Theory and Practice of Transactional-Transformational LeadershipTHEORY AND PRACTICE OF TRANSACTIONAL-TRANSFORMATIOAbstractThis essay details the different behaviors characterized by the contemporary transactional and transformational leadership models.
The specific behaviors of each model are reviewed and their corresponding relation to motivation of individuals and teams are assessed. Both leadership techniques are distinct however neither is mutually exclusive and a balance of both models is generally needed for the success of a business.THEORY AND PRACTICE OF TRANSACTIONAL-TRANSFORMATIOTheory and Practice of Transactional-Transformational Leadership Leadership and its various theories have been a topic of interest according to Robbins, DeCenzo and Coulter (2013) since people have been working in groups to accomplish common goals (p 310). Contemporary leadership theories include: leader-member exchange (LMX), transformational-transactional leadership, charismatic-visionary leadership and team leadership. This essay will assess the theory and practice of the transactional and transformational leadership models and how each relates to individuals, teams and their successes. Transactional LeadershipBusinessdictionary.
com (2013) defines transactional leadership as a “style of leadership that is based on the setting of clear objectives and goals for the followers as well as the use of either punishments or rewards in order to encourage compliance with these goals”. It is a model which uses a leader with a contingent reward system, rewarding his or her team/followers for desired performance. Transactional leaders lead and manage by exception, taking corrective action when goals are not met and/or do not generally intervene until a problem is serious or brought to their attention. The behaviors engaged in by transactional leaders, managing by exception (both actively and passively) and contingent reward systems can help team members/followers by clarifying expectations to achieve goals and rewards and avoiding failures or punishments.These techniques of leadership can help facilitate a team to achieve its desired outcomes and business goals. According to Ingram (2013), “Transactional leaders provide distinct advantages through their abilities to address small operational details quickly. Transactional leaders handle all the details that come together to build a strong reputation in the marketplace while keeping THEORY AND PRACTICE OF TRANSACTIONAL-TRANSFORMATIOemployees productive on the front line”. Although the method of reward and punishment may not sound overly-engaging in theory, it can be a very effective means of management.
The reward system can be incredibly powerful as a motivator when monetary or bonus based. Transformational LeadershipBusinessdictionary.com (2013) defines transformational leadership as a “style of leadership in which the leader identifies the needed change, creates a vision to guide the change through inspiration, and executes the change with the commitment of the members of the group”.
It is a model which uses a leader that serves as an outstanding role model for the team emphasizing important values and connecting those values with organizational goals. Transformational leaders lead with inspirational motivation, intellectual stimulation, new perspectives and individualized concern. It is not rare for a transactional leader to question old theories and assumptions. These techniques of leadership can stimulate a team towards creating new perspectives when confronted with challenges and can lead to innovation.The behaviors engaged in by transformational leaders typically enhance team members/followers to higher motivation and performance because the team members feel more confident in the leader and his or her abilities as well as their own.
Transformational leaders often are successful at motivating their teams to achieve and exceed goals, doing more than originally expected. Transformational or Transactional?Robbins et al. (2013) indicates that “transformational leadership develops from transactional leadership” (p 311). Although both theories of leadership have distinctly different behaviors, neither should be considered mutually exclusive. As referenced by Ingram (2013) “Both leadership styles are needed for guiding an organization to success”.Successful and THEORYAND PRACTICE OF TRANSACTIONAL-TRANSFORMATIOeffective leaders will make use of both leadership styles as they are best suited to different situations. Knowing which style to use and where is the challenge faced by most leaders.
For instance a transactional leadership style will be more effective on a minimum-wage employee where a monetary reward, such as a fifty dollar bonus is offered for a sales goal or a high customer evaluation score. The same type of reward offered to a sales manager earning a $50,000 annual salary would be much less effective because fifty dollars will most likely not be a huge motivator for this individual.The same sales manager would be more inclined to be motivated by a transformational leadership style where he or she can be engaged to perform through inspiration and personal values.
Whether choosing a transactional or transformational style a leader must always consider the team and understand how that team will best be motivated. Choosing the right style for the team will be essential for success.ReferencesBuisnessDictionary.com.
(2013). Retrieved from http://www.businessdictionary.com/definition/. Ingram, D. (2013). Transformational leadership vs.
transactional leadership definition. The Houston Chronicle. Retrieved from http://smallbusiness.
chron.com/transformational-leadership-vs-transactional-leadership-definition-13834.html. Robbins, S.P.
, DeCenzo, D.A. & Coulter, M. (2013). Fundamentals of management. Upper Saddle River, NJ: Prentice Hall.