Team Member

Transactional Leadership
Transactional leadership is built upon contingency — subordinates know they will receive a
reward for a job well done or chastisement for one not completed successfully. Transactional
leaders define their expectations transparently so all involved parties know what is required of
them. Transactional leadership depends upon followers accepting full responsibility for their
work.
Transactional leadership builds on the premise that organized action brings results. Among the
careers that transactional leaders are best suited are office managers, coaches, military leaders,
and entrepreneurs.
In this leadership style, the leader uses his authority and responsibility as his power as well as the
style has a formal approach. Prize and penalties are the two primary tools employed by the leader
to inspire his subordinates i.e. if an employee achieves the target within the stipulated time he is
given initiative for his work, whereas if the task is not completed within the required time, then
he will be penalised for the same.

Transformational Leadership
Transformational leadership, uses motivation and inspiration to encourage subordinates to
innovate and bring about change within their job functions. Transformational leadership thrives
in an environment that celebrates worker independence. Through this, workers gain autonomy
over the decisions relating to their responsibilities. Followers can become transformational
leaders themselves through training via mentorship.
Transformational leadership understands that ideas drive results. Among the careers that
transformational leaders excel are project managers, human resource managers, management
consultants, politicians, and businesspeople.
In transformational leadership, the leader acts as a role model and as a motivator too who offers
vision, excitement, encouragement, morale and satisfaction to the followers. The leader inspires
his people to increase their abilities and capabilities, build up self-confidence and promotes
innovation in the whole organisation.
The following are the major differences between transactional and transformational leadership:
1. Transactional Leadership is a type of leadership whereby rewards and punishment are
used as a basis for initiating the followers. Transformational Leadership is a leadership
style in which the leader uses his charisma and enthusiasm to influence his followers.
2. In transactional leadership leader, is lays stress on his relationship with followers.
Conversely, in transformational leadership leader lays stress on the values, beliefs and
needs of his followers.
 3. Transactional Leadership is reactive whereas Transformational Leadership is proactive.
4. Transactional Leadership is best for a settled environment, but Transformation is good
for the turbulent environment.
5. Transactional Leadership works for improving the present conditions of the organisation.
On the other hand, Transformational Leadership works for changing the present
conditions of the organisation.
6. Transactional Leadership is bureaucratic while Transformational Leadership is
charismatic.
7. In Transactional Leadership, there is only one leader in a group. In contrast to
transformational leadership, in which there can be more than one leader in a group.
8. Transactional Leadership is focussed towards planning and execution as compared to
transformational leadership which promoted innovation.
References
Ljubomir DRAKULEVSKI, Stojan DEBARLIEV, Aleksandra JANESKA-ILIEV, & Angelina TANEVA-
VESHOVSKA. (2017). A Story on Leadership Styles from Macedonian Companies: Components of
Transformational Vs. Transactional Leadership Influenced by Aspects of Emotionall
Intelligence. Ecoforum, (2). Retrieved from
http://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=edsdoj&AN=edsdoj.6489064f505
4498ba126e7735c6f0883

CARRISON, D. (2016). Transactional vs. transformational leadership. Industrial Management, 58(1), 6.

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