Examining the Influence of Transformational and Transactional

...

subordinate job stress. However, most of these

studies were conducted in western countries, making it important to replicate it in the Ghanaian context because

culture plays an important role in leadership behaviours (Jing & Avery, 2008). Particularly, this study focuses on

employees in the Ghanaian banking sector to determine how the leadership behaviours exhibited by managers

contribute to employees perceived job stress.

2. Theoretical Review

2.1 Transformational Leadership

Burns (1978) was the first author to introduce the concept of transformational and transactional leaderships.

Later, Bass (1985) developed and extended Burns’ theory of transformational and transactional leaderships.

Burns (1978) defined transformational leadership as a process where, “one or more persons engage with others

in such a way that leaders and followers raise one another to higher levels of motivation and morality”. In

transformational leadership, followers identify themselves with the leader, share the leader’s vision of the future,

and altruistically work hard to achieve determined goals. Transformational leadership believes in collective

effort, thereby emphasizing group work as the best way to achieving organisational goals. Transformational

leaders create and emphasize a unified and supportive workplace that leads to shared objectives. According to

Bass, Avolio and Goldheim (1987), transformational leaders increase the confidence, motivation and satisfaction

of group members by fostering unity among the members. In addition, transformational leaders help followers to

identify and develop their potentials as they encourage, support and inspire followers particularly through

challenges. According to Bass and Avolio (1997), transformational leaders inspire and encourage their followers

to the extent that the followers see challenges as opportunities and the leaders cooperate and work with them to

overcome these challenges at the workplace. These leaders recognize employees as knowledgeable who can

intellectually contribute to solving some of organisations’ problem. Hence, transformational leaders share a

significant degree of decision-making power with their employees. Ahmed and Sadiq (2008) asserted that trust

plays a substantial role in transformational leadership because of the mutual co-operation and reliance found

between leaders and subordinates.

Bass (1990) acknowledged four types of transformational leadership behaviours to include idealized influence,

inspirational motivation, intellectual stimulation, and individual consideration. Leaders with idealized influence

are admired and respected by followers. Such leaders are believed to have referent power or charisma that pulls

followers along. Transformational leaders have vision and a sense of mission, instill pride in and among the

group, gain respect and trust from followers, sacrifice their personal gains for the benefits of the group, set

personal example for followers, and demonstrate high ethical standards (Bass, 1985; Humphreys & Einstein,

2003). Through inspirational motivation, transformational leaders create and present an attractive vision of the

future, use symbols and emotional influences, and demonstrate confidence and eagerness (Kark, Shamir, & Chen,

2003). Thus, transformational leaders talk optimistically about the future, talk enthusiastically about what needs

to be accomplished, articulate a compelling vision for the future and expresses confidence that goals will be

achieved (Bass & Avolio, 2004). According to Bass (1985), transformational leadership through intellectual

stimulation provides followers with challenging new ideas and encourages them to view and handle problems

from a fresh perspective. Such leaders do not accept things as they are; rather they challenge the status quo,

beliefs and values, and encourage followers’ to do same. With the individualized consideration such leaders

coach, support and encourage subordinates. Bass and Avolio (1994) stated that transformational leaders teach

and help followers to develop their strengths, and listen attentively to the concerns of followers.

2.2 Transactional Leadership

Transactional leaders reward or discipline followers with regards to their performance. Yukl (1981) viewed

transactional leadership as an exchange process in which both the leader and the follower influence each other

reciprocally so that they both derive something of value. Bass (1985, p. 14) indicated that transactional leaders

“pursue a cost-benefit, economic exchange to meet subordinates’ current material and psychic needs in return for

contracted services”. Also, he argued that leaders’ promise of rewards and benefits to followers influence the

followers to perform tasks and achieve predetermined goals (Bass, 1990). Transactional leaders believe that task

completion is premised on exchange of desirable reward to followers. Kellerman (1984) described the exchange

www.ccsenet.org/ijbm International Journal of Business and Management Vol. 10, No. 8; 2015

163

relationship