exceed expectations.^35 In other styles of transactional leadership, the leader empha-
sizes correction and possible punishment rather than rewards and recognition. This
style “results in performance below expectations, and discourages innovation and ini-
tiative in the workplace.”^36 Of course, leaders should not ignore poor performance, but
effective leaders emphasize how to achieve expectations rather than dwell on mistakes.
Some leaders inspire followers to transcend their own self-interests for the good of the
organization and have a profound and extraordinary effect on their followers. These
are transformational leaders, such as Matthew Barrett, chairman of Barclays PLC,
Britain’s second-largest bank, and formerly CEO of Bank of Montreal; Frank Stronach,
chairman of the board of Aurora, Ontario-based Magna International; and Mogens
Smed, CEO of Calgary-based DIRTT (Doing It Right This Time) and former CEO of
SMED International. Other Canadians who have frequently been cited as charismatic
leaders include René Lévesque, Quebec premier; Lucien Bouchard, former Bloc Québécois
leader; Michaëlle Jean, Governor General; Pierre Trudeau, prime minister; and Craig
Kielburger, the Canadian teenager who founded Free The Children to promote chil-
dren’s rights and combat exploitation of child labour. What links these individuals is that
they pay attention to the concerns and developmental needs of individual followers.
Transformational leaders change followers’ awareness of issues by helping them look at
old problems in new ways, and they are able to excite, arouse, and inspire followers to
exert extra effort to achieve group goals.^37
Transformational leadership is sometimes identified separately from charismatic
leadershipin the literature, although McGill’s Kanungo notes that the two formula-
tions do not differ in that charismatic leaders are also transformational leaders. Relying
on his judgment, we use the two concepts interchangeably. As Kanungo notes, the
charismatic leader “critically examines the status quo with a view to developing and
articulating future strategic goals or vision for the organization and then leading orga-
nizational members to achieve these goals through empowering strategies.”^38 While
not all transformational leaders are charismatic in personality, both transformational and
charismatic leaders work to empower their followers to reach higher goals.
Transactional and transformational leadership should not be viewed as opposing
approaches to getting things
done.^39 Transformational lead-
ership is built on top oftransac-
tional leadership—it produces
levels of employee effort and per-
formance that go beyond what
would occur with a transactional
approach alone. Exhibit 8-9 on
page 270outlines the difference
between transactional and trans-
formational (or charismatic)
leaders. Would you be able to be
a charismatic leader? We give you
tips in this chapter’s From
Concepts to Skillson pages 291.
While the idea of charismatic
leadership was developed based
on North American observa-
tions, professors Dale Carl of the
School of Business Management
at Ryerson University and
Mansour Javidan at the
University of Calgary also sug-
Chapter 8Leadership 269transformational leaders
Leaders who inspire followers to go
beyond their own self-interests for
the good of the organization and
have a profound and extraordinary
effect on their followers.charismatic leadership
Leadership that critically examines
the status quo with a view to devel-
oping and articulating future strategic
goals or vision for the organization,
and then leading organizational
members to achieve these goals
through empowering strategies.Through his charismatic leader-
ship, Steve Jobs achieved unwa-
vering loyalty and commitment
from the technical staff he over-
saw at Apple Computer during
the late 1970s and early 1980s.
However, as the company grew,
this style was less effective, and
he was forced out of Apple in- In 1996, with Apple doing
poorly, Jobs was brought back to
lead the company once again
with his vision and charisma. With
such innovations as the iPod and
the iPod shuffle, Jobs’ visionary
leadership continues to make
Apple successful.