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CMA Final · Entrepreneurship and Startup · Leadership

Rohan, CEO of a Bengaluru fintech startup, repeatedly articulates an inspiring picture of the company's future, encourages employees to look beyond self-interest, and develops them intellectually to challenge old ways of working. Which theory of leadership best describes his approach?

Rohan follows transformational leadership. He inspires with a shared vision, motivates people to rise above self-interest and stimulates them intellectually to challenge existing practices. Transactional leadership instead depends on rewards and corrections in exchange for performance, and autocratic leadership centralises decision-making, so neither fits his behaviour.

  1. ATransformational leadershipCorrect
  2. BTransactional leadership
  3. CAutocratic leadership
  4. DManagement by exception

Explanation

Transformational leaders inspire through vision, move followers beyond self-interest and stimulate them intellectually. Transactional leadership is based on exchange of rewards for performance and on management by exception, which does not match the inspirational, developmental behaviour described. Autocratic leadership centralises decisions rather than inspiring.

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