Transactional and Transformational Leadership

They do not possess these leader characteristics, nor are they able to develop strong emotional bonds with followers or inspire followers to do more than they thought they could. Instead, transactional leaders motivate followers by setting goals and promising rewards for desired performance. Therefore, this leaders negotiated and bargained over the means. O Transforming leaders employ larger “end values such as order, liberty, equality, justice, [and] community”. C Transactional leaders were like the bureaucrats, and charismatic heroic leaders were the transformation leaders.

D Believed that leadership could take one of wow formal: transactional leadership or transformational leadership. II] Maintained that power and leadership were two distinct entities. Questions to be Discussed: – What radical new form or fad of leadership is transactional and transformational leadership? What are the differences and similarities between transformational leadership and transactional leadership and which is the most effective? What are the attributes of the transformational and transactional leader? What are the strengths and weaknesses of transformational and transactional leadership? What conclusions can be drawn about the usefulness of transformational and transactional leadership? TRANSACTIONAL LEADERSHIP What is Transactional Leadership? “Do as I say and you will get a raise” “Meet this Quota or you will get fired” Mutual Dependence between Leader and Follower. Exchange of rewards by the leader for successful task performance by the followers. Results in marginal improvement in the quantity and quality of performance.

Transactional Leadership Behavior Contingent Reward – reward or disciplining followers based on their performance. 2. Management by Exception (Passive) – not acting until problems occur 3. Management by Exception (Active) – monitoring followers for deviations from standards. 4. Laissez Fairer – avoidance or absence of leadership. Personal Characteristics Directive Dominating Action- Oriented Competent Responsible Accepts status quo Rigid Influence Approaches 1 .

Enjoyment – The leader attempts to convince the target of the enjoyment he or she will experience along with compliance. 2. Coercion – The leader uses or implies threats, frequent checking 3. Reward – The leader offers favors, benefits, or future rewards for compliance Influence Approaches (Cont’d) . Legitimate – The leader seeks to establish legitimacy of request by claiming the authority or the right to make it, or by verifying that it is consistent with organizational policies, rule or practices 5.

Reciprocity- The leader appeals based on feeling of debt (based on past favors) to the leader Key Directional Ideas of Transactional Leadership By Marcus S. Robinson 1 . Clear boundaries – having clearly defined boundaries between role and function, technical process, span of control, decision rights, and domains of influence allow transactional leaders to control and manage interactions to drive sired business results 2.

Order – for the transactional leader, everything has its own time, place, and usefulness to the process. By maintaining a highly ordered system of interaction, transactional leaders can drive predictably uniform outcomes systematically over time. Key Directional Ideas of Transactional Leadership (Cont’d) 3. Compliance – this aspect of transactional leadership focuses on the need to comply with mutually defined operational guidelines and methodologies in every aspect of the business system.

Deviation from procedure, methodology, and process guidelines are viewed as problems to be resolved and eliminated in order to drive predictable uniform outcomes. 4. Willfulness – striving to impose order and control on an otherwise chaotic and uncontrollable environment is a driving force behind transactional leadership Weaknesses of Transactional Leadership 1 . It can place too much emphasis on the “bottom line” and by its very nature is short-term oriented with the goal of simply maximizing efficiency and profits. 2.

The leader can pressure others to engage in unethical or amoral practices by offering strong rewards or punishments. 4. If utilized as the primary behavior by a leader it can lead to an environment earmarked by position, power, perks and politics. 5. Transactional leadership seeks to influence others by exchanging work for wages, but it does not build on the workers need for meaningful work or tap into their creativity. Application Level Works where the organizational problems are simple, clear and technical in nature. Usually associated with the military Examples: Hitler and Henry Ford TRANSFORMATIONAL LEADERSHIP DEFINITION It is a type of leadership that occurs when leaders ” broaden and elevate the interests of their employees, and when they generate awareness and acceptance f the purposes and the mission of the group, and when they stir their employees to look beyond their own self interest for the good of the group”( Bernard Bass, 1990) Components of Transformational Leadership Bass proposed a theory of transforming Leadership which argues that the leader transforms and motivates followers by: Generating greater awareness of the importance of the purpose of the organization and task outcomes. Inducing them to transcend their own self- interests for the sake of the organization or team Activating their higher-level needs.

The four factors or components to ramifications leadership-or four Xi’s are:- Charisma or idealized influence Inspirational Motivation Intellectual stimulation Individualized consideration. 1. Charisma or idealized influence Leaders display conviction, and specify the importance of having a strong sense of purpose. Stimulate employees to be more innovative-they themselves take personal risks and take stand on difficult issues- are not afraid to use unconventional (always ethical) methods in order to achieve a collective mission. Act as role models; they generate pride, loyalty, confidence, and alignment round a shared purpose. Talk about most important values and beliefs. Consider the moral and ethical consequences of a decision. Instill pride in employees for being associated with them. 2. Inspirational consideration Leaders articulate in appealing a vision of the future-they have a collective vision of the future, and most importantly manage to communicate it effectively to all employees. They are masters of communication skills ,using stories and symbols to communicate their vision. Talk optimistically and with enthusiasm. Provide encouragement and meaning for what needs to be done. Engender the trust and respect of their followers by doing the right thing rather than doing things right. 3.

Intellectual stimulation Leaders question old assumptions, traditions and beliefs. They stimulate in others new perspectives and ways of doing things. Encourage the expression of ideas and reason. Trust their subordinates and leave them space to breathe and grow ( as opposed to transactional leaders who emphasize corrective action,mutual exchanges and rewards only when performance expectations are met) Seek different perspectives when solving problems 4. Individualized consideration Leaders deal with others as individuals, considering their individual needs,abilities and aspirations. Spend time teaching and coaching,and advise nag. Listen attentively, and ready to further their development. Are compassionate, appreciative, and responsive to each employee and recognize and deliberate each employee’s achievements. Application: Becoming an effective transformational Leader is a process. Understanding the basics of transformational leadership and the four Xi’s can help a manager apply this approach. Characteristics of Transformational Leadership Rhetorical skills Image and trust building Personalized leadership Change agents – Their professional and personal image was to make a difference and transform the organization that they had assumed responsibility for by setting an example of how to initiate and implement change. Courageous – These are prudent risk takers, individuals who take a stand. Believe in people – They are powerful yet sensitive of other people, and ultimately they work toward the empowerment of others. Value-driven – Each transformational leader is able to articulate a set of core values and exhibited behavior that was quite congruent with their value positions. Characteristics of Transformational Leadership (Cont’d) Life long learners – A transformational leader is able to talk about mistakes he/ she has made without seeing them as failures but learning experiences. Have the ability to deal with complexity, ambiguity and uncertainty – A transformational leader is able to cope with and frame problems in a complex, changing world. Visionaries – The ability to dream, the ability to translate those dreams and images so that other people can share them Empowers followers to do what is best for the organization A strong role model with high values; Listens to all viewpoints to develop a spirit of cooperation Follower Characteristics of Transformational Leadership Identification with the Leader and the Vision Heightened Emotional Levels Willing Subordination to the Leader Feelings of Empowerment Situational Characteristics of Transformational Leadership Crises Task Interdependence Innovation More Receptive to Change Organizational Downsizing Personal Qualities Honesty Loyalty Fairness Justice Equality Human rights. Guidelines for Transformational Leadership by Yuk

Guidelines for Transformational Leadership by Yuk(Cont’d) Provide opportunities for early success and increase the confidence of an individual or team undertaking a challenging task. Celebrate successes and maintain an awareness of continuing progress, and recognize the contribution and accomplishments of individuals. Use dramatic, symbolic actions to emphasize key values in order to reinforce the vision by actions consistent with it. Lead by example through exemplary behavior in day-to-day interactions with subordinates: actions speak louder than words. Empower people to achieve he vision by delegating to individuals and teams authority for decisions about how to do the work.

Impact of Transformational Leadership Impact on other people – Successful transformational leaders are usually identified in terms of providing a strong vision and sense of mission, arousing strong emotions in followers and as sense of identification with the leader. Impact on organization – Works where the organizational problems are simple, clear and technical in nature. Examples of Transformational Leaders Sam Walton – Founder of Wall-Mart Martin Luther King Jar. Gandhi Moses in the Bible Nelson Mandela Strengths of Transformational Leadership Empowering others to take more initiative in their work, inspiring them to be more committed and building their self-confidence. Nurture an organizational culture by giving attention to priorities and concerns, maturely reacting to crisis situations, role modeling, wise allocation of rewards, and by defining the criteria for success.

Weakness of Transformational Leadership Critics argue that transformational leadership is unethical. They contend that its rhetoric may appeal to emotions rather than to reason. They contend that it lacks the checks and balances of democratic discourse and power distribution. Differences between Transactional & Transformational Leadership Similarity of Transactional Leadership & Transformational Leadership Both leadership styles relate to the legitimacy of authority and informed consent by followers. Recommendation Many leaders tend to lock into leadership style that is most comfortable for them. Effective leaders should adapt to fit varying situations and the personal needs and styles of others. Leaders should blend aspects of different leadership tales. The best leadership is a blend of both transactional and transformational leadership. Conclusion Transformational leadership is both desirable and necessary in business today, and will increasingly become more important. Organizations must be capable of fast, radical change and those that aspire to be the best must be able to lead change rather than just follow it… Can we have renaissance leaders? Can transformational and transactional behavior work successfully in a single leader? Yes without doubt and more so, where leaders can understand the necessity and actively produce both by means to the leadership team. At one point, Bass (1985) contends that transformational and transactional leadership are likely to be displayed by the same individual in different amounts and intensities However, those whom we call transformational do much more of the transformational than the transactional. In their defining moments, they are transformational, Those whom we label as transactional leaders display much more transactional leadership behavior. They are more likely to have attitudes, beliefs, and values more consistent with transactional leadership but hey still may be likely to be transformational at times. The best of leadership is both transformational and transactional. Transformational leadership augments the effectiveness of transactional leadership; it does not replace transactional leadership. (Walden, Bass, & Yammering, 1990).

Example of Both Transactional & Transformational Leader Abraham Lincoln He made many transactional executive decisions based on his own sense of timing and political expediency such as delaying the Emancipation Proclamation until after the first Union victory at Intimate in 1862. Even then, to hold the lave states of Delaware, Maryland, Kentucky and Missouri in the Union, the Proclamation only prohibited slavery in those 11 states that had seceded. As an authentic transformational leader, his sense of duty and what he personally thought was right, good and proper, propelled him into executive decisions unapproved by Congress and unsupported by public opinion. He suspended Habeas Corpus in 1862 when Washington, D. C. Was almost surrounded by rebel troops. Nevertheless, by his second inauguration in 1864, he was espousing a generous, forgiving peace settlement “with malice towards none. “