In the 1970s through the 80s organisations were seen to be facing the dilemma of employee commitment. [2] Jay Conger (University of Southern California) has observed that in the midst of their change efforts, companies were resorting to extensive downsizing as well as to new organisational arrangements such as flatter hierarchies and strategic business units. While often improving bottom-line performance, these initiatives took their toll on worker satisfaction and empowerment. In the process, the old social contract of long-term employment in return for employee loyalty was broken. The net result was the disenfranchising of many in the workforce. Moreover, this occurred just at the moment when corporations were demanding ever-greater performance and commitment from employees.

Valencia, Spain (More) For companies, the challenge became a question of how to orchestrate transformational change while simultaneously building employee morale and commitment, a seemingly contradictory endeavour. In the view of Conger, these events had a direct impact on the study of leadership. It turned attention to the senior leaders in the belief that they possessed the power and resources to effectively implement significant organisational change. In the late 1970’s an approach to studies of leadership emerged which engaged a number of researchers in the USA and expanded to investigate the extent to which a new theory of leadership behaviour, based first on studies of politicians, could be applied internationally, was more valid in circumstances of crisis, applied to people at different levels and was true for both public and private organisations. Transformational Leadership Theory emerged from considerations by James McGregor Burns [3] of the histories of various political leaders. Burns identified two types of leadership style, transformational and transactional