Transactional leadership is one of the most common approaches to governance in the modern business environment. In this study, the researcher was interested in investigating the impact of organizational leadership on business activities and operations of a company. Asda was used as a case study to facilitate primary data collection. The researcher relied on information collected from both primary and secondary sources. The findings of this investigation revealed that transactional leadership is a highly effective governance approach that can help a firm to achieve growth. Used effectively, it helps in ensuring that specific goals are achieved within a short period and without the misuse of resources. Although it limits creativity and may sometimes expose employees to work-related pressure, this governance style has helped Asda to remain sustainable and successful in a highly competitive industry.
Introduction
The concept of leadership has attracted the attention of many scholars over the past several decades. According to Murphy and Louis (2018), the ability of a firm to have a clear vision of what it needs to achieve in the market and strategies needed to make it a success depends on its leadership. Recruiting, retaining, and maintaining a team of highly skilled and motivated employees within a firm also depends on the leadership strategies that a firm employs. As such, scholars have been keen on finding appropriate strategies of leadership which may be relevant under different settings. Understanding the appropriate leadership strategy that a firm needs to employ is critical, especially in the current competitive business environment. It defines the success of business activities and operations of a given company. One of the common leadership strategies in in practice today is transactional leadership style.
Transactional leadership, which is sometimes referred to as transactional management, is considered one of the most effective leadership strategies in the current business environment. Kilian (2018) explains that transactional leadership as a performance-based leadership that emphasizes the need to supervise and organize employees to enhance their performance. The leader is expected to closely monitor how employees undertake their responsibilities, and when necessary, provide guidance to ensure that their performance is improved. The primary assumption of this leadership style is based on Theory X of human motivation, which assumes that people require constant supervision and motivation to work effectively (Davis & Silvestri, 2020). A transactional leader is expected to engage employees and ensure that they understand and are capable of undertaking tasks assigned to them as effectively as possible. The study will focus on how this form of leadership is applied at Asda.
The retail market remains one of the most competitive industries not only in the United Kingdom but also in other countries around the world. The retailers are forced to set competitive prices for high-quality products as a way of attracting and retaining customers. At Asda, the management understands that most of its customers are influenced, in their buying decisions, by the price of their products. As such, they have to maintain costs of operations as low as possible while at the same time ensuring that customers get the best service and quality of products that they need. They must also understand the emerging market trends and find ways of regularly adjusting their products to meet needs of customers. In the retail market, customer service is critical in ensuring that a firm attracts and retains a pool of loyal customers. It means that the performance of employees is critical in ensuring that Asda remains attractive to its customers. In this paper, the researcher seeks to identify the role of transactional leadership in managing business activities and operations of Asda.
Statement of the Problem
Asda faces stiff competition in the market as the number of retailers continue to emerge both in the traditional brick-and-mortar markets and on online platforms. Attracting and retaining a pool of loyal customers has become more challenging than it ever has been (Bhattachary & Chakraborty, 2020). The management of Asda also faces the challenge of managing expectations of employees to avoid industrial actions and to ensure that the best workers are retained at the firm. It means that this company has to do a lot with the little it has to achieve its vision. It requires a leadership strategy that not only focuses on the performance of the employees but also on their motivation. It must ensure that workers understand the need for them to constantly improve their performance as a way of ensuring that specific goals set within a given period are achieved successfully. In a market where customers have numerous options from which to choose, the management of Asda must understand the nature of the problem that it is facing in the market.
It is possible to employ various forms of leadership to enable the company to achieve success in such a highly competitive business environment. Liu (2020) warns that when selecting an appropriate approach of governing employees, one should understand the goal that needs to be realized. Different leadership styles are appropriate under different settings, depending on the circumstances that an organization is facing. Transactional leadership style is often considered effective when the management is focused on achieving specific goals within a given period. It is an intense approach of governing workers as it involves constant supervision and guidance. A transactional leader must understand their critical role to ensure that they achieve the targeted goal. The constant supervision is meant to identify weaknesses of employees and to offer guidance as opposed to punishing workers (Davis & Silvestri, 2020). The performance of employees is given a high priority in such an environment. However, that can only be realized when they are convinced that the constant supervision is meant to assist them as opposed to punishing them.
The management Asda needs to understand how to use transactional leadership to achieve specific goals in the market. Tropman (2020) admits that applying transactional leadership may not be as easy as using other forms of leadership. In many cases, employees often feel that constant supervision by the management is a sign of lack of trust in the capacity and commitment of workers. As such, they detest such a governance approach and may be demotivated by it. However, cases arise when it is not possible to avoid this approach to governance. The challenge that the management of this firm will have to face is convincing its employees that the constant supervision is meant to assist them improve their performance as opposed to trying to micromanage their assignments. They must remain motivated in their work, even with the constant supervision, to ensure that they register improved performance. Achieving such a goal will define how successful this firm will be in employing this form of leadership in its operations.
Significance of the Research
Leadership strategies that a firm employs defines its ability to achieve success in the market. Different circumstances that an organization faces defines the leadership strategy that is appropriate for it. Transformational leadership, transactional leadership, authoritative governance, coaching, and laissez-faire are some of the common strategies of governing employees (Bhattachary & Chakraborty, 2020). Understanding how to effectively use a specific governance strategy is critical because the goal is to ensure that workers not only become more productive but also remain motivated. The strategy should also create an effective relationship between the management and employees of the company. Transactional leadership is one of the most effective and commonly used governance strategies in the modern business environment. The main challenge, as mentioned in the section above, is understanding how to apply it effectively to achieve the intended goal (Marques & Dhiman, 2018). If the management fails to understand how to apply this approach to governing employees, the outcome may be counterproductive. It may result into employee demotivation and a drastic drop in their performance.
The study is important because it seeks to explain how this form of governance can be applied correctly to help a firm in achieving its goals. The choice of the company, Asda Stores Ltd, was deliberate. This firm operates in one of the most competitive markets in the world. Employees interact constantly with customers, which means that their performance and attitude directly affects the success of the firm. The study will help in defining how this company, and any other entity that may be interested in embracing this governance style, can use transactional leadership style effectively. The document will also be important to future scholars who may be interested in conducting further studies in this field. It will provide critical information on how to apply this governance approach in an organizational setting where competition is stiff. The methodology that the researcher will use to collect and process data from various sources can also guide future scholars. As such, the study will not only benefit those who intend to put into practice this concept of leadership but also future scholars.
Aim and Objectives
It is necessary to define aim and objectives of this study at this stage of the paper. As Bejaoui (2019) notes, having a clear aim and objectives helps a researcher to understand the nature of data that should be collected from the field. It helps in determining whether the study has achieved specific goals by the end of the research. The aim of the study is to identify the role of transactional leadership in managing business activities and operations of an organization- a study of Asda. The following are the specific objectives that should be realized:
- To understand the concept of organizational leadership in the context of a modern-day organization;
- To determine the role and benefits of transactional leadership in managing business activities and operations of an organization;
- To examine the issues faced by Asda while using transactional leadership for managing its activities and operations.
Research Questions
It is equally important to define specific questions that should be used in a given research. According to Smith and Pourdehnad (2018), when research objectives have been defined, the next steps is to develop research questions. The research questions helps in defining the information that should be collected from both the primary and secondary sources. In such a study, it is easy for a researcher to sway away from the focus of the study and gather information that is not relevant for the project. Having clearly defined questions helps a researcher in ensuring that focus is not lost in the study by strictly defining what needs to be answered when gathering data from various sources. The following questions were used to guide the process of collecting data in this study:
- What is the concept of organizational leadership?
- What is the role and benefits of transactional leadership in managing business activities and operations of an organization?
- What are the issues faced by Asda while using transactional leadership in managing its activities and operations?
Dissertation Structure
The dissertation has five chapters organized in a way that made it possible to achieve the aim and objectives. Chapter 1 was the introductory chapter that explained the background of the study and statement of the problem. Significance of the research is also explained this chapter as well as aim, objectives, and research questions. Chapter 2 focused on the review of the relevant literature in the study. Several theories of leadership and their significance in the governance of modern organizations are discussed. The chapter also discusses the importance of choosing a specific governance strategy and the impact of transactional leadership on an organization’s performance. Chapter 3 discusses the method used to collect, analyze, and interpret data from various sources. Research philosophy, research approach, and research design are discussed. The chapter also explains sampling strategy, data collection and analysis method, ethical considerations, limitations and delimitations. Chapter 4 presents the findings made from the analysis of primary data. It presents data analyzed both qualitatively and quantitatively as explained in chapter 3. The final chapter provides a conclusion and offers recommendations that the management of the firm and other similar organizations should consider when choosing the right leadership style.
Literature Review
Success of any organization largely depends on the performance of individual employees. The performance of the workers, on the other hand, is directly affected by the leadership strategies that a firm employs. According to Bonnie and Iyana (2017), the leadership of a firm plays a critical role in the operations of a firm as it is responsible for developing vision, mission, and strategies that define the path the entity should take towards achieving its goal. Leaders must understand how to break down a long term goal into specific activities that defines daily operations of a firm. Asda is one of the most successful supermarket chains in the United Kingdom. Its success is directly linked to the leadership strategies that it has been using to achieve specific goals in the current competitive market. In this section of the paper, the focus is to review the literature to assess various leadership styles and theories and their relevance under various settings. The chapter will also review impact of transactional leadership on business activities and operations.
Leadership Theories and Styles
Scholars have developed theories and explained leadership styles that have been commonly in use for many years. According to Grandy and Sliwa (2017), a leader must be as dynamic as possible, knowing which leadership style to use under different settings. One leadership style may be highly effective in one setting but inappropriate in another. It means that successful leaders understand how to change form one approach to another. It is important to review some of the common leadership theories and styles relevant in an organizational setting.
The Great Man Theory. It is one of the most explored leadership theory in the world of academics. The theory holds that excellent leaders are born with natural qualities that make them effective in governance (Ofosu-Anim & Back, 2021). Traits such as courage, confidence, intelligence, charm, and intuition naturally occur in people. As such, one does not need to go through some form of training to acquire these critical skills of leadership. The theory opposes the idea that leaders are developed (Ruben & Gigliotti, 2017). It explains why in many ancient kingdoms, leadership was inherited from a parent to a child because of the belief that the child would have leadership qualities of their parents. Although some arguments presented by this theory is true, many scholars have disputed the relevance of this theory in modern society.
In the current dynamic environment, a leader has to learn, especially when governing a diverse group of people or a team of highly intelligent employees. The belief that one has natural qualities of a leader that makes it unnecessary for them to learn can be misleading. A great leader must understand the changing events both within the firm and in the external environment. They should know how to respond to these forces in a way that will ensure that their organizations are not derailed. Despite these weaknesses, the theory helps in explaining why some people tend to be better leaders than others.
The Trait Theory. The theory is shares some principles with the great man theory when explaining the concept of leadership and the source of power that leaders have. It holds that specific natural qualities make some people better leaders than others. A person who can listen to concerns of others and respond effectively can become a good leader. Similarly, one who can empathize with others and offer solutions when colleagues are faced with problems can be trusted with leadership (James et al., 2018). However, the theory holds that having these qualities does not automatically qualify an individual as an excellent leader.
One may be a good listener, courageous, and confidence but lacks financial and self-discipline. It means that such an individual cannot be trusted with the finances of organization and neither can they respect themselves and their colleagues in a workplace setting (Wang, 2018). Such an individual cannot be a good leader, especially in a highly competitive business environment where discipline and commitment of leaders is critical. The trait theory emphasizes the need for a leader to have a combination of traits that strengthen their ability to govern others. It admits that it may be possible that a leader may have some weaknesses, but they should exhibit most of the desirable qualities.
Situational Theory of Leadership. Situational leadership is another common theory of governance that has gained massive popularity over the recent past. As Wang (2018) explains, this form of governance holds that a good leader should not rigidly embrace one leadership style and ignore the rest. Although some leadership styles are considered superior to others, one cannot just stick to one approach of governance. Situations may arise, which forces a leader to change from one approach of governance to another. A good leader should know when to command, persuade, coach, delegate, and even participate in specific activities. They should ensure that their decisions and actions are defined by the situation that they and their organization face. Such leaders cannot be accused of being dictatorial because they only command their followers when the situation forces them to do so. Similarly, they cannot be accused of being too weak or lenient because they only embrace such strategies when environmental forces allow them to do so. It remains one of the most preferred governance approaches because of its dynamic approach to leadership.
McGregor’s Theory X and Y. McGregor’s theories of leadership have been considered highly relevant in the management of human resource. Theory X holds that humans are lazy and require constant supervision to ensure that they deliver the expected results (Bhattachary & Chakraborty, 2020). The theory require managers to maintain strict supervision of their workers to ensure that workers perform as is expected. The theory explains that when necessary, a leader may be forced to employ punitive measures to force lazy employees to perform as is expected. The theory is popular among those who employ dictatorial or autocratic forms of governance.
On the other hand, theory Y holds that in most cases, employees are self-motivated and would require minimal supervision if necessary (Murphy & Louis, 2018). It explains that when a person is doing what they like, they will be so motivated and determined to deliver great results that they will not need any form of supervision. In such cases, the role of a leader is to offer guidance whenever it is necessary. The leader also ensure that communication channels within the organization remains open and efficient to enable employees to share their ideas amongst themselves and with their supervisors. This theory is popular among transformational leaders and those who embrace laissez-faire form of governance. A good leader should know when to embrace theory X and theory Y when governing employees.
Transformational Theory of Leadership. One of the most popular theories of governance in the modern business environment is transformational leadership. According to James et al. (2018), transformational leadership emphasizes the need for an effective and positive relationship between leaders and the subordinates (Bonnie & Iyana, 2017). It holds that the role of a leader should be that of role model to the junior officers. An effective leader should be passionate and enthusiastic enough to inspire employees to achieve success. Instead of issuing instructions and constant threats, an effective leader should understand strengths and weaknesses of individual employees and guide them effectively towards a path of success.
A transformational leader should be interested in motivating workers to achieve greater performance than previous one. Such a leader does not use threats or force to achieve their intended goal. Instead, they work alongside their subordinates with the interest of understanding their personal weaknesses and assisting them to overcome these challenges. As a way of motivating their colleagues, transformational leaders demonstrate what they expect of followers instead of merely issuing instructions. Such actions helps in reminding employees that it is possible to achieve specific goals when they put the right effort.
Transactional Theory of Leadership. Transactional leadership, sometimes referred to as the management theory, makes a radical shift from principles of transformational theory. It uses the principle of rewards and penalties, also known as the rod and stick. In this theory, a leader should be result-focused and hierarchical (Grandy & Sliwa, 2017). A transactional leader is often focused on achieving specific goals within a given timeframe. They do not emphasize the need for followers to like their leader. Instead, they have to ensure that they meet specific targets within a given period using the available resources. In most of the cases, a transactional leader has specific targets that have to be realized. As such, they prioritize performance, order, and discipline over creativity (Bhattachary & Chakraborty, 2020).
The theory shares some principles with McGregor’s Theory X, which views followers as being lazy, needing constant and strict supervision. A transactional leader is not interested in inspiring subordinates as a way of enhancing their performance. Instead, they reward those who meet or exceed expectations and punish those who fail to do so. Davis and Silvestri (2020) believe that transactional leadership is an effective way of governance when trying to achieve short-term goals within an organization.
Coaching Leadership. One of the popular approaches to governance is coaching style of leadership. As the name suggests, such a leader is interested in coaching subordinates to enable them improve their performance. The leader works closely with the employees with the aim of understanding their strengths and weaknesses. The leader then finds ways of enabling workers to overcome their weaknesses while at the same time maximizing on their strengths. It requires an effective communication system to achieve the intended goals. Tropman (2020) notes that when using this governance approach, feedback is critical. The leader is expected to provide a regular feedback to the employees about the progress made and areas of improvement that is necessary. The goal is to ensure that there is continuous learning and adjustment in the performance of workers over time.
Servant Leadership. Servant leadership is a governance approach that is useful in specific contexts. In this style, the leader strives to serve subordinates instead of issuing instructions. A servant leader listens to the concerns of junior officers with the aim of finding a solution to each issue (Ofosu-Anim & Back, 2021). Such a leader is committed to creating a workplace environment where employees feel cared for and respected. The strategy is effective when working with a team of highly-skilled, self-driven, and hardworking employees who only need an enabling environment to perform within expectations. The leader will be focused on creating a communication platform that allows employees to share their views with the management and fellow workers whenever necessary. A servant leader believes that the success of employees does not depend on issuing threats and maintaining constant supervision. Instead, it requires a leader to trust the capacity of the subordinates and provide them with the best environment to deliver the best performance.
Democratic Leadership. Democratic leadership is another popular approach of governing employees. In this approach to governance, a leader creates an environment where employees are allowed to take part in critical decision-making processes. Instead of top managers developing new policies without any input of employees, democratic leadership require managers to engage their subordinates, especially if the new policy will directly affect everyone (Bhattachary & Chakraborty, 2020). Whenever a firm is planning to introduce a new concept or technology, employees should be involved, and their opinion taken into consideration. In some cases, a firm may need to allow views of the majority to prevail if it is in line with the vision and mission of the company. When using this strategy, James et al. (2018) warn that care should be taken to ensure that interests of other members of the organization should be respected. Shareholders’ interest is to maximize profits while employees may want a situation where they are handsomely remunerated and given flexible working hours. A balance of the interest of stakeholders and the organization itself should be prioritized over the interest of an individual.
Laissez-Faire. The management of a given organization may opt to use laissez-faire as the most appropriate governance approach. In this strategy, a leader delegates tasks to subordinates and maintains minimal supervision, if any. Principles of this approach to governance is based on theory Y of leadership, which holds that when provided with the right environment and support, employees can register impressive performance even without any form of supervision (Ofosu-Anim & Back, 2021). Such a leader will delegate duties to specific employees, inform them about the expected outcome and timeline, and allow workers to use their strategies to achieve the intended goal. Davis and Silvestri (2020) warn that when using this strategy, a leader needs to ensure that the subordinates are not only skilled and experienced but also self-driven. They should have the capacity to work effectively without supervision and maintain a level of communication that allows the management to understand the progress made.
Bureaucratic Leadership. In some cases it becomes necessary for a firm to maintain a bureaucratic approach to managing employees. In this approach, subordinates are expected to respect the hierarchy of command and strictly follow procedures that define their operations (Marques & Dhiman, 2018). In this strategy, instructions flows from the top management unit, through mid-managers and supervisors, to the junior officers. Whenever an employee has an issue, they have to report it to their immediate supervisor who will assess it, address the issue, dismiss it, or report it to their seniors as they may deem fit. It limits creativity and innovativeness among workers because of the need for them to follow approved procedures. The bureaucratic approach also limits the accessibility of top managers to junior employees and vice versa. As such, it is possible for managers to develop policies that fails to appreciate the reality that junior employees face. The strategy can be used to undertake short-term projects where employees are expected to follow specific strategies and achieve goals set by project managers.
Autocratic Leadership. Authoritarian or autocratic leadership was the most common and highly effective form of governance during the agrarian and industrial revolution (Smith & Pourdehnad, 2018). It remained popular in the 19th and 20th centuries as many large corporations enjoyed operating in a market where they enjoyed dominance. However, it started getting less popular because of the empowered employees who can easily move from one company to the other where they feel their views and interests are respected.
In this approach, a leader makes decision without consulting subordinates, and expects everyone to follow their instructions without question. Employees are expected to listen to the commands of their superiors and follow them to the best of their capacity. Those who fail to follow such instructions are often punished as the leader may deem necessary. It is a less desirable strategy in an environment where workers can easily resign to seek employment in rival companies. It cannot be used when a firm is keen on maintaining a team of highly skilled employees (Ofosu-Anim & Back, 2021). However, it is considered an effective governance strategy when a firm is keen on achieving short-term goals.
Choosing the Right Leadership Style
Choosing the right approach to governing employees is critical when a manager is keen on achieving specific organizational goals. Smith and Pourdehnad (2018) explain that a successful leader cannot rely on just one specific approach to governance. Such a leader should know the strategy that is appropriate when addressing a specific issue within an organization. Although transformational leadership is often considered as one of the best long-term strategy of managing employees because of the approach of inspiring and promoting continuous improvement and innovation, sometimes it is necessary for a leader to use a different strategy when faced with a unique situation.
The internal and external organizational factors will always dictate the right leadership strategy that a firm’s management should embrace. When a firm is keen on promoting creativity and innovativeness as a way of responding to changes in the marketplace, strategies such as transformational leadership, coaching, and servant leadership may be considered effective. When it is necessary to complete a specific project within the shortest time possible using the available strategies and resources, then autocratic and transactional leadership are some of the best governance approaches (Marques & Dhiman, 2018). A firm will also need to consider the most common strategies that its top competitors are using before selecting an appropriate approach to governance.
Impact of Transactional Leadership on Business Activities and Operations
Transactional leadership has gained popularity among leaders keen on completing specific projects in a relatively short time and limited resources. In such cases, the intention of the firm is not to try something new. The team will focus on using known strategies to ensure that the time and resources made available will be effectively utilized to complete the project. It may not be the most desirable strategy among employees, especially because of its principle of rewarding or punishing employees (Bhattachary & Chakraborty, 2020). However, in some cases, it is the most effective approach of managing workers. It is necessary to discuss the impact of this strategy on business activities and operations.
One of the main benefits of transactional leadership is the reduction of wastage of resources. When using this strategy to complete a specific project, a leader will expect subordinates to use specific strategies that have been tried and tested by the firm (Ofosu-Anim & Back, 2021). They are not allowed to try something new that may inflate the original budget. It explains why project managers prefer using this strategy, especially when it is necessary to complete specific projects using limited resources. The firm will be assured that a given amount of resources will be needed.
Using this approach of managing workers significantly reduces time wastage when conducting projects. Davis and Silvestri (2020) observe that one of the biggest challenges that face project management is lateness. The inability of a firm to complete a project within a specific time may lead to inflation in the overall cost of the project, besides causing dissatisfaction among clients and sponsors of the project. Transactional leadership may help in avoiding or limiting such problems by creating a strict procedure of undertaking specific activities. It is easier to avoid time wastage because the management will be aware of specific tasks that should be completed by specific employees within a given period. Tracking lateness and wastage is easy and can be corrected within the right time.
Planning activities are easy when one is using transactional approach of governance. A transactional leader expects subordinates to follow strict procedures when undertaking assignments given to them. It means that a manager can plan on the time and resources that will be needed to complete specific tasks. A manager can make predictions because there is a clearly defined pattern of operations that employees are expected to follow (Marques & Dhiman, 2018). The hands-on approach involved in this leadership strategy means that a leader can easily identify and correct mistakes as soon as they arise. It eliminates cases where such mistakes are detected late when making adjustments is costly. Despite these numerous benefits of transactional leadership, it is necessary to admit that it also has specific challenges that may negatively affect business activities and operations of a firm.
This strategy may create immense fear among employees when they are involved in the normal operations of the company. They are constantly reminded that their performance will be rewarded or punished depending on the output. James et al. (2018) argue that some workers tend to perform poorly when they are subjected to constant fear. Their attention shifts from achieving the desired success to finding ways of avoiding punishment. They may be forced to use unconventional means of achieving the set goals primarily to avoid punishment. Others may even consider sabotaging activities of their colleagues instead of supporting them, just to ensure that they avoid the punishment. The outcome in such a toxic workplace environment will be a significant drop in the outcome of the firm’s operations.
Transactional leadership emphasize the need to strictly follow procedures and standards set by the firm. It means that workers are not allowed to try something new because it may result in failure, time wastage, and an increase in the budget of the project (Bhattachary & Chakraborty, 2020). The rigidity of operations in such environment means that there is no room for creativity and innovativeness. Employees must do what the managers expect to avoid being punished. Working under such pressure also limits the creativity of workers. It means that if this strategy of governance is used for a long time, the workforce will become less innovative. They will wait for the managers to make decisions and give directions instead of being proactive in their assignments.
Methodology
The previous chapter has provided a review of literature, providing a background for the study. In this chapter, the focus is to discuss the method that was used to collect and analyze data. As Bell et al. (2018) observes, after identifying knowledge gaps from a review of the literature, the next step is to collect primary data to address the gaps in the body of knowledge. In this chapter, the research design, research approach, and data collection methods are discussed. Also discussed are data analysis method, ethical considerations, limitations and delimitations. The aim of the study is to identify the role of transactional leadership in managing business activities and operations of an organization- a study of Asda. Primary data had to be collected from the targeted organization and analyzed to achieve this aim. Research onion in figure 3.1 below helps in explaining the method and approach taken to collect and analyze primary data.
Research Philosophy
The research onion in the figure above shows that one of the first factor that has to be defined when planning to conduct a research is the philosophy. It refers to the assumptions and beliefs about the manner in which data about a given phenomenon should be collected, processed, and applied (Azari & Rashed-Ali, 2021). A researcher can opt to use positivism, realism, interpretivism, or pragmatism based on the aim and objectives of the study. In this research, pragmatism was considered the most effective research philosophy. This problem-oriented philosophy holds the view that the best method of research are those that answer research question most effectively (Patten & Newhart, 2018). It allows a researcher to use different methods (mixed-method research) to achieve a given goal. When investigating the impact of organizational leadership on business activities and operations of a company, it was appropriate to use both qualitative and quantitative methods.
Research Approach
When the research philosophy has been defined, the next step is to determine the appropriate research approach. Pajo (2017) notes that research approach refers to how one intends to develop knowledge in a given study. A researcher can use either inductive or deductive approaches to develop knowledge. In this study, the researcher considered inductive methods as the most appropriate approach to developing knowledge. This approach involves observing a social phenomenon then collecting data to explain it occurs in a specific was. The researcher then needs to develop a theory or a concept to explain the social phenomenon (Hennink et al., 2020). In this case, of interest will be to explain how transactional leadership affects activities and operations at Asda. Figure 3.2 below identifies steps involved when using inductive approach to developing knowledge.
Research Design
Research design helps in determining the strategy that one tends to use in processing data collected from primary sources. The choice of the design is often based on the aim and objectives that should be realized in a given study. According to Patten and Newhart (2018), one can opt to use descriptive, correlation, experimental, or causal-comparative/quasi-experimental. In this study, the researcher considered correlation and descriptive research as the most appropriate design. Correlation study made it possible to statistically explain how transactional leadership affects business operations at Asda. The method made it possible to investigate the magnitude of the impact of this form of governance on the operations of the firm. On the other hand, qualitative method made it possible to use the case study to understand views of respondents about the impact of this form of governance on the firm’s normal operations.
Sampling and Sample Size
It was necessary to collect primary data from a sample of population. Collecting data from specific employees working at the targeted organization was important to understand. Asda was identified as the firm upon which the study was to be based upon because of its large number of employees and relative success in a highly competitive business environment. It was necessary to collect data from both the managers and the non-management staff. As such, stratified sampling method was considered appropriate. The method allows a researcher to classify respondents into specific strata and then select a given number of participants from each stratum (Greenfield & Greener, 2016). The strategy made it possible to collect data from 10 management staff and 10 non-management staff. 20 participants were considered adequate for the study.
Data Collection Method
The next step after sampling is the actual process of data collection. The researcher used social media platforms and direct phone calls to contact the participants. The researcher explained to them the significance of the study and their role in it. Those who agreed to take part in the investigation received questionnaire through their e-mail addresses. They were requested to e-mail back the filled questionnaire within a period of two weeks. The questionnaire had both closed and open-ended questions to help in collecting detailed information about the effective of organizational leadership on business activities and operations at Asda.
Data Analysis
When data has been collected from a sample of respondents, the next step is to analyze it in a way that directly responds to the research questions and objectives. As explained above, this study used both quantitative and qualitative methods. Quantitative methods made it possible to assess the magnitude of the impact of transactional leadership on business activities and operations at the selected company. It was necessary to understand the severity of the effect of this style of governance to determine effectiveness in enhancing organizational success. The closed-ended questions facilitated the quantitative analysis and the outcome was presented in graphs to enhance clarity. It was equally important to conduct a qualitative analysis of data in this study. The researcher was interested in explaining specific phenomenon that demonstrated effectiveness of this governance strategy at this company. It helped in allowing respondents to explain their answers based on their experience, knowledge, and personal views. Open-ended questions made it possible to conduct such an exploratory investigation. Data analyzed qualitatively was presented thematically.
Ethical Considerations
When conducting this study, the researcher considered it necessary to observe ethical issues. As was previously mentioned, data was collected from both primary and secondary sources. When collecting primary data from a sample of respondents, Bell et al. (2018) argue that it is essential for a researcher to ensure that participants are protected. In this study, data was collected from employees of Asda. It was essential to ensure that the identity of these participants was protected to avoid cases where one is criticized or subjected to any form of attack or discrimination because of their views which may be different from that of the majority of the population or those in positions of power. Instead of using their actual names, respondents were assigned codes (Participant 1, Participant 2, Participant 3 …). The strategy helped in protecting the actual identity of those who took part in the study. Dawson (2020) explains that it is ethically important to explain to participants the significance of the study. The researcher informed the participants the aim of the research and the role they were expected to play in it. Participation in the study was voluntary.
Limitations and Delimitations
It is necessary to acknowledge that the study encountered some challenges worth discussing at this stage. One of the major issues the researcher faced was the difficulty of convincing some of the employees to take part in a face-to-face interview. The majority cited COVID-19 concerns while others noted that their schedules were too tight to have time for such interview. As such, the best solution was too conduct an online survey. A questionnaire was developed and e-mailed to the participants. They were requested to fill in the questionnaires during their free time and e-mail it back.
Data Analysis
The previous chapter has provided an explanation of the method that was used to collect and process data in this study. In this chapter, the focus is to present findings made from the analysis of the primary data. Data was analyzed both qualitatively and quantitatively to have a detailed understanding of the impact of organizational leadership on business activities and operations at Asda.
Significance of Transactional Leadership at Asda
It was necessary to determine the importance of transactional leadership at the company. Respondents were asked to state whether they believe transactional leadership is relevant in their organization. As shown in figure 4.1 below, a significant majority of the respondents (60%) strongly agrees with the statement that transactional leadership is relevant in this organization. Another 20% of the respondent agreed with the statement. It means that 80% of those who took part in the study agreed with the statement. Only 15% felt that it is not such a relevant style of governance. The remaining 5% stated that they are not sure about its relevance. Based on the outcome of the analysis, it is evident that transactional leadership is necessary and important in this company.
The researcher was interested in determining how frequently this form of leadership is used at this company. The participants were asked to state how often transactional leadership style is used in their organization. Figure 4.2 below shows the response that was obtained from them. 15% of the participants felt that this form of governance is extremely common, while another 65% stated that it is common. It means that 80% of the participants felt that it is a common approach to governance in their organization. 15% stated that this governance approach is less common, while the remaining 5% stated that it is rarely used in the organization. The outcome of the analysis shows that Asda frequently uses transactional leadership when necessary to achieve specific goals.
Impact of Transactional Leadership on Activities and Operations of the Firm
Companies are keen on using leadership styles that will enhance their success irrespective of the level of competitiveness in the industry. Asda operates in a highly competitive industry and its ability to remain sustainable largely depends on its leadership strategies. It is in the interest of the management and all stakeholders to ensure that the most effective governance approach is used. Respondents were asked to state whether they believe transactional leadership has had a positive impact on the performance of their firm. Figure 4.3 below shows the outcome of the analysis of responses obtained from them. The statistics show that 40% of the respondents strongly agree with the statement that transactional leadership has had a positive impact on the organization. Another 45% agree that this form of governance has facilitated growth and sustainability of the firm. It means that 85% of those who took part in the study believe that transactional leadership has been of benefit to the firm. 10% of the participants disagreed with the statement while another 5% strongly disagreed with the statement. One can conclude that transactional leadership is highly beneficial to the company.
The researcher requested participants to explain specific benefits that they associated with transactional approach to governing employees. Using qualitative methods of analysis, it was necessary to understand specific benefits of this form of management. Open-ended questions made it possible to allow participants to explain their answers. One of the themes that emerged in this context is efficiency in managing workers to achieve specific goals.
Participant 2 explained, “When trying to achieve specific goals within a relatively short period, transactional leadership is highly effective. It emphasizes the need to follow specific methods and to complete tasks within a given timeframe.”
The respondent explained that this form of governance helps the management to focus on specific tasks and complete them within a short period using known strategies. In such contexts, the goal is not to be creative, but to use tested methods to achieve a set of goals. The priority of the leader is to ensure that subordinates follow instructions and complete their assignments correctly. Another common theme that emerged during the qualitative method of analysis is discipline.
Respondent 11 said, “When using this leadership strategy, discipline and commitment are key factors that subordinates have to embrace. They have to follow instructions provided by the management.”
Discipline is a critical factor among high performance employees in a given organization. They should not only respect the leader but also ensure that they remain committed to their assignments. They have to observe rules and regulations set by the institution. This governance approach helps in ensuring that subordinates are able to follow instructions of their superiors in the firm. It was also necessary to capture the criticism that a section of the respondents had towards this form of governance.
Respondent 1 said, “Transactional leadership gives excessive power to the leader who can abuse if care is not taken. It may also subject employees to unnecessary pressure if it is regularly used.
Those who are opposed to this governance approach feel that it gives managers unnecessary power that can easily be abused. When using it, subordinates are required to strict to instructions given by their superiors without question. They may feel that the approach being proposed is inappropriate, but they lack the capacity to challenge the directive of the superiors. Working under such an environment for long may expose workers to unnecessary pressure (Greenfield & Greener, 2016). If proper mechanisms are not put in place, these employees may be depressed, which will directly affect their overall performance.
Respondent 14 said, “Transactional leadership kills creativity and innovativeness among employees in an organization.”
One of the main concerns that arise when using this leadership strategy is that workers are not given the opportunity to exploit their creativity. The leader expects them to complete tasks using specific governance strategies known to the firm. They are not allowed to deviate from standard approaches set by the company. In such an environment, it is not easy for employees to be innovative. It can negatively impact on the overall performance of a firm if it is used for a long period.
After reviewing the pros and cons of transactional leadership, it was necessary to determine if it is a leadership approach that should be used in an organization that is keen on achieving growth and overcoming market challenges. The respondents were asked if they would support the use of this governance strategy. 25% of the participants stated that they strongly support the use of this governance approach, while another 30% stated that they support. It means that a slight majority (55%) recommends frequent use of this leadership style. A significant minority (30%) of the participant stated that they are undecided when it comes to choosing this governance approach instead of others such as transformational leadership and coaching. 15% stated that they discourage the use of the strategy because of its obvious weaknesses. Based on the analysis of data from both primary and secondary sources, it is evident that this governance approach is important for a firm’s success, but it should be used under specific circumstances.
Conclusion
The success of every organization depends significantly on its effective leadership. The goal of the study was to determine the impact of transactional leadership on business activities and operations of Asda. The investigations revealed that transactional leadership is one of the effective governance strategies in an organization. Data collected from both primary and secondary sources show that successful leaders understand when it is appropriate to apply a specific governance approach. The study reveals that transactional leadership is most desirable when undertaking short-term projects where activities have to be completed within a specific time and limited resources. In such circumstances, employees are expected to follow guidance of their leader and to avoid untested strategies that may consume more resources or time. It promotes discipline and commitment among employees in an organization. However, care should be taken to ensure that the firm also uses other forms of governance such as coaching and transactional leadership that promotes employees’ growth, creativity, and innovativeness. The following are specific recommendations that a firm should consider when using this governance approach:
- Transactional leadership should be used as a governance strategy for short term projects within a firm;
- It is necessary to regularly shift from transactional leadership to coaching or transformational leadership to promote creativity among employees and eliminate unnecessary pressure;
- It may be necessary to explain to workers why a firm has to use this governance approach to undertake specific project to avoid discontent and dissatisfaction among workers.
- When using this governance strategy, a leader should not ignore views and concerns of employees.
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