Transform ational&

Transactional
Leadership

D efi
n itions
Transactional
Leadership is responsive
Works within the organizational
culture
Employees achieve objectives
through rewards and punishments
set by leader
Motivates followers by appealing
to their own self-interest
Management-by-exception:
maintain the status quo; stress
correct actions to improve
performance.

VS.

Transformational
Leadership is proactive
Works to change the organizational
culture by implementing new ideas
Employees achieve objectives through
higher ideals and moral values
Motivates followers by encouraging them
to put group interests first
Individualized consideration: Each
behavior is directed to each
individual to express consideration
and support.
Intellectual stimulation: Promote
creative and innovative ideas to

Transform ational

D efi
n itions
transformational

A
leader is a person who stimulates and
inspires (transform) followers to achieve extraordinary outcomes
(Robbins and Coulter, 2007).
leadership that creates positive change in the followers whereby they
take care of each other's interests and act in the interests ofthe group
as a whole (Warrilow, 2012).

Transformational leadership focuses on increasing employee motivation

and engagement and attempts to link employees' sense of self with
organizational values. This leadership style emphasizes leading by
example, so followers can identify with the leader's vision and values.

Characteristics
Charisma

Inspiration

*Create an emotional
bond between leader
and group.

Lead by examples

Transformatio
nal
Intellectual Stimulation
* Challenge the group to
identify and solve problems (out
of the box)

individualized
consideration
* Develop appropriate
personal relationships
with members
* Treat members
differently but
equitably.

Leaders &
followers
raise one
another o
higher levels
of motivation
and morality

Appeal to
individuals to
better
themselves

Empowering
others to
achieve a
shared vision
both
transforms

Fosters
followers
inborn
desires for
higher
values,
morals,
humanitarian
ideals

Moves
individuals
beyond
transactions &
interpersonal
exchanges to
perform
beyond basic
expectations

Uses power to
instill a belief
followers can
do exceptional
things

Burns w as infl
uenced by Abraham M aslow s Theory of
H um an N eeds

Impacts (Transformational)

Advantages
Focus on the followers value, needs and morals
Develop future leaders
Enthusiastic work atmosphere
Innovations
Higher output and efficiency
Widely researched intuitive appeal

D isadvantages
Lacks conceptual clarity
Validity of MLQ is questionable
Totally depends on the ability of leader
Leaders might lack the required characteristics

Transactional

D efi
n itions
"Set goals, create explicit agreements regarding leaders
expectations regarding organizational members and how
they will be rewarded for their efforts and commitment, and
provide constructive feedback to keep everybody on task"
(Vera & Crossan, 2004, p.224).
transactional leadership promotes obedience with existing
organizational goals and performance expectations through
supervision and the use of rewards and punishments.
uses the exchange principle. In exchange for good and
satisfactory work within the agreed time, the manager gives
the employee a reward for their performance.

Characteristics
contingent
reward

Passive
managementby-exception

Transactional
Active
management by
exception

Laissez - faire

Leaders overemphasize detailed and short-term

goals, and standard rules/ procedures
Subordinates have to obey the orders of the
superior.
Subordinates are not self-motivated as they have
to be closely monitored and controlled to get the
work done from them.

Impacts (Transactional)

Leaders effective in guiding efficiency decisions

which are aimed at cutting costs and improving
productivity.
Leaders tend to be highly directive and action
oriented.
Followers relationships tends to be transitory and
not based on emotional bonds.

Impacts (Transactional)

Advantages of Transactional
Leadership
1. Rewards and Incentives
2. Structure is Clear
3. Short Term Goal
4. Control Rewards

Disadvantages of a
Transactional Leadership
Transactional leaders tend to be more
reactive to changes in market
conditions.
Transactional leadership also promotes
a rigid hierarchy.
Slow to respond to and take advantage.

Disadvantages of a
Transactional Leadership
This type of leadership is flawed since it
motivates people only on the base level.
This is poor when higher thinking skills
level is needed to utilize.
This also limits its follower that wishes to
engage with higher level of professional
environment.