Contemporary Leadership Styles: How relevant are they in today’s changing world?

In the 20^th century, contemporary leadership theories were developed, for example, transactional, transformational and charismatic leadership (Lee et al., 2019). Although these theories have received great attention from the researchers, it is suspected if they keep relevant in today’s changing world. I am curious about their applicability to the automotive industry, facing the fast pace of technological change and the environmental dynamics.

To discuss the relevance of contemporary leadership styles, three major theories are considered: transactional leadership, transformational leadership, and charismatic leadership regarding the description of, debates around these theories and challenges facing the contemporary leaders.

Contemporary leadership theories: Three key theories were taken into account.

a) Transactional leadership: Exchange relationship between the leaders and the employees via reward and punishment to correct employee behavior for organisational goals (Valero, 2015). It emphasises task and efficiency (Xu & Wang, 2019).  

b) Transformational leadership: Concern with employee demands (Bian et al., 2019). Transformational leader acts as role model to be respected by the subordinates, to inspire them, understand their needs and welcome their creative ideas in line with idealised influence, inspirational motivation, individualised consideration and intellectual stimulation respectively (Valero, 2015).

c) Charismatic leadership: Personality traits that enable the leaders to exercise “referent power over the followers” (Gregory-Mina, 2009). Being similar to transformational leaders, charismatic leaders set high expectations on them, use emotional cues and personal relationship to motivate their outstanding performance (Kamble & Mulla, 2020).

Critiques: Despite the applicability in the 20^th century, contemporary leadership theories are critiqued to be no longer adequate in today’s changing world (Uhl-Bien et al., 2007; Lee et al., 2019).

Too bureaucratic and administrative: According to Uhl-Bien et al. (2007), the leadership theories in the 20^th century are top-down from the leaders’ decisions to the subordinates’ behaviours within a bureaucratic, administrative organisation. The argument is similarly justified by Valero (2015) as transactional leadership is dominant in a bureaucratic organisation, such as, the public sector. In contrast, charismatic and transformational leadership styles are less hierarchical since employee demands are concerned with (Bian et al., 2019; Kamble & Mulla, 2020). Nevertheless, the principle underlying these leadership theories is the rational alignment between employee behaviour and organisational goal (Uhl-Bien et al., 2007).

Too masculine: It is argued by Kamble and Mulla (2020) that charismatic leadership is masculine since men are perceived to be more charismatic than women. Similarly, based on exchange of reward, transactional leadership is criticised to be masculine (Paustian-Underdahl et al., 2014). Nevertheless, there is a controversy relating to transformational leadership, which is widely recognised to be feminine (Silva & Mendis, 2017; Balasubramanian & Krishnan, 2012). The reason is that transformational leaders motivate employee participation and creativity. In the empirical study of Balasubramanian and Krishnan (2012) among 102 managers in a large nationalised bank in India, femininity is the predictor of transformational leadership. Despite that, as critiqued by Ayman et al. (2009), the current leadership styles remain masculine since transformational leadership style of female leaders are less effective within a male-dominated team.   

Too Western: Another critique against contemporary leadership theories is Western-centric (Perkins, 2009; Wangmo & Samul, 2019; Hino, 2020). It is because of the assumption that Western theories are superior to Eastern ones (Wangmo & Samul, 2019). The Eastern regions should learn from the Western countries. Additionally, contemporary leadership theories were founded in the Western nation and assumed to be applicable to a multi-cultural context (Perkins, 2009). However, it is argued that the Western and Eastern are not alike (Xu & Wang, 2019). There is a limitation for the Western-centric leadership theories to be applied in non-Western regions.

Challenges facing the contemporary leaders: From aforementioned critiques, contemporary leaders, particularly Western, masculine and bureaucratic ones, have faced challenges in today’s changing world.

Environmental uncertainty: The world is full of uncertainties regarding political, economic, legal, technological and social issues. For instance, Tesla, an electric car manufacturer from America, is currently facing political change due to the presidential election in November. Elon Musk, its CEO, advocated Donald Trump, who missed the chance to become the next president of the US (Roth, 2020). Thus, his plans that are designed under Trump’s era, might become irrelevant.

External crisis: The world has been experiencing a global pandemic, called Covid-19, which causes an organisational crisis to different industries. For example, Tesla has been forced to stop producing cars in California since March 23^rd (O’Kane, 2020). Production shutdown is a huge loss to Tesla. Other than economic loss, there are other social issues facing Elon Musk. For instance, despite the announcement of plant closure, several employees kept working, resulting in two positive cases (O’Kane, 2020). The investigation puts Tesla at risk of non-compliance with job safety. In response, Elon Musk promised that employees could stay at home to protect from Covid-19 without punishment while in reality, they were fired due to failure to return work (Siddiqui, 2020). Thus, the today’s crisis not only damages financial performance but also reputation of the firms. It threatens the leaders to be transparent, ethical and trustworthy.   

Globalisation: Contemporary leaders have faced the fast pace of globalisation. Thus, Western-centric styles are no longer appropriate (Uhl-Bien et al., 2007). For instance, Tesla opened a Gigafactory in China, an Asian country (Toh, 2020). Hence, the leader is required to lead the Asian workforce successfully.

Femininity: Being too masculine, contemporary leaders may struggle to lead the workforce in a feminine work environment (Balasubramanian & Krishnan, 2012). For example, although Elon Musk is open to innovation, the pressure to innovate is too aggressive on the employees (Meyer, 2019). The reason is that Tesla would like to achieve the mission to become the most innovative car manufacturer in the world. It causes employee stress and exhaustion. Caring is increasingly demanded in today’s business environment.

Development of future leadership styles: Facing the critiques and contemporary challenges, it is discussed that contemporary leadership theories are no longer relevant in today’s changing world. Their principles are insufficient to help leaders address environmental uncertainty, cope external crisis, meet globalisation and femininity.

According to Uhl-Bien et al. (2007), complexity leadership theory should be researched to develop new leadership styles, which evolve from bureaucratic administrative leadership to complex adaptive leadership. Similarly, Lee et al. (2019) described this theory as the most modern one to explain leadership. It is evaluated to meet environmental uncertainty and crisis. For instance, after Joe Biden won in the election, Elon Musk can quickly adapt his new political policies. Additionally, facing Covid-19, complexity leadership theory can act as a guideline for Elon Musk to adapt the lockdown policy and prepare for the new normal. Moreover, facing cultural differences in global manufacturing network, the leader can easily adapt the host culture and communicate well with the local workers.

Besides, another viewpoint is that future leadership styles should be developed on the basis of transformational leadership rather than transactional and charismatic ones. It is because this leadership style is more feminine than the counterparts (Silva & Mendis, 2017; Balasubramanian & Krishnan, 2012). Meanwhile, femininity is another challenge facing the automotive industry in general and Tesla in particular. In addition, transformational leadership is assessed to be less bureaucratic and top-down than transactional leadership (Uhl-Bien et al., 2007).

Conclusion

It is concluded that no leadership theory is ideal all the time. Instead, leadership theories have evolved and will evolve over time. In response to environmental uncertainty, external crisis, globalisation and femininity, today’s leadership research should link with complexity leadership theory. Especially, contemporary leadership styles are critiqued to be too bureaucratic, masculine and Western-centric. Nevertheless, the future leadership styles can be developed based on transformational leadership.

References

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