Leadership During Organizational Change


Leadership during organizational change is an important subject, as it can contribute to positive outcomes. In the chosen scenario, the organization changed mission and strategy to reach more customers and improve financial performance. Nurse leaders had to support organizational change by improving employee motivation and performance. This scenario was chosen because organizational change is commonly used to improve business performance (Hornstein 2015). However, internal changes pose challenges to leaders and require using effective strategies to foster motivation and achieve better employee performance (Sharif & Scandura 2013).

Leadership Theory

Leadership is the process of improving the environment and encouraging employees to achieve organizational goals (Caramela, 2017). Using leadership theory, leaders can help organizations to achieve success by enhancing employee motivation, establishing and meeting performance goals, fostering a healthy organizational climate, and inspiring employees to grow and develop their skills and competencies. Thus, leaders make a great contribution to company performance, as they facilitate effective human resources management. There are many leadership theories that are based on different motivation theories, as the primary goal of leadership is enhancing motivation and performance.

Transactional Leadership

Transactional leadership was used in the chosen scenario to reduce turnover. In this leadership theory, motivation is viewed as the result of a successful transaction, where employees’ work is exchanged for salary and other benefits (Deichmann & Stam 2015; Ejere & Abasilim 2013). Transactional leadership is flexible in its application, and thus can be used in most business settings, including healthcare. When leaders apply this theory, employees can feel positive results of their work and become more motivated (Deichmann & Stam 2015).

Applying Transactional Leadership

In the example, transactional leadership was applied by improving the range and size of benefits for employee performance. The nurse leader consulted employees to determine preferred benefits. Ideas were gathered from two short meetings with employees, where nurses expressed their wishes for financial bonuses, flexible scheduling, and increased vacation time. The strategy also included measuring turnover and staffing regularly, as well as conducting employee surveys on job satisfaction. Although the results proved to be positive in this scenario, there are ethical concerns associated with applying transactional leadership in healthcare. Firstly, providing material benefits to employees makes them act out of concerns for financial well-being and work-life balance rather than out of duty. Secondly, healthcare employees are required to comply with professional codes of ethics, which set clear values. It is expected that nurses’ integrity, performance and professionalism is motivated by their desire to help patients rather than to achieve a personal gain. Flexible scheduling and increased vacation time may be helpful for motivating employees, but these strategies may result in poor patient outcomes due to reduced nurse-to-patient ratio on some shifts. Finally, financial benefits and paid time off result in additional expenditures, thus forcing healthcare organizations to seek funding from the government or cut costs, which would lower the quality of care. Because of these drawbacks, the transactional leadership theory should not be used in healthcare organizations.

Transformational Leadership

Transformational leadership would be the preferred alternative for healthcare settings because it is more ethical and less expensive. This theory rests on the idea of inspiring employees to contribute to organizational vision, thus improving their motivation and performance (Avolio & Yammarino 2013). Transformational leadership is particularly useful for promoting retention, as it ensures that employee performance aligns with the organization’s vision, mission, and goals. According to Kark and Shamir (2013), this causes employees to identify with the leader and the company, thus reducing their intentions to leave.

Applying Transformational Leadership

In order to apply transformational leadership to the chosen example, it would be critical to align employee performance with the company’s vision and goals to ensure social identification (McCleskey 2014). For instance, because healthcare organizations seek to provide high-quality care to achieve better patient outcomes, leaders should place improved patient health and high quality of care at the core of mission, vision, and goals. Then, leaders would use their image and vision to inspire employees to contribute to achieving organizational goals. Nurse leaders should thus apply values of integrity, continuous professional development, and ethics in their work. As part of the process, it would also be necessary to enhance internal communication and provide employees with opportunities for training and professional development (Braun et al. 2013). On the whole, transformational leadership would help to achieve the same results while also avoiding ethical concerns, and would thus be more relevant and beneficial in the chosen scenario.

Key Learning Points

The literature shows that both transactional and transformational leadership styles are useful for reducing turnover. However, as transactional leadership relies on rewards, it is more expensive to organizations (Ejere & Abasilim 2013). It also creates multiple ethical concerns when applied in healthcare settings, and thus it should be avoided in healthcare leadership.

Transformational leadership requires less financial resources, as it builds on the leader’s charisma and their vision (Avolio & Yammarino 2013; Odumeru & Ogbonna 2013). Literature also points to the importance of two-way, open communication in both cases (Breevaart et al. 2013). The analysis of both leadership styles and their application to the example shows that transactional leadership is preferred. It would not produce any ethical conflicts, as it relies on the organization’s values, such as providing high-quality care and improving patient health.

Applying Knowledge in Future Practice

The project allowed generating knowledge that can be applied in future practice. Firstly, employee surveys could help to determine leadership gaps, while job satisfaction monitoring could be used to prevent issues and ensure successful outcomes. Secondly, leaders should set a shared vision and mission to improve retention. Thirdly, the example showed that, while there are many leadership styles that can enhance workforce characteristics, not all of them can be applied in healthcare. Thus, it is critical to analyze all available alternatives from an ethical perspective in order to determine if it would conflict with the key principles and values in nursing.


All in all, the Vodcast covered the use of transactional and transformational leadership for addressing high turnover by applying them to the chosen example. The review of the literature showed that the two leadership styles view employee motivation differently. In transactional leadership, motivation is the result of a transaction and thus relies on rewards received by employees. In transformational leadership, motivation is inspired by a charismatic leader with a clear vision of success. In the chosen scenario, transactional leadership was successfully applied to promote retention. Nevertheless, in the future, it would be beneficial to consider transformational leadership in order to reduce expenditures and address ethical concerns. Other leadership theories, such as situational leadership, may also be applicable depending on the circumstances and the company’s goals.


Avolio, BJ & Yammarino, FJ 2013, ‘Introduction to, and overview of, transformational and charismatic leadership’, in BJ Avolio & FJ Yammarino (eds), Transformational and charismatic leadership: the road ahead, 10th edn, Emerald Group Publishing Limited, Bingley, pp. xxvii – xxxiii.

Braun, S, Peus, C, Weisweiler, S & Frey, D 2013, ‘Transformational leadership, job satisfaction, and team performance: a multilevel mediation model of trust’, The Leadership Quarterly, vol. 24, no. 1, pp. 270-283.

Breevaart, K, Bakker, A, Hetland, J, Demerouti, E, Olsen, OK & Espevik, R 2014, ‘Daily transactional and transformational leadership and daily employee engagement’, Journal of Occupational and Organizational Psychology, vol. 87, no. 1, pp. 138-57.

Caramela, S 2017, 4 ways to define leadership, 2018.

Deichmann, D & Stam, D 2015, ‘Leveraging transformational and transactional leadership to cultivate the generation of organization-focused ideas’, The Leadership Quarterly, vol. 26, no. 2, pp. 204-219.

Ejere, EI & Ugochukwu, DA 2013, ‘Impact of transactional and transformational leadership styles on organizational performance: empirical evidence from Nigeria’, The Journal of Commerce, vol. 5, no. 1, pp. 30-41.

Hornstein, HA 2015, ‘The integration of project management and organizational change management is now a necessity’, International Journal of Project Management, vol. 33, no. 2, pp. 291-298.

Kark, R & Shamir, B 2013, ‘The dual effect of transformational leadership: priming relational and collective selves and further effects on followers’, in BJ Avolio & FJ Yammarino (eds), Transformational and charismatic leadership: the road ahead, 10th edn, Emerald Group Publishing Limited, Bingley, pp. 77-101.

McCleskey, JA 2014, ‘Situational, transformational, and transactional leadership and leadership development’, Journal of Business Studies Quarterly, vol. 5, no. 4, pp. 117-130.

Odumeru, JA & Ogbonna, IG 2013, ‘Transformational vs. transactional leadership theories: evidence in literature’, International Review of Management and Business Research, vol. 2, no. 2, pp. 355-341.

Sharif, MM & Scandura, TA 2014, ‘Do perceptions of ethical conduct matter during organizational change? Ethical leadership and employee involvement’, Journal of Business Ethics, vol. 124, no. 2, pp. 185-196.

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