Towards Transformational and Transactional Neuroleadership

1. International Annual Seminar and Workshop KSU,27th -28th March 2009 Towards Transformational and Transactional Neuroleadership Associate Professor Zainal Ariffin Ahmad drzaba2001@yahoo.com Adel Tajasom adeltajasm@yahoo.com Human Development Lab Graduate School of Business Universiti Sains Malaysia 11800 Penang MALAYSIA Tel: 604-6532534, Fax: 604-6577448

2. Leadership in history • Leadership could be traced back to the conversations of Aristotle and Plato (Johnson, 1991) • Leaders who are intuitive access previously compartmentalized, relevant, and important thoughts that have been stored in their mental filing system through environmental readings, files from the past or a combination thereof" Dyer and Carothers (2000, p. 2) • Leaders characterized by being in touch with the physical (body), mental (mind), emotional (heart), spiritual (soul), and environmental (place) opportunities in the workplace on a regular basis (Vaughan, 1979; Emery, 1994)

3. Definition and Theories • "Leadership is one of the most observed and leastunderstood phenomena on earth" (Wren, 1995, p. 9). • Early Theory on leadership was Trait theory of leadership or the Great Person Theory, "generated within the context of a person's moral and philosophical framework in relation to one's followers and constituents". Krause (1997, p. 3)

4. Definition Phillips (1999), Leaders are: • leaders move othersby caring, inspiring, and persuading • Leaders have bias for action and a sense of urgency • leaders act with respect for the values of the people • The only way to inspire and persuade people is to established trust, understanding, learning, listening,

5. Leadership Theories • As trait theory could not adequately explain good or bad leadership behaviours then, the theory was based on task behaviour. • During the 1970's leadership focused on the situational theories of effective leaders.

6. Leadership Theories • Hersey and Blanchard (1984) Situational Leadership Theory • Path Goal Theory (1974) • Fiedler's Contingency Theory (1967) • Influence of situational factors between leader behavior or traits and outcomes (Yukl, 1989)

7. Burns (1978) Transactional leadership as an exchange that motivates followers by providing rewards and benefits for productivity. Bass (1985) Transactional leaders clarify their followers' responsibilities, expectations the leaders have, tasks that must be accomplished, and the benefits to the self-interest of the followers for compliance. Transactional Leadership

8. Transactional Leadership 3 behaviors of Transactional leaders (Bass, 1995): • Contingent reward – followers and leaders have a positively reinforcing interaction; • Management-by-exception – the leader intervenes only when things go wrong, and • Laissez-faire – whenleadership is absent.

9. Burns (1978) A process in which "leaders and followers raise one another to higher levels of morality and motivation;” these leaders motivate followers to transcend their own immediate self-interest for the sake of the mission and vision of the organization. Bass (1985) Transformational leaders motivate their followers to perform beyond expectations by activating followers' higher order needs, fostering a climate of trust, and inducing followers to transcend self-interest for the sake of the organization. Transformational Leadership

10. Transformational Leadership 3 behaviors of Transformational leaders (Bass, 1985): • Idealized Influence or Charisma • Inspiration • Intellectual Stimulation • Individualized Consideration

11. Towards Neuroleadership • Transactional vs Tranformational Leadership • Transactional vs Transformational Neuroleadership • Decision Making and Neuroleadership • Propositions • Methodology

12. Neuroleadership is the study of leadership through the lens of neuroscience. NL applies what we are learning about the brain in these instances, thus building a neurological theory base for the “soft skills.” NL looks at elements of leadership such as awareness of self, awareness of others, insight, influence, decision making. Neuroleadership

13. Bass Transactional and Transformational dimensions are separate. Burns Transactional and Transformational are opposite ends of the leadership continuum. Transactional vs TransformationalNeuroleadership • Regardless of separate and continuum, the common behaviour is decision making which is one of the elements of leadership in Neuroleadership.

14. Decision Making & Neuroleadership • Whereas decision making has been studied extensively from the economics standpoint, not so from leadership behavior or style. • Whereas leadership theories cannot explain the leader’s behavior of decision making, we explore the neuroscientific aspects of decision making, i.e. from the neuroleadership perspective. • Therefore, we extend Bass’ work on Transactional and Transformational Leadership into Transactional and Transformational Neuroleadership.

15. Transformational vs Transactional & Neuroleadership

16. The Common Denominator:Decision Making NL Decision Making

17. Classical Decision Theory (CDT) • Classical Decision Theory (CDT) - making decisions involve choosing a course of action among a fixed set of alternatives with a specific goal in mind(Wout, Kahn, Sanfey & Aleman, 2006). • According to CDT theory, the aim in making a decision is to maximize the gains, or expected value of the outcome, and use information in a way that would accomplish this goal. • Three components of a decision: (1) options or courses of action, (2) beliefs and expectancies of the options in achieving the goal, and (3) outcome expectancies (negative or positive)

18. For transactional leaders, decision making is based on contingent rewards. They clarify the options and outcomes for the followers to maximize gains or benefits to perform meeting expectations. Transactional leaders interact with their followers to make decision to suitself-interests. For transformational leaders, decision making is based on cognitive rewards. They provide a climate of trust and draw out the followers’ higher order needs to perform beyond expectations. Transformational leaders inspire their followers to make decision that transcend self-interests. Transformational vs TransactionalNeuroleadership Neuroleadership

19. Propositions • Transformational leaders and transactional leaders differ in how they make decision. • Transformational leaders make decisions based on cognitive rewards • Transactional leaders make decisions based on expected or contingent rewards

20. Methodology • Use neuroimaging (EEG/fMRI) to find out how transformational versus transactional managers make decision • The selected managers identify their style via MLQ (5X) • Experiments – decision making task • Data gathering – EEG/ERP • Apparatus – Geodesic Sensor Net Electrode 32-channel

21. Bass' (1985) Multifactor Leadership Questionnaire (MLQ Form 5X) • 45 item survey - assesses transformational factors, transactional factors, non-leadership factor, and outcome factors. • Five point likert scale (0 = Not at all; 1 = Once in a while; 2 = Sometimes; 3 = Fairly often; and 4 = Frequently) • In this study, the subjects (managers) will be asked to complete this questionnaire. • Once we know their style, we would conduct the study using EEG. • Subject wi

22. Transformational MLQ

23. Transactional MLQ

24. EEG Experiment • Participants fill out MLQ(5X) and identify themselves as Transformational (TF) and Transactional (TS) • Select 10 TS and 10 TF

25. Task • The subject seated in a comfortable chair placed 80 cm away in front of LCD stimulation screen in a dimmed and sound-atenuated room. • They were instructed to fixate a central point on the LCD monitor, relax when performing the task and to avoid body movement, blinking or other eye movement to minimize the artifact. • The task given to subjects in this experiment is known as the classic oddball paradigm in the EEG literature. • In this task, a train of equally spaced visual stimuli is presented to the subject. There are two types of stimuli; the standard stimuli and the target stimuli. • The standard occur more frequently (140) than the target (60) events. • The subject are instructed to respond to the target which is when the LCD monitor displaying the ‘X‘s by pressing the SR Switch and do nothing when the LCD monitor displaying the ‘O’s.

26. ERP Recording • The EEG was amplified and analog filtered with 0.3 Hz – 30 Hz bandpass filters (referenced to the vertex) and 60-Hz notch filters. • The EEG signals - recorded continuously at 250 sampling rate per second by the Net Station with a 24-bit analogue to digital converter. • The EGI Net Station - recorded all event onset times and accuracy for later analysis. • Instruction and visual stimuli were presented on a 17-inch LCD monitor • The experimental trials were controlled by commercial software, E-prime (Psychology Software Distribution, Pittsburgh, Pennsylvania), to present the trials and to record relevant trial information. • E-prime also sent event information to an EEG recording system (Net Station)

27. EEG in Human Development Lab

28. Example EEG Transformational vs Transactional