The Roles And Functions Of Laissez-Faire

According to Sullivan and Decker (1997) transactional leadership is a traditional, goal oriented type of leadership based on the social exchange theory. Work is exchanged for rewards in

Transformational leaders and transactional leaders differ from one another in the manner that they encourage and motivate those who follow them. Transactional leaders are defined as those who focus on monetary and tangible rewards as motivational tools for the daily operations (Marquis & Huston, 2015). Transactional leadership is associated with a clear organizational structure in which managers and subordinates understand their roles and know from whom to receive reward and feedback (Cherry, 2015). This type of leadership style focuses on motivation for the here and now to accomplish daily tasks at hand. This leadership does not focus on forward thinking or growth towards the future (Gellis, 2001).

5. Transactional leadership includes a deal between the leader and his/her followers. The workers are basically doing tasks for the organization, in order to receive some kind of benefits, money, etc.

During the nineteenth century, Europe, more so in England and France, experienced a transition from an agrarian economy to one dominated by industrial manufacturing, otherwise known as the Industrial Revolution. Prior to the Revolution, European economy was primarily centered around agriculture and products from farming. Population concentrations were low, as expected by a rural community. Rapid industrialization enabled more people to work and generate an income, however, the profit-driven mentality of business owners led to injustice towards laborers and children. For example, third class factory workers worked for as long as sixteen hours per day, receiving about ten cents per hour. This, however, was only true for men; women and children

The time period from 1865 to 1900 covered a large portion of American history, it covers all of the Gilded Age and portions of the Civil War and Progressive Era. A lot has changed in the United States from the mid-Civil War era to the early Progressives. Government began intervening in economics and the principles of a Laissez-Faire economy became more regulated as the federal government began helping out the lower class and helping them survive as well as attempting to destroy monopolization. The national government had always been passive in the face of a Laissez-Faire government but they slowly became less of a spectator and more of a peacemaker that attempted to even out the competition. Government began to exert a very minimal and regulatory

Transactional leadership styles are more concerned with maintaining the normal flow of operations. Transactional leadership is described as making contact with others for the

“Transactional leadership is a style of leadership focused on contingent rewards of followers” (McGuire & Kennerly, 2006, p.180). Goals are set, directions are given, and rewards are used to reinforce employee behaviors associated with meeting or exceeding established goals. Followers are manipulated and controlled with rewards of praise and recognition, merit raises, and promotions, which can be given or withheld according to the employee’s performance. The outcome of such behavior is enhanced role clarity, job satisfaction and improved performance (McGuire & Kennerly, 2006).

Organizational leadership builds on traditional theories in order to form new and exciting directions. Transactional leadership is a traditional theory, which has been used as a platform to understand leadership and further develop techniques for higher organizational performance. The three components of transactional leadership help shape and define the style, but are not always strictly adhered to. There are many advantages and disadvantages of transformational leadership. Knowing how and when to apply this style will prove useful for most successful organizational leaders. President Dwight Eisenhower was a good example of how transactional leadership could be used successfully.

A Participative Style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness; rather it is a sign of strength that your employees will respect. In my environment from my military service to my post military endeavors, there is a quote that highlights the way my relationship with my fellow associates, co-workers and generally anyone that I meet:

In Paul Roberts’ tastefully blunt but grim text “The Failure of Laissez-faire Capitalism” takes us on short walk on memory lane and shows us that the capitalism that we live under today is but an echo of its former glory, and the sad part is, that its being held down by us.

The leader makes an agreement with the follower with outlined performance expectations, and the follower either rises to the expectations or not, each with a defined set of consequences. Bass (1997) wrote about two factors of transactional leadership; first this leadership style is contingent upon rewards. The next factor is management by exception, the leader intervenes if standards are not meet or if something goes wrong.

Author Ravi Kanbur explains laissez-Faire in his article, “The End of Laissez-Faire, the End of History, and the Structure of Scientific Revolutions” Laissez-Faire is the theory that More harm than good is likely to be done by almost any interference Government (Kanbur, 2016). Laissez-Faire can be associated to money, buying and selling of goods, politics and religion. Kanbur’s article concludes by saying, “True liberty is that every man should be left free to dispose of his own property, his own time, and strength, and skill, in whatever way he himself may think fit, provided he does no wrong to his neighbors” (Kanbur, 2016, p.41).

Laissez faire is the absence of effective leadership (Yukl G, 2010). Laissez faire leaders ignore problems and follower (Yukl G, 2010) and they do not contribute to the growth of the follower ( (Northouse, 2007). Feedback, rewards and leader involvement are totally absent in this type of leadership hence reduced organisational commitment.

The key strengths of participative leadership style are increased productivity and job satisfaction. When employees are afforded an opportunity to be involved in the organization’s decision making process, they are likely to develop a strong sense of commitment to the organization as well as increase their performance. Job satisfaction is another key strength of this leadership style. Most employees display high levels of job satisfaction when they notice their suggestions and/or recommendations are taken seriously and in some instances implemented within the organization. Additionally, this

Transactional and transformational leadership differ. Ingram (2016) states “Different managers employ distinctly different management styles, ranging from relatively hands-off, facilitative styles to autocratic, micromanaging styles. Managers can also employ different motivational strategies and techniques to boost employee performance or accomplish internal change. Transformational and transactional leadership are polar opposites when it comes to the underlying theories of management and motivation. Understanding the difference between transformational and transactional leadership is crucial for anyone pursuing a career in management.” (Ingram, 2016). When I was a manager, I had to make sure my store operated properly and maintain sales. Sometimes I would hold contest for my workers to motivate them, Ingram (2016) states “Transactional leadership styles are more concerned with maintaining the normal flow of operations. Transactional leadership can be described as "keeping the ship afloat." Transactional leaders