Introduction
Leadership is a fundamental part of social life and work. It is a process of directing a team to attain goals. Thus, a leader is needed when a team of individuals wishes to achieve a common objective. Leadership is also a key factor that facilitates the overall wellbeing of the organizations. Effective leadership plays an imperative role in the performance as well as the growth of all the organizations (Riaz, Haider, & Open, 2010). Ideally, the success of any organization in establishing high performing teams depends on the type of leaders it has. Various people exhibit leadership through a wide scope of skills and talents. Consequently, there are different styles of leadership used in the organizations. Leadership styles entail the way the leaders inspire the employees to do their job, the way programs, as well as plans, are implemented within the organizations, and how leaders provide direction to their organizations. Lester (1975) maintains that every person’s style of leadership has a significant bearing on how successfully an organization attains its objectives. The present paper delves into the transactional and transformational leadership styles. Specifically, the paper evaluates each of these leadership styles and comments on which may be superior.
Transactional leadership, which is also referred to as managerial leadership, is essentially a style of leadership that give emphasis to the transaction between the followers and their leaders. Hamilton (2010) describes it as the transactions between the leaders and their followers in an attempt to enhance the performance of the latter. As a result, this style of leadership is more concerned with upholding the ordinary flow of operations. In other words, the leaders utilizing the transactional leadership style keep the things the way they are. Consequently, the transactional leadership style sticks to the status quo. It is worth noting that the transactional leadership style can be more successful when applied by the front-line managers in supervising the minimum-wage workers. These managers are required to be task-oriented as well as result-oriented, and this explains why they are required to utilize the transactional leadership approach.
The two dimensions that define the transactional leadership style are the management-by-exception and contingent reward. Odumeru & Ogbonna (2013) affirm that the management-by-extension element maintains the existing state of affairs, intercedes when the followers fail to meet the set levels of performance and initiates the counteractive action to enhance the performance. For this reason, the management-by-extension dimension of transactional leadership defines if the transactional leaders act to resolve or prevent the issues as they occur. Pastor and Mayo (2006) describe this dimension as the behaviors of the leaders who regularly participate in corrective transactions with the subordinates. Consequently, the management-by-exception dimension describes the leaders who either actively monitor the errors and mistakes made by the subordinates or their deviation from the standards and corrects them or wait passively until the subordinates make errors and mistakes or deviates from the standards and corrects them.
The contingent reward, as Odumeru & Ogbonna (2013) further affirm, acknowledges good performance and offers the rewards for effort. Thus, this element defines the degree to which successful exchange and transaction are set up between the subordinates and the leader. According to Pastor and Mayo (2006), the contingent reward dimension of transactional leadership are those relationship aspects in which the transactional leader make the goals clear, mentions the anticipated accomplishments and behaviors, and rewards the followers for the anticipated performance levels. Consequently, this dimension suggests that the transactional leader makes clear the targets to the followers and rewards them when they attain the anticipated goals. According to Kurland, Peretz, & Hertz-Lazarowitz (2010), contingent reward entails the leaders behaviors centered on clarifying task and role requirements as well as giving the subordinates psychological or material rewards.
The transactional leaders promote the submission of their subordinates through the use of punishments and rewards (Odumeru & Ogbonna, 2013). These leaders use different types of incentives to inspire the workforces to do their best. They also punish the employees when they find deviations and faults in their work. The transactional leadership style as Nikezić, Purić, & Purić (2012) assert is based on the supposition that best systems of rewards as well as benefits motivate the employees. In essence, this style of leadership applies a practice of management, which concentrates on the way the subordinates carry out their tasks. Transactional leaders are described as passive. The preservation of the status quo, as well as the creation of the criteria for rewarding the subordinates, are the main behaviors related to this leadership style (Odumeru & Ogbonna, 2013). In essence, the transactional leaders wait passively until the followers commit errors/mistakes or deviate from the standards, and correct them. In other words, the transactional leadership style is passive because the leaders wait to intervene when the subordinates fail to meet the standards.
One of the benefits of transactional leadership is that it contributes to the increase in the productivity of the organization. As already elucidated, the transactional leadership style works on a system of rewards and incentives. The transactional leaders give their subordinates rewards for attaining the organizational goals. The employees work hard to be rewarded and, as a result, increase the productivity of their organizations. The transactional leaders also punish those employees who deviate from the standards or make errors and mistakes. Consequently, this style of leadership facilitates the production of high-quality products. The transactional leaders work with the under-performing employees and help them improve their efficiency. As a result, this ultimately results in the increase in the organization’s productivity.
The transactional leadership is also a clear leadership structure. In other words, this style of leadership clearly defines the expectations and responsibilities of both the subordinates and leaders. The employees working in the organizations that utilize this leadership approach benefit from a perfect and structured leadership system. They understand what is required of them. They perform their duties as required because they know that the failure to do so might lead to punishments. Besides, the employees understand that they will be rewarded when they complete the tasks as expected. Consequently, they work hard to produce the best results and, as a result, increase the competitiveness of their organizations. In essence, the transactional leadership structure facilitates the success of the organization by ensuring that the employees do what is required of them.
The transactional leadership style also increases the efficiency of both the employees and the organization. The transactional leaders aim at guiding the employees to the successful completion of the tasks. These leaders endeavor to improve the efficiency of their subordinates as well as that of the organizations. They reward those employees who produce quality results and in so doing facilitate the improvement in their efficiency. Besides, they work with those employees who perform below the expectations and help them improve on their efficiency. The employees on their part work hard so as to avoid the consequences of not producing the expected results. As a result, this results in the overall improvement in the efficiency of the organization.
However, transactional leadership style is criticized due to some weaknesses. One of these weaknesses is that this style of leadership is flawed. It motivates the employees merely on the base level. In other words, the rewards and punishments only motivate on the lower levels of subordinates’ development and thought. Besides, this leadership style creates a work environment that is stressful (Rowold & Schlotz, 2009). The punishments make the employees fear the repercussions of failing to produce the required outcomes. They do not enjoy working for their organizations and, as a result, fail to develop their skills, leading to the reduction in their creativity.
The transactional leadership style also discourages high-quality works within the organization. In essence, this style of leadership concentrates on the external motivations of punishment and reward. As a result, the high-performing workers tend to be self-motivated instead of externally motivated. In essence, this discourages the employees from thinking outside the box. The organization, thus, does not get high-quality work. The subordinates only work hard to please their leaders but not to increase the competitiveness of their organizations. The transactional leadership model is not suitable for the organizations that concentrate on channeling the innovative and creative potential of their personnel.
Transformational leadership centers on raising the followers’ engagement and motivation. According to Bass (1991), transformational leadership takes place when the leaders raise and widen the interests of their subordinates. Thus, this style of leadership grows out of the notion that individuals will follow a leader who motivates as well as inspires them. The transformational leader motivates the followers to be efficient and effective by connecting their sense of self to the organization’s collective identity and mission. There are three components of transformational leadership. They include developing the vision, selling it, and establishing relationships with the followers. In particular, a transformational leader inspires and motivates the followers by establishing an appealing vision, selling it, and concentrating on creating healthy relationships with the subordinates as a coach and mentor. It is vital to note that transformational leadership style produces a positive and valuable change in the subordinates with the final goal of transforming them into leaders.
In the organizations, transformational leadership concentrates on motivating, team-building, and collaborating with the workforces at various levels to achieve change for the better. The four elements of transformational leadership are inspirational motivation, individualized consideration, idealized influence, and intellectual stimulation. All these elements combine to make the leaders transformational figures (McCleskey, 2014). The first element of transformational leadership, inspirational motivation, is the extent to which the transformational leader articulates a vision, which is both alluring and inspiring to the subordinates. Inspirational motivation entails the behavior to both inspire and motivate the subordinates by giving them a challenge as well as a common meaning (McCleskey, 2014). Specifically, the transformational leader motivates the followers and creates the enthusiasm. Besides, the leader communicates optimism regarding the upcoming goals and gives significance to the task on the way. Inspirational motivation is, thus, characterized by optimism and enthusiasm. The subordinates are required to have a robust sense of purpose so as to be inspired and motivated.
The second element of transformational leadership, individualized consideration, entails the leader acting as a mentor or coach so as to help the subordinates attain their full potential. In other words, individualized consideration is the extent to which the transformational leaders listen to the needs and concerns of their subordinates, perform the roles of a coach or mentor, and attend to all the needs and concerns of their juniors. In this case, the transformational leaders provide their followers with a helpful climate as well as learning opportunities. Besides, these leaders are required to challenge the followers, keep communication open, and give the subordinates the support they need.
The other element of transformational leadership, idealized influence, shows whether the transactional leaders hold the followers’ trust, appeal to their visions and hopes, and demonstrate dedication to them (Xiaoxia & Jing, 2006). Specifically, this element encompasses two different aspects of the subordinate relationship as McCleskey (2014) reports. For one, the leaders influence their subordinates through their behaviors. Second, the subordinates attribute the transactional leaders with specific qualities, which they want to imitate. In both cases, the transactional leaders act as role models for their followers. In fact, the followers endeavor to be like their leaders. According to Kurland, Peretz, & Hertz-Lazarowitz (2010), the idealized influence is the leaders’ charismatic actions focused on the beliefs, a sense of mission, and values.
The last element of transformational leadership, intellectual stimulation, is the extent to which the transactional leader takes risks, challenges the assumptions, and solicits the ideas of their subordinates. In this case, the transactional leaders raise their subordinates’ efforts at innovation, thus, stimulating and promoting their creativity. Intellectual simulation calls for openness on the leaders (McCleskey, 2014). The subordinates’ self-efficiency is facilitated by their levels of confidence as well as the criticism from their leaders. As a result, the transformational leaders are required to be open when criticizing their followers. It is important to note that the leaders succeed in fostering as well as nurturing subordinates, who think autonomously when they are open to them.
There are different benefits associated with transformational leadership. First of all, this style of leadership improves the morale of the employees that, in turn, lead to the increase in efficiency of the organization. The transformational leaders motivate the subordinates to act as well as move towards the goals, thus, raising their morale. Besides, these leaders appeal to their employees’ dreams and hopes as well as encourage them to be creative. As a result, this enhances the morale of the employees since they feel cared for as well as valued. They appreciate the efforts made by their leaders through performing their duties industriously. Consequently, this facilitates the enhancement in the productivity of their organizations.
The other benefit that is associated with transformational leadership is the decline in the employee turnover costs. The transformation leaders know the way to retain the organizations’ workforces. In particular, these leaders fully engaged with the subordinates and strive to satisfy their needs. The staffs feel comfortable working for the organization and, thus, do not quit to go and search for other jobs. The transformational style of leadership decreases the costs of turnover by raising the employee engagement and motivation. The engaged and motivated personnel commit themselves fully to their organizations, therefore, reducing the rates of turnover.
Transformational leadership also helps the organization create an enthusiastic work environment as well as drive it with changes and innovations. The transformational leaders facilitate the employees’ self-motivation by soliciting their ideas and motivating them (Bloomer, 1999). These leaders motivate the employees to work hard for their goals, which surely go beyond their self-interest. Besides, the transformational leaders dedicate themselves to formulating forward-thinking visions and enlightening the workers about them. The employees follow these leaders because they demonstrate confidence in them. Both the transformational leaders and the employees work together to attain the common goals and objectives. As a consequence, this contributes to the increase in the organization’s output and efficiency. Besides, the working together of the leaders and subordinates drive the organization with innovations.
The other advantage of transformational leadership style is that it facilitates the growth of the organization. The transformational leaders are continuously involved with the development of their workers as well as the growth of their organizations. As inspirational leaders, transformational leaders spend time with their employees to make their jobs easier. The employees, in turn, feel respected and appreciated by their leaders and, in consequence, work hard to facilitate the growth of their organizations.
Nevertheless, transformational style of leadership is criticized due to some reasons. For one, this leadership style is said to assume subordinate motivation. It fails to incorporate the situational dynamics and, what is even more, assumes that the subordinates always desire to collaborate to realize a common goal. Secondly, the effectiveness of transformational leadership style depends on both the personality and values of the leader. It might be impractical for the individuals who lack charisma as well as inspiring communication skills. Moreover, the transformational leaders might abuse their power. It is worrying to note that transformational leadership is not used morally at all the times. What is more, transformational leadership facilitates the generation of ideas devoid of merit if the right acknowledging procedure is not put in place.
Furthermore, these leaders are inspiring as well as motivating. Unlike the transactional leaders, the transformational leaders endeavor to attain positive outcomes from the subordinates by way of keeping them devoted to the tasks, resulting in, an inner, high-order rewarding system. Also, the transformational leaders offer their subordinates guidance and lead them towards the anticipated state, that is, the attainment of the vision. As a result, the employees develop their capabilities and skills. However, this is not the case in the transactional leadership style. The transactional leaders are only interested in the subordinates’ results, not their growth. What is more, the transformational leaders develop robust emotional bonds with their subordinates since they possess better management and visioning skills compared to the transactional leaders. Thus, the transformational leadership style facilitates better working relationships between the employees and their leaders compared to the transactional style of leadership.
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