Transactional Leadership Vs. Transformational Leadership

In today's world, leadership is playing an increasingly important role in our society. From emphasis among the academic community to foster leadership skills in students to programs that strive to develop leadership in the workplace, it is more critical than ever for each American to understand leasdership and its important role. Consequently, I have put together a brief analysis of leadership, focusing primarily on two types: transactional leadership and transformational leadership.

What is Leadership?

Essentially, "leadership is an interpersonal influence directed toward the achievement of a goal or goals" (Allen, 1998, A Definition of Leadership section). It is important to realize that just because an individual has authority within an organization, it does not mean he or she is necessarily a leader. Rather, only the managers, supervisors, etc. that learn to motivate those under them to achieve company goals without using that authority are true leaders (Allen, 1998). It must also be noted that not every leader uses the same thing to motivate employees.

Transactional Leadership

For example, transactional leadership sets up a series of rewards and punishments to motivate members of the organization. If these individuals adequately meet the leader's goals and expectations, they will be rewarded for their hard work (i.e., salary, bonus, or other incentive). On the other hand, if they fail or violate these goals and expectations, they may face punishment (i.e., demotion, termination of employment, etc.) (Straker, 2007a). Transactional leadership can be quite effective in many situations, such as managers offering a bonus to the first salesperson who reaches a number of sales. Examples of famous leaders that effectively employed transactional techniques include McCarthy and de Gaulle. In the end, though, the leader and employees must continue to share a common understanding of the importance of the leader's goals and expectations for transactional leadership to work. And because transactional leadership has a highly structured environment and a strong emphasis on managerial authority, this form of leadership has its limitations, particularly when it pertains to the creative expansion of the organization (Boje, 2000; Homrig, 2001).

Transformational Leadership

In contrast, transformational leaders (i.e., Moses and Kennedy) use completely different methods to motivate their followers (Boje, 2000). They use charisma and a shared vision to "inspire followers to transcend their own self-interest for the good of the organization" (Allen, 1998; Transformational Leadership section). The entire organization, as well as the employees and leader, can be transformed and improved through this form of leadership because the leader creates a powerful bond with his or her followers that supports confidence, dedication, and creative problem solving (Allen, 1998). Transformational leadership has proven to be highly effective in times of great difficulty or challenges (i.e., combat or extremely tight budgets). Transformational leaders constantly use their vision and passion to energize their followers enough to stay focused and determined during even the most trying circumstances and to guide them into a more promising future. Ultimately, this form of leadership also has its share of shortcomings. For instance, the constant energetic and passionate motivation of transformational leaders can prematurely drain employees if used improperly. Furthermore, not all situations call for such drastic changes within an organization (Homrig, 2001; Straker, 2007b). Consequently, the best leaders in history, such as Roosevelt and Lenin, recognized that strong leadership does not come in a single form. Instead, each form complements the other and each situation might call for a different approach (Boje, 2000).

References:

Allen, G. (1998). Leading. Retrieved July 25, 2008, from Dallas County Community College District Web site: http://ollie.dcccd.edu/mgmt1374/book_contents/4directing/leading/lead.htm
Boje, D. M. (2000, December 25). Transform into super leaders: Transformational leadership. Retrieved July 24, 2008, from New Mexico State University College of Business Web site: http://cbae.nmsu.edu/~dboje/teaching/338/transformational_leadership.htm

Homrig, M. A. (2001, December 21). Transformational leadership. Retrieved July 24, 2008, from Air University Web site: http://leadership.au.af.mil/documents/homrig.htm

Straker, D. (2007a). Transactional leadership. Retrieved July 24, 2008, from http://changingminds.org/disciplines/leadership/styles/transactional_leadership.htm

Straker, D. (2007b). Transformational leadership. Retrieved July 24, 2008, from http://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm