The management of an organization entails the use of four basic functions such as planning, organizing, leading and controlling. Managers will need the value of leadership in so that followers will perform the tasks to accomplish the goals of the organization. Leadership is a process wherein one will help bring about change in any organization. This can be differentiated from management. Management connotes preserving and maintaining the current order of things in the business organization (Robbins & DeCenzo 2004). Leadership is a term that will imply change or certain movement that will improve the current condition to something better in the future. Leadership is also a process that is done intentionally because the change that is being done is a planned one and not just changes for the sake of changing. Change is geared towards a desired objective or purpose. Leadership is naturally based on values. The values of leadership are most reflected when the efforts of the leader is directed towards the achievement of a certain goal. The essence of being a leader is one that is capable of inspiring others and motivating them to achieve a certain goal (Nahavandi 2006). A leader will be able to work with a group of people and unite them in order to accomplish their objectives. Leadership means providing a set of directions and discussing them to other members of the group who are willing to listen. When the situation calls for it, the leader is always ready to give out a few words of not quitting and raise their level of self-esteem.
Transformational leadership is the style of leadership wherein an individual or more people will interact with others as leaders and followers will be able to motivate each other and boost one another's morale. The purposes of these leaders and followers might have began as separate but still related to one another and will be joined together. The foundation for power is related for the benefit of mutual support of having a single purpose. The relationship of the leaders and followers are based on morals. Transformational leadership has the ability to raise the level of behavior of people and the ethical goals of the leaders and followers. The leadership style is called as such because it creates an effect of transformation between the leaders and the followers (Bass & Avolio 1994).
Leaders of the business organization can also influence the organization through the employment of the rewards system. This may be in a formal or informal way. The reward system will have a significant effect on the culture of the organization as well as its employees. They will be motivated to work hard and improve their job performance because of the existence of the reward system. The reward can be in the form of monetary benefits or incentives. This is given to employees who perform well or who are following the orders of the executives including doing what they want. There are certain goals that the leaders have set and also standards that need to be followed. When the standards and goals are met by the members of the organization, they will be rewarded by the management because they have accomplished what managers wanted them to achieve. An example of this is when the employee will be able to reach his quota or target sales revenue for a certain period of time then he is entitled to an incentive or commission (Nahavandi 2006).
The reward system does not only employ the monetary benefits. It is also applied on personnel by selecting and promoting those employees that have performed well for the goals of the company or business organization. Members of the organization who follow and observe the structure and culture of the organization including their ability to meet the goals of the company will be subject to this kind of reward system. They have greater chances of being promoted to higher positions than those who do not perform well. This concept can be true in most situations. Promoting leaders in the organization who have diligently observed the mission of the company and fit well into the culture of the company will be rightfully rewarded in some way. Rewarding the performance of the employees can encourage the ability to make decisions and behave according to the standards of the company and its culture. Those leaders who are capable of acting as models and manifest these standards themselves are more likely to create a greater impact to the organization.