Transactional and Transformational Leadership

Transactional Leadership

Transactional leadership deals with motivating people to get the job done. The leader interacts with followers through transactions; the exchange between the leader and follower or employee is important. If the follower meets expectations, the leader rewards achievements. In other words, in return for putting forth efforts and for accomplishing tasks successfully, the follower gains rewards and gratifications. It is worth noting that transactional leadership includes two elements: the so-called contingent reward and management by exception. In the first, the leader exerts control over subordinates. The leader establishes the structure by setting expectations, determining procedures, and controlling and allocating the tasks. Rewards are given for individuals achieving high standards in their work.

The contingency rewards approach can be perceived as task oriented, because since it focuses on achieving challenging goals. In management by exception, the leader monitors and controls the realization of tasks performed by followers, intervening only if something goes wrong. Management by exception can be either passive or active. In active management by exception, the leader is constantly picking out mistakes and vigilantly monitoring performance of entrusted tasks. In this perspective, leading is based on the constant process of observation of the work of subordinates. In passive management by exception, the leader tries not to interfere with entrusted tasks and intervenes only when something goes wrong.

Types of transactional leaders can be categorized according to their behavioral attitudes using a psychoanalytical approach. Types include the narcissistic leader, the possessive leader, the seductive leader, and the prudent leader. The narcissistic leader exhibits a high level of autocracy and characteristically has features of megalomania, omnipotence, impatience, and conviction of one's own immunity and immortality. Another characteristic pattern of behavior resulting from a narcissistic nature is an instrumental attitude toward subordinates and events. Such leaders expect complete devotion and dedication from their subordinates because they are convinced that the world revolves around them. Narcissistic leadership is the only style within the typology of transactional leadership where the leader is not focused on relations between leaders and followers. The possessive leader perceives others as objects on which either love or hatred can be bestowed and desires to possess and appropriate subordinates without regard to their humanity. The seductive leader, oriented on emotional issues, desires to charm and seduce followers. Here the leader's framework of activities is based on the craving to be the follower's idol. Unfortunately, such leaders have a great propensity toward moodiness and mental instability. The so-called prudent leader is friendly, interested in subordinates' self-development, likely to be rational, and tends to act consciously to achieve goals. This is the only type of transactional leader to respect subordinates' decisions, opinions, and personalities. The strategy and activities characteristic of such a leader can establish an atmosphere of calm and harmony in an organization.

...