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CMA Final · Entrepreneurship and Startup · Leadership

Rohan leads a growing logistics startup. Employees say he is excellent at rewarding targets met and penalising misses, yet he rarely articulates a long-term vision or inspires them beyond targets. A board member suggests he add the behaviours that raise followers' motivation beyond expected performance. Which is the most accurate diagnosis?

Rohan is mainly a transactional leader, since he manages by rewarding met targets and penalising misses. To lift motivation beyond expected performance he should add transformational behaviours, such as communicating a vision, inspiring followers and giving individual attention, which augment the effect of transactional exchange.

  1. AHe is a laissez-faire leader and should centralise decisions
  2. BHe is mainly transactional and should add transformational behaviours such as vision and individual considerationCorrect
  3. CHe is mainly transformational and should add contingent rewards
  4. DHe is a charismatic leader and should reduce communication of vision

Explanation

Contingent reward and penalty for targets is the hallmark of transactional leadership. Adding vision, inspiration and individualised attention are transformational behaviours that augment results. Option C reverses the roles, and he is not laissez-faire because he actively monitors targets.

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