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this practice is centered on the management process that involves controlling, organizing and short-

term planning. This style follows the principle of reward and punishment in which an act that is good
will merit a reward while the opposite can result to a disciplinary action. Still popular among
managers, this type of leadership includes clear structures that subordinates need to follow. It also
makes the followers responsible for their actions despite the instructions being fed or handed down
to them. Although this management or leadership style has its benefits, it does not come without
drawbacks.

Transactional leadership style


Here are some of the characteristics of transactional leaders:

Focused on short-term goals


Favor structured policies and procedures
Thrive on following rules and doing things correctly
Revel in efficiency
Very left-brained
Tend to be inflexible
Opposed to change

Howard Schultz

Howard Schultz was born in 1953 and grew up in the Brooklyn housing projects. He escaped the
projects with a football scholarship from Northern Michigan University. After college, he started
selling coffee makers to companies that included the Starbucks Coffee Tea and Spice Company,
which originally sold coffee beans rather than made-to-order drinks. He was hired by the company in
1982. In 1984, Schultz opened the first Starbucks coffeehouse based on the concept of an Italian
espresso bar.

Schultz wanted to grow Starbucks, but the owners wanted to stay small. Schultz left and opened his
own company in 1985. With the help of investors in 1987, he bought Starbucks and merged the two
companies. By 2006, Schultz was ranked 394 on Forbes magazines list of the 400 richest people in
America. As a transactional leader, he was responsible for the vision and implementation of the
Starbucks model.
Does not Encourage Creativity
Since this leadership style is rigid and not into bending principles and rules as well as listening to
suggestions from people under the management, this hampers creativity from members of the team
who might have sound and effective recommendations for the betterment of the organization. The
short-term goals and structured policies make it hard for transactional leaders to make changes and
be open to ideas from others that do not go with their existing goals. And since the company or
organization relies on a transactional leader, if this person leaves, it can affect the business because
most of the employees are have not been given the opportunity to become leaders but merely
followers.
3. Accountability of Employees
Another disadvantage of transactional leadership is its practice of providing the tasks to employees,
along with their policies and principles to be strictly followed.
4. Insensitivity
Since transactional leaders operate within rules that cannot be changed, managers with this style of
leadership do not really put the emotions of employees in consideration so long as tasks are done.
Employees are given clear and detailed instructions but they are also expected to perform these
tasks efficiently and on time.

TRANSFORMATIONAL LEADERSHIP

A successful transformational leader should be able to motivate others, set clear


goals, set high standards of performance and expectations, be fair and honest to
his work, appreciate his team for the work they put in, encourage the employees
to look at the greater good of the company and not only their self interests and
make people challenge themselves to be able to perform to the best of their
potential.
Transformational leadership is a style of leadership where the leader, along with
his/her team, is able to identify the challenges ahead, resources available and
build a long term vision for the team and is constantly engaging and involving the
employees to perform to the best of their abilities and grow professionally and
personally in the process.
One of the best descriptions of transformational leadership has been penned by Prof. Bernard Bass, a
renowned exponent of the idea. He says succinctly, "Leaders are truly transformational when they
increase awareness of what is right, good, important and beautiful, when they help to elevate followers'
needs for achievement and self-actualisation, when they foster in followers high moral maturity, and
when they move followers to go beyond their self-interests for the good of their group, organisation or
society."

In a similar vein avers Mr. Kumar Mangalam Birla, "Transformational


leadership to me means leadership in its highest form, such that it transcends the trappings of
hierarchies, authority, power, as well as, formal and informal systems of reward and recognition
and in the political sphere, votes."

In the words of our Chairman, "Quintessentially, transformational leadership is about taking people on
an all-together different plane. At the same time though, few great leaders follow a path deliberately
designed to make them popular. Nor do they promise easy times ahead. On the contrary, they ask for
sacrifice, for 'blood, toil, tears and sweat'. Nor do great leaders always score high on charisma, as we
normally think of it. And surprisingly, many leaders don't even have a platform that automatically
leverages them with the power and the authority. Rather, their influence derives from their idea, their
conviction, the example they set, and their extraordinary ability to mobilise people and make things
happen.

The first able to set out a bold vision.


A second skilled at marshalling the intellectual and emotional equity of their people. They work hard
to gain their trust and commitment because, no matter how appealing the vision, if others don't buy
into it, it won't get implemented.
There is a third lesson which relates to "individualised consideration". This implies caring for the
individual at the highest level, understanding and factoring in his or her unique circumstances, but at
the same time, being dispassionate and not letting it cloud one's sense of judgement.
The fourth lesson is the ability to mind the mind. Transformational leaders will not let the storms of
the heart cover the sun in the mind. They leave behind the regrets of the past, and will take forward the
lessons instead, into the future.
The stoke the spirit of intellectual courage to recognise good ideas and have the intellectual honesty to
give credit where it is due.
The sixth leadership lesson is about the imperative of institutionalisation, in order to ensure continuity
without disruption. They focus on building an institution, which is enduring and lasts far beyond the
leader and his individual contribution, and continues to thrive and to serve the larger interest of the
group.
And finally, the seventh lesson pertains to the leader's willingness to move away from his
conventional role and take on an entirely different mantle, maybe even hanging up his boots. Such an
act caps true leadership, representing as it does, wisdom and the grace to pass on the baton.
Concluding remarks
To conclude, I'd say that transformational leaders are few and far between. They emerge from the times
and circumstances and all too often, from the ashes strewn around them. Commanding leadership
and easy times rarely go together.