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What is Transactional Leadership Style

Describe about transactional leadership and transformational leadership styles.

Leaders have the duty and obligation of inspiring their superiors and employees so that they will feel obligated to take action towards realising the goals of the organisation.  However, every leader has their own style of leading others but at the end of the day ensure that the goals are accomplished.When employees and staff comprehend what the changes that need to be done are and adhere to them, then that is a clear indication that the leader is using the right style of leadership. During times of crisis, the way a leader goes by his task will determine the type of response the followers have towards the crisis. Transactional leadership majorly puts its focus on connection between the leaders and their followers towards achieving the set goals while Transformational leadership focuses on the leader putting their whole concertation on what is important and what needs to be accomplished by their followers (Hameed, 2013).

Transactional leadership is a style in which leaders encourageobedience by team membersby means of usingrecompenses and penances. It mostly focuses on administration, organisation and teamenactment. Unlike transformational style of leadership, this approach does not consider changing the future but rather keeping things the way they are. The primary focus of such leaders is to keep track of and monitor the performance of followers to find any trace of deviations or mistakes (Abuorabl, 2012). It is most effective in cases of emergency or crisis because the leaders are expected to set the goals of the organisation, communicate what the followers’ expectation are and stipulate on how the followers will be rewarded for their efforts.

This style of leadership is mostly operational in companies that have grown past the frenzied phase of growth. Just like Bill Gates the CEO of Microsoft company who used the transactional style of leadership where he used to visit teams that were working on the new projects and asked them hard and tough questions. When they answered his questions correctly, then he would be satisfied and will know that they are heading to the right direction towards achieving the set goals. Today, Bill Gates is one of the richest people in the world, aided by the transactional leadership style.

It institutes and regulates the practices that will make the organisation reach the maturity stage by putting emphasis on the goals, production of tasks and increase of efficiency. These type of leaders put their central concentration on improving the productivity of the already established procedures and customs and following the rules that exist than implementing changes to the organisation of the company. They use an exchange model where rewards are given for good performance and positive progress in followers (Hartley, 2010).

Examples of Transactional Leadership Style

In times of crisis and emergency, transactional leaders can execute punishment for any justified poor performance in employees or negative results until the crisis is brought under control. They manage each sector or tasks individually to make sure that it is completed (Benington, 2010). What they focus on contingent reward is given when the goals set are accomplished successfully, and contingent penalization is given when the performance quality is below the standards. With transactional leadership being more managerial in style, it acts as the foundation for the transformational leadership style that applies on the higher needs level rather than lower needs like transactional leadership.

A transactional leader operatesby creating detailed structures that clarify what is anticipated of the followers and the recompenses they get for adhering to the rules and regulations; the punishment part is not usually stated out, but the followers are conscious of it and know that the formal systems of discipline exist.  When a follower is allocated a specific task, they are fully responsible for everything, whether they are capable of performing it or not and whether the resources for executing it are available or not (Ivey, 2008).

Transformational is a leadership style by which the organisational manager or the overall leader works with the juniors to ascertain any change that needs to be implemented, generate a vision to chaperon through inspiration and put forth change in line with dedicated team members. This type of leadership style serves the purpose of enhancing the confidence of followers together with their job performance and motivation to execute their various duties. Transformational leaders manage to do all the above by connecting the followers’ feeling of identity and sense of character to a mission and the shared distinctiveness of the company (Keel, 2007).

Transformational leaders have the aspiration, resolution, and expertise to execute the necessary changes and recognise the basics of transformational leadership. With this, they will accomplish the degree of change needed in any dynamic environment and handle crisis critically. In their book, Leadership and Organizational Commitment: Transactional And Transformational Leadership Vs. Organizational Commitment Sabir, Anwar and Hameed said that the rarest resource in the world today is the leadership talent that can reform organisations recurrently to win in the world of the future generation. Sabir et.al. (2013). An organisation to be transformed faster and prepare it for a future success needs to have skilled transformational leaders. An organisation’s future depend on how many transformational leaders it has, it can be one or all of them. They will be very substantial in cases of any changes and crisis management.

Benefits and Limitations of Transactional Leadership Style

An example of a CEO who used the transformational leadership style and was successful throughout is Marissa Mayer, the CEO of Yahoo company. She joined the company of Google and was an employee before becoming the CEO of Yahoo. She had to make tough decisions that later on cost her but kept on pushing alongside her employees whom she inspired all the way. Despite the losses that Yahoo at one time incurred, her influence and charisma saw her through solving the crisis. The critics from the competitors did not have any impact on her goals for the company, the cooperative and loyal employees were with her all the way.

Transformational leaders act as the role models of their followers for them to get inspired and raise their interest in ensuring the well-being of the organisation. The staff will respect a leader who possesses the qualities of a good leader, however, if the leader does not have the qualities, then he or she will not be considered as a role model by anyone. A transformational leader will challenge the followers to take considerable responsibility for their work and give it their devotion, he or she will know the strengths and weaknesses of followers and with this, will be able to assign the followers with tasks that boost their performance and fit their abilities and skills (Abuorabl, 2012).

These leaders hold positive expectations for their followers and believe that each of the followers can do to their level best. Because of this, the followers getmotivated,endowed and inspired to surpass their normal levels of enactment cultivating them to become loyal and high performers. With their full loyalty and participation, even in times of crisis or change, it will be very easy to handle issues and bring back the order and therefore the continuation of an organisation’s development and success. According to the various studies carried out, it has become evident that transformational leadership styles are associatedwith progressive aftermaths in comparison to other styles of leadership including transactional leadership style (Bertocci, 2009). Charisma, one of the qualities a transformational leader gets from the ability to motivate and inspire followers, is a variable most powerfullyconnected to leader efficiency. Other works indicate that transformational leadership is relatedclearly with worker outcomes plusobligation, cooperation, clarity of task, and welfare (Coppola, 2011).

A good example is that of Nelson Mandela who used the transformational leadership style during the time when he was working with other leaders to abolish apartheid in South Africa. His recurring emphasis for forgiveness contributed towards the eradication of racial separation in South Africa because of the influence he had on people, until today, he is the role model of so many people, old and young altogether because of his transformational leadership qualities.

What is Transformational Leadership Style

In contradiction to transformational leadership, transactional leadership styles concentrate on the use of awards and penalties to achieve assent from followers. Transformational leaders look towards altering the future to motivate followers and achieve goals, while transactional leaders pursue to maintain the status quo, not aiming for progress. Studies have shown transformational leadership practices traverse to higher satisfaction with the leader among followers and better leader efficiency, while transactional applications result in higher follower job satisfaction and leader job performance (Shumate, 2011).

Transformational leadership and transactional leadership are the two management styles that are usually associated the most. Scholars have distinguished the two styles and explained that transactional leader is leaders who exchange touchable rewards for the loyalty and work of followers. Transformational leaders are those who participate with followers, put emphasis on higher order key requirements, and rise awareness concerning the importance of explicit outcomes and new ways whereby those results might be attained (Keel, 2007). Transactional leaders tend to be more inactive as transformational managers establish active behaviours that comprise of providing a sense of duty.

Transactional leadership is a powerful motivator whereby there are tangible rewards that have proven to be reliable motivation tool. Most followers or employees need a job to pay their bills and other requirements and would do things faster and effectively just to be rewarded, including implementing changes in times of crisis. Especially when short-term results are needed fast, like in crisis management, for instance providing extra payment for the sales persons to meet a surge in holiday demand or proposing a vacation time to a team of employees working on a project if they finish it by a specific deadline are operational styles to solving instantaneous financial and organisational problems (Zumitzavan, 2015).

While the transformational style of leadership may yield more long-lasting results, it does not, however, giveprecisedirections as to who should accomplish what in which manner and how. On the other hand, with transactional style, there is almost no room for misinterpretations as each party knows exactly what their responsibilities are. It is a simple style and will cost low, and that is the reason it will be useful in implementing changes and managing a crisis in an organisation (Michie, 2015). Most leaders can perform it because it does not require one to possess personal traits like charisma and inspiration nor does it need training. Its primary focus is achieving the goals set at the end of the day.

References

Abuorabl, T. (2012). The Impact of Transformational And Transactional Leadership Characteristics On Motivation, Job Satisfaction And Trust: Jordanian universities.

Top of Form

Bertocci, D. I. (2009). Leadership in Organizations: There is a difference between leaders and managers. Lanham, Md: University Press of America.

Hartley, J., & Benington, J. (2010). Leadership for Healthcare. Bristol: Policy Press.

Horsford, S. D. (2010). New Perspectives in Educational Leadership: Exploring social, political, and community contexts and meaning. New York: Peter Lang.

Ivey, G. (2008). Transformational and active transactional leadership: Manifestation, effects, and followers' expectations across hierarchical levels in the Canadian military. Ottawa: Library and Archives Canada = Bibliothèqueet Archives Canada.

Keel, J. M. (2007). The Relationship between Leadership Style, Work-Family Interface, and Parenting Style in Police Officers.

Landy, F. J., & Conte, J. M. (2010). Work In The 21st Century: An introduction to industrial and organizational psychology. Malden, Mass: Wiley-Blackwell.

Ledlow, G. R., & Coppola, M. N. (2011). Leadership for Health Professionals: Theory, skills, and applications. Sudbury, Mass: Jones and Bartlett.

Ramos, O. (2007). A Leadership Perspective for Understanding Police Suicide: An analysis based on the suicide attitude questionnaire. Boca Raton, Fla: Dissertation.com.

Sabir, M. S., Anwar, N., & Hameed, R. M. (2013). Leadership and Organizational Commitment: Transactional and Transformational Leadership Versus Organizational Commitment: A Test On Uk Manufacturing Industry. Saarbrücken: LAP LAMBERT Academic Publishing.

Shumate, R. L. (2011). Transformational Versus Transactional Leadership: Which perceived leadership style has the stronger relationship between teacher efficacy and student achievement?.

Zumitzavan, V., & Michie, J. (2015). Personal Knowledge Management, Leadership Styles, And Organisational Performance: A case study of the healthcare industry in Thailand.

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