16 Transactional Leadership

Ross Paschall, Mitchell Large

The Transactional Leadership Theory is a very popular, and commonly used theory when trying to promote great leadership qualities. Essentially, this theory can be defined as, leaders or managers motivating the group to perform based off of punishments and incentives. This can be achieved by forming the right set of rewards and punishments that will persuade the group to perform at an exceptional level.

In the mid-20th century, Max Weber is considered to be the first to describe a rational-legal leadership, later to be known as Transactional Leadership Theory. Weber is most notably recognized for his bureaucratic leadership style. The concept of the bureaucratic leadership style basically focuses on the idea of believing in an organization’s objectives based off of rules, regulations, and certain positions held in an organization. In this case, an employee is likely to report to his direct superiors if there are any questions or concerns about anything. As the years went on, a scientist, James McGregor Burns, and researchers, Bernard M. Bass, Jane Howell, and Bruce Avolio, went on to advance Weber’s theory on Transactional Leadership.

 

The Transactional Leadership style also focuses on the idea of a management process that includes three basic concepts: organizing, controlling, and short-term planning.

  • Organizing for a leader might look something like making sure that the group or organization has a set plan, providing set meetings where the group or organization can meet to discuss goals and objectives, or really anything else that might be considered as some form of organizing.
  • Controlling as a leader would include giving the group or organization proper guidance or telling them what is or what is not acceptable.
  • Short-term planning for a leader might focus on goals that the organization should have for the near future, or guiding the group to make positive changes in a very quick manner.

 

Another important aspect of transactional leadership focuses on motivating and giving followers direction by appealing to their own self-interest. Since a leader is fundamentally the guide for a group, they are able to convince the followers to obey the instructions that are given to them; consider what this might look like in the workplace. If a manager knows what needs to be accomplished to make an organization more successful, they will guide their group in the right direction in order to achieve that. If a manager is successful at convincing his employees to put the organization first, they will be bound for success.

Transactional Leadership Theory allows both leaders and followers to accomplish many things. This theory allows “leaders to accomplish their performance objectives, complete required tasks, maintain the current organizational situation, motivate followers through contractual agreement, direct behavior of followers toward achievement of established goals, emphasize extrinsic rewards, avoid unnecessary risks, and focus on improving organizational efficiency” (McCleskey, 6). With that, it “allows followers to fulfill their own self-interest, minimize workplace anxiety, and concentrate on clear organizational objectives such as increased quality, customer service, reduced costs, and increased production (Sadeghi & Pihie, 2012)” (McCleskey, 6).

Learn more about situational, transformational, and transactional leadership and leadership development:

Situational, Transformational, and Transactional Leadership and Leadership Development

 

Transactional leadership is often times compared to transformational leadership. However, there are some key differences between the two. One of the biggest differences that stand out is the fact that transactional leaders are not necessarily trying to “change” how members of an organization might act. Instead, a transactional leader will try to “mold” these members with the hope of making them the greatest version of their self.

Transactional Leadership can definitely have its pros as a leadership theory, but it can definitely also have its cons. Sometimes, whether or not this leadership style is the best way to approach the organization, depends on the situation, the followers, the organization’s values, and the type of leader. With that being said, the pros outweigh the cons. The table below goes more into detail with some of the pros and cons of using the Transactional Leadership style:

 

 

PROS: CONS:
Easy to manage with a simple concept Does not consider others emotions or values
Pretty self-explanatory Possibly exploiting
Incentives given motivation to do well People might be motivated only by incentives, not to make the group better
Has been proven to be successful from scientific studies Could be intimidating under stressful situations
Consistent regardless of the situation Might not bring out the best in people, but could actually overwhelm them
When there is a time crunch, this method can be performed quickly Difficult to replace due to the group possibly relying on a few leaders

 

The link below describes Transactional Leadership a little more, as well as, comparing it to Transformational Leadership.

Transactional Leadership vs. Transformational Leadership

 

SOME IMPORTANT TERMS FROM THIS SECTION

Transactional Leadership – leaders or managers motivate the group to perform based off of punishments and incentives

Organizing – making sure that the group or organization has a set plan, providing set meetings where the group or organization can meet to discuss goals and objectives, or keeping track of everything neatly and in a timely manner.

Controlling – giving the group or organization proper guidance or telling them what is or what is not acceptable

Short-Term Planning – focus on goals that the organization should have for the near future, or guiding the group to make positive changes in a very quick manner

 

REFERENCES

Leadership Styles: Which Type of Leader Are You? (n.d.). Retrieved November 08, 2016, from http://www.youtube.com/watch?v=ddt_IGMMOrI

McCleskey, J. A. (2014). Situational, Transformational, and Transactional Leadership and Leadership Development. Journal of Business Studies Quarterly, 5(4), 6-9.

Spahr, P. (2014, November 25). What is Transactional Leadership? How Structure Leads to Results. Retrieved November 8, 2016, from http://online.stu.edu/transactional-leadership/

Transactional Leadership Theories. (n.d.). Retrieved November 8, 2016, from http://www.leadership-central.com/transactional-leadership-theories.html#axzz4NSfwIGOg

Transactional Leadership Theory. (n.d.). Retrieved November 8, 2016, from https://managementstudyguide.com/transactional-leadership.htm