A transformational leadership model for managing change and transformation linked to diversifi cation investments

Abstract

Owing to its relationship with change and transformation, transformational leadership theory should be relevant to managing change and transformation linked to diversifi cation investments. However, the question of what model of transformational leadership would be appropriate for managing change and transformation linked to diversification investments has not been addressed. The purpose of this research was to explore managers’ perceptions of the links between transformational leadership and diversifi cation strategies.Using a qualitative research method, this study provides a critical analysis of the transformational leadership theories and triangulation with the behaviours of 30 purposively sampled managers from ten firms involved in different diversifi cation activities. The aim of this was to determine the most appropriate transformational leadership model for managing change and transformation linked to diversifi cation investments. Besides the degree of industry predictability and certainty, the findings echoed the reasoning in the full-range transformational leadership theory that a continuum of transformational-transactional leadership behaviours enhances effective management of diversifi cation-related changes and transformation. However, no similar transformational leadership model was found to have been adopted by prior studies or enterprises engaged in different diversifi cation activities. The study should fill this gap by identifying a new transformational leadership theory that links the full-range transformational leadership theory to Ansoff’s model for diversifi cation and growth improvement strategies.

Key words: diversification investments; managing change and transformation; transformational leadership