It is crucial for managers to develop brand-building behaviours on the part of employees. The leadership style they adopt to do so will affect how well this is done. This Idea suggests that a high level of transformational leadership, combined with a moderate level of transactional leadership will be most effective in maximizing employees’ internal motivation to engage in brand-building behaviour.
Employee performance plays a vital role in the success of a service brand. In this Idea, faculty from HEC, WHU–Otto Beisheim School of Management and University of St. Gallen set out to examine what type of leadership is required to stimulate employees to build and strengthen an organization’s brand image. In internal marketing and brand building, the role of leaders has proven to be essential. Therefore, different leadership styles are expected to have an impact on brand-building behaviours of frontline employees.
Specifically, they looked at two generic leadership philosophies: transactional and transformational leadership. Transactional leaders act differently from transformational leaders and they activate different psychological processes on the part of their employees, which in turn trigger different brand-building efforts. Examples of a brand-specific transactional leadership style include ‘contingent reward systems’ and ‘management by exception’ (i.e. clarifying what constitutes ineffective performance of a brand representative and punishing for being out of compliance with standards).
On the other hand, examples of typical behaviours reflected in a transformational leadership style include charisma (idealized influence), inspirational motivation, intellectual stimulation and individualized consideration.
To understand how these different leadership styles affect employees, a cross-sectional study with regular face-to-face, written, and/or telephone customer contact was conducted with 269 service employees of a large telecommunications company in Switzerland. Results show that brand-specific transformational leadership is more effective in enhancing brand-building behaviours among employees than brand-specific transactional leadership.
The transformational approach works through a process of ‘internalization’ that leads to an increase in employees’ in-role and extra-role behaviours, such as participation in brand development, advocacy of the corporate brand, etc. In turn, individuals come to accept the brand values as their own and thus perceive value congruence between their own and the corporate brand’s values.
In contrast, brand-specific transactional leaders influence their followers through a process of compliance, which has a mainly negative impact on followers’ brand-building behaviours. Nevertheless, this style is still the most common practice among managers in charge of customer contact personnel.
As such, managers should make a paradigm shift from the prevalent transactional leadership philosophy to a more transformational one. Some of the examples given in this Idea of a more transformational approach include the following behaviours:
However, do not rule out transactional leadership altogether; in fact, this research shows that managers will be most successful in turning their crew into brand champions with a combination of a high level of brand-specific transformational and a moderate level of brand-specific transactional leadership.
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