Compare and Contrast Transactional and Transformative Leadership Styles
For a long time, leadership has been defined differently by different scholars. One definition of leadership is that it is a way through which an individual influences others so that they can attain a certain goal via communication. There is also a definition that considers leadership as a behavior that an individual exhibits while directing activities in a group.
Other definitions attempt to capture the importance of leadership. Nevertheless, all leadership definitions indicate that the direction and productivity of any organization is determined by its leadership (Bass & Riggio, 2012). Evidently, leadership is affected in different ways in an organization (Pedraja-Rejas, Rodriguez-Ponce, Delgado-Almonte & Rodrigueze-Ponce, 2006).
Varying methods employ varying strategies which contribute in the realization of varying results for each method. In this paper, there are comparisons between transactional and transformational leadership systems. Differences and similarities between these leadership styles are also cited in this paper.
Definitions of Transactional and Transformational Leadership
Transactional leaders refer to leaders who use social exchange programs to lead. They use exchanges in leading others (Pedraja-Rejas, Rodriguez-Ponce, Delgado-Almonte & Rodriguez-Ponce, 2006). Among the leaders in this category are politicians who earn their votes by making promises to the people. In business, transactional leaders offer rewards to the employees so that they can get good productivity from them. They do not reward workers whose productivity in the organization is low.
On the other hand, transformational leaders assist followers to develop and to grow so that they can hold positions of leadership later. Their focus is on the growth of employees rather than on what the followers can give them (Bass & Avolio, 1993). To achieve their objectives, transformational leaders respond to the needs of their followers by assisting them in aligning personal goals with the organizational goals.
According to Bertocci (2009), transactional leadership is a leadership style that entails the identification of rewards by the leaders and their use in helping followers in achieving the desired results. Transactional leaders offer rewards in return for better performance from their followers. Bertocci (2009) goes ahead to define transformational leaders as the leaders who are capable of motivating followers so that they can achieve better results via internal rewards.
Basically, transformational leadership has is a leadership of a charismatic nature. This makes identifying with these leaders easy for the followers. Transformational leaders provide idealized influence so that followers can envy emulating them because they act as the role models of the other members of the team. Leaders are endowed by followers with extraordinary qualities such as determination and persistence. Thus, followers strive to attain abilities and characteristics that are similar to those of their leaders.
The emphasis of transformational leaders is the essence of having a collective mission. This implies that the aim of the employees is to fulfill the mission of the organization (Bass & Riggio, 2012). These leaders also communicate the capability of overcoming obstacles that prevent the achievement of the organizational mission. This establishes a positive sense of direction and hope among the members of the team. It also enhances the attainment of positive results for the team.
The idealized influence of the leaders enables them to take consistent risks despite these not being arbitrary to the objectives of the organization. Additionally, transformational leaders depict high ethical and moral standards because they put others’ interests before personal interests. They avoid pursuing personal interests at the expense of the followers (Bass & Riggio, 2012).
Inspirational motivation is another characteristic of transformational leaders. These leaders exhibit behaviors that inspire and motivate followers. They promote teamwork among their followers while ensuring enthusiasm and optimism. They attain this by enabling the followers to envision the promising and beautiful future of the organizations.
These leaders communicate clear expectations to followers while articulating compelling visions. They also demonstrate commitment to shared goals and visions of the organization. All these characteristics comprise the charismatic nature of transformational leadership.
Intellectual stimulation is the other major element of transformational leadership. Transformational leaders work in ways that stimulate followers so that they can be creative and innovative. They attain this by employing new approaches to old problems and questioning assumptions. They also reframe problems in the organization in order to impart intellectual stimulation in the workers.
Transformational leaders also ensure that public criticism of their followers for committed mistakes is avoided. Instead, they solicit innovative ideas while developing creative solutions. They involve followers in the vital processes of making decision and getting solutions to problems (Bass & Riggio, 2012). Followers’ intellect is also respected by the leaders. These leaders also avoid putting down followers with different ideas. Instead, they take different angles while looking at problems while incorporating all profitable ideas.
Individualized consideration is the final main characteristic of this leadership style. This entails paying attention to every follower. The focus of transformational leaders is on the achievement and growth of the followers by acting as personal mentors and coaches. This entails ensuring that every follower develops to attain higher level of their potential.
In transformational leadership, followers get opportunities that they need to learn new things in supportive climates. Individual differences are appreciated and supported by these leaders. Individuals are treated as per their preferences and needs (Pedraja-Rejas, Rodriguez-Ponce, Delgado-Almonte & Rodriguez-Ponce, 2006). Two-way communication is also encouraged by transactional leaders and followers can question the views of followers and leaders. In this leadership style, tasks are delegated as a means of facilitating the growth of followers and enhancing effective task performance.
Focusing on punishing or rewarding workers on the basis of their performance in the organization is the main difference between transactional leaders and transformational leaders. Contingent Reward (CR) refers to positive reward while Management-by-exception (MBE-P) or (MBE-A) refers to passive rewards. Contingent reward is also called constructive transaction and it is used as an effective tool in employees’ motivation that the transactional leaders use. In transactional leadership, the leader is required by contingent reward to enter a contractual agreement with followers.
Transactional leaders communicate to the followers what they should do and then promise them material or actual rewards once they complete the assignment successfully. This is different from transformational leadership in which motivation comes from the communication of the vision and future of an organization to the workers (Bass & Riggio, 2012).
Transactional leadership also uses Management by Exception (MBE) where they punish employees who fail to accomplish the set goals and to meet the set standards. Active MBE happens when leaders monitor the deviances of the set standards actively. All errors and mistakes are actively monitored to facilitate taking of appropriate corrective measures against the employees.
Followers are punished for mistakes and errors at the point of their failure. On the other hand, passive MBE entails waiting upon the mistakes passively (Spinelli, 2006). Workers are punished once the entire process is completed. This is different from transformational leadership because transformational leaders avoid criticizing or punishing followers for their errors or mistakes. Instead, they consider the mistakes as grounds for learning especially because followers are encouraged to be innovative by the leaders.
Transformational Vs. Transactional Leadership
The difference between transformational leaders and transactional leaders is that transformational leaders ensure a clear communication of the vision to all members. Therefore, the aim of followers is to attain a future state or vision (Spinelli, 2006). The leaders depict the organization in a successful and positive manner so that the employees can desire to work hard and bring it to the desired level. Therefore, transformational leaders might not provide material rewards to better-performing employees and this is different from transactional leadership.
However, transformational leadership has similarities with transactional leadership in cases where they offer contingent reward in form of a psychological reward. A transformation leader can operate with employees closely to provide contingent reward by praising them. This motivates the follower.
There are views that indicate that transformational leaders results in more commitment and loyalty of the followers than transactional leaders. This is due to the fact that transformational leadership imparts a feeling of appreciation among the followers. The leaders mentor and coach the followers personally. In transformational leadership, followers become loyal to their leaders because they know that the aim of their leaders is to groom them so that they can take leadership positions.
This is explained properly from the beginning of the relationship and therefore followers have a vision of advancement. Followers are allowed to perform their duties without criticism from leaders. This enhances production among the followers. Followers are highly encouraged to be creative and innovative by transformational leaders. This brings new products and ideas to an organization.
In transactional leadership, workers do not have this motivation especially because they are punished for making mistakes. Consequently, this increases turnover in the organization. Less commitment and loyalty is reported in these organizations.
Transactional leaders are in most cases directive which is contrary to transformational leaders. This implies that their tolerance level for ambiguity is very low. They expect followers to follow the established standards as well as to accomplish the instructed roles. This limits followers to the instructions provided by the leaders (Spinelli, 2006). This is different from transformational leadership in which followers are expected to deviate from the set standards. As such, transformational leadership enhances creativity and innovation while allowing followers to prepare themselves so that they can take over leadership positions.
Unlike transactional leaders who are directive, transformational leaders tend to be more behavioral and they express deep concern about their followers (Albritton, 1993). In transformational leadership, followers are viewed in the entire perspective because the leaders are concerned about their subordinates’ wellbeing. Two-way communication is allowed and counseling services are provided. Followers contribute in the running of their organization.
The high persuasive and empathetic characteristic of transformational leader is also an expression of behavioral aspect. Leadership standards are easily compromised in the organization. Looser control is accepted where the employees are not required to strictly follow the established structure. On the other hand, transactional leaders are only concerned about the execution of tasks by the followers.
Interest period is the other difference between transformational and transactional leaders. The focus of transformational leaders is on the long term interests. They are determined to fulfill the long term vision of their organizations as well as the development of the followers on long term basis (Spinelli, 2006). For this reason, they try to develop their subordinates to full capacities in leadership so that they can become future leaders. On the other hand, transactional leaders focus on the short-term interest because they are interested in specific processes and roles while rewarding employees.
Transformational leaders are mostly charismatic which is different from transactional leaders. This objective is achieved by cultivating senses of pride, value and respect in the followers. Leaders strive to enable their followers to achieve their full potential. Contrary to this, transactional leaders are not charismatic especially when punishing their followers (Bryant, 2003). It should be noted that’s this affects leaders-followers relationships in some cases. It also kills the morale of the followers and thus, it lowers output while increasing turnover in a company.
Transformational leadership also differs from transformational leadership because it strives to improve the organization, individuals and groups by identifying performance and innovation improvement opportunities. The leaders are also risk takers who challenge the existing status while ensuring a work environment that encourage followers follow suit. They also encourage positivism at the workplace.
Transactional leaders lack this because they do not create positive environments for their followers. Contrary to it, they penalize workers and in most cases they have negative attitude when meting lofty penalties on workers (Spinelli, 2006).
Group performance is also encouraged by transformational leaders because they encourage the operation of groups as units. This facilitates the achievement of the vision of their organizations. Despite giving followers personal attention, they ensure that the vision is communicated to the entire group. They also ensure that each individual understands the role that they ought to play to enhance the fulfillment of the vision.
However, transactional leaders are different because they reward individuals rather than the group. In the setting of transactional leadership, the focus of individuals is not teamwork but personal achievement.
In transactional leadership, conflict is high. This is because the punished followers envy those who are rewarded. This establishes cartels and divisions in the organization while raising unhealthy competition. Transformational leadership on the other hand reduces conflicts because all employees are treated equally in the company. Conflict is also reduced because followers emulate leaders and the leaders respect personal differences of the people (Spinelli, 2006).
However, it should be noted that similar to transformational leaders, transactional leaders care about their subordinates. Perhaps, this is different to the insinuation of most people that transactional leaders refer to leaders who satisfy some needs using their subordinates.
According to Bertocci (2009), transactional leaders research on the desires and needs of their followers and how they would enhance the achievement of certain goals. They consider the esteems and self-concepts of individuals in determining the rewards to give and to satisfy their subordinates. This is similar to transformational leaders who consider the subordinates’ personal needs. Differences between followers are also respected and each follower treated as per their individual needs.
Both leadership styles are also similar because followers are shown how to accomplish the expected goals. According to Bertocci (2009), transactional leaders employ the path goal concept in showing their followers how to get the promised rewards. This indicates that a personal contact exists between leaders and subordinates more so before starting the working process (Spinelli, 2006). This is also the case for transformational leaders who act as mentors and coaches for the followers.
However, the proximity varies because in most cases transformational leaders act as friends and personal confidants of the followers. On the other hand, transactional leaders maintain a strictly official contact with followers. Transactional leaders step back only when the expected results are not realized. This is why it is known as Management-by-exception (Bryant, 2003).
Transactional leaders and transformational leaders are also similar in the sense that they reward subordinates’ performance. The focus of transformational leaders is not on punishing the subordinates who fail which is the case for transactional leaders. Instead, they focus on assisting such subordinates so that they can enhance their performances. They also assist them in eliminating or avoiding obstacles that keep them from achieving their goals (Spinelli, 2006).
In conclusion, transactional leadership and transformational leadership have a clear difference. The focus of transformational leadership is mainly on individualized consideration, idealized influence, intellectual stimulation and inspirational motivation (Goodrigdge, 2006). These are the factors that act as the basis of the leaders-followers relationship.
Transformational leaders depict personal concern for followers. They also assist them so that they can develop and grow to become better persons. These leaders also act as the role models of their followers. On the other hand, the focus of transactional leadership is on the management-by-exception (MBE) and Contingent Reward (CR) concepts. Transactional leaders communicate the organizational vision and then establish the terms to be followed in fulfilling it. Workers are rewarded for achieving the expected outcomes. When workers fail to deliver the expected results, they are punished.
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