparison of Servant Leadership and Transformational Leadership Theories

SOURCE: Adapted from Barbuto and Wheeler, 2006.

40.

Yukl, 2006). Anheier (2005) offers concise definitions for both transformational and transactional leadership:

Transformational leadership involves the motivation of employees and members to perform normal expectations for meeting the organization’s mission and for achieving organi zational goals. It inspires staff and members to put aside per sonal self interest for the common good of the organization and to have confidence in their ability to achieve the “extra ordinary” challenges before them. Transactional leadership is about maintaining an align ment between the organization’s mission and goals on the one hand, and the motivation and interests of employees and members in achieving set objectives on the other. (p. 163)

Transactional leadership, in concept, involves leaderfollower exchanges necessary for achieving specific or routine performance mutually agreed on by leaders and followers (Schermerhorn et al., 2008). As the name implies, there is somewhat of a quid pro quo involved in this theory. Leaders often promise certain rewards or actions in exchange for something from their followers, usually completion of a task, high performance, or essentially whatever terms the leader and follower agree on. Denhardt, Denhardt, and Aristigueta (2002) capture quite succinctly how transactional leadership parlays into transformational leadership:

Transactional leadership . . . involves an exchange of valued things (e.g., economic, political, psychological) between ini tiators and respondents. For example, a political leader might agree to support a particular policy in exchange for votes in the next election. . . . In the case of transactional leader ship, the two parties come together in a relationship that advances the interests of both, but there is no deep or enduring link between them. Transformational leadership, on the other hand, occurs when leaders and followers engage with one another in such a way that they raise one another to higher levels or morality and motivation. Although the leaders and followers initially might come together out of the pursuit of their own interests or because the leader recognized some spe cial potential in the followers, as the relationship evolves, their interests become fused into mutual support for common purposes. (pp. 200 201)

Schermerhorn and colleagues (2008, p. 258) cite four dimensions of leader-follower exchanges or behaviors as they involve transactional leadership: 1. Contingent rewards. Various kinds of rewards in exchange for mutually agreed upon goal accomplishments.

2. Active management by exception. Involves watching for deviations from organizational rules and standards and taking corrective action.

3. Passive management by exception. Requires intervening only if standards are not met. 4. Laissez faire. Involves giving up responsibilities and avoiding decisions.

Servant, Transformational, and Transactional Leadership • 349

Tichy and Ulrich (1984) issued their “call for the transformational leader” in response to a declining economy:

A new brand of leadership is necessary. Instead of managers who continue to move organizations along historical tracks, the new leaders must transform the organizations and head them down new tracks. . . . We call these new leaders transfor mational leaders, for they must create something new out of something old: out of an old vision, they must develop and communicate a new vision and get others not only to see the vision but also commit themselves to it. Where transactional managers make only minor adjustments in the organization’s mission, structure, and human resource management, transfor mational leaders not only make changes in these three areas but they also evoke fundamental changes in the basic political and cultural systems of the organization. The revamping of the political and cultural systems is what most distinguishes the transformational leader from the transactional one. (p. 59)

According to Yukl (2006), Bass (1985b) positioned transformational and transactional leadership as distinct, but not mutually exclusive processes. Transformational leadership increases follower motivation and performance in more ways than transactional leadership, however, effective leaders employ both types. Rainey (2003), discussing Bass’s (1985b, 1998) work on the Multifactor Leadership Questionnaire (MLQ) and based on that work, lists the following behaviors associated with transformational leadership (p. 204): 1. Idealized influence. Arouses followers’ emotional attachment to the leader and identification with him or her. 2. Intellectual stimulation. Engages followers in recognizing and confronting challenges, and in viewing challenges from new perspectives. 3. Individualized consideration. Provides support, encouragement and coaching.

4. Inspirational motivation. Communicates an appealing vision, using symbols to focus efforts, and modeling appropriate behaviors.

Transformational and Transactional Leadership in Nonprofit Organizations

To date, research on transformational and transactional leadership with direct implications for nonprofit organizations has been relatively scarce. A handful of researchers and practitioners, nevertheless, have produced some noteworthy works that should be given due attention. Anheier (2005) states that the transactional and transformational leadership types suggest a connection between the organizational life cycle and leadership. He cites Nanus and Dobbs (1999) and their suggestions for what nonprofit leaders need to focus on (Anheier, 2005, p. 163): 1. Internal organizational aspects, in particular the board, staff, volunteers, members, and users that the leader has to inspire, encourage, and unite behind a common mission

350 • V. LEADING THE NONPROFIT ORGANIZATION 2. External organizational aspects, in particular donors, policy makers, the media, and other constituencies whose support the leader needs for financial resources and legitimacy

3. Present operations such as organizational performance and service quality, demand, information flows, organizational conflicts and motivation, and community support 4. Future possibilities, where the leader addresses questions of sustainability and potential threats and opportunities that may have important implications for the organization and its direction

Riggio, Bass, and Orr (2004) wrote that the essence of transformational leadership is the leader who does not just inspire commitment to a vision or cause but also develops or “transforms” followers to reach their highest potential and to take on the responsibilities of leading the organization to achieving its mission, which makes the theory “a particularly appropriate one” for nonprofit organizations. As it was with servant leadership, there has been little research—empirical or otherwise—on transformational leadership in nonprofit organizations. Riggio and colleagues (2004) highlight this, particularly in contrast to the significant research that has investigated transformational leadership in for-profit companies, the government, the military, and educational institutions (Bass, 1998). To illustrate this, they cite a study by Egan, Sarros, and Santora (1995) that compares two CEOs of nonprofit organizations with two CEOs from “similarly sized” private, forprofit organizations. The authors claim that nonprofit organizations should be more conducive to transformational leadership, however, results showed no significant differences among the executives (Egan et al., 1995). The sample size of only four, however, compromises the validity of the study (Riggio et al., 2004). While the design of this chapter is not to advocate one type of methodology over another, the sample size of four perhaps presents a better opportunity to study subjects in-depth for a case study, whereas an empirical research study with a larger sample would allow hypothesis testing to show greater potential variance; moreover, means tests may be able to show whether or not there is indeed a difference between private and nonprofit transactional leadership styles. Riggio and colleagues (2004) also cited a study by Egri and Herman (2000) in which 33 nonprofit leaders were compared to 38 leaders in private forprofit companies in the United States and Canada. All of the organizations were environmental organizations that provided similar services or products. Although transformational leadership was significant among all environmental organizations, there were no significant differences between private for-profit and nonprofit organizations. Overall results, however, indicated that nonprofits were more receptive to the idea than their for-profit counterparts (Egri & Herman, 2000; Riggio et al., 2004). Dym and Hutson (2005) cited Gandhi, Martin Luther King Jr., Winston Churchill, and Franklin D. Roosevelt as transformative and visionary leaders whose leadership “was based on ethical and national ideals and communicated in brilliant

rhetoric and through acts of individual courage” (p. 42). These leaders, the authors claimed, embodied their message in ways that magnified their credibility and attractiveness. “What is more, they had an intuitive grasp of what their followers would and could do, a strategic empathy, if you will” (p. 42). Dym and Hutson claim that transformational leadership is “aligned” leadership in two important ways: First, although the focus is not on relationship, transforma tional leadership is based on relationship. Leaders cannot per suade in such powerful ways without a powerful, explicit or implicit relationship with followers. Second, the notion of transformation is itself a form of alignment. It generally builds through virtuous cycles. The leader proposes actions in ways that catch the imagination of followers. As followers begin to join the leader, she is encouraged and makes further bolder proposals, which further capture the imagination of followers, who come on board with greater number and enthusiasm, which spurs the leader to further, . . . and so it goes. While this virtual cycle is enacted, a seamless and unselfconscious bond builds between leaders and followers. Their every action seems aligned to each other and to their objectives. (pp. 42 43)

Jaskyte (2004), in one of the few research articles addressing transformational leadership in human services organizations, examined this leadership context as it relates to organizational culture and organizational innovativeness. Her research shows that positive relationships exist among transformational leadership, organizational values, and the degree of agreement among employees on those values (otherwise known as “cultural consensus”). She concluded that examining linkages between transformational leadership and organizational culture is critical to understanding the relation between leadership and innovation; her results indicated that transformational leadership may not be related to organizational innovation. In fact, the relationships in her study indicate that leadership practices carried out in the sample created strong cultural consensus around values that may actually hinder innovation.

Perceived Weaknesses of Transformational Leadership

Yukl (1999) stated that the concept of transformational leadership provides several important insights, but several conceptual weaknesses need to be corrected to make the theory more useful. These criticisms of transformational leadership are not offered here to refute the theory by any means: It is a valid theory in numerous situations and is applicable to a variety of settings. Rather, they are offered to give a more holistic view in terms of understanding the theory. Yukl (1999) illustrates the criticisms in eight main points:

1. Ambiguity about underlying influence processes. The influence processes for transformational and transactional leadership are vague and have not been studied in a systematic way. “The theory would be stronger if the essential influence processes were identified more clearly

40.

and used to explain how each type of behavior affects each type of mediating variable and outcome” (Yukl, 1999, p. 287). Influence processes mentioned by Yukl include the arousal of motives or emotions, increased self-efficacy or optimism, and increased task commitment.

2. Overemphasis on dyadic processes. “Most theories of transformational leadership are conceptualized primarily at the dyadic level. The major interest is to explain a leader’s direct influence over individual followers, not leader influence on group or organizational processes. . . . How leaders influence these group processes is not explained very well by the transformational leadership theories” (Yukl, 1999, pp. 287–288). Yukl gives examples of relevant group processes: how well work is organized to use personnel and resources; how well interrelated group activities are coordinated; mutual trust and cooperation among members; and member confidence in the capacity of the group to attain its objectives.

3. Ambiguity about transformational behaviors. Specific types of transformational behavior are usually based on the inductive process of factor analysis. Yukl (1999) claims that the theoretical rationale for differentiating among behaviors is not clearly explained. “Developing includes coaching and mentoring. Supporting includes being friendly, helpful, considerate, and appreciative of individual subordinates. It is reasonable to treat developing as a core transformational behavior, because it enhances subordinates skills and selfefficacy. However, there does not seem to be a good rationale to include supporting as a core transformational behavior; . . . there is ample research to show that it increases satisfaction with the leader . . . but has only a weak effect on subordinate motivation or performance” (p. 288).

4. Ambiguity about transactional leadership. Yukl (1999) claims that transactional leadership theory fails to make a strong linkage between the process of leader-subordinate exchange and each transactional behavior. “Instead, transactional leadership includes a diverse collection of (mostly ineffective) leader behaviors that lack any clear common denominator. Contingent reward behavior includes things that are clearly involved in an impersonal exchange process (e.g., explaining reward contingencies, offering incentives, rewarding good performance). However, contingent reward behavior also includes providing recognition to subordinates. . . . Providing praise and recognition is usually more personal and may involve transformational leadership as well as transactional leadership” (p. 289).

5. Omission of important behaviors. Yukl (1999) claims that Bass (1990, 1996) omits important transformational behaviors in his version of the theory. These missing behaviors, Yukl states, can be identified by examining other theories and research on effective leadership, some of which include “facilitating agreement about objectives and strategies, facilitating mutual trust and cooperation, and building group identification and collective efficacy. . . . The core transformational behaviors should probably include articulating a vision and strategy for the organization, guiding and facilitating change, and promoting organizational learning”

Servant, Transformational, and Transactional Leadership • 351

(p. 290). Yukl is especially critical of Bass’s (1996) use of the label “full range leadership theory” and notes that it invites critical evaluation of completeness.

6. Insufficient specification of situational variables. One criticism that is fairly apparent is that Bass (1996) proposes that transformational leadership is beneficial for followers and their organization, regardless of the situation at hand. This is clearly untrue. Yukl (1999) offers another criticism here and writes that the “search for situational moderator variables may be more successful if directed at specific types of transformational behavior. Even if there is always some type of transformational behavior that is relevant for effective leadership, not every type of transformational behavior will be relevant in every situation” (p. 291).

7. Insufficient identification of negative effects. This criticism deals mostly with the fact that the theory does not offer room for criticism of itself—there is no explicit part of the theory that identifies a situation where transformational leadership is “detrimental.” Yukl (1999) cites several researchers who point to potentially negative elements of transformational leadership. For example, the role of leadership in increasing task motivation and performance can be biased toward top management at the expense of employees. Furthermore, role ambiguity and role conflict can be heightened by different leaders with competing visions. Yukl calls for more research in terms of the potential negative outcomes related to transformational leadership. 8. Heroic leadership bias. Yukl (1999) claims that, like most other earlier leadership theories, the transformational leadership theories reflect the “implicit assumptions associated with the ‘heroic leadership’ bias” (p. 292). Yukl further states, “When a correlation is found between transformational leadership and subordinate commitment or performance, the results are interpreted as showing that the leader influenced subordinates to perform better. There is little interest in describing reciprocal influence processes or shared leadership. Researchers study how leaders motivate followers of overcome their resistance, not how leaders encourage followers to challenge the leader’s vision or develop a better one” (p. 292).

Despite these criticisms of transformational leadership, numerous elements of the theory are highly applicable to nonprofit organizations merit further research on transformational leadership in the specific nonprofit context. Riggio and colleagues (2004) call for more research on the role of transformational leaders in nonprofit organizations. “One obvious reason is that for-profit organizations, with their large numbers of employees, easy access to leadership consultants, and large leadership development budgets, are more likely venues for scholars to study transformational leadership quantitatively” (Riggio et al., 2004, p. 54). These authors also make claim to a shortage of qualitative research on transformational leadership to better explore the fit between transformational leadership and the nonprofit world. Furthermore, studies that highlight

352 • V. LEADING THE NONPROFIT ORGANIZATION

whether or not transformational leadership varies based on sector (i.e., public, private, nonprofit) may also yield interesting results that could potentially enhance the theory.

Summary Of the multitudinous theories on leadership, those few presented here—servant leadership and transactional and transformational leadership—can be highly relevant to the operations of nonprofit organizations and may eventually play a role in either the success or demise of these organizations. The central belief surrounding the concept of servant leadership as put forth by Greenleaf was that business organizations should create a positive impact on the organization’s employees and throughout the surrounding community (Schermerhorn, et al., 2008). This is an ideal that is upheld by countless nonprofit organizations (along with many organizations in the public and private sector as well). Despite this often unifying theme across nonprofit organizations, some resources that are common in private businesses or government agencies (i.e., sustained streams of funding, large employee base, benefits and other incentives, etc.) are lacking in nonprofit organizations. In these cases, servant leadership behaviors, as well as the behaviors related to transactional and transformational leadership, are often subsequently related to sustainable and successful nonprofit organizations. The sometimes amorphous term nonprofit can make it difficult to assess these behaviors. A small, community-based social benefit organization with a mission to end homelessness may significantly differ from a wealthy national foundation with a large staff in terms of many of the aforementioned resources and leadership behaviors. Various other differences exist among nonprofit organizations based on environmental factors and organizational mission. These are but a few of the reasons the concepts of servant, transactional, and transformational leadership remain important to these organizations. Furthermore, this reinforces the call for further research on these leadership behaviors with specific application to nonprofit organizations.

Next Steps: Assessing Your Leadership Potential

As you ponder what you have learned in this chapter, I hope you have asked yourself on more than one occasion, What kind of leader am I? The information on leadership provided here is clearly not exhaustive as the various typologies and techniques that individuals employ in directing the efforts of their organizations are exceptionally numerous. However, practices involving servant leadership and transactional and transformational leadership are clearly on the rise. Old methods of leadership that are dated and ill-suited for the ever-changing nature of 21stcentury nonprofit organizations are being set aside for newer, more innovative, groundbreaking techniques. The vitality of many nonprofit organizations is tied to leaders’

ability to thoughtfully guide them through times both prosperous and turbulent. Tactics of servant and transformational leadership, as well as many other types of leadership, are becoming increasingly important in nonprofit organizations. Individuals carry with them a variety of abilities and talents when it comes to leadership. Some will argue that leaders are born, whereas others will assert that leaders can be “made.” Regardless of your position, you have the capacity to be a leader. Regarding these specific instances of servant leadership and transformational leadership, readers should take inventory of their leadership qualities by asking a series of questions: • What motivates you to lead? • Who are the exemplars of leadership you aspire to emulate? • What are your strengths as a leader? • What aspects of leadership can you improve? • What traits of servant leadership do you exemplify? • What traits of transactional and/or transformational leadership do you exemplify? • In what areas of your life can you further display your leadership talents? • How can you help foster or cultivate leadership in others?

These questions should help form the basis for your leadership inventory, and you should add additional questions that are more relevant to you and your personal goals. Write them down along with answers, look at them often, and change them as needed, or you can create some sort of visual reminder to help keep these questions fresh in your mind. Seek constructive feedback from your peers, trusted mentors, and those you lead. Set goals that pertain to your development as a leader, and on occasion, reexamine your strengths and areas you might need to improve. They may change over time, but a constant cognition focused on your qualities and attributes will continue to strengthen your overall potential and effectiveness as a leader.

Notes 1. For extensive literature reviews on servant leadership, see Russell and Stone (2002) and Barbuto and Wheeler (2006). 2. The descriptions of these characteristics are paraphrased from Spears (2004). 3. For example, see Viterbo University’s Master of Arts in Servant Leadership (http://www.viterbo.edu/sl). 4. For example, see The Servant Leadership School of Greensboro, NC (http://www.servantleadergreensboro.com). 5. See http://www.greenleaf.org. 6. Charismatic leadership refers to “personal characteristics of leaders that inspire in others pride, faith, identification, dedi cation, and commitment and a willingness to follow directives and accept decisions” (Anheier, 2005, p. 162). For a more detailed description of charismatic leadership in organizational settings see Boal and Bryson (1988), Conger and Kanungo (1987, 1998), and Conger (1989).

40.

References and Further Readings Anheier, H. K. (2005). Nonprofit organizations: Theory, management, policy. London/NewYork: Routledge. Barbuto, J. E., & Wheeler, D. W. (2006). Scale development and construct clarification of servant leadership. Group Organization Management, 31(3), 300 326. Bass, B. M. (1985a). Leadership: Good, better, best. Organizational Dynamics, 13(3), 26 40. Bass, B. M. (1985b). Leadership and performance beyond expectations. New York: The Free Press. Bass, B. M. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational Dynamics, 18(3), 19 31. Bass, B. M. (1996). A new paradigm of leadership: An inquiry into transformational leadership. Alexandria, VA: U.S. Army Research Institute for the Behavioral and Social Sciences. Bass, B. M. (1998). Transformational leadership: Industrial, military, and educational impact. Mahwah, NJ: Lawrence Erlbaum. Bass, B. M., & Avolio, B. J. (1990). Multifactor leadership questionnaire. Palo Alto, CA: Consulting Psychologists Press. Boal, K. B., & Bryson, J. M. (1988). Charismatic leadership: A phenomenological and structural approach. In J. G. Hunt, B. R. Baliga, H. P. Dachler, & C. A. Schreisheim (Eds.), Emerging leadership vistas (pp. 11 28). Lexington, MA: Lexington Books. Burns, J. M. (1978). Leadership. New York: HarperCollins. Conger, J. A. (1989). The charismatic leader: Behind the mystique of exceptional leadership. San Francisco: Jossey Bass. Conger, J. A., & Kanungo, R. N. (1987). Toward a behavioral theory of charismatic leadership in organizational settings. Academy of Management Review, 12(4), 637 647. Conger, J. A., & Kanungo, R. N. (1998). Charismatic leadership in organizations. Thousand Oaks, CA: Sage. Denhardt. R. B., Denhardt, J. V., & Aristigueta, M. P. (2002). Managing human behavior in public & nonprofit organizations. Thousand Oaks, CA: Sage. Dennis, R. S., & Bocarnea, M. (2005). Development of the servant leadership assessment instrument. Leadership & Organization Development Journal, 26(8), 600 615. Dennis, R. S., & Winston, B. E. (2003). A factor analysis of Page and Wong’s servant leadership instrument. Leadership & Organization Development Journal, 24(8), 455 459. Dym, B., & Hutson, H. (2005). Leadership in nonprofit organizations. Thousand Oaks, CA: Sage. Egan, R. F. C., Sarros, J. C., & Santora, J. C. (1995). Putting transactional and transformational leadership into practice. Journal of Leadership Studies, 2(3), 100 123. Egri, C. P., & Herman, S. (2000). Leadership in the North American environmental sector: Values, leadership styles, and contexts of environmental leaders and their organizations. Academy of Management Journal, 43(4), 571 604. Farling, M. L., Stone, A. G., & Winston, B. E. (1999). Servant leadership: Setting the stage for empirical research. The Journal of Leadership Studies, 6(1/2), 49 72.

Servant, Transformational, and Transactional Leadership • 353 Greenleaf, R. K. (1977). Servant leadership. New York: Paulist Press. Greenleaf, R. K. (1978). Servant, leader, & follower. New York: Paulist Press. Herman, R. D., & Heimovics, D. (2005). Executive leadership. In R. D. Herman (Ed.), The Jossey Bass handbook of nonprofit leadership & management (pp. 153 170). San Francisco: Jossey Bass. Jaskyte, K. (2004). Organizational culture and innovativeness in nonprofit organizations. Nonprofit Management & Leadership, 15(2), 153 168. Joseph, E. E., & Winston, B. E. (2005). A correlation of servant leadership, leader trust, and organizational trust. Leadership & Organizational Development Journal, 26(1), 6 22. Miner, J. B. (2005). Organizational behavior I: Essential theories of motivation and leadership. Armonk, NY: M. E. Sharpe. Nanus, B., & Dobbs, S. M. (1999). Leaders who make a difference: Essential strategies for meeting the nonprofit challenge. San Francisco: Jossey Bass. Page, D., & Wong, T. P. (2000). A conceptual framework for measuring servant leadership. In S. Adjibolosoo (Ed.), The human factor in shaping the course of history and development. Lanham, MD: University Press of America. Rainey, H. G. (2003). Understanding & managing public organizations (3rd ed.). San Francisco: Jossey Bass. Riggio, R. E., Bass, B. M., & Orr, S. S. (2004). Transformational leadership in nonprofit organizations. In R. E. Riggio & S. S. Orr (Eds.), Improving leadership in nonprofit organizations (pp. 49 62). San Francisco: Jossey Bass. Rinehart, S. T. (1998). Upside down: The paradox of servant leadership. Colorado Springs, CO: NavPress. Russell, R. F. (2001). The role of values in servant leadership. Leadership & Organization Development Journal, 22(2), 76 84. Russell, R. F., & Stone, A. G. (2002). A review of servant leadership attributes: Developing a practical model. Leadership & Organizational Development Journal, 23(3), 145 157. Schermerhorn, J. R., Jr., Hunt, J. G., & Osborn, R. N. (2008). Organizational behavior (10th ed.). Hoboken, NJ: John Wiley. Sendjaya, S., & Sarros, J. C. (2002). Servant leadership: Its origin, development, and application in organizations. Journal of Leadership & Organizational Studies, 9(2), 57 64. Spears, L. C. (1998). Tracing the growing impact of servant leadership. In L. C. Spears (Ed.), Insights on leadership: Service, stewardship, spirit, and servant leadership (pp. 1 12). New York: John Wiley. Spears, L. C. (2004). Practicing servant leadership. Leader to Leader, 34(Fall), 7 11. Tichy, N. M., & Ulrich, D. O. (1984). The leadership challenge: A call for the transformational leader. Sloan Management Review, 26(1), 59 68. Yukl, G. (1999). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The Leadership Quarterly, 10(2), 285 305. Yukl, G. (2006). Leadership in organizations (6th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.