by Bernard M. Bass , Bruce J. Avolio
The organization's culture develops in large part from its leadership while the culture of an organization can also affect the development of its leadership. For example, transactional leaders work within their organizational cultures following existing rules, procedures, and norms; transformational leaders change their culture by first understanding it and then realigning the organization's culture with a new vision and a revision of its shared assumptions, values, and norms (Bass, 1985).
Effective organizations require both tactical and strategic thinking as well as culture building by its leaders. Strategic thinking helps to create and build the vision of an agency's future. The vision can emerge and move forward as the leader constructs a culture that is dedicated to supporting that vision. The culture is the setting within which the vision takes hold. In turn, the vision may also determine the characteristics of the organization's culture.
Transformational leaders have been characterized by four separate components or characteristics denoted as the 4 Is of transformational leadership (Avolio, Waldman, and Yammarino (1991). These four factors include idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Transformational leaders integrate creative insight, persistence and energy, intuition and sensitivity to the needs of others to "forge the strategy-culture alloy" for their organizations. In contrast, transactional leaders are characterized by contingent reward and management-by-exception styles of leadership. Essentially, transactional leaders develop exchanges or agreements with their followers, pointing out what the followers will receive if they do something right as well as wrong. They work within the existing culture, framing their decisions and action based on the operative norms and procedures... [continues]
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