Three leadership theories and models that resonate well are the transformational leadership theory, leader-member exchange theory, and the path-goal theory of leadership. Each of these has pros and cons, but knowledge of all of them can inform a leader in developing their leadership strategy. Each of these models is from the 1970s, but each of them are valid and taught today.
Transformational Leadership Theory
Transformational leadership theory, introduced by James McGregor Burns in his book “Leadership” in 1978, separates transactional leaders from transformational leaders. Bernard M. Bass’s 1985 book, “Leadership and Performance Beyond Expectations,” developed the idea of transformational leadership to include some traits for that leader. That leader sets clear goals, has high expectations, is encouraging, provides support and recognition, has integrity, stirs the emotions of followers, inspires people, and gets people to look past their own self-interest (Mindtools, n.d.).
Bauer simplifies this into transformational leaders aligning followers to their own goals. In contrast, transactional leaders provide rewards based on right behaviors. (Bauer, T., Ergodan, B., 2010, p.280). In other words, transformational leaders inspire with vision and transactional leaders reward for compliance.
Transformational leaders use charisma, inspirational motivation, intellectual stimulation, and individualized consideration to lead their followers. Transformational leaders are more effective and have more satisfied employees than transactional leaders, also. Transformational leaders are more trusted than transactional leaders because of their inherent passion and concern (Bauer, T., Ergodan, B., 2010, p.281).
Leader-Member Exchange Theory
Leader-member exchange (LMX) theory from the 1970s focuses on the relationships that the leaders have with their followers. Similar to the trust that followers have for transformational leaders, leaders in high-quality LMX relationships default a bond of trust with their followers. In the LMX theory, there is mutual trust and respect that creates and environment where both the leaders and the followers will go above and beyond to help each other succeed. In low-quality LMX relationships, the leader and follower may not trust, respect, or like each other. Motivation in those low-quality LMX relationships is about reward and punishment (Bauer, T., Ergodan, B., 2010, p.282).
In other words, high-quality LMX relationships are similar to the trust and devotedness between transformational leaders and their followers. Low-quality LMX relationships are analogous with transactional leaders who use reward or punishment as their motivational tools.
One thing that is interesting about LMX is that it varies for each leader-employee relationship. In other words, a leader may have a high-quality LMX with one team or group of employees, where there is mutual respect and trust, and both the teams and the leader are high performers. That same leader may have low-quality LMX relationships with other people, so that there is no mutual respect nor trust, and both the leader and the employee are experiencing low performance as a result. This is realistic, as not every employee can have a great relationship with the leader in a company.
Path-Goal Theory of Leadership
Robert House’s Path-Goal theory was introduced in 1971 as his version of Fiedler’s Contingency Theory from the mid-1960s. House said that a leader’s behavior is contingent upon the satisfaction, motivation, and performance of those subordinates being led. According to House, the leader must identify the personal goals and motivations of the leader’s followers, then the leader must adapt their approach to fit the individual motivations of the subordinates (Granite State College, n.d., p.52).
House specified four leadership styles: directive leaders, supportive leaders, participative leaders, achievement-oriented leaders (Bauer, T., Ergodan, B., 2010, p.276). Directive leaders explicitly defines how followers should do their tasks, with the idea that clearly defined roles and directions will motivate employees (Granite State College, n.d., p.52). Supportive leaders are the encouraging leaders that get to know their workers on a personal level and respond to their followers’ psychological and emotional needs (Bauer, T., Ergodan, B., 2010, p.276). Participative leaders are involved in decision-making with their leaders in a collaborative process. This an effective leadership style when employees are highly skilled and have a high internal locus of control (Bauer, T., Ergodan, B., 2010, p.276). Achievement-oriented leaders challenge followers with goals and expect them to perform at their best (Granite State College, n.d., p.52). When to use these may be situational, based upon what structure they need, their ability level, their desire for control, and their experience (Clark, 2015).
Pros and Cons
The LMX theory seems to be an extension of the transformational leadership theory. High-quality LMX relationships are similar to the relationships that transformational leaders have with their employees. Likewise, low-quality LMX relationships are similar to some relationships with transactional leaders. Also, in the path-goal theory, achievement-oriented leaders mixed with participative and supportive leadership blend to be transformational leaders. Supportive leadership and participative leadership are both high-quality LMX. Directional leadership, in contrast, is very low-brain and feels very transactional/low-quality LMX.
Transformational leaders (high LMX leaders) have highly-passionate followers that flourish based off of the trust, respect, communication, and the richness of the relationship between the leaders and the followers.
Transactional leaders (low LMX leaders) have low barrier to entry and do not need to develop a close relationship with their followers. Transactional leaders are able to use extremely powerful rewards, like money, recognition, or other perks to drive high-performing teams.
From the path-goal leadership theory, directive leaders have followers that have a very clear and specific goal, so they have a great deal of reliability and psychological safety. Supportive leaders have followers that feel nurtured and cared about. Participative leaders have followers that feel included in the decision-making process, thus have higher buy-in and commitment. Achievement-oriented leaders have followers that are trusted and motivated to achieve a high level of performance.
Transformational leaders can put on an act and be disingenuous, since some leaders are managing the impression that people have about them more than their actual relationship with their followers. Transformational leaders may be the result of public relations and marketing, self-promotion, and acting.
Transactional leaders have less real empathetic relationships and often fail to seek any individuality among their follows, which limits innovation and creativity. Leaders and employees are often underdeveloped, without passion, and often promote a culture of blame in seeking their rewards.
From the path-goal leadership theory, directive leaders give their followers little room for innovation, creativity, or experimentation. People with a highly internal locus of control do not like being managed by someone who manages as a directive leader since it seems like they are being micromanaged. Supportive leaders have created a close relationship with followers, which may cause problems when they need to discipline or ‘be the boss’ to change behavior. Supportive leaders also face difficulties with scale and nurturing large groups due to the time and energy it requires. Participative leaders face issues when a vision or change needs to be pushed down and communicated rather than opening an idea up for discussion. Not every change can be decided in collaborative teams. Achievement-oriented leaders can face employees who feel that, although they are trusted with lofty goals, they are not individually appreciated, which can create high-turnover, lack of innovation, and a high-stress environment.
How the Models Fit My Style
The leader-member exchange (LMX) theory rings the truest to me. Although most of my followers see me as a transformational leader, there are some relationships that are highly transactional with my employees. Although I am engaged and highly participative, supportive, and achievement-oriented with some employees, other employees get a purely directional leadership style. Some employees who fade to the background experience even a laissez faire approach from me and receive periodic recognition for good work, but otherwise: I stay out of their way. The LMX theory is a potent model because it demonstrates that a leader can have both high-quality and low-quality LMX relationships at the same time. It also brings home that I need to spend more time reaching out to those employees that I forget about, and I also need to make sure that I use a blend of transactional and transformational approaches, since transformational approaches will be wasted on someone with a low-trust/low-respect view of me.
In addition to the LMX and transformational leadership theory, I appreciate the path-goal theory, identifying that there is a method for leadership in each relationship, environment, and organizational culture. Some groups may appreciate an achievement-oriented approach, while others appreciate a participative approach to leadership.
Personally, I know that I am not a directive leader, as I would rather give my team a vision and trust them to execute it with their skillset and problem solving. Likewise, although I am great at being a supportive leader in small groups, on a company-wide scale, I am simply unable to invest the time and energy required. It is not a scalable approach for me.
I am a blend of being an achievement-oriented leader and a participative leader, as I trust create goals and vision and then work with my team to achieve them, design systems together, troubleshoot together, and come up with creative solutions together.
The path-goal theory, the transformational leadership theory, and the leader-member exchange (LMX) theory have each been around since the 1970s and still have valid, tried, and tested approaches to leading people. Each of these models overlaps strongly to the point where they do not feel unique anymore. They have evolved together with seemingly different names, although many of the concepts are the same, such as transactional leaders being low-quality LMX leaders and directive leaders.
Bauer, T., Ergodan, B. (2010). Organizational Behavior, Version 1.1. Licensed under Creative Commons. Flat World Knowledge.
Clark, D. (2015). Path-Goal Leadership Theory. Retrieved from http://www.nwlink.com/~donclark/leader/lead_path_goal.html
Granite State College. (n.d.). Cultivating Your Leadership Capabilities. Licensed under Creative Commons. Granite State College. Retrieved from https://granite.pressbooks.pub/ld820/open/download?type=print_pdf
Mindtools. (n.d.). Transformational Leadership: Becoming an Inspirational Leader. Retrieved from https://www.mindtools.com/pages/article/transformational-leadership.htm