In the beginning of this report it would be essential to say what leadership is and its history. According to James MacGregor Burns, “leadership is one of the most observed and least understood phenomena on earth” (http://www.emeraldinsight.com).

The study of leadership has been important to humans since the dawn of the civilization. The concepts of leadership, leader, and follower are represented in Egyptian hieroglyphics written 5000 years ago. Between 400 and 300BC the Greek philosophers Plato and Aristotle wrote about leadership and the requirements, characteristics, and education of leaders (http://www.emeraldinsight.com).

Leadership is central to the human condition (Wren, 1995) and has been found to be important to all societies, although specific patterns of behavior vary over time and across cultures (Bass, 1990)(http://www.emeraldinsight.com).

Although we can see that leadership is being an ancient notion there was no evidence of existence of the word leadership in the English language until the yearly nineteenth century. According to Bass (1990), the appearance of the concept of leadership in political, sociological, and organizational writings was usually accompanied by a unique and ambiguous definition (http://www.emeraldinsight.com). Bryman (1992) defines leadership as “a social process in which leaders influence followers to achieve group goals”. Although leadership described in many cases as a process, most of the theories and researches look at the person to understand the nature of leadership.

History of leadership

Leadership can be defined by three phases:

• Leader’s traits
• Leader’s behaviors; and
• Leader’s qualities

From the turn of the twentieth century through the 1940s, leadership research focused on identifying traits that distinguish leaders from non-leaders (http://www.emeraldinsight.com). As example we can see Stogdill’s review of the leader trait research.

This research was based on the idea that leaders were born, not made, and the key to success was simply in identifying those people who were born to be great leaders (http://www.emeraldinsight.com). Nevertheless a lot of work was done to identify the trait, the research failed to identify a universal set of traits that differentiated effective leaders.

In the early 1950s a second major thrust appeared. This thrust looked at leader behaviors in an attempt to determine what successful leaders do, not how they look to others (Halpin and Winer, 1957) (http://www.emeraldinsight.com).

Two primary, independent factors were identified by these studies:

• Consideration; and
• Initiation structures.

“The impact of this work was in part the notion that leadership was not necessarily an inborn trait, but instead effective leadership methods could be taught to employees” (Saal and Knight, 1988). A lot of progress was made in identifying what behaviors differentiated leaders from followers so that the behaviors could be taught (http://www.emeraldinsight.com).

Another impact of this work has to do with the broadening of management’s focus to include both people-oriented activities along with task-oriented activities (http://www.emeraldinsight.com). These studies helped categorize leaders based on their behavior.

Another approach dealt with the interaction between the leader’s traits, the leader’s behaviors, and the situation in which the leader exists (http://www.emeraldinsight.com).

Contingency theories make the assumption that the effects of one variable on leadership are contingent on other variables. In other words, meaning that leadership could be different in every situation. Although he found that certain leadership styles were more effective in certain situations, the contingency approach was more theoretical.

Culture as well plays an important role in leadership research. According to Schein, 1985, culture related issues must be clearly identified in order for leaders to be successful. It is important to notice that one of the aspects of the culture is change. Therefore, leaders must be able to adapt to the change in order to be more successful. Also some words have to be said about culture management as another important aspect of leadership. “Culture management deals with the ability of leaders to know and understand what the organizational culture is, modifying that culture to meet the needs of the organization as it progresses” (Horner, http://www.emeraldinsight.com). Therefore, it is obvious that leaders need to work within the culture to be most successful.

Leadership and motivation

The study of motivation is extremely important as all the above theories depend on it. This study “suggests that leadership is less a specific set of behaviors than it is creating an environment in which people are motivated to produce and in the direction of the leader. By creating the right environment, one in which people want to be involved and feel committed to their work, leaders are able influence and direct the activities of others” (Horner, http://www.emeraldinsight.com). Herzberg (1964) differentiated between elements in the work place that led to employee satisfaction and elements that led to employee dissatisfaction. These elements can be thought as motivators as employees are motivated to achieve them. For example, Herzberg labeled hygiene factors as they are necessary to keep employees from dissatisfaction (Horner, http://www.emeraldinsight.com).

Moreover, there are some need theories that people have needs for certain results. One of these theories is Maslow’s hierarchy of needs, which suggests that some needs are more basic than the others and people are motivated to satisfy them (Horner, http://www.emeraldinsight.com). Certainly, work satisfy some of these needs, but some people have more advanced needs and it is essential to know whether leaders can develop an environment that will satisfy those needs. One more theory by Alderfer (1969) suggests that there are only three needs that can be. They are: existence needs, relatedness needs, and growth needs. His theory was based on the thought that people can move up and down the hierarchy and can be motivated by many needs at any one time.

Let’s look now at another need theory, which called Murray’s (1938) manifest needs theory. His view about people’s needs what that that people can experience a variety of needs, such as need for achievement or need for power and that is not necessary that everyone would have the same needs.

There are also some additional motivation theories such as expectancy theory, equity theory, goal setting, and reinforcement. Each of this has implications for the approach leaders can take to dealing with followers (Horner, http://www.emeraldinsight.com). The reason why motivation theories are added to leadership issue is that because of the emphasis on the followers themselves and what causes them to act, instead of focusing on the leaders.

Therefore, “leadership is not only the process and activity of the person who is in leadership position, but also encompasses the environment this leader creates and how this leader responds to the surroundings, as well as the particular skills and activities of the people being led” (Horner, http://www.emeraldinsight.com).

The transformational-transactional leadership

“Transactional leadership stems from more traditional view of workers and organizations, and it involves the position power of the leader to use followers for task completion” (Burns, 1978). “Transformational leadership, however, searches for ways to help motivate followers by satisfying higher-order needs and more fully engaging them in the process of the work” (Bass, 1985).

“Transformational leaders can initiate and cope with change, and they create something new out of old. They build strong relationships with others while supporting and encouraging each individual’s development” (Horner, http://www.emeraldinsight.com).

A very interesting theory of “Super Leadership is offered by Manz and Sims (1991). They challenge the traditional paradigm of leadership as one person doing something to other people (Manz and Sims, 1991). Instead, they suggest, “the most appropriate leader is one who can lead others to lead themselves” (Manz and Sims, 1991, p.18). They suggest that leaders become great by unleashing the potential and abilities of followers, consequently having the knowledge of many people instead of relying solely on their own skills and abilities (Horner, http://www.emeraldinsight.com).

To understand better what is transforming leadership lets look at it as at the “body”, which consists of the heart, and head and hands. There are three aspects of leadership: supervisory, strategic and inspirational. They are going to be discussed more detailed further down.

The heart

“The most universally encountered aspect of leadership is the “inspirational” leadership of the heart. The essential, distinguishing the feature of inspirational leadership is that it never resorts to the use of coercive power or authority” (Nicholls, http://www.emeraldinsight.com). To energize enthusiastic followers, inspirational leaders create a compelling “vision”, which changes peoples view at the world around them. Another change that “vision” creates is that people change way they relate to one another.

There are two ways of affecting people minds by creating a “vision”. First one is that it clarifies understanding, and the second one is that it encourages alignment. So we can see that by its impact on the people’s personal beliefs, the leader’s vision builds the psychological ground for common action

(Nicholls, http://www.emeraldinsight.com).

Nichols defines it as “that activity which stimulates purposeful activity in others by changing the way they look at the world around them and relate one another”.

The head

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