Transactional Leadership

• Definition: It is an exchange process in which

leader clarify employee roles, task requirements and then reward or punish followers based on their performance. This style can also be mentioned as telling style.

Assumptions of Transactional Leadership

• Employees are motivated by reward and punishment.

• The subordinate have to obey the orders of his supervisor.

• The followers/subordinates are not self motivated. They have to be closely monitored and controlled to get work done.

Implications

• The transactional leadership emphasize detailed and short-term goals, and standard rules and procedures.

• Do not make an effort to enhance followers’ creativity and generation of new ideas.

• This kind of leadership style may work well where organizational problems are simple and clearly defined .

Implications Cont..

• The transactional leaders tends to be highly directive and action oriented and their relationship with followers tends to be transitory and not based on emotional bonds.

• The Only transaction between leader and follower is the money which the follower receive for their compliance of effort.

Transformational Leadership

• Transformational Leadership is a leadership style where one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.

4 I's of Transformational Leadership

Idealized Influence Leader serves as an ideal role model for followers and is admired for this

Inspirational Motivation Transformational leaders have the ability to inspire and motivate followers

Individualized Consideration Transformational leaders demonstrate genuine concern for the needs and feelings

of followers which brings out the best efforts from each individual

Intellectual Stimulation Transformational leaders challenges followers to be innovative and creative

Transactional vs TransformationalLeadership

Categories Transactional TransformationalLeader’s source of power Rank, position Character, competence

Follower reaction Compliance Commitment

Time frame Short term Long term

Rewards Pay, promotion, etc. Pride, self-esteem, etc.

Supervision Important Less important

Counseling focus Evaluation Development

Where change occurs Follower behavior Follower attitude, values

Where “leadership” found Leader’s behavior Follower’s heart

Transactional Vs Transformational Leadership

Leaders search for adaptive solutions to engage hearts and minds in the change process

Leaders often use technical knowledge to determine the change process

Leaders possess good visioning, rhetorical and management skills, to develop strong emotional bonds with followers

Leadership depends on the leader’s power to reinforce subordinates for their successful completion of the bargain

Leaders create learning opportunities for their followers motivate and stimulate followers to solve problems

Leaders motivate followers by setting goals and promising rewards for desired performance

Leaders are distinguished by their capacity to inspire and provide individualized consideration, intellectual stimulation and idealized influence to their followers

Leaders rely on standard forms of inducement, reward, punishment and sanction to control followers

Leadership is proactive and forms new expectations in followers

Leadership is responsive and its basic orientation is dealing with present issues

Leaders arouse emotions in their followers which motivates them to act beyond the framework of what may be described as exchange relations

Leaders are aware of the link between the effort and reward

Transformational Leadership Transactional Leadership

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