Differentiate between Transformational and transactional leadership and evaluate how the two

concepts translate into practical work environment.

Transformational Leadership:

Transformational leadership is a type of leadership where the leader is found to work with subordinates
to identify the things that need to be changed and create a vision to guide that change through
inspiration and then implement the change in tandem with committed members of the group.

According to Yukl and Van Fleet (1992) theories related to leadership are a hybrid approach to
leadership (e.g traits, behavior, attributes and situations). Burns in 1978 introduced the difference
between transformational and transactional leadership while Bass in 1985 identified eight dimensions of
leadership behavior covering these two broad domains.

Dimensions of Transformational leadership behavior:

Idealized influence, those leaders who have high standards of ethical and moral conduct, they have high
personal regard and engender loyalty from followers.

Inspirational motivation, those leaders with a strong vision for the values and ideals on future based.
These leaders stimulate enthusiasm, build confidence and inspire followers using symbolic actions and
persuasive language.

Intellectual stimulation, leaders who challenge organizational norms, encourage divergent thinking, and
force followers to develop innovative strategies.

Individual consideration, this dimension refers to leader behaviors intend at apprehending any different
growth and developmental needs of followers as consulting them.

Transactional Leadership:

It is also called as managerial leadership, and their major focus are supervision, organization and
performance. Leadership style under this heading is that leaders promote compliance by employees
through both punishment and reward.

Dimensions of transactional leadership are:

Contingent reward, leadership behaviors focused on exchange of resources.

Management by exception-active, performances are monitored by taking corrective action as required.

Management by exception-passive, in it passive approach are been taken by the leaders, intervening
only if problem becomes serious.

Laissez-faire, it is thought as a non-leadership qualities or the avoidance of leadership responsibilities

and where the subordinates are allowed to make decisions.
Advantages and disadvantages of Transformational leadership:

Management positions are often given to transformational leaders in companies to enhance the spark.
They often have that charisma and inspire others to develop a vision and follow them.

Vision:

Most important trait of leadership is Vision. Transformational leadership quickly assess companys
current situation and formulate a vision for growth and development. For that purpose leaders
communicate their vision well to other leaders and all employees and bring them on board to discuss
that and also hear their vision terms of improvement. This advantage can help the company deal with
the bigger challenges as they can see the bigger picture now.

Inspiration:

It is the ability to motivate and inspire aligns in terms of the vision of transformational leaders. To
optimize performance in an organization, passion and enthusiasm are common traits of the
transformational leaders.

Detail challenges:

Though transformational leaders are known for the big picture, vision and inspiration, they sometimes
battle with detail orientation. This means other executives, assistants and other leadership team
members help maintain a transactional focus to help transformational leaders moving in a right
direction.

Truth and reality:

Transformational leaders may fall in the trap of relying too much on emotions and passion and fail to
look at truth and reality. Over dependence on enthusiasm can restrict the transformational leaders
willingness to cave into research, study and logical reasoning to hear or face the often harsh truth about
the companys position. To stabilize success in the company and to motivate change, transformational
leader should have enough courage to uncover the truth.

Advantages and disadvantages of Transactional leadership:

Employee motivation:

This leadership style is more effective in motivating employees to train members of the team towards
more productive and efficient. This is because of the two reasons. First, the incentives that are paid to
the employees when they work in double shifts or over-time and this motivates them to keep extra
efforts towards company. Second, this leadership technique also keeps an eye on the employees to
make them sure that they have to work hard and maintain the workforce and to ensure them that
mistakes committed and under performance would go against them and count as a demerit.

Achievable goals:
Because of the short term planning as a part of this leadership style, it is ensured by the management
that the visions of the company will be realized. As it plans the goals to be done in a short interval.
Apparently this is much easier to accomplish and less demoralizing for employees.

Productivity and cost:

Transactional leadership is effective in cutting down costs and increase in production. The reason is this
leadership style has short term goals that made it easy for employees to get things done by deadlines.
Also, rewards are promised for motivation in this type of leadership to the members of the team in
terms of incentives whether monetary or psychological.

Unyielding leadership:

Transactional leadership does not have a clear structure. It also has stiff rules and policies. Despite of
the incentives given to the members of the team and the short period of time, team is meant to work
under strict rules that are appointed for them. Going against these rules and policies may cause negative
impression and often results in termination or suspension.

Creativity not encouraged:

It is a rigid style of leadership and does not bend towards compromising rules and principles as well as
listening from people under management. It hampers creativity of the members of the team which
might have better and sound recommendations for the company.

Steve jobs- A true transformational leader:

After the death of Steve Jobs, it brings to an end the story of a man who rivalled the great talents of the
past. There are no of great inventors, entrepreneurs and many great corporate leaders but few people
have shown expertise in all these areas, even topped it off with an icing on the cake. This is what Jobs
sets in the modern world and a multi- talented person that sets the example of a great transformational
leader. He was proved to be a great leader because of his abilities to take on the challenges of being
successful in the world where there are millions of competitors and their capability to copy your ideas in
no time.

Steve Jobs did not graduate from any from any business school nor he did Mba, it says a lot about his
business opinions, he wasnt driven by money which also says a lot. Add to this is his invention and his
entrepreneurial skills- setting up Apple, and a pattern appears. He was focused, driven, innovative,
ahead of the game he constantly seek new ways of doing things. A typical geek that obviously would be
last person in the world with the great leadership qualities and is the good CEO of the worlds best
brand. He showed as a CEO that it is possible for an entrepreneur and inventor to be a great corporate
leader and proved that those who have the core leadership qualities or ability and who can create the
vision for future can inspire others to build something. He never compromised on perfection or taking
short cuts and he was right. He had the ability to inspire both audiences and individuals, employees and
investors, public and his competitors, something that very few corporate leaders can do. But the
greatest skill of his was that he focused on doing what public want.

George H.W. Bush- A true transactional leader:

Bush, who is the father of 43rd US President, also served his time as a Vice President, Congressman, and
the CIA Director. Bush received the foundation of his transactional style of leadership as a Veteran of
World War II based on the emphasis on the chain of command. During the attack on Pearl Harbor, he
was the youngest Navy aviator at that time. He got into oil business and then into politics after that war
which proves that youre never too old to gather the consequences of positive choices of past.

Literature review:

Theories on Transformational leadership are:

Robbins and Coulter in 2007 said that; a transformational leader stimulates and inspires followers to
achieve extraordinary efforts.

Warrilow in 2012 says that; leadership that creates positive change in the followers and take care of
each others interests and act as whole group.

Theories of Transactional leadership:

Hargis et al in 2001 said that; transactional leadership works at the basic level of need satisfaction and
transactional leaders focus on the hierarchy which is always low level.

Implementation:

Leadership development however is a systematic approach that expands the performance capability of
an individual in roles of leadership for a company. It is not achieved that easily and requires a series of
steps or through a journey and this journey is a process of leadership development.

Leadership which is effective involves a lot of management- managing the people that works in an
organization and align themselves according to the required strategy. Henry Mintzberg makes the case
that the cause of too many problems in an organization are the separation of leadership and
management roles. Leaders are responsible for formulating and communicating the strategy and also
manage the alignment of people for strategic implementations. Leaders should ensure that the people
working in the organization are understanding the strategy and implement accordingly.

References:

Bass, B. M. (1996).Anew paradigm of leadership: An inquiry into transformational leadership. Alexandria,

VA: U. S. Army Research Institute for the Behavioral and Social Sciences. Bass, B. M. (1985).

Leadership and performance beyond expectations. New York: Free Press.

Hargis, M. B., Wyatt, J.D., Piotrowski, C. (2001). Developing Leaders: Examining the Role of Transactional
and Transformational Leadership across Contexts Business. Organization Development Journal 29 (3):
5166
(Bass 1998) (Robbins and Coulter 2007) (Warrilow 2012) (Hargis, Wyatt and Piotrowski 2001)

(Howell and Avolio 1993) (Weihrich, Cannice and Koontz 2008) (Yukl 1999)
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Howell, J. M., and B Avolio. "Transformational leadership, transactional leadership, locus of control and
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Robbins, S. P., and M Coulter. Management (9th ed.). London: Prentice-Hal, 2007.

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