COMSATS University Islamabad Lahore Campus

Leadership and Ethics

IMPACT OF TRANSFORMATIONAL LEADERSHIP ONFOLLOWER

DEVELOPMENT AND PERFORMANCE: A FIELD EXPERIMENT

Group Members:

Faiqa Ashraf FA16-BBA-077

Samreen Yusuf FA16-BBA-177

Zarmeena FA1 -BBA-

Submitted to: Sir Fahad Javaid

Contents

Leadership Defined ....................................................................................................... 3

Transformational Leadership and its Impact on Follower Development and
Performance .................................................................................................................. 4
Introduction to the organization: Nestle Pakistan Ltd. .............................................. 5
Leadership practices in Nestle Pakistan Ltd. ............................................................. 6
Comparative Analysis of Nestle Pakistan Ltd and Millat Tractors Ltd ..................... 8
Conclusion ..................................................................................................................... 9
References ................................................................................................................... 10
Leadership Defined

Leadership has endless definitions and is indeed a vital part of the organization. No
organization can exist without the presence of leaders. Leadership is defined as a process
whereby an individual influences a group of individuals to achieve a common goal. (Peter
G. Northouse, 2016).

The leaders are the driving force that enable the followers to see the desired direction
that aligns with the goals of the organization, a leader has a clear vision of where he
wants to take the organization and injects it in sub-ordinates of his for which the leader
builds trust in the employees and they are involved in the process of decision making for
effective implementation of the decisions. Effective leaders set objectives and goals
effectively and communicate it to their staff. Subordinates are informed with the
grandness of the goals. This helps in developing corporate trust to achieve the
organizational goals (Lester & Kunech, 1999).

Leadership helps people to connect with their immense potentials and enable them to
accomplish purposeful things collectively that give the individual contributors sense of
personal accomplishment and fulfillment. Leader enable commitment and loyalty between
individuals which in turn encourages those individuals to fully exploit their potential and
go out of the way for the benefit of an organization. Leaders build the morale of the
followers and helps resolve any conflicts between them, it’s the job of the leader to merge
the individual outputs and ultimately produce the combined output which will have and be
more effective for the organization.
Transformational Leadership and its Impact on Follower
Development and Performance

According to Fitzgerald and Schutte (2009), transformational leadership is a motivational

of leadership style with a clear organizational vision that stimulate and inspire which can
achieved by establishing a closer rapport with employees, understanding their needs, and
helping them to attain their potential, contributes to good outcomes for an organization.

Whenever there is some change that needs to be brought about in an organization or

implementation of anything different, transformational leadership is the best style of
leadership to influence the followers. Transformational leaders are always focused on the
followers and are always concerned about follower motivation, performance and growth
which makes it an ideal type of leadership. One distinctive characteristic that differentiates
transformational leadership from other leadership approaches is its active involvement
with and engagement of personal values among followers (Jung, et al., 2009).

Leaders motivate followers in such a way that their primary motive is to satisfy self-
actualization needs rather than the lower needs in Maslow's (1954) need hierarchy.
Bass(1985) emphasized the collectivistic aspect of moral development and suggested
that transformational leaders get their followers to transcend their self interest for the sake
of the team or organization. The transformational leaders are those who are themselves
creative help their followers be creative as well, they fully support them attend to them
fully.

They help build confidence in their followers which in turn helps achieve organizational
outcomes. Such organizations have more entrepreneurial capabilities and are more risk-
taking in nature which encourages optimism at work and self-efficacy at work. Followers
are more likely to pursue ambitious goals, agree on strategic goals of the organization,
and believe the goals that they are pursuing are personally related (Stephen P. Robbins,
2015). In a study by S. C. Voelpal, it was found that creative performance was more
evident when transformational leaders were assigned in an organization
Introduction to the organization: Nestle Pakistan Ltd.

Nestle has been providing quality products to Pakistani consumers since 1988, when its
parent company, Nestle SA has Joint stock venture with MilkPak Ltd and access to the
management in 1992.Its main products are made from milk. Today, it is the world’s
biggest milk collection processing and operating company. From over 3000 villages it
collects milk, the farmers deliver milk from different areas and it is providing best quality
products to consumers, Nestle has installed over 2200 chillers-cold chains in the areas
where milk is preserved. The Nestlé’s headquarter is located in Lahore, and Nestle is also
operating in Sheikhupura and Kabirwala. Aligned with its global ideology, it provides safe,
best quality, healthy products to its customers.

Nestle Products are available in almost each area of Pakistan, and its yearly turnover rate
is 74.7 billion Swiss francs. It runs nearly 509 industrial facilities in 89 nations and gives
around about 250,000 individuals with employment opportunity. Nestlé provides relatively
each sustenance & refreshment classification, giving purchasers more delicious and more
worth full items. Their most famous and mainstream brands are Nescafe, Milk Pak,
Nesvita, Fruita Vitals, Maggi, Milo and Kitkat. Their items are accessible worldwide in
markets, basic need shops, through online retailers and furthermore in all nearby stores.
Nutrition is at the heart of the Nestlé’s organizational philosophy, since Henri Nestlé
invented the Farine lactée1 that saved the life of a child. Nestle Nutrition; Health and
Wellness strategy is now more connected than ever as people around the globe becomes
more concerned about their health. They are more concerned about the role of nutrition’s
in the development of their personal health and well being. Nestle is well positioned to
support these people, providing them with higher quality, nutritious food and beverages
that have both aspects e.g. delicious and convenient. The products of Nestlé have a broad
portfolio that includes some of the world’s most recognized brands.
Leadership practices in Nestle Pakistan Ltd.

The organizational structure at Nestle depicts that in top management there is the
managing director, the chairman. The organizational chart is divided into different
departments. The head or manager of each department plays the role of the leader in
most effective and efficient way. Basically in Nestle, there are departmental teams, sub
teams within the departmental and there are emergent and anticipated leaders. The
manager or head of department set all the objectives, planned, organized, leads and
control for the achieving of the desired organizational outcomes.

The managers have control over the decisions but with the consent of their employees,
they motivate their employees in such a way that they will ready to put their extra efforts
in return they get good rewards, also gain personal development. The employees have a
voice in the decision making, if they need to complete a project in Nestle, the meeting is
set up and all the employees are there, everyone participate about their perception and
contribute their ideas for the completion of project and achieving the desired goals.

The leader who is a manager gives personal attention to all the employees, if the
employees are not working well or not participating actively, the manager separately ask
about their problems and try to solve that. All the employees actively participated in the
decision making process, they think out of the box because they have freedom. The sub
teams have emerged and there must also be a leader to whom we can say an emergent
leader who have influence on the others. The manager or subordinated representative of
the team make all the initial step for the completion of tasks, analyze the information,
share the information, involve all the members in the sayings, and then they will go for
the achieving the desired outcomes. In Nestle the employees are motivated by just
financial rewards they are more motivated due to the non financial rewards, the autonomy
they enjoy, as company treated them all as assets. They always ready to put extra efforts.

As a result, Leader has the most crucial role but not as in the Nestle; the head of
departments controls all the processes and direct the organization functions practically
and psychologically with influencing on subordinate through the stated mission of the
organization to achieve the final goals that is improving life quality of marginalized people.
The relation between transformational leadership effectiveness and employee’s
performance and development stabilizes the key functional performance and the desired
organizational goals.
Comparative Analysis of Nestle Pakistan Ltd and Millat
Tractors Ltd

When comparing Nestle Pakistan ltd with Millat tractor ltd, we found that there is much
significant difference based on the leadership practices in the organization. Some of the
basic differences are e.g. in Millat tractor ltd they didn’t prefer team work, due to which
there have not as much effective and efficient goal achievements, whereas in Nestle team
work is preferred as it is discussed above that they have departmental teams and sub
teams, they collectively put their extra efforts for the achievements of organizational
goals.

In Millat tractor Ltd, the decision making power in the hands of top management or based
on the designation of the employees, the lower subordinates share their ideas in decision
making but the decision is taken by the higher authorities according to their preferences,
the authority is in the hands of the higher designation employees. As the employees has
little autonomy so that they didn’t put their extra efforts, not as much motivated to work,
and became less satisfied and committed to their jobs. On the other hand, nestle Pakistan
ltd give autonomy to all of the employees that if they have a new idea they share and it is
implemented, there employees are more satisfied and committed to their organization as
they have given them to much rewards and monetary and non monetary. In Millat Tractor
Ltd, they didn’t concerned about the personal development of their employees, there is
no intellectual consideration.
Conclusion

We can conclude that there is a positive relationship between Transformational

leadership and follower development as well as performance. We have observed through
various studies and have done comparative analysis between Millat Tractors Ltd. And
Nestle Pakistan Ltd. It has been discussed that transformational leadership style can help
optimize the organizational goals and objectives through empowerment, morality and
motivation. Additionally, recommended as a prospect for future research and case
development to fulfill this gap between the literature and organizational practice they are
involved in.
References

https://pdfs.semanticscholar.org/fc7d/1a4ff5d2551912725e6e9017bc7aeb2a16e3.pdf?_ga=2.67101166
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https://blog.runrun.it/en/effective-leadership/

https://study.com/academy/lesson/leadership-leaders-their-role-in-organizations.html

https://pdfs.semanticscholar.org/12df/84044f9618d8dae3d281d83d6840e3b66350.pdf

http://hrmars.com/hrmars_papers/The_Relationship_between_Transformational_Leadership_and_Foll
owers%E2%80%99_Work_Characteristics_and_Task_Performance.pdf

https://journals.sagepub.com/doi/abs/10.1177/107179190100800102

https://www.nestle.pk/