Transactional Leadership Vs

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Transactional Leadership Vs. Transformational Leadership

Posted by Babou on August 4, 2008

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Number of Leadership theories evolved on the basis of Trait, Behavioral, Transformational, Situational,

Charisma. Researchers and thinkers made efforts linking some of the theories across these leadership

islands. But each model has its own pros, cons, assumptions & limitations. Latest researches are

conducted on Situational & Transformational leadership styles. Leadership gurus presented new models

as variations to the already existing models. Max Weber, MacGregor Burns, Bernard M.Bass, Warren

Bennis & Nanus are few important researchers in the area of transformational leadership.

Understanding the difference between transactional and transformational leadership is vital in getting

the whole concept of transformational leadership theory.

As a starting point, let us review our everyday life. In general, a relationship between two people is

based on the level of exchange they have. Exchange need not be money or material; it can be anything.

The more exchange they have the more stronger the relation. Your manager expects more productivity

from you in order to give good rewards. In this way, if something is done to anyone based on the return

then that relation is called as µTransactional¶ type. In politics, leaders announces benefits in their agenda

in exchange to the vote from the citizens. In business, leaders announces rewards in turn to the

productivity. These relation is all about requirements, conditions and rewards (or punishment). Leaders

who show these kind of relationship are calledµTransactional Leaders¶ .

In life, at one point of time, things happen without expectation from other side. Say, mom¶s dedicated

service to her kid. Mom doesn¶t expect anything from the child and the service she provides in raising

the child is unconditional, dedicated, committed. Mom plays a major role in shaping up the kid¶s future

life. This type of relation is called as µTransformational¶. Leaders do exist in this world with these

behaviors. Transformational Leaders work toward a common goal with followers; put followers in front

and develop them; take followers¶ to next level; inspire followers to transcend their own self-interests in

achieving superior results.



Transactional Leader:

approaches followers with an eye to exchanging one thing for another « Burns

pursues a cost benefit, economic exchange to met subordinates current material and psychic needs in

return for ³contracted´ services rendered by the subordinate «. Bass

Transformational Leader:

³recognizes and exploits an existing need or demand of a potential follower« (and) looks for potential

motives in followers, seeks to satisfy higher needs, and engages the full person of the follower´ « Burns

The leader who recognizes the transactional needs in potential followers ³but tends to go further,

seeking to arouse and satisfy higher needs, to engage the full person of the follower « to a higher level

of need according to Maslow¶s hierarchy of needs´ « Bass

As exactly said by Bass ± ³the transactional leaders work within the organizational culture as it exists;

the transformational leader changes the organizational culture´.

Following table shows difference of transactional and transformation leadership[1].

Transactional Leadership Transformational Leadership

* Leaders are aware of the link between the effort

and reward

* Leadership is responsive and its basic

orientation is dealing with present issues

* Leaders rely on standard forms of inducement,

reward, punishment and sanction to control

followers

* Leaders motivate followers by setting goals and

promising rewards for desired performance

* Leadership depends on the leader¶s power to

reinforce subordinates for their successful

completion of the bargain.

* Leaders arouse emotions in their followers which

motivates them to act beyond the framework of whatmay be described as exchange relations

* Leadership is proactive and forms new expectations

in followers

* Leaders are distinguished by their capacity to

inspire and provide individualized consideration,

intellectual stimulation and idealized influence to

their followers

* Leaders create learning opportunities for their

followers and stimulate followers to solve problems

* Leaders possess good visioning, rhetorical andmanagement skills, to develop strong emotional

bonds with followers

* Leaders motivate followers to work for goals that

go beyond self-interest.



CHARISMATIC

Assumptions

Charm and grace are all that is needed to create followers.

Self-belief is a fundamental need of leaders.

People follow others that they personally admire.

Style

The Charismatic Leader gathers followers through dint of personality and charm, rather

than any form of external power or authority.

The searchlight of attention

It is interesting to watch a Charismatic Leader 'working the room' as they move fromperson to person. They pay much attention to the person they are talking to at any onemoment, making that person feel like they are, for that time, the most important person

in the world.

Charismatic Leaders pay a great deal of attention in scanning and reading theirenvironment, and are good at picking up the moods and concerns of both individualsand larger audiences. They then will hone their actions and words to suit the situation.

Pulling all of the stringsCharismatic Leaders use a wide range of methods to manage their image and, if theyare not naturally charismatic, may practice assiduously at developing their skills. They

may engender trust through visible self-sacrifice and taking personal risks in the nameof their beliefs. They will show great confidence in their followers. They are very

persuasive and make very effective use of body language as well as verbal language.

Deliberate charisma is played out in a theatrical sense, where the leader is 'playing tothe house' to create a desired effect. They also make effective use of storytelling,including the use of symbolism and metaphor.

Many politicians use a charismatic style, as they need to gather a large number of followers. If you want to increase your charisma, studying videos of their speeches and

the way they interact with others is a great source of learning. Religious leaders, too,may well use charisma, as do cult leaders.

Leading the team

Charismatic Leaders who are building a group, whether it is a political party, a cult or abusiness team, will often focus strongly on making the group very clear and distinct,

separating it from other groups. They will then build the image of the group, in

particular in the minds of their followers, as being far superior to all others.

The Charismatic Leader will typically attach themselves firmly to the identify of thegroup, such that to join the group is to become one with the leader. In doing so, theycreate an unchallengeable position for themselves.

Alternative views

The description above is purely based on charisma and takes into account varying moralpositions. Other descriptions tend to assume a more benevolent approach.

Conger & Kanungo (1998) describe five behavioral attributes of Charismatic Leadersthat indicate a more transformational viewpoint:

y Vision and articulation;

y Sensitivity to the environment;

y Sensitivity to member needs;

y Personal risk taking;

y Performing unconventional behaviour.



Musser (1987) notes that charismatic leaders seek to instil both commitment toideological goals and also devotion to themselves. The extent to which either of thesetwo goals is dominant depends on the underlying motivations and needs of the leader.

Discussion

The Charismatic Leader and the Transformational Leader can have many similarities, in

that the Transformational Leader may well be charismatic. Their main difference is in

their basic focus. Whereas the Transformational Leader has a basic focus of transforming the organization and, quite possibly, their followers, the Charismatic

Leader may not want to change anything.

Despite their charm and apparent concern, the Charismatic Leader may well besomewhat more concerned with themselves than anyone else. A typical experience withthem is that whilst you are talking with them, it is like being bathed in a warm and

pleasant glow, in which they are very convincing. Yet afterwards, ask the sunbeam of their attention is moved elsewhere, you may begin to question what they said (or even

whether they said anything of significance at all).

The values of the Charismatic Leader are highly significant. If they are well-intentionedtowards others, they can elevate and transform an entire company. If they are selfishand Machiavellian, they can create cults and effectively rape the minds (and potentially

the bodies) of the followers.

Their self-belief is so high, they can easily believe that they are infallible, and hencelead their followers into an abyss, even when they have received adequate warning from

others. The self-belief can also lead them into psychotic narcissism, where their self-absorption or need for admiration and worship can lead to their followers questioning

their leadership.

They may also be intolerant of challengers and their irreplaceability (intentional orotherwise) can mean that there are no successors when they leave.

Empowerment is a distinguishable behavioral characteristic of a charismatic leader from an ordinary manager

(Bass, 1985; Burke, 1986; Conger & Kanungo, 1998). By facilitating empowerment, a charismatic leader hel ps

followers feel powerful and capable (Tichy & DeVanna, 1986). As followers possess the enhanced feelings of

self-efficacy resulting from the empowerment of a charismatic leader, they start to become independent in the

initiation and continuation of work behavior and processes.

Charismatic leaders rely on several techniques to empower followers (Conger, 1989). First, they structure goals

and tasks so that followers can easily experience initial success before tackling successive gradual increments in

task complexity (Behling & McFillen, 1996; Burke, 1986). The experience of initial success enhances followers'

self-efficacy in later task performance (Bandura, 1986). As a result, followers are inspired to do more than they

thought they could do. Second, verbal persuasion and personal recognition by a charismatic leader help

followers gain confidence in their abilities, mobilize a greater sustained effort, and confirm their self -worth

(Conger, 1989; Spreitzer, 1995, 1996). Third, by demonstrating his/her own ability in performing some of the

same tasks that followers are supposed to do, a charismatic leader can serve as a role model. In experiencing

vicarious success through their charismatic leader, followers come to have confidence in their own efficacy in

task performance (Bandura, 1986).

Proposition 1c: Charismatic leaders empower their followers by enhancing their perceptions of self-efficacy and

their confidence in their ability to overcome obstacles, by using verbal persuasion and verbal recognition, and

by functioning as a role model.

VISIONARY



Visionary leaders are the builders of a new dawn, working with imagination, insight,and boldness. They present a challenge that calls forth the best in people and brings

them together around a shared sense of purpose. They work with the power of intentionality and alignment with a higher purpose. Their eyes are on the horizon, not

just on the near at hand. They are social innovators and change agents, seeing the big picture and thinking strategically.

There is a profound interconnectedness between the leader and the whole, and truevisionary leaders serve the good of the whole. They recognize that there is some truth

on both sides of most polarized issues in our society today. They search for solutionsthat transcend the usual adversarial approaches and address the causal level of

problems. They find a higher synthesis of the best of both sides of an issue andaddress the systemic root causes of problems to create real breakthroughs.

Personal Characteristics of Visionary Leaders

Visionary leaders are likely to have many of the following personal characteristics:

A deep sense of personal purpose[3]

coupled with an unshakable self-confidence[4]

in the ability to

realise this purpose.

A strong desire to take charge and make things happen, without being overly bossy[5]

.

A strong social presence[6]

and superb oral communication skills[7]

, often coupled with a reputation

of unconventional behaviour [8]

.

A sensitivity to how people are feeling[9]

and an ability to influence others at a one-on-one level

through relational power [10]

.

A willingness to take personal risks and make sacrifices in order to realise their vision[11]

.

In short, visionary leaders are confident, purpose driven people, who can connect well with others and

mobilise them into action. These characteristics emerge in different ways with different people as

illustrated by such notable figures as Bob Hawke, Sir Richard Branson, Mahatma Gandhi, Martin

Luther King, Jr. and Aung San Suu Kyi.

Behavioural Components of Visionary Leadership

Behavioural elements of transformational leadership common across various models include:

Being able to communicate a clear vision of the future along with the gap between that vision and

current realities, in compelling and contextually relevant ways[12]

.

Helping people to find purpose and meaning in their life through pursuit of this vision[13]

.

Overtly modeling the values and attitudes needed in your own behaviour [14]

.

Communicating clear and high standards regarding what you expect from those around you[15]

.

Empowering staff with the authority to create innovative ways of realising the vision, whilst helping

staff align their ideas with the broader organisational solutions[16]

.



Engaging others in strategic and creative thinking around the realisation of the vision[17]

.

Using a caring and coaching style of leadership in one-on-one settings, empathising with the

situation of staff whilst drawing forth creative solutions from the staff themselves[18]

.

Recognising staff achievements and desired behaviours in personally meaningful ways.[19]

Char ismatic Leader ship

Charismatic leadership occurs when follower s attribute a leaders behavior to extraordinary qualities

that they believe the leader possesses. The term charismatic is an ancient Greek word that means,

gifted - or more specifically gifted by the gods.

Charisma is neither a personal trait, nor a behavior - although both contribute charismatic leadership.

Rather, charisma emerges from the meaning that other s place on our behavior and our habitual

tendencies. It is follower perception that ultimately creates charismatic leadership.

It is not surprising then that being sensitive to the needs, frustrations, hopes and dreams of others is

the first behavioral tendency that is likely to lead followers to view a leader as charismatic. Vision

matters, but only when it emotionally resonates with the existing mental state of those being led. This

is why Martin Luther King's (Jr), I have a dr eam speech was able to capture the hearts and minds of

so many, while many of the corporate vision statements that adorn the walls of companies do not.

Leaders wanting to enhance their charismatic appeal, would do well to first see the world from the

eyes of those being led, and then frame a dual message that:

Shows you understand what life is like for them (senitivity to followers).

Offers hope of a more appealing future (vision).

It also appears that such emotionally connected behavior is more likely to be considered charismatic if

it is coupled with three other habitual actions:

Personal risk in pursuit of the vision.

Unconventional behavior.

Astute reading of organizational realities and constraints, with an ability to work within these.

Transactional Leadership Vs

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