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The spiritual dimension in

leadership at Dilmah Tea

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School of Management and Marketing, Faculty of Commerce,

University of Wollongong, Wollongong, Australia

Mario Fernando

Received September 2008

Revised February 2009
Accepted March 2009

Frederick Beale
Acute Care Policy Section, Department of Health and Ageing, Canberra,
Australia, and

Gary D. Geroy

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Colorado State University, Fort Collins, Colorado, USA

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Abstract

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Purpose The purpose of this paper is first to report an exploratory study intended to capture the
elements of a leaders spirituality; and second to examine these elements against the current discussion
of spiritual leadership in general, and the transcendental leadership model in particular.
Design/methodology/approach Within a single case study scenario, the in-depth interview
method captures the elements of the leaders spirituality. Grounded theory is used to analyze the data.
Findings The findings suggest that a spiritually driven leaders high internal locus, a strong
passion for giving and caring for his followers, and spirituality epitomize the concept of transcendental
leadership.
Research limitations/implications The major limitation concerns generalizability of the
findings. While in-depth studies of larger samples of spiritually driven business leaders are needed,
these leaders could be drawn from different cultural settings. Using different assessment tools to
measure various aspects of spirituality might provide helpful perspectives in future research aimed at
understanding the relationships between spirituality and leadership styles.
Practical implications The paper provides an alternative way of characterizing spiritually
oriented leaders, as they strive to integrate spirituality to all aspects of their life.
Originality/value The paper assesses the functionality of a spirituality-driven business leader as
early evidence of the viability of the concept of transcendental leadership. It is of value to academic
researchers and practitioners.
Keywords Leadership, Transactional leadership, Transformational leadership
Paper type Case study

Leadership & Organization

Development Journal
Vol. 30 No. 6, 2009
pp. 522-539
q Emerald Group Publishing Limited
0143-7739
DOI 10.1108/01437730910981917

1. Introduction
This paper examines the notion of transcendental leadership through the application of
a case study inquiry. The case study focuses on Merrill J. Fernando, founder of Dilmah
Tea, and chair of the MJF Group. The study determined and evaluated both evidence of
the articulation of transcendental theory of leadership into practice, as well as provided
questions that emerged from the study that are potentially counter thesis to the theory.
An earlier version of this paper was presented at the 2007 Annual Academy of Management
Conference held in Philadelphia.

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Recently questions have emerged regarding the universality and limitations of

current general classic models of leadership those being the transactional and
transformational models. The emergent discussions focus on the question of what if
any influencing dynamics are associated with the interplay and linkage between the
process-interpersonal dimensions in the role of leadership (in the classic models), and
the spirituality-intrapersonal dimension in the role of leadership.
As a response, several studies attempt to promote transcendental leadership theory
(Cardona, 2000; Sanders et al., 2003; Dent et al., 2005; Geroy et al., 2005), but
transcendental leadership theory remains to be empirically tested in a variety of social
and organizational environments (Sanders et al., 2003, p. 30). The conceptual model
offered by Sanders et al. (2003) puts transcendental leadership and transactional and
transformational styles along several continua, including spirituality.
The prevailing spiritual revival in the workplace has taken shape over the past 20
years. The burgeoning workplace spirituality literature has been mainly influenced by
developments in the fields of religious studies and psychology (Giacalone et al., 2005).
Spirituality is an inherent characteristic of all humans, which encompasses the
sacredness of everything, is nondenominational, broadly inclusive and embracing
everyone, and involves experiencing or achieving a godlike self through connection
(Mitroff and Denton, 1999; Dent et al., 2005; Fernando, 2007; Smith and Rayment, 2007).
Dehler and Welsh (1994) define spirituality as:

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. . . a subconscious feeling that energizes individual action in relation to a specific task [. . .] an

animating life force, an energy that inspires one toward certain ends or purposes that go
beyond self (p. 19).

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Scholarly contributions on spiritual leadership relates to leaders animating life force

or intrinsic motivation. According to Fry and Coen (2009), the purpose of spiritual
leadership is to:

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. . . tap into the fundamental needs of both leader and follower for spiritual wellbeing through
calling and membership, to create vision and value congruence across the individual,
empowered team, and organization levels [. . .] to foster higher levels of employee wellbeing,
organizational commitment, financial performance, and social responsibility (pp. 266-7).

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These authors state that the theory of spiritual leadership is developed within an
intrinsic motivation model, and is founded on qualities such as hope, faith and altruism
(Fry and Coen, 2009, p. 266). In practice, spiritual leadership is driven by the inner life
or spiritual practice. It develops the values, attitudes and behaviors necessary to
intrinsically motivate ones self and others so they have a sense of spiritual wellbeing.
While the workplace spirituality literature singles out leadership as the most
important influence on the presence of spirit in the workplace (Fernando and Jackson,
2006), and there is growing recognition of an ethical leadership style in the general
leadership literature (Barling et al., 2008), early empirical attempts at testing the
relationship between spirituality and leadership have found that the characteristics of
leaders do not commonly include notions of spirituality (Dent et al., 2005). For example,
Jacobsen (1994) found that the most exhaustive collection of research on leadership by
Bass does not mention spirituality as an important trait in the qualities affecting
leaders values or performance. Also, in a study of 266 leaders examining the
commonalities of transformational leadership and the dimensions of spirituality, Zwart
(2000) found no significant relationship between spirituality and transformational

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After ascertaining the elements of spirituality in the case subjects leadership style,
spiritual leadership is discussed. The conclusion assesses the functionality of the case
subject as evidence of the viability of the concept of transcendental leadership.
The rest of the paper is organized as follows. First, an overview of the transactional,
transformational and transcendental leadership styles is presented. Second, we present
the methodology of data collection and analysis, and an overview of our case subject.
Third is a discussion of the subjects spiritual leadership attributers. Finally, the
conclusion presents implications and recommendations for future research.

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2. Literature overview
Bass (1995) and Bass and Avolios (1997) Full Range Leadership (FRL) model, which
conceptualizes transactional and transformational forms of leadership, has perhaps
been the most cited source for leadership researchers in the past two decades
(Fukushige and Spicer, 2007, p. 509). Scholars have studied the FRL model as a
predictor of a variety of outcomes in organizations such as employee satisfaction,
effort, motivation, organizational effectiveness and performance. Strong relationships
have been found between transformational leadership and most positive outcomes
(Bass and Stogdill, 1990; Barbuto et al., 2007).
The FRL model describes the distribution of leadership behaviors, ranging from
completely inactive (laissez-faire) to transactional behaviors to transformational
behaviors. Thus transactional and transformational leadership are seen to be in a
continuum rather than being mutually exclusive (Yammarino, 1993; Bass and Avolio,
1994). The FRL model consists of three transactional leader characteristics:
(1) Contingent reward leaders are found to be reasonably effective, although not as
much as the five Is in transformational leadership for motivating others to
achieve higher levels of performance. These leaders assign agreements on what
needs to be done and promise rewards or actually reward followers for
satisfactorily carrying out the assignment.
(2) Management by exception active leaders are found to be less effective than
contingent reward leaders but are still required in certain situations. They

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leadership within the workplace. Dent et al. (2005), Fry (2003) and others propose the
constructs of spiritual leadership models are confounded, and they further propose that
formal study is required to develop their conceptual distinctions. Dent et al. (2005) also
suggest that both the constructs of spirituality and leadership share the problem of not
having a specific and a consensus definition.
The relationship between spirituality and leadership seems to be much more
complex than a blanket assertion that there is a strong spiritual component in
leadership. As theorists and researchers attempt to better understand spiritual
leadership, they should attempt to examine specific aspects of spirituality in leadership
as opposed to broad connections (Gehrke, 2008, p. 356).
The purpose of this paper is twofold:
(1) to report an exploratory study intended to capture the elements of a leaders
spirituality as revealed in a single case study scenario; and
(2) to examine these elements against the current discussion of spiritual leadership
in general, and the transcendental leadership model in particular.

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Thus, transactional leadership embraces an economically based exchange relationship.

The leader promotes uniformity by providing extrinsic (positive or negative) rewards
to the collaborators (Cardona, 2000, p. 203). Transactional leadership style behaviors
engage in coaching activities and facilitate capacity development toward achieving
results that the organization determines desirable (Geroy et al., 2005).
In the FRL model, transformational leadership is characterized by five scales:
(1) Leaders portraying idealized influence attributed have the socialized charisma
(Avolio and Bass, 2002). They are perceived as being confident and powerful,
and viewed as focusing on higher-order ideals and ethics. Followers admire,
respect and trust these leaders as a role model and want to emulate leaders.
(2) Idealized influence behavior leaders behave in ways that their actions are
centered on values, beliefs and a sense of mission. The leaders consider the
needs of others over their own personal needs and share risks with followers.
(3) Inspirational motivation leaders motivate and inspire followers by providing
meaning and challenge to work. These leaders engage followers in envisioning
attractive future states and create communicated expectations that followers
want to meet.
(4) Intellectual stimulation leaders stimulate followers efforts to be innovative and
creative by questioning assumptions, reframing problems and approaching old
situations in new ways. New ideas and creative problem solutions are solicited
from followers who are included in the process of addressing problems and
finding solutions.
(5) Individualized consideration leaders pay special attention to the needs of each
individual follower for achievement and growth. Followers are developed to
successively higher levels of potential (Fukushige and Spicer, 2007, p. 510).

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arrange to actively monitor deviances from standards, mistakes and errors in

the followers assignments and to take corrective action as necessary.
(3) Management by exception passive leaders wait passively for deviances,
mistakes and errors to occur, and then take corrective action (Avolio and Bass,
2002; Fukushige and Spicer, 2007, p. 510).

Hence, the exchange relationship changes between leader and follower, from one based
on pure economic transaction to one that also includes an element of social exchange.
In the FRL model, the transformational leader-follower relationship is viewed as one of
mutual stimulation (Barbuto, 1997). The influence of transformational leaders was
also distinguished on the hierarchical scale of moral development measured by
Kohlbergs conceptualization (Popper et al., 2000, p. 269). This study also reports
transformational leaders are classified as more morally advanced than transactional
leaders, and more successful in motivating their followers to move beyond Maslows
(1954) need hierarchy from needs for safety and security to needs for achievement and
self-actualization (Bass, 1995, p. 467).
According to Avolio (1999), the FRL model does not include all possible notions of
leadership. The intent was to focus on a particular range and examine it to its fullest
(Bass and Avolio, 1997). The full range goes from the highly avoidant to the highly
inspirational and idealized, suggesting that there are other leadership constructs that

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are not included in this range that need to be further explored (Antonakis et al., 2003,
p. 286). In this context, let us next examine transcendental leader attributes.
Transcendental leaders use relational leadership concepts while incorporating
elements of personal or trait leadership (Sanders et al., 2003). Their values, attitudes
and behaviors (altruistic love, hope/faith, vision) are used to intrinsically motivate
followers (Fry, 2003; Fry et al., 2005). Transcendental leaders tap into the fundamental
needs of both the leader and followers for spiritual survival, and aims to improve the
spiritual development of both the leader and followers (Cardona, 2000; Fry, 2003;
Sanders et al., 2003). Without desire to manipulate others, transcendental leaders can
be distinguished from transformational leaders by motives such as altruistic love, a
sense of wholeness, harmony and wellbeing. They show authentic selfless concern for
people and help followers feel powerful and enabled to accomplish work (Fairholm,
1996; Korac-Kakabadse et al., 2002; Fry, 2003). Therefore, transcendental leadership is
both follower- and leader-centered.
Transcendental leaders grow beyond the ego towards a higher influence in order to
comprehend an extraordinary, spiritual presence in their lives (Sanders et al., 2003,
p. 23). The most important competence of transcendental leaders is their integrity and
capacity to sacrifice themselves in the service of their collaborators, even at the
expense of their own interests (Cardona, 2000, p. 205). The transcendental leader is not
only concerned with the economic and social work-based exchanges in their
relationship with followers, but also is concerned with the people themselves and tries
to contribute to their personal development (Cardona, 2000, p. 205). This focus on the
whole follower (as opposed to only the work presence of the follower) means
transcendental leaders engage in mentoring activities that not only have the capacity
to address organizational expectations and needs, but also influence all facets of an
individuals life (Geroy et al., 2005, p. 28).
Several scholars have pointed to the weaknesses in transformational leadership
including the unidirectional influence flowing from the leader to the follower, over
identification with the leader creating loyal and obedient followers, and
overdependence on the leader (Yukl, 1999). More importantly to this discussion,
transformational leadership is also criticized for lacking in morality and ethics (Bass
and Steidlmeier, 1999; Kanungo, 2001; Price, 2003). Sankar (2003) argues that leaders
character based on integrity, trust and human dignity influencing a leaders vision,
ethics and behaviors, rather than charisma, should be the critical measure of leadership
excellence.
In more recent dialogue, transformational leadership and its variants such as
servant leadership and authentic transformational leadership overcome some of the
conceptual weaknesses of transformational leadership. Although these variants
resemble more closely to the transcendental notion offered in this paper, servant
leaders service orientation is aimed at enabling wise organizations (Barbuto and
Wheeler, 2006), whereas transcendental leaders influence the followers to comprehend
and connect with the extraordinary. Although (Smith et al., 2004) suggest that servant
leadership leads to a spiritual generative culture, according to Cardona (2000), the
difference between servant and transcendental leaders manifests itself in the care taken
by the servant to make sure that other peoples highest priority needs are being served.
The transcendental leader is not just a server but also a transactional leader, who is
also charismatic. Cardona (2000) argues that being a server makes it impossible for

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transcendental leaders to be manipulators, as they must always look after the interests
of their collaborators in the first place.
Authentic transformational leadership claims to foster the modal values of
honesty, loyalty, and fairness, as well as the end values of justice, equality, and human
rights (Bass and Steidlmeier, 1999, p. 192). For transformational leadership to be
authentic, it must incorporate a central core of moral values (Bass and Steidlmeier,
1999, p. 210). Even though Bass and Steidlmeier try to explain how certain values are
found in all traditions and cultures, they fail to specify the core values in order to
distinguish the good transformational leader from the bad one (Cardona, 2000). Price
(2003) points out a commitment to authenticity does not directly address inequalities in
power that might allow transformational leaders to impose their values on others,
especially on those with minority interests. Thus, the unity in the leader-follower
partnership and the development of follower for his or her good is unique to
transcendental leadership. In this context, let us next examine how the dimensions of
spirituality in leadership could be explained using traditional theories.

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3. Putting it all together: transcendental leadership theory continuum

Sanders et al. (2003) propose a model that comprises three dimensions of spirituality:
(1) consciousness;
(2) moral character; and
(3) faith.

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They incorporate the managerial aspects of transactional leadership theory with the
charismatic aspects of transformational leadership theory to enhance leader
effectiveness. In this model, transactional, transformational and transcendental
leadership styles are connected through three continua:
(1) locus of control;
(2) spirituality; and
(3) effectiveness (Sanders et al., 2003, p. 20; Geroy et al., 2005, p. 23) (see Figure 1).

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Locus of control refers to the extent to which individuals differ in terms of their beliefs
about whether they control the outcomes in their lives (i.e. internal locus of control), or
the outcomes are controlled by factors such as luck and other people (i.e. external locus
of control) (Blakely et al., 2005). An internal locus of control is positively related to
corporate citizenship and the self-esteem of managers (Hoffi-Hofstetter and Mannheim,
1999), better physical and psychological health, and high academic performance and
achievement (Graffeo and Silvestri, 2006). An external locus of control is related to
managers feelings of powerlessness and workplace bullying, withdrawal from
corporate citizenship activities in times of crisis (Hoffi-Hofstetter and Mannheim, 1999),
and poor health outcomes (Graffeo and Silvestri, 2006).
Locus of control relates to transactional, transformational and transcendental
leadership types, and is important in determining the quality of relationships or
exchanges that develop between the leader and followers. Some researchers find a
positive relationship between an internal locus of control and high quality
leader-follower exchanges (Kinicki and Vecchio, 1994; Martin et al., 2005). An
internal locus of control was positively related to ratings of transformational

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Figure 1.
Integration of
transcendental leadership
theory

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leadership (Howell and Avolio, 1993, p. 899), meaning that transactional leaders are
characterized by an external locus of control, while transformational leaders are
characterized by an internal locus of control, and are more likely to use rationality
when attempting to influence others (Barbuto and Moss, 2006). Transcendental leaders
are even more internally focused than transformational leaders, because they are
spiritually focused, which compels them to consciously place greater importance on
the dynamics of the immaterial (i.e. inner spirit), as opposed to the material (i.e. body)
(Sanders et al., 2003, p. 25).
The second continuum is the spirituality continuum. Spirituality and morality are
key constructs in the development of transactional leaders to transformational leaders,
as Bass (1995) states: to be a transformational leader requires mature moral
development (p. 474). Burns (1978) suggests that transactional leaders control their
followers by catering to the followers lower-order physical and social needs.
Furthermore, these leaders concentrate on method, technique and mechanisms rather
than on broader ends and purposes (Burns, 1978, p. 405) in order to satisfy the
self-interests of organizational members, and thereby manage day-to-day
organizational operations. The transformational leader, on the other hand, seeks to
satisfy the followers higher-order growth needs, transform the followers self-interest
into collective concerns, and overall engages the full person of the follower (Burns,
1978, p. 4). For Burns, transformational leadership is moral in that it raises the level of
human conduct and ethical aspiration of both leader and led (p. 20), and transactional
leadership is not moral in that it is self-absorbing and manipulative.
In contrast with the views of Burns (1978), Kanungo (2001) argues that the ethical
justification for transformational leadership is not that clear; neither is the assertion
that transactional leadership is devoid of a moral base. According to Kanungo (2001,
p. 258), unless leaders are able to transform everyone and create absolute unanimity of
interests, transformational leadership produces simply a majority will that represents
the interests of the strongest faction. Such leadership, then, may not always protect the

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basic interest of the weak from the self-interest of the strong. This clearly poses a moral
problem for transformational leaders.
As leaders internal moral values and spirituality deepen, they progress from
transactional to transformational leadership. However, they must go one step further to
become transcendental leaders, which involves not only communicating and adopting
deep moral values, but also developing a concern for their followers spiritual journey
and divine awareness associated with the highest level of moral and spiritual
development (Sanders et al., 2003, p. 26). This level of development and concern for an
employees spiritual journey motivates the change from counseling and coaching
activities to mentoring. A clear progression is evident. As leaders move from low
spirituality to high spirituality, they also move from transactional leadership through
transformational leadership to transcendental leadership.
Effectiveness is the last continuum. Strong evidence supports the claim that a
transformational leadership style is more effective than transactional leadership style
(Howell and Avolio, 1993; Burpitt, 2009). Sanders et al. (2003, p. 25) argue that because
transcendental leaders possess all of the same effectiveness traits as transformational
leaders, as well as having a higher internal locus of control and high spirituality, they
should be just as, if not more, effective than transformational leaders.
Cardona (2000) argues a slightly different point. He believes that the closer economic
and social exchange relationship between transformational and transcendental
leadership results in the highest possible value-added partnerships being developed.
Geroy et al. (2005) argues a similar, but related point, contributing increased effectiveness
to the appropriate selection of coaching, counseling or mentoring techniques by the
leader; mentoring activities involving the highest intensity exchanges.
The nature of the relationship between transactional, transformational, and
transcendental theories of leadership is defined along a hierarchical continuum
(Sanders et al., 2003, p. 27). As leaders progress from an external to internal locus of
control, and from low to high spirituality, they move from transactional to
transformational to transcendental leadership styles. The more internal a leaders locus
of control and the higher the leaders spirituality, the more effective they are.
Effectiveness is the dependent variable of locus of control and spirituality.
4. Methodology
The case that is the focus of this paper is drawn from a larger study sample of business
leaders. The fieldwork for the present study was conducted in Colombo, Sri Lanka,
over two months. The method for selecting participants was purposive, because the
study learned about workplace spirituality from typical cases of leaders who were
known to practice workplace spirituality (Patton, 2002). The business leaders were
selected because they were spiritually motivated that is, they had publicly
acknowledged their spiritually motivated approach to heading business organizations,
and were identified as such by others in their communities, especially the media.
4.1 Data collection and analysis
The primary method of data collection was in-depth, face-to-face interviews using a
semi-structured interview guide. Merrills interview lasted approximately 120 minutes,
in which he was encouraged to reflect upon spirituality and how it influenced his
leadership and decision making. To observe moods and hesitancies in response to

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Questions were broad enough to capture a wide range of experiences, and narrow
enough to elicit Merrills specific experiences. Additional probing questions were
interwoven during the interview to seek verification. With respect to data
triangulation, additional information was obtained through interviews with two
directors, each lasting 110 minutes. The review of relevant company and public
documents to verify Merrills interview data was also carried out. Company documents
included annual reports, newsletters, photographs, newspaper cuttings, certificates,
and web sites. Also examined were public documents held in the archives of leading Sri
Lankan media organizations, including media reports collected since 1970, which
featured Merrill and the MJF Group. These reports were critical in substantiating the
accuracy of the data.

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4.2 Grounded theory framework

A variant of the grounded theory framework based on Charmaz (2002) and Strauss and
Corbin (1990) was used to generate theory from data. We placed priority on the
phenomenon of study of workplace spirituality and see both data and analysis as
created from the shared experiences of the researchers and participants, and the lead
authors relationship with the participant. Thus, we believe we have been creators of
the research or what is generally defined as being constructivist in our approach
(Charmaz, 2002). We have assumed that the research participant could and would
relate significant meanings about their situations to us. His responses to our questions
were assumed to be accurate reflections of his meanings because of the ability to
comprehend the meaning of the question and willingness to relate his story, fully and
accurately.
Through the grouping of responses on spirituality, we collected 81 statements and
labeled them within a spirituality statement file. If data from one group were relevant
to others, we copied them to each group. The color-coding and review facility in
Microsoft Word was used to avoid errors in cutting and pasting. We carried out an
initial coding process. The initial statements were further condensed to facilitate the
analysis process. The major condensed representative statements were identified and
copied into a file of themes. These themes represented a composite of data that
constituted a meaningful unit. We then began to focus on selected and relevant
categories of the phenomenon under study which Charmaz (2002) has termed selective
or focused coding.

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specific questions, the interview was audio taped. Additional probing questions were
interwoven during each interview to seek verification and explanation. To glean
Merrills perspectives on the phenomenon under study, the interview guide was based
on an open-ended format, in order to encourage him to share information in a style that
he was comfortable with.
The questions focused primarily on two topics:
(1) the meaning of spirituality; and
(2) the enactment of workplace spirituality.

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4.3 The case subject: Merrill Fernando, founder and chair, Dilmah Tea
Youngest of a family of five, Merrill was born to a Roman Catholic family on 6 May
1930, in Negombo, Sri Lanka. His father was a local trader and his family was of very

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modest means. His early education was at Maris Stella College, Negombo and then at
St Josephs College, Colombo. He did not pursue any tertiary education. Merrill started
his career as an inspector with an American petroleum company. Soon he began
training as a tea taster, the first batch of Sri Lankans to receive such training. He
traveled to Mincing Lane, London, and after working in a UK tea company, returned to
Sri Lanka, and joined a British-owned and managed tea business. He eventually
bought out the British shareholders and ran the business with a partner. He
distinguished himself by supplying the first ever consignment of Ceylon tea direct to
the then USSR.
Merrill J. Fernando & Co. soon became one of the top-ten tea exporters in Ceylon. In
the 1970s, Merrill lost his tea plantation to nationalization, and sold his business with
the intention of emigrating from Sri Lanka. However, persuaded by friends, he
remained in Sri Lanka, and formed another company, MJF Exports Ltd. In the early
1980s he registered the trademark Dilmah with a dream of eventually supplying
pre-packed, value-added tea to his bulk tea clientele. In the 1980s Merrill imported the
first tea bagging machine into Sri Lanka. Merrills vision was not based on the politics
of development, but on the idea that, by supplying consumers direct from the origin,
the quality and freshness of tea could be improved in every market without additional
cost.
The most significant achievement of Merrill was the commitment to single-origin
tea as a response to the entire tea industry moving towards multi-origin blends. This
move was motivated by commercial reasoning, since the practice of blending allowed
companies to introduce inferior and much less expensive teas from various origins at a
significant discount. It was therefore a profit maximization strategy which Merrill
objected to on the basis that single-origin teas were undeniably more authentic,
reflected greater integrity since it offered consumers the ability to make an empowered
decision on which tea they preferred. The significance of all this was that Merrills path
was entirely opposite to the direction of the global tea industry. He focused on building
upon the attributes of quality, genuine variety and freshness that made tea famous and
popular in the nineteenth and twentieth centuries.

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5. Findings: Merrills spiritual leadership qualities

Merrill believes strongly in a philosophy of sharing his profits and his family wealth
with others less fortunate. His mother had a strong influence on his personality and
character. He acknowledged that his lifestyle had changed, but:
. . . my thinking remains as it was when I was with my mother . . . I feel that my greatest
strength is that I havent forgotten my beginnings . . . I was particularly close to my mother,
who imbibed in me the importance of charity. My mother was my role model because she
valued everyone . . . She did the kind of thing that impressed me. She was very kind to all the
villagers . . . she used to make little treats and others things, and keep a share, and give [a
share] to people . . . When she was older . . . I used to take her some tea . . . I realized that she
was making small parcels out of that and giving [them] to the villagers, so I gave her more
tea, and she continued to do that. It built in me the need to give. I grew up with that . . . my
mother died at 90 years of age and she left an indelible mark on charity in me.

Charity is a significant part of his life and also permeates his business. For example,
Dilmah Tea supports the Ronald McDonald Houses, the Childrens Leukemia and
Cancer Research Foundation in Australia, as well as the hospice movement in New

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. . . the leadership defined by a contribution-based exchange relationship. In this relationship

the leader promotes unity by providing fair extrinsic rewards, appealing to the intrinsic
motivation of the collaborators, and developing their transcendent motivation (Cardona, 2000,
p. 204).

Merrill justifies his actions by using key aspects of the contribution-based exchange
relationship:

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I have wealth acquired through the cooperation and the assistance of many other people who
worked with me. I realize and I strongly believe that we come into this world with nothing
and go with nothing. I have added to this philosophy that the wealth should return to those
who helped us to acquire it while we are still around . . . I am giving it back before I go in
tribute and thanks to consumers, workers, and others who helped me along the way.

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He places a strong emphasis on staff welfare. He provides free in-house staff medical
facilities and financial assistance for the education of their children. Merrill concerns
himself with the wellbeing of his followers, who he treats like members of his family. For
example, for 30 years he provided the children of his clerical staff with all the school
textbooks at the beginning of the year, and three suits, and a pair of shoes. He remarked
that he started this practice when he had 50-60 employees, and still continued the
tradition with 1,000 employees. Merrill elucidated his generosity towards his staff:

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I feel I should give, you know, help them. Every one of the employees has helped me. Because
of them I have got this business empire and therefore, while I can, I want to give back, share
with them . . . I am very proud of that. I was also in the habit of treating and feeling that the
employees are like my family. It inspired me to look after the staff, which I look after in a very
big way.

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Zealand. About one-third of Merrills wealth is set aside for his foundation, the Merrill
J. Fernando Charitable Foundation. The Foundation began by assisting a major project
to provide breast cancer screening facilities in Colombo. The Foundation has built
hospitals, orphanages, homes for the elderly, and schools in rural areas where such
facilities were not provided by government. Cardona defines transcendental leadership
as:

Merrills interactions with his followers demonstrate a social exchange relationship.

Cardona gives an example of a social exchange relationship between boss and
subordinate as one of the boss concerning herself with the subordinates family needs,
and the subordinate taking greater pains with his work in order to please his boss [. . .]
an implicit reciprocal undertaking does exist, based on a certain identification between
the two parties (Cardona, 2000, p. 202).
During the interview, Merrill was careful to use the phrase meaningful charity. He
emphasized that, in order for any charity to be meaningful, it should extend beyond a
mere donation of resources:

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One should ensure that those resources are put to good use and are received by the parties
that the resources were originally intended for . . . Today, to give a million rupees to a charity
is nothing. That is not charity. You must take the trouble and time to spend those million
rupees for the actual welfare of some people.

He also maintained that charity must come from the heart and shouldnt influence
people about me or my business. He argued that it would not become meaningful
charity if people knew that he was engaged in so much philanthropic work and

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therefore felt obliged to buy his products. Responding to the question why he engaged
in charity to such an extent, he remarked:
Those who are blessed unusually must do unusual charity. I do a lot of charity because I have
been blessed with a lot. So, I want to share that.

He went on to relate how he personally visited places around the globe to ensure that
his charitable resources actually help people. The transcendental leaders genuine
interest in his followers:
. . . creates, out of reciprocity, a sense of responsibility in the collaborator which is what we
call unity. Unity is much stronger than alignment, because the follower does not only believe
in the leader but also wants to help him or her (Cardona, 2000, p. 205).

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This was evident when Merrills employees reciprocated his concern for their wellbeing
by organizing a bodhi puja for him when he was gravely ill. Bodhi puja is performed by
Buddhists on important religious days, such as the full moon poya.
A contribution-based relationship is based on the contribution that the work makes
to others (Cardona, 2000, p. 202). In this situation, employees:

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. . . are motivated not only by the extrinsic and intrinsic rewards of the partnership, but also
by motives that transcend their self-interest, such as the good of the organization or the
people that work in that organization . . . [they] want to work for somebody who is trustful
and worth contributing for. They want to identify with a cause that is meaningful and makes
a difference (Cardona, 2000, p. 203).

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Merrill is a very spiritual businessman. He believes that all religion teaches the same,
we are taught in a different style. Spirituality, to Merrill, is the inner wellbeing. In his
case, the Catholic religion, and my feeling for the Buddhist philosophy is my
interpretation of spiritual wellbeing. He said:

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We are a very religious family. I was trained to go to mass every day, and it gave me a lot of
strength and courage in what I did. So even as a small boy, we had no wants. Religion was the
cornerstone of my foundation and eventually as I grew up, I became very dedicated to religion.

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While religious practice has a major influence in his life, he believes strongly his
success is due to hard work. He said, I dont think I know that any other tea-growing
country has had a person who has achieved this success. Why do I deserve this
success? It is hard work, no doubt, but there are other people who work harder.
Throughout the interview with Merrill and subsequent dealings with him, Merrill
projected the image of someone very self-assured and content, projecting a high
internal locus of control:
This is the business which I have created, and I have spent about 16-18 hours a day working.
I think I have had the energy and the vision and very exceptional capabilities. I have used
them very well.

He was faithful and thankful to God for giving him much more than he deserved. He
admitted that he wondered why he had been blessed with nice children and very
hardworking people with the same values as him. Merrill Fernandos high internal
locus, a strong passion for giving and caring for his followers and the less fortunate,
and his spirituality, epitomize the concept of transcendental leadership as developed by
Cardona (2000) and Sanders et al. (2003).

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6. Discussion
Based on the interview and secondary data on Merrills leadership style, it is clear that he
enacted transactional, transformational and transcendental leader attributes at different
times, in different amounts and in different circumstances. At times, Merrill motivated
his followers externally with rewards demonstrating transactional leader characteristics.
Merrills leadership style engages the five transformational leadership scales in the FRL
model at varying levels of intensity. A senior and respected business leader in the
country, Merrill epitomizes an individual blessed with abundance of unusual social
charisma (idealized influence attributed). He is driven by a sense of complete satisfaction
with what he was doing, what he wanted to do and what he had achieved. As a
spiritually driven businessman, Merrill was perceived by his followers as focusing on
higher-order ideals and ethics. Over the years, Merrills consistent hard work towards
achieving his vision projects a man driven by a sense of mission and high internal locus
(idealized influence behavior). Merrills extremely altruistic nature in treating his
employees like his family inspires and motivates his followers. Team spirit is high and
his human kinship provides a basis for meaningful work for his employees (inspired
motivation). Although in this instance there was no evidence of Merrills efforts for
intellectual stimulation of followers efforts to be innovative and creative, what was
demonstrated in abundance was Merrills individualized consideration of his followers
needs by adopting two-way communication and managing by walking around.
In several areas Merrills leadership characteristics went beyond the transactional
and transformational leader scales of the FRL model. His leadership behavior extended
beyond efforts targeted at merely transcending followers to organizational goals.
Merrill amply demonstrates of a leader who constantly attempts to engage the whole
follower to appreciate the importance of an higher influence. For example, Merrill holds
an annual mass in his office complex: we have a mass a solemn mass. Scholars
have noted that spirituality in the workplace can lead to arrogance that holds a
particular faith higher, morally superior or more worthy than another, thus fostering
zealotry (Giacalone and Jurkiewicz, 2003). There was no evidence to suggest that
Merrill was forcing his Christian religious beliefs onto his followers. On the other hand,
because the majority are Buddhists about 80 per cent of the workforce I do this
pirith [Buddhist chanting] ceremony at office too.
Merrills leadership demonstrates a collaborative partnership with his followers,
reflecting not only alignment but unity as well. As unity is much stronger than
alignment (Cardona, 2000), the follower does not only believe in the leader but also
wants to help him or her. The bodhi puja devoted to Merrill for his speedy recovery
shows the extent of followers concern, and that the leader-follower partnership is not
unidirectional. More importantly to the discussion at hand, Merrills leadership is
driven by a strong foundation of Christian belief and hard work, suggesting Merrills
leadership effectiveness is based on integrity, trust and human dignity rather than
charisma (Sankar, 2003).
Reave recognizes a clear consistency between spiritual values and practices, and
effective leadership:

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. . . values that have long been considered spiritual ideals, such as integrity, honesty, and
humility, have been demonstrated to have an effect on leadership success. Similarly, practices
traditionally associated with spirituality as demonstrated in daily life have also been shown
to be connected to leadership effectiveness (Reave, 2005, p. 655).

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Sanders et al. (2003) and Geroy et al. (2005) argue that transactional leaders are the least
morally developed of the three leadership types outlined. However, transactional
influence can have a moral teleological basis (Kanungo, 2001) because it serves the
interests of all parties concerned (Price, 2003) while transformational leadership can be
ethically questioned due to their over-reliance on the emotion of followers and the
unequal power in the relationship (Ciulla, 2001). Thus a strong case could be made for a
form of enlightened transactional leadership that is more morally developed than
transformational or even transcendental leadership.
Merrills successful leadership may be due largely to his internal locus of control and
spirituality, but also due to his ability to deal constructively with political conflict
within his organization.

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7. Implications and concluding thoughts

The findings from this study suggest that a spiritually driven leaders high internal
locus, a strong passion for giving and caring for his followers, and his spirituality
epitomize the concept of transcendental leadership, as developed by Cardona (2000)
and Sanders et al. (2003). At an applied level, this study brings several opportunities to
be formulated, as well as advances questions for the practitioner and management
development authorities.
The study shows that when an individual fully understands themselves and what
motivates and drives their ethics they are more confident in themselves. This
confidence takes a very interesting articulation turn. First, it provides the individual
with the strength and understanding of why they feel they should or should not engage
in a scenario or interaction with others. It allows themselves to be sensitive to how
others also arrive at their state of the legitimacy for their own views and actions. The
former provides a foundation to allow a leader to resist or to manage stress and
pressure of influence being applied to shape their behavior. The latter provides a sound
understanding from which to realize differences in philosophy, values, ethics, capacity
and capabilities. In this new 360 degree view, the leader gains insights into their peers
and followers which provides a true appreciation of what constitutes the subtle yet
powerful cultural difference (albeit potentially within the same organization and based
on structural norms) which must be addressed by awareness, strategy synergy and
negotiation.
In terms of questions, for the practitioner and management development authority,
it raises both development and strategic questions. Pragmatically is the practitioner
psychologically ready to put themselves under this level of introspection? If the answer
is yes, then the individual may be ready to embrace the complexity of growth and
development necessary to become a transcendental leader, and more importantly be
ready for that highest level and form of leadership in the organizational structure.
Pragmatically speaking, the expectations of transcendental leadership is to be less
focused on process, relationship building, and management of systems; and be more
focused on shaping the culture and externally branding of the who and what the
organization is within the community of economics and social boundaries. In other
words, when the name of their organization is stated, the image of who and what they
represent is clear and consistent with the embodiment of what the leadership is, and is
respected for its deep and consistent ethic.

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In terms of the leadership development authority, one question will be how to move
away from a curriculum of systems management and leadership techniques (as utilized
in transactional and transformational leadership) to one which emphasizes
understanding the whole self as a leader. The most challenging aspect of this
development experience will be articulating a development experience where the
outcome is not behavioral (externally evaluated) to one where the outcome is the
construction of a centered energy (internally evaluated). Finally, theoreticians can also
be offered a question to ponder based on this study of the transcendental model.
Specifically, if the state of transcendental leadership can be attained by individuals, is
it possible (or likely) that given a sufficient threshold of top leaders in an organization
who attain this state is achieved, can an organization itself become a transcendental
organization. If yes, what would be the cultural, systems, and group dynamic
characteristics of such an organization?
However, any implications drawn from this research should be tempered with
caution. Extrapolation about the leadership capabilities of a given individual based on
the perceptions regarding one leaders religion-based spirituality is a process fraught
with potential hazards (Fernando and Nilakant, 2008). While spirituality can make our
lives more meaningful, promote connections, and generally make the world a better
place, more research and theoretical classification is needed to prevent spirituality from
becoming just another management fad. Particularly in regard to the spirituality
continuum, more empirical work is required in order to determine how and why it
impacts on organizational effectiveness.
The present study is based on one leaders perspective. Similar studies, on larger
samples of spiritually driven business leaders, are needed. These leaders could be
drawn from different cultural settings and faith systems, and could also include
non-religion based practitioners. Future research could compare the findings of this
study from other stakeholders perspectives such as non-executive employees,
shareholders, customers, and suppliers. Different assessment tools measure various
aspects of spirituality (Hinds, 2005). The influence of these elements on the attributes of
different leadership styles might provide helpful perspectives in future research aimed
at understanding the relationships between spirituality and leadership styles.

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Corresponding author
Mario Fernando can be contacted at: mariof@uow.edu.au

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