TRANSACTIONAL AND

TRANSFORMATIONAL
LEADERS
Flow
• Transactional Leadership

• Transformational Leadership

• Transformational v/s Charismatic leaders

• Transformational v/s Transactional leaders

• Conclusion

• References
 Transactional Leadership

• First described by Max Weber in 1947 and

then by Bernard Bass in 1981.

• Most often style used by the managers.

• Focuses on the basic management

process of controlling, organizing, and
short-term planning.
CHARACTERISTICS

• Involves motivating and directing followers primarily

through appealing to their own self-interest.

• The power of transactional leaders comes from their

formal authority and responsibility in the organization.

• The main goal of the follower is to obey the instructions

of the leader.

• The style can also be mentioned as a ‘telling style’

• Motivation through a system of
rewards and punishment.

• The exchange between leader and

follower takes place to achieve routine
performance goals.

• The transactional leaders tend to be

highly directive and action oriented and
their relationship with the followers
tends to be transitory and not based on
emotional bonds.
Dimensions of Exchanges

Active
Contingent
Management
Rewards
by Exception

Passive
Management Laissez-faire
by Exception
EVALUATION
PROS
• The transactional leaders are found to be
quite effective in guiding efficiency
decisions which are aimed at cutting
costs and improving productivity.

• This kind of a leadership style may work

well where the organizational problems
are simple and clearly defined
 CONS
• Overemphasis on detailed and short-term
goals, and standard rules and procedures.

• They do not make an effort to enhance

followers’ creativity and generation of new
ideas.

• Such leaders tend to not reward or ignore

ideas that do not fit with existing plans and
goals.

• The only ‘transaction’ between the leader and

the followers is the money which the followers
receive for their compliance and effort.
 Joseph McCarthy
American politician who served as
a Republican U.S. Senator from the state
of Wisconsin from 1947 until 1957.

• Punishing for deviation from the

rules
He had a ruthless style of accusing people
of being Soviet spies during the Cold War
• Rewarding followers
Those who brought him accused
communist infiltrators
• Promoting results among followers
• The term McCarthyism, coined in 1950 in
reference to McCarthy's practices, is still
used more generally in reference
to demagogic, reckless, and
unsubstantiated accusations.
 Charles de Gaulle
He founded the French Fifth Republic and also served
as its first President.

• Reward and punishment protocol

• Became the leader of the free French in a crisis

situation
TRANSFORMATIONAL
LEADERSHIP
Who are transformational
leaders?
• Inspire followers to transcend their own self-
interests

• Capable of having a profound and

extraordinary effect on followers.
Are You a Transformational
Leader?
• Multifactor Leadership Questionnaire
Bernard M. Bass & Bruce J. Avolio

• The Multifactor Leadership Questionnaire (MLQ—also known

as MLQ 5X short or the standard MLQ) measures a broad
range of leadership types.

• The MLQ identifies the characteristics of a transformational

leader and helps individuals discover how they measure up in
their own eyes and in the eyes of those with whom they work.

• Success can be measured through a retesting program to

track changes in leadership style. The program described in
the MLQ Trainer's Guide provides a solid base for leadership
training.
 Agree or Disagree

1. I would never require a follower to do something

that I wouldn't do myself.
2. My followers would say that they know what I
stand for.
3. Inspiring others has always come easy to me.
4. My followers have told me that my enthusiasm
and positive energy are infectious.
5. My followers would say that I am very attentive
to their needs and concerns.
6. Even though I could easily do a task myself, I
delegate it to expand my followers' skills.
7. Team creativity and innovation are the keys to
success.
8. I encourage my followers to question their most
basic way of thinking.
 MODEL OF
TRANSFORMATIONAL
LEADERSHIP
 ROLES OF A
TRANSFORMATIONAL
LEADER
Bonding

Consultation and participation

Collectivization and team work

Empowerment and support

Serving as a role model

Bringing in changes

Maintaining continuity

Being innovative
 How Transformational
Leadership Works?
Encourage followers to be more innovative and
creative.

Goals – charting a course for followers

Vision

Engenders commitment on the part of followers and

instill in them a greater sense of trust in the leader

Influence team performance through the mediating

effect of team potency.
 EVALUATION
• Supported in disparate occupations

• A research has found that teams produce better-

quality products under such leadership

• A review of 87 studies found that it was Related to

 motivation and satisfaction of followers
 higher performance and perceived effectiveness of
leaders.

• Is contingent leadership strictly a characteristic of

transactional leaders only?
 Abraham Lincoln
• Vision : Abraham’s vision was to find a new
nation – the Promised Land, one where his
descendents would live as a unified people
believing in monotheism, concern for the helpless,
and justice for all.

• Courage and confidence : With only 318

people, waged war with four powerful kings in
order to rescue his nephew Lot

• He cared about people and had a strong

sense of justice : The Bible relates that on one
hot day, Abraham was sitting at his tent’s entrance
and noticed three strangers. He ran towards them
and invited them to come to his home and "wash
their feet" and eat a "morsel of bread."

• Charisma : He was able to attract a following.

The Hittites respected him and referred to him as
a "prince of God"

• He dared to be different : His clan had all the

monotheists in a pagan society.
 Walt Disney
• A legend known for his imagination,
optimism, creation, and self-made
success in the American tradition.

• Passion of creating dreams and

bringing reality to his fantasies.

• High Emotional Intelligence.

• Courage to keep going on despite

setbacks

• He encouraged others to make their

dreams a reality.

• Confident enough in himself to

empower his subordinates and
delegate tasks to others
 A.G.Lafley
• He is the former Chairman of the
Board, President, and Chief Executive
Officer of Procter & Gamble.

• Brought flexibility and creativity to a

slow growing company.

• By forming and communicating a

clear vision and modeling that vision,
he has transformed the consumer
goods company.

• Recast his top management group to

be 50% non-American since most of
P&G’s business was outside the US.

• He shifted P&G’s focus from in-house

innovation by setting a goal that 50%
of new products be developed with
outside partners.
Can transformational
leadership be learned?
• Training can be done

• Organizations can enhance

transformational leadership by
developing sattva and reducing
tamas, and by reinforcing the vedic
worldview.
Transformational and Charismatic
Leadership
Transformational Leadership = Charismatic Leadership??

Charisma is a part of transformational leadership.

Transformational leadership is broader than charismatic
leadership.

A transformational
A charismatic leader
leader will want the
will influence the
follower to have the
follower to be like the
ability to question the
leader.
views of the leader also.

Measures of both types are almost equivalent.

Leadership Model
 TRANSACTIONAL V/S
TRANSFORMATIONAL LEADERSHIP

TRANSACTIONAL TRANSFORMATIONAL
• Leadership characterized by • Unites diverse members in pursuit
exchange that aids individual of higher goals.
interests.

• It is about motivating • It is about motivating

subordinates to make small subordinates to make large
changes. changes.

• Less effective in achieving higher • More effective in achieving higher

productivity, higher job productivity, higher job
satisfaction and lower employee satisfaction and lower employee
turnover rate turnover rate
 TRANSACTIONAL TRANSFORMATIONAL

• Works within the organizational • Work to change the organizational

culture culture by implementing new ideas

• Leadership is responsive • Leadership is proactive

• Its basic orientation is dealing • Forms new expectations in

with present issues. followers.

• Leaders motivate followers by • Leaders arouse emotions in their

setting goals and promising followers which motivates them to
rewards for desired act beyond the framework of what
performance. may be described as exchange
relations.
APPLICATION
• Different management styles are best suited to different
situations.
• When it comes to front-line supervisors of minimum-wage
employees, for example, a transactional leadership style can
be more effective.
• Shift supervisors at a fast food restaurant will be much more
effective if they are concerned with ensuring all of the various
stations run smoothly, rather than spending their time
thinking up better ways to serve hamburgers.
• On the other hand, CEOs or sales managers can be more
effective if they are transformational leaders.
• Executive managers need the ability to design and
communicate grand strategic missions, passing the missions
down to transactional leaders for implementation of the
details.
 CONCLUSION

• Transformational leadership builds on

top of transactional leadership and
produces levels of follower effort and
performance that go beyond what
would occur with a transactional
approach alone.

• The best leaders are transactional and

transformational.
References
• Organizational behavior by Robbins, Judge
and Sanghi (13th edition)

• http://smallbusiness.chron.com/transform
ational-leadership-vs-transactional-
leadership-definition-13834.html

• http://psychology.about.com/od/leadershi
p/a/transformational.htm
THANK YOU!