Transactional and Transformational Leadership

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--- Introduction ---

Today, organization are threaten by lots of challenges which require managers to cope with rapid changes in the work place, technology development, competition, growing of employees expectations, raising customer satisfaction and awareness, and so on. Having these challenges and problems solved, organizations should have leaders who possess certain personalities, attitude and skills in order to tackle the business complexity.

In this paper, couple of Leadership theories will be reviewed and discussed in order to provide and suggest proper methods and ways to help leaders drive organizations to be more effective. At the first chapter, the definition of leadership, Transactional Style and Transformational Style is discussed along with major differences between them. In the second chapter, different types of problems a leader may have to deal with are shown with the focus on the problem of change management. This chapter includes an example from the company that the author is working at. Finally, the third chapter discusses the skills, knowledge and experience a leader should have.

--- Company Profile ---

Al Safi Dairy Company was established by Al Faisaliah Holding Group in 1979 in order for them to expand into the food dairy industry including cattle rising and production of raw milk. Also, Al Safi integrated a dairy farm along with a private factory. Al Safi has a wide range of products including fresh milk, long life milk beside other different subsidiaries. By March 1981, there were some recognizable factors which helped Al Safi began the commercial trade of its products and those factors were the combination of the factory, advanced farming techniques and importation of 6,500 heads of cattle from the finest cowherds in the world. Nowadays, Al Safi has its unique reputation and respected existence among the dairy factories all over the world. In addition to that, Al Safi was recognized in Guinness World Book of Records [1998 edition] as the largest dairy farm in the world. It covers approximately 3,500 hectares of land and employs an around-the-clock 1,400 workforce. Furthermore, in 1973, the Danone group was considered as the largest nutrition company in the world because of the diversified partnerships with small and large companies all over the world. Therefore, its products spread to more than 30 countries around the world resulting in revenues of 83.9 billion French Francs in 1996. In 2001, Al-Faisaliah Holding Group and International DANONE Group formed a joint venture between Al Safi and the French dairy Danone. This joint-venture gave birth to Al Safi Danone which is considered as region’s largest dairy company. The company owns the largest transportation fleet in the kingdom: 500 refrigerated vans serving 28,000 POS (Points of Sales) in 25 regional distribution centers, where the company has many branches. On average, the company launches four new products annually. Al Safi Danone’s market share is 36% from the total dairy market in Saudi Arabia; the company is planning to increase the percentage of the Saudi employees to 40%, while now it is 25%.

--- Chapter One ---


Leaders in the new millennium will create an environment that encourages the development of skills, learning and openness so that those on their team can participate in the deployment of financial and human resources. (Laurie J. Mullins 2002). Accordingly, the above supports the saying that traditional command and control leadership models are not relevant for today’s organizations management. Where today’s leadership requires empowering others through sharing information, power, and authority to make decisions and take actions. And also increasingly emphasizes on soft skills, team working, communication and motivation. Leadership theory is one of the most talked-about, researched and written-about management topics. Many people believe that leadership is simply being the first,...
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