Transformational Leadership

Transformational leadership is one of the leadership theories that encourages and inspires
employees to innovate and develop new ways to grow and improve the path to a company's
future success. Therefore, the fundamental skills of a transformational leader include being able
to mobilize employees, inspire them and boost their morale. Transformational leader focus on
changing faulty systems and in grouping employees who work well together to increase
productivity and overall job satisfaction. They also focus on helping members of the group to
support one another and provide them with the support, guidance and inspiration they need to
work hard and perform well. Most transformational leaders are also charismatic leaders because
they are seen as heroic and as having a profound and extraordinary effect on their followers.

Transformational leadership approach has several effects on organizational behavior.

Increased Employee Motivation:

Transformational leaders inspire employees to exceed expectations, fostering higher levels of
motivation.
Enhanced Employee Performance:
Transformational leaders encourage creativity and innovation by promoting a supportive and
empowering work environment.
Improved Job Satisfaction:

Employees tend to experience higher job satisfaction due to the meaningfulness of their work
and the support provided by transformational leaders.

Positive Organizational Culture:

Transformational leaders contribute to the development of a positive organizational culture by
promoting values such as integrity, transparency, and ethical behavior.

Transactional Leadership

Transactional leadership is a leadership style where leaders rely on rewards and punishments to
achieve optimal job performance from their subordinates. This leadership style is based on an
exchange or transaction. The leader gives rewards to employees who perform their tasks to the
specified levels and punishments to employees who do not perform to those set standards. This
relationship between leaders and subordinates is based on theories that assume the employees are
not self-motivated and need structure, instruction and supervision to accomplish their jobs. The
theory also assumes that employees will perform their tasks as the transactional leader wants
them to do in exchange for the leader's offering something they want, such as pay.

Transactional leadership approach has several effects on organizational behavior.

Clear Expectations:
 Transactional leaders set clear expectations and guidelines for their followers, leading to
improved organizational behavior as employees understand what is expected from them.
Performance-Based Rewards:
 Transactional leaders often use performance-based rewards such as bonuses or
promotions to motivate employees. This can positively impact organizational behavior by
encouraging individuals to meet or exceed performance standards.
Punishment for Non-Compliance:
 Transactional leaders may employ corrective actions or punishments for employees who
fail to meet expectations. This can influence organizational behavior by creating a fear of
consequences, leading to compliance.
Task-Oriented Focus:
 Transactional leaders typically emphasize task accomplishment and efficiency. This
focus can shape organizational behavior by fostering a results-driven culture where
employees prioritize goal achievement.