Leadership Crisis: ABC & Transactional Leadership Analysis (MBA401)

This video transcript analyzes the leadership crisis at the Australian Broadcasting Corporation (ABC), focusing on the causes, consequences, and the application of transactional leadership. The crisis, marked by the resignation of the Managing Director, poor board-executive relations, and political interference, led to employee loss, political manipulation, and reputational damage. The presentation highlights the advantages of transactional leadership, such as promoting accountability and motivation, while also pointing out its rigidity and insensitivity to change. Recommendations include adopting a more flexible, dynamic, and participative approach to address the shortcomings and improve ABC's performance. The analysis provides a comprehensive overview of the leadership challenges and potential solutions within the organization.

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Video Transcript
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Leadership Crisis at the Australian Broadcasting Corporation
The Likely Causes of the Leadership Crisis
Australian Broadcasting Corporation (ABC) is a state-owned media entity in Australia.
The company has been facing a problem of mismanagement. There is poor leadership that has
made it quite challenging for the organization to achieve its goals. In 2018, the organization
faced many problems such as the resignation of its only and first Managing Director- Michelle
Guthrie. There was also a poor relationship between the Board of Directors and the executive
management. Worse still, the organization had to deal with a problem of political interference
and manipulation, something that led to the sacking of some journalists. These are serious
problems that made it quite difficult for ABC to achieve anything in 2018.
The Potential Consequences of the Crisis
The leadership crisis has negatively impacted on the progress of ABC in many ways.
First, it has led to the loss of some of the most productive employee in the organization. For
example, the unfavorable working conditions in which Ms. Michelle worked compelled her to
resign and quit the organization. Among the challenges she cited were sexism and lack of
consultation by the board. Besides, the crisis has created room for political manipulation of the
organization. The political leaders have put the organization under siege. It is the politicians who
want to dictate who to work for the company, who to sack, and who t promote. Last, but not
least, the crisis has led to poor performance, damaged reputation, and loss of trust in the
organization by the general public.
The Advantages of the Transactional Leadership Style applied in ABC

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The management of ABC has been applying the use of transactional leadership style.
Here, the management uses reward and punishment system to promote compliance. The first
advantage of this leadership style is that it promotes responsibility and accountability. The
culture of accountability and responsibility can thrive if, for instance, it is a rule to punish
irresponsibility in the workplace. Besides, it enhances the motivation of workers. The employees
can feel motivated if they are rewarded for the efforts that they make in the workplace. Lastly,
transactional leadership can help in the accomplishment of the organizational goals because it
makes the workers to remain focused and objective. Such kind of focus can be beneficial because
it can improve the performance of individual workers and the organization at large.
The Disadvantages of the Transactional Leadership Style applied in ABC
Transactional leadership has got some drawbacks hat hinder it from propelling the
organization to utmost success. One of its shortcomings is that transactional leadership is rigid. A
strict compliance of the rules or conditions is quite rigid because it has no room for flexibility. It
leaves the employees with no choice as they are required to follow all the rules no matter their
opinion, perceptions or capabilities. The rules must be followed because there is no room for
argument. Besides, transactional leadership might create fear and demoralize the employees. The
dangling of the punishment in case of poor performance might hinder individual workers from
doing their best for fear of punishment in case of any failures to achieve the set goals. Finally,
transactional leadership style is not sensitive to change. Once the rules are set, they have to be
followed. However, this is bad because it does not cater for the changes in the society today.
Rules are good, but they cannot be forced on the employees at all times.
Recommendations

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Transactional leadership can be a good style of leadership if appropriately applied. What
has happened in ABC demonstrates that the management has failed to apply this leadership style
well. In this regard, to address all these short comings, the management of ABC should adopt the
following recommendations. First, it should be flexible and dynamic in its approach. The rues
should not be too rigid, but instead, they should be flexible enough to cater for the current
changes in the corporate world. Society is not static because it changes each day. Lastly, the
management should be participative. Meaning, the decision-making process should not be
dominated by the leaders alone. Instead, the leaders should always be ready to involve all the
employees and other stakeholders and seek for their opinion whenever making any decisions that
directly or indirectly affect them. If such recommendations are adopted, ABC can manage to
rectify all the identified inefficiencies and end up becoming a good company that offers an ideal
workplace to accommodate all sorts of workers and be at the fore-fronst of accomplishing its
short and long-term goals.