TRANSACTIONAL VS. TRANSFORMATIONAL LEADERSHIP

Transactional Leadership vs. Transformational Leadership

Compare and contrast any two theories of leadership

Transactional Leadership vs. Transformational Leadership

Introduction

Number of Leadership theories evolved on the basis of Trait, Behavioral, Transformational, Situational, and Charisma. Researchers and thinkers made efforts linking some of the theories across these leadership islands. But each model has its own pros, cons, assumptions & limitations. Latest researches are conducted on Situational & Transformational leadership styles. Leadership gurus presented new models as variations to the already existing models. Max Weber, MacGregor Burns, Bernard M.Bass, Warren Bennis & Nanus are few important researchers in the area of transformational leadership.

Understanding the difference between transactional and transformational leadership is vital in getting the whole concept of transformational leadership theory.

Discussion

As a starting point, let us review our everyday life. In general, a relationship between two people is based on the level of exchange they have. Exchange need not be money or material; it can be anything. The more exchange they have the stronger the relation. Your manager expects more productivity from you in order to give good rewards. In this way, if something is done to anyone based on the return then that relation is called as 'Transactional' type. In politics, leaders announce benefits in their agenda in exchange to the vote from the citizens.  In business, leaders announce rewards in turn to the productivity. This relation is all about requirements, conditions and rewards (or punishment). Leaders who show this kind of relationship are called 'Transactional Leaders'. (Mink, 1992)

Assumptions of Transformational Leadership

People will follow a person who inspires them.

A person with vision and passion can achieve great things.

The way to get things done is by injecting enthusiasm and energy.

Assumptions of Transactional Leadership

People are motivated by reward and punishment.

Social systems work best with a clear chain of command.

When people have agreed to do a job, a part of the deal is that they cede all authority to their manager.

The prime purpose of a subordinate is to do what their manager tells them to do.

Style of Transformational Leadership

The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place. (Brown, 1994)

The early stage of Transactional Leadership is in negotiating the contract whereby the subordinate is given a salary and other benefits, and the company (and by implication the subordinate's manager) gets authority over the subordinate.

When the Transactional Leader allocates work to a subordinate, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure (just as they are rewarded for succeeding). (Brown,1994)

The transactional leader often uses management by exception, working on the principle that if something is operating to defined (and hence expected) performance then it does not need ...