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Transformational vs Transactional

Leadership
By dlldixon | Studymode.com

Transformational versus Transactional Leadership


This document is intended to compare and contrasts Transformational and Transactional
Leadership and discusses how they are used in management of organizations by managers.
Before we can delve into the comparison or contrast, we first need to define what we mean by
each of these terms we are comparing and contrasting. Transformational Leadership Defined
This type of leadership can best be defined as a process in which "leaders and followers help
each other to advance to a higher level of morale and motivation". This style of leadership is
intended to create significant changes in the life of people and organizations. This leadership
style redesigns perceptions and values, and changes expectations and aspirations of
employees. Unlike in the transactional approach, it is not based on a "give and take"
relationship, but on the leader's personality, traits and ability to make a change through
example, articulation of an energizing vision and challenging goals. Transforming leaders are
idealized in the sense that they are a moral exemplar of working towards the benefit of the
team, organization and/or community. The extent, to which a leader is transformational, is
measured first, in terms of his influence on the followers. The followers of such a leader feel
trust, admiration, loyalty and respect for the leader and because of the qualities of the
transformational leader are willing to work harder than originally expected. These outcomes
occur because the transformational leader offers followers something more than just working for
self- gain; they provide followers with an inspiring mission and vision and give them an identity.
The leader transforms and motivates followers through his or her idealized influence or
(charisma), intellectual stimulation and individual consideration. In addition, this leader
encourages followers to come up with new and unique ways to challenge the status quo and to
alter the environment to support being successful Now 30 years of research and a number of
meta-analyses have shown that transformational and transactional leadership positively predicts
a wide variety of performance outcomes including individual, group and organizational level
variables. The full range of leadership introduces four elements of transformational leadership:
1. Individualized Consideration the degree to which the leader attends to each follower's
needs, acts as a mentor or coach to the follower and listens to the follower's concerns and
needs. The leader gives empathy and support, keeps communication open and places
challenges before the followers. This also encompasses the need for respect and celebrates the
individual contribution that each follower can make to the team. The followers have a will and
aspirations for self-development and have intrinsic motivation for their tasks. 1
2. Intellectual Stimulation the degree, to which the leader challenges assumptions, takes risks
and solicits followers' ideas. Leaders with this style stimulate and encourage creativity in their
followers. They nurture and develop people who think independently. For such a leader, learning
is a value and unexpected situations are seen as opportunities to learn. The followers ask
questions, think deeply about things and figure out better ways to execute their tasks. 3.
Inspirational Motivation the degree to which the leader articulates a vision that is appealing

and inspiring to followers. Leaders with inspirational motivation challenge followers with high
standards, communicate optimism about future goals, and provide meaning for the task at hand.
Followers need to have a strong sense of purpose if they are to be motivated to act. Purpose
and meaning provide the energy that drives a group forward. The visionary aspects of
leadership are supported by communication skills that make the vision understandable, precise,
powerful and engaging. The followers are willing to invest more effort in their tasks; they are
encouraged and optimistic about the future and believe in their abilities. 4. Idealized Influence
Provides a role model for high ethical behavior, instills pride, gains respect and trust.
Transactional Leadership Defined Also known as managerial leadership focuses on the role of
supervision, organization, and group performance; transactional leadership is a style of
leadership in which the leader promotes compliance of his followers through both rewards and
punishments. Unlike Transformational Leadership, leaders using the transactional approach are
not looking to change the future; they are looking to merely keep things the same. Leaders
using transactional leadership as a model pay attention to followers' work in order to find faults
and deviations. This type of leadership is effective in crisis and emergency situations, as well as
when projects need to be carried out in a specific fashion. Transactional leaders use reward and
punishments to gain compliance from their followers. They are extrinsic motivators that bring
minimal compliance from followers. They accept goals, structure, and the culture of the existing
organization. Transactional leaders tend to be directive and action-oriented. Transactional
leaders are willing to work within existing systems and negotiate to attain goals of the
organization. They tend to think inside the box when solving problems Transactional leadership
is primarily passive. The behaviors most associated with this type of leadership are establishing
the criteria for rewarding followers and maintaining the status quo. Within transactional
leadership, there are two factors, contingent reward and management-byexception. Contingent
reward provides rewards for effort and recognizes good performance. Management-byexception maintains the status quo, intervenes when subordinates do not meet acceptable
performance levels, and initiates corrective action to improve performance.
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Transactional vs. Transformational Leadership
Transactional and Transformational are the two modes of leadership that tend to be compared
the most. One writer distinguished between transactional leaders and transformational by
explaining that: transactional leader are leaders who exchange tangible rewards for the work
and loyalty of followers. Transformational leaders are leaders who engage with followers, focus
on higher order intrinsic needs, and raise consciousness about the significance of specific
outcomes and new ways in which those outcomes might be achieved. Transactional leaders
tend to be more passive as transformational leaders demonstrate active behaviors that include
providing a sense of mission. Transactional Leadership is responsive Works within the
organizational culture VS. Transformational Leadership is proactive Works to change the

organizational culture by implementing new ideas Employees achieve objectives through higher
ideals and moral values Motivates followers by encouraging them to put group interests first
Individualized consideration: Each behavior is directed to each individual to express
consideration and support. Intellectual stimulation: Promote creative and innovative ideas to
solve problems.
Employees achieve objectives through rewards and punishments set by leader Motivates
followers by appealing to their own self-interest Management-by-exception: maintain the status
quo; stress correct actions to
Management-by-exception: maintain the status quo; stress correct actions to improve
performance.
Both of these leadership styles can be seen in the activities of managers as these activities
relate to the employees they manage. The more managers interact with those they manage, the
more they know about their subordinates and the closer the bond between them become. In
transactional leadership, the parties involved in the relationship get rewarded for the returns
gained; for example, in politics, voters are promised that the agendas are actualized when they
elect him or her to office. This is an example of transactional leadership; it can also be applied in
business where the managers promise promotions to the staff as a result of the productivity of
their units. On the other hand, transformational leadership is not hooked to the performance of
the juniors; this is the typical relationship experienced in life where the one does not expect any
return for what they offer to the other party. A perfect example of this relation is a mother to her
child. Mothers do not need or more still expect anything from their children for the care they
extend to them. Mothers take care and protect their kids unconditionally, with great commitment,
and with total dedication. Even if the child does not appreciate the effort that the mother is
making she 3
does not stop caring for her child. This form of relation best describes transformational
leadership. This form of leadership is taken up by leaders focused in ensuring that their
followers are engaged to a similar goal as them and ensure that they take their followers to the
next level in order to achieve a superior result together. The two forms of leaderships have
notable characteristics; most of the transactional leaders are believed to be charismatic. While
on the other hand, transformational leaders are concerned about the gains for the whole group
as a block. The other difference between the two forms of leadership is that transformational
leaders are recognized by the inspiration they give to the individuals and the intellectual
stimulation they give to the followers. On the other hand, transactional leaders are focused on
setting up goals to their followers. Another contrast between the two groups is that a
transactional leader depends on the powers to reinforce their juniors to finish their assignment
successfully and meet their bargain. For a transformational leader, they are focused on

motivating the ability of their juniors to work to a certain goal as a group. Still yet another
difference is that transactional leaders are more concerned about personalized output of their
juniors while transformational leaders are visionary, rhetorical and have management skills that
are geared towards creating a strong emotional bond between the juniors. Concluding,
transformational leaders are focused on ensuring that there is an overall improvement in terms
of performance and output without basing emphasis on the returns gained from the relation.
Transactional leadership is based on conditions, if there are no returns from a relationship then
it is considered a failed assignment, the mode is materialistic and short sighted.
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