, QUESTION 1
1.1. The case study "The Banking Company" revolves around Martin Sithole, a seasoned leader at
ABC Bank who has risen to an executive position after a decade of service in various leadership
roles. Known for his confidence and ability to inspire his team to exceed performance targets,
Martin has earned a reputation for his involvement in mergers and acquisitions. In his new role, the
CEO tasks him with leading the bank through a merger, a responsibility Martin approaches with a
top-down, self-interested perspective, disregarding input from his team. The Human Resources
Wellness Division has been asked to design strategies to mitigate stress within the organization,
while Martin faces challenges in managing team diversity, including assisting in the inclusion of a
new team member who uses a wheelchair and addressing complaints about undervaluing female
employees' contributions.
Modern Leadership Theory Applied by Martin Sithole
The leadership theory that Martin Sithole applied in the case study is Transactional Leadership.
Explanation of Transactional Leadership
Transactional leadership focuses on the exchanges or transactions that occur between leaders
and followers, wherein employees or subordinates are rewarded for meeting specific
performance goals and adhering to the directives of the leader. This style of leadership is
rooted in management by objectives, and its key elements include:
Contingent Rewards: Leaders offer rewards (bonuses, promotions, praise) in exchange for
compliance or achievement of performance targets.
Management by Exception: Leaders focus on identifying deviations from expected
standards or performance and take corrective actions, either actively (proactively
preventing mistakes) or passively (intervening only when problems arise).
Clear Hierarchical Control: The leader maintains a strong position of control, dictating the
vision and making key decisions with little to no input from subordinates.
Short-term Focus: This leadership style tends to emphasize immediate performance and
results rather than long-term personal development or innovation.
How Martin Applied Transactional Leadership
Top-Down Decision Making: In leading the merger process, Martin dictated his vision without
considering feedback from his subordinates. This aligns with the transactional leadership
approach, where leaders control the process and expect compliance rather than collaboration
or shared decision-making.
Focus on Procedures and Standards: Martin trained his subordinates in standard operating
procedures related to the merger but did not engage them in a strategic discussion.
Transactional leaders typically emphasize adherence to established rules and systems rather
than fostering creativity or innovation.
