SITUATIONAL OR TRANSFORMATIONAL LEADERSHIP

Does Situational or Transformational Leadership Produce Greater Productivity and Profit in Small Business

Table of Contents

Introduction2

Discussion and Analysis3

Transformation Leadership in Small businesses:5

Situational Leadership in Small businesses:6

Situational Leadership vs. Transformational Leadership:7

Situational Leadership:7

Example of situational leadership:7

Transformational Leadership:7

Example of transformation leadership:8

SMART Goals within Situational Leadership for Small Businesses:8

Specific and Measurable:9

Motivating:9

Attainable:9

Relevant:10

Time-Bound:10

Conclusion10

References11

Does Situational or Transformational Leadership Produce Greater Productivity and Profit in Small Business

Introduction

Both the owners of private as well as public businesses, within the 21st century, envisioned the economic growth, although the growth got sluggish when leader who were unethical turned to be infatuated for gratifying their personal needs rather than satisfying their employees and customers' needs. The economic growth had significant impacts on it due to these unethical practices that influenced bankruptcy of small businesses, individual pensions loss, capital investments for small businesses and unemployment. Economic insecurity started to emerge due to the malfunction of WorldCom, e-business segment, and Enron (Luthans, et.al, 2001). The economy in the United States faced a turn down prior to the September 11th, attacks due to the declining economic growth, reduced consumer spending, and rising unemployment (Shaw & Shapiro, 2002). The September 11th, attacks hastened the decline in the economy, declining economic growth, sounded alarm for each level of leadership for concentrating on the success of their organizations and fetched further ambiguity to the already declining economy (Luthans, et.al, 2001). The economy of the United States had its considerable part stemming from thriving small businesses. The leaders of small businesses utilized a number of resourced for positioning a company for achieving its objectives and goals (Howard, 2006). The economy of the United States, from the year 1996 to the year 2006, benefited from the extraordinary success in the economy, as pointed out by the significant economic dimension known as the productivity growth rate (Acs & Szerb, 2007). Due to the enhanced condition of the economy, within this market the small business demand rose.

Discussion and Analysis

As described by Beaver (2003) and Perry (2001), the reasons behind the failures of numerous small businesses are the practices of poor leadership in those businesses. As advocated by Gordon and Yukl (2004) further studies on the skills of leadership pertinent to turbulent environments of small businesses, from which was deduced the key malfunction of companies was neglect by management and lack of knowledge regarding leadership. The rate of failure for small businesses, as indicated by Pellerin (2007), is tremendously far above the ground. Pellerin even found out that the small businesses' failure rate after the 3rd year is nearly sixty-two percent; even though the research failed to address the incompetence of the management. 90% of the small businesses become unsuccessful within the initial decade of their subsistence (Scheers & Radipere, 2007). They were of the view that failures of small businesses occurred because of poor management and leadership skills. A thriving small business relies in the competitiveness and productiveness of the small business (Fuller, 2003). In the early 21st century, failures of small businesses stressed the need for personal commitment and leadership ...