Transactional and Transformational leadership

Transactional Leadership
 Transactional Leadership

It is the influence of a leader toward his subordinates using reward and

punishment as a form of motivational medium.

It is also known as managerial leadership.

Course number and name 3

Qualities of Transactional Leadership

Contingent reward and management-by-exception.

Reward and punishments

Course number and name 4

Qualities of Transactional Leadership

Directive and action-oriented.

Transactional leaders are willing to work within existing systems .

Course number and name 5

Advantages of Transactional Leadership

• Rewards and Incentives

• Passive
• Structure is Clear
• Short Term Goal
• Control Rewards

Course number and name 6

Disadvantages of a Transactional Leadership

• Transactional leaders tend to be more reactive to changes in market conditions.

• Transactional leadership also promotes a rigid hierarchy.

Course number and name 7

Disadvantages of a Transactional Leadership

• It motivates people only on the base level of Maslow’s systems of needs.

• This is poor when higher thinking skills level is needed to utilize.
• This limits the follower that wishes to engage with higher level of professional
environment.

Course number and name 8

Transformational Leadership
 Transformational Leadership

“broaden and elevate the interests of their employees, when they generate awareness
and acceptance of the purposes and the mission of the group, and when they stir their
employees to look beyond their own self-interest for the good of the group.”

Course number and name 10

Transformational Leadership

“ A form of leadership that requires leaders to engage with followers as ‘whole’ people,
rather than simply as an ‘employee’ for example. In effect, transformational leaders
emphasize the actualization of followers.”

Course number and name 11

 • Starts with creating a vision
Developing • Vision that is exciting and attract potential followers
Vision

• Constantly sell the vision and build a strong network of high potential
Selling the
Vision

• Have a fair idea about the direction to move and want followers to move in the same
direction
• Ready to accept failures
Road Map

• Transformation leaders remain in the fore-front during the action

• Always visible and stand up to be counted
Leading the
• Bolster and infect the followers with commitment and enthusiasm
charge

Course number and name 12

 COMPONENTS OF TRANSFORMATIONAL LEADERSHIP

Idealized Leadership: behave in ways that make them role models for their
followers.
Followers identify with these leaders and want to emulate them.
consider the needs of others over his or her own personal need.
He or she avoids using power for personal gain and in fact uses his or her power
only when needed
Demonstrate high standards of ethical and moral conduct

Course number and name 13

 COMPONENTS OF TRANSFORMATIONAL LEADERSHIP

Inspirational Motivation: They motivate and inspire those around them by providing
meaning and challenge to their followers’ work.
The leader gets followers involved in envisioning attractive future states.
Communicate expectations that followers want to meet and demonstrates
commitment to goals and the shared vision.

Course number and name 14

 COMPONENTS OF TRANSFORMATIONAL LEADERSHIP

Intellectual Stimulation. Stimulate their followers’ efforts to be innovative and

creative.
Followers are encouraged to try new approaches, and their ideas are not criticized
if they differ from the leader's ideas.

Course number and name 15

 COMPONENTS OF TRANSFORMATIONAL LEADERSHIP

Individualized Consideration: pay special attention to each individual's needs for

achievement and growth by acting as a coach or mentor
New learning opportunities are created along with a supportive climate
Interactions with followers are personalized (e.g., the leader remembers previous
conversations, is aware of individual concerns, and sees the individual as a whole
person rather than as just an employee).

Course number and name 16

 Advantages of transformational leaedership

• Vision
• Inspiration (Motivation)
• Lower Employee and Customer Turnover Costs (Retention)
• Superior Employee Performance
• Corporate Learning
• Innovations
• Develops future leaders
• People will work for leader even if monetary compensation is less

Course number and name 17

 Disadvantages of transformational leadership

1. Dependence on the Leader

2. Power and Manipulation
3. Lack of Check and Balance
4. Usage of Impression Management

Course number and name 18

 Transactional vs Transformational

Transactional Transformational
Leadership Leadership
Leadership is responsive
Leadership is proactive
and its basic orientation
and forms new
is dealing with present
expectations in followers
issues
Works to change the
Works within the
organizational culture by
organizational culture
implementing new ideas
Course number and name 19
 Transactional vs Transformational

Transactional Transformational
Leadership Leadership
Employees achieve
Employees achieve
objectives through
objectives through higher
rewards and punishments
ideals and moral values
set by leader
Motivates followers by Motivates followers by
appealing to their own encouraging them to put
self-interest group interests first
Course number and name 20
 Transactional vs Transformational

Transactional Transformational
Leadership Leadership
Management-by-exception:
Promote creative and
maintain the status quo;
innovative ideas to solve
stress correct options to
problems
improve performance
Leadership depends on the
Leaders create learning
leader’s power to reinforce
opportunities for their
subordinates for their
followers and stimulate
successful completion of the
followers to solve problems
bargain
Course number and name 21
 Full Range of Leadership Model

Course number and name 22