Introduction
Leadership is regarded as a vital aspect of management. This is due to the fact that leadership is a major factor that significantly contributes to a nation or organization's general wellbeing. Effective leadership has seen organizations such as Chrysler and General Electric become two of the most profitable organizations in the world. The two organizations under the leadership of Lee Iacocca and Jack Welch turned around from the brink of bankruptcy. The United State of America, France, Britain, and other great nations have gained prominence in the world as a result of effective leadership. The reason for the prominence is that things are made to happen by leaders of such nations and organizations.
A leader in this study is defined a person who exhibits influence on others while leadership is the practice of influencing others to achieve the desire purpose. A number of theories are used to give an explanation of leadership effectiveness. The two most common leadership theories are Transactional and Transformational leadership theories. Theories of charismatic and transformational leadership have been ascended since the late 1980s. Several theorists, for example, Bass, proposed the versions of transformational leadership.
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Even though most authors are in agreement that transformational and transactional leadership have differences in terms of practice and concept, a majority of them are of the opinion that transactional leadership is significantly augmented by transformational leadership and this results in higher levels of organizational, group or individual performance. Other authors consider transactional leadership as a subset of transformational leadership. The aim of this study is to apply literature evidence to carry out an extensive analysis of these styles of leadership. The weaknesses associated with the two styles as well as the possible area of modification are also addressed.
Transformational Leadership
A transformational leader is a person with the ability to inspire (transform) and stimulate his or her follower to attain extraordinary goals. The person recognizes the concerns and development needs of his or her followers. The perception of issues experienced by the followers is changed by these leaders who assist them to look into the challenges in a new way (Avolio & Yammarino, 2013). They are capable of arousing, inspiring and exciting followers to achieve group goals by putting out extra effort. The transformational leadership theory talks about leadership that involves the creation of positive change in the followers whereby the act according to the interests of the group as a whole and also take care of the needs of each other.
The concept of transformational leadership was introduced in 1978 by James Macgregor in his descriptive research involving political leaders. The use of this concept has however expanded to include management and organizational psychology and was further modified further B.M Bass and J.B Avalio (Avolio & Yammarino, 2013). Transformational leadership is important in enhancing motivation, performance, and morale of the followers by use of many mechanisms. For instance, relating the sense of identity of the followers to the organization’s projects. The followers are also inspired and made more interested hence it acts as a role model.
Transformational leadership understands the weaknesses and strengths of the followers, challenges them to take greater ownership of their work. Therefore, the followers can be aligned with tasks which improve their performance by the leader (Braun et al., 2013). Four components of the transformational style of leadership were identified by Warrilow. The leadership style has idealized influence and charisma. The degree to which this leader displays conviction, takes stands and behaves in ways that are admirable results in the followers identifying with the leader whom besides acting as a role model for the followers, has a clear set of values. Intellectual stimulation is the other element of transformational leadership. It represents the degree to which the assumptions in followers are challenged by the leader, who then stimulates or encourages their creativity (Avolio & Yammarino, 2013). He provides a framework for the followers to overcome the obstacles that are in the way of the mission and see how they connect to each other, the organization, the leader, and the goal.
The third component is inspirational motivation which is the degree to which the leader articulates vision which inspires and appeals creativity in his followers with optimism in respect to future objectives, and gives meaning to the present tasks. The last component is the individual and personal motivation (Braun et al., 2013). This involves the degree to which the needs of an individual follower is attended by the leader who also acts as a coach and mentor and gives appreciation and respect of the contributions of the individual to the team. This enhances and fulfills the needs of the individual member of the team for self-worth, self-fulfillment and therefore the followers are inspired to further growth and achievement.
Transformational Leadership Weaknesses
Seven major weaknesses related to transformational leadership were identified by Yulk in 2009. The first weakness is the ambiguity that underlies its process and influences. The interacting variables between transformational leadership and positive outcomes are not explained by this theory (Fasola, Adeyemi & Olowe, 2013). The theory would have been considered stronger in case there was clear identification of the essential influence processes, and their application in explaining how each behavior type impacts on the outcome and mediating variable.
The other weakness is the dynamic level of the theory on leadership processes is overemphasized. Explaining a direct influence of the leader over individual followers is the major focus, as opposed to the influence of the leader on organization processes or group. The relevant group-level processes involve how the work is appropriately organized to make use resources and personnel (Men & Stacks, 2013). Also included is the level of agreement among the members with regards to priorities and objectives, the cooperation and mutual trust among members. The group-level processes also involve the extent of identification of the members of the group, the confidence of the members in the group's capacity to achieve its objectives and the efficient use and procurement of resources and the external coordination with outsiders and other parts of the organization.
How these group processes are influenced by leaders is not well explained by the theories of transformational leadership. Insufficient attention is also received by the organizational processes in most transformational leadership theories. Leadership is taken as a major determinant of the effectiveness of an organization (Men & Stacks, 2013). However, most studies on transformational leadership seldom describe in detail the causal effects of the behavior of a leader on the organizational processes that eventually determine effectiveness. The theories of transformational leadership would benefit more from an elaborate description of the influence of a leader on organizational and group processes.
Third, the explanation for the theoretical grounds for differentiating among the behaviors does not seem to be clear. The high level of inter-correlation that is found in the transformational behaviors and the partially overlapping content raises doubts with regards to construct validity (Fasola, Adeyemi & Olowe, 2013). For instance, the operational definition of intellectual stimulation as causing a subordinate to question the traditional beliefs, having different ways of looking at problems, and to coming up with creative solutions to address the challenges (Braun et al., 2013). This content is not only diverse but ambiguous. What is actually done or said by the leader to impact on the subordinates’ behavior and cognitive processes is not given a clear description.
Fourthly, many transformational behaviors were omitted from the original theory of transformational leadership as was identified by Yulk. This has been shown to be relevant by empirical evidence. Some of them include empowering (providing discretion and significant voice to followers) developing (enhancing self-confidence and follower skills) and inspiring (infusing the work with meaning). Fifth is that there is an insufficiency in the specification of situational variables in Transformational leadership (Men & Stacks, 2013). The main assumption of the theory of transformational leadership is that in all situations, there is a similarity in the leadership process and outcomes.
There was a suggestion by Bass that both organization and followers benefit from transformational leadership regardless of the situation. It is shown by studies that situational factors influence the transformational leadership effects on work outcomes and followers (Fasola, Adeyemi & Olowe, 2013). Yulk further suggested situational variables that act as moderators between followership and transformational leadership. This included organic structure, as opposed to bureaucracy, the stability of the environment, and dominance of boundary-spanning units over the technical core and the entrepreneurial culture.
Sixth, any situation where transformational leadership is detrimental is not explicitly identified by the theory. Like other leadership theories, transformational leadership can exhibit detrimental effects on both the organization and followers (Fasola, Adeyemi & Olowe, 2013). There is a belief that transformational leadership is inclined towards the managers, owners and top management. Followers can be transformed to a very high level such that they work overtime and become stressed and burned out. The leaders can be exploited by individual leaders by creating emotional involvement of a high level when it is not required. Influencing of an organization’s members by different leaders who have competing versions can lead to increased role conflict and role ambiguity (Men & Stacks, 2013). Although motivation of the members can be improved by leaders that create strong identification with their subunit and its objectives, excessive competition can occur among different organization’s objectives. This can result in a decrease in the effectiveness of the organization. There is need to investigate the likelihood that this leadership style has negative results.
Research methods to detect such effects should also be designed. Lastly, transformational leadership like other leadership theory assumes the heroic leadership stereotype. It is assumed that effective performance by an organization, group or individual depending on the leadership by a person who has skills of finding the correct path and motivating other people to follow it (Odumeru & Ogbonna, 2013). In many versions of the theory of transformational leadership, it is basically assumed that the followers will be influenced by an effective leader to exert exceptional effort and make self-sacrifices. The influence flows to the leader from the follower and is therefore unidirectional. Finding a relation between performance and commitment of the subordinate and transformational leadership is interpreted to mean that the subordinates were influenced by the leaders to perform better. A description of shared leadership and reciprocal influence processes is of little interest.
Despite the numerous criticisms associated with transformational leadership, it has experienced a growth in popularity in recent times (Okçu, 2014). For example, research has shown that managers of different settings such as business and military concluded that transformational leaders were evaluated as higher performers, more effective and more promotable in comparison to their transactional counterparts (Braun et al., 2013). Also, there are more interpersonally sensitive. It is also shown by empirical evidence that a strong correlation exists between transformational leadership and work outcomes of the employee including increased level of productivity, goal achievement, lower turnover rates and well-being of the follower. Well-known transformational leaders include Walt Disney and Martin Luther King Jr.
Transactional Leadership Style
Also called managerial leadership, transactional leadership emphasizes the role of supervision, group and organization performance. Transactional leadership is a leadership style whereby the compliance of the followers of a leader is promoted through both rewards and punishment. In contrast to the transformational leadership, leaders making use of this leadership approach are considering keeping things the same and not looking to change the future (Men & Stacks, 2013). These leaders pay attention to the work of the followers as a way of identifying faults and deviations. This leadership type is comes in handy when projects have to be completed in a particular fashion, as well as in emergency and crisis situations.
Transactional leadership within the hierarchy of needs context developed by Maslow works at the basic levels of need satisfaction. The transactional leaders mainly emphasize on the lower levels of hierarchy. A model of exchange is used by the transactional leaders with rewards being given for positive outcomes and high quality work (Chaudhry & Javed, 2012). Conversely, people exhibiting this style of leadership also tend to punish negative outcomes and poor work to ensure that the problem is corrected. Stressing specific task performance is one way in which transactional leader focuses on the lower level needs. Transactional leaders show effectiveness in having particular tasks completed by individually supervising each portion.
Transactional leaders are not troubled with ideas of forward-thinking, but rather with processes. Contingent reward, also called contingent positive reinforcement is the focus of this type of leaders. Contingent rewards including praise, are granted when there is accomplishment of set goals ahead of time, on-time and the subordinates are kept working at different times at a good place throughout completion (Okçu, 2014). Contingent punishment, for example, suspensions, are given when the quantity or quality of performance falls to a level lower that the required standards of production or tasks and goals are not attained at all. Contingent punishment is often handed down on the basis of management-by-exception. In this case, the exception is something going wrong.
Within management-by-exertion, there are passive and active routes. The active management-by-exception the performance of each subordinate is continually looked into by the leader. The leader then makes corrections throughout the process by making changes to the subordinate’s work (Odumeru & Ogbonna, 2013). Passive management-by-exception leaders tend to wait for issues to occur before addressing the problems. Transactional leadership is a basis for transformational leadership that applies to higher-level needs because it is more managerial in style and applied to the lower level needs.
Qualities of Transactional Leadership
Transactional leadership involves applying punishment and rewards as a way of gaining compliance from the followers. The leaders act as extrinsic motivators who bring minimal compliance from followers. The show acceptance of the structure, culture, and goals of the particular organization. Transactional leaders are somehow directive and action-oriented (Fasola, Adeyemi & Olowe, 2013). The leaders negotiate to achieve the organization’s goals and express willingness to work within the existing systems of the organization. When it comes to solving problems, they are shown to think inside the box. The transactional type of leadership is mainly passive. The most affiliated behaviors involve developing the criteria for the maintenance of the status quo while rewarding followers.
The two factors that define transactional leadership include contingent rewards and management-by-exception. The status quo is maintained by management-by-exception. It intervenes when acceptable performance levels are not met by subordinates and consequently applies corrective action to improve performance (Men & Stacks, 2013). Contingent rewards recognize good performance and provide rewards for efforts. Charles de Gaulle and Joseph McCarthy are some of the famous people who demonstrated transactional type of leadership.
Comparison Between Transactional and Transformational Leadership
James Macgregor Burns gave a distinction between transformational and transactional leaders by explaining that transformational leaders are those raises consciousness concerning the importance of particular outcomes, and new methods aimed at attaining the outcomes. They focus on high order intrinsic needs in addition to engaging with followers (Okçu, 2014). The transactional leaders are passive. Transformational leaders on the other hand exchange tangible rewards for loyalty and work of the followers. They show active behaviors such as providing a sense of mission. The difference is considered under the following subheadings.
Steward Leadership or Basis Servant
Transformational leaders usually tend to exhibit idealized vision. They are the honorable and likable hero that are worth identifying and imitating (Odumeru & Ogbonna, 2013). They provide leadership by promoting change in the environment. In contrast, transactional leaders work on the giving rewards for job performance and have the basis of the exchange process. They strive to promote stability in the workplace.
Leadership development
Transformational leaders demonstrate more power. They energize and empower excellence in their followers. Therefore, they re-engineer their followers (Fasola, Adeyemi & Olowe, 2013). Transactional leaders on the other hand, design structure, reward system and control in their organization to improve efficiency and effectiveness.
Leading by example
Transformational leaders handle and meet the need of the individual hence are charismatic (Men & Stacks, 2013). Transactional leaders, however, have a different style of leadership by applying the right style when the time is necessary.
Proactive Change Agent
Transformational leaders strive to inspire the followers to help them transcend and change their selves for greater achievements (Odumeru & Ogbonna, 2013). Transactional leaders, on the other hand, are reactive to change at instances and reward their followers according to their performance.
Propagandist and Vision creator
Transformational leaders create a vision for the desired state of the future. Transactional leaders, in contrast, emphasize the goals and objectives of the company (Okçu, 2014). They ensure the required goals are attained.
The comparison can similarly be shown in tabular form as shown below
| Transactional Leadership | Transformational Leadership |
| Leadership is shown to be responsive | Leadership is viewed as proactive |
| The transactional leader works within the culture of the organization | The leader strives to change the culture of the organization by coming up with new ideas. |
| The objectives of the organization are achieved by the employees through the rewards and punishment that the leader sets | The organization’s objectives are achieved by the employees through their moral values and ideals |
| The employees are motivated by the leaders by appealing to their own self-interest. | The employees are motivated by the leaders to put the interest of the group first. |
| It exhibits management by exertion whereby the performance is improved by stressing corrective actions. The status quo is also maintained. | It focuses on individual consideration whereby there is a direction of each behavior to each individual to express consideration. There is also the aspect of intellectual stimulation since the leader solves problems by promoting innovating and creative ideas. |
Transactional and Transformational leadership styles can be compared with Theory X and Theory Y of Douglas McGregor. Transactional leadership has similar characteristics with Theory X whereby managers require to consequences and fear. In this theory and style, there is a motivation of the employees through incentives and punishment of negative behavior. There is similar concept between Transformational leadership and Theory Y (Okçu, 2014). This is because the idea that managers make an effort to encourage their workers is supported by both theory and style. The leaders believe their workers to be self-motivated, respectful and trusting hence assume the best of the employees. They help in supplying the followers with necessary tools to excel.
Conclusion
To conclude, the transformational leadership is viewed as seeking to transform. A transformational leader will be frustrated when the workers are happy and the organization does not require transforming. Under the right circumstances, however, they can be personally responsible for saving the whole company. Transactional leadership, on the other hand, seems insufficient in bringing out the maximum potential of leadership. Although the basis for more mature interactions is formed by this style of leadership, leaders should take care not to exclusively practice it since it can result in the creation of an environment permeated by politics, perks, power, and position.
References
Avolio, B. J., & Yammarino, F. J. (Eds.). (2013). Introduction to, and overview of, transformational and charismatic leadership. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. xxvii-xxxiii). Emerald Group Publishing Limited.
Braun, S., Peus, C., Weisweiler, S., & Frey, D. (2013). Transformational leadership, job satisfaction, and team performance: A multilevel mediation model of trust. The Leadership Quarterly , 24 (1), 270-283.
Chaudhry, A. Q., & Javed, H. (2012). Impact of transactional and laissez faire leadership style on motivation. International Journal of Business and Social Science , 3 (7).
Fasola, O. S., Adeyemi, M. A., & Olowe, F. T. (2013). Exploring the relationship between transformational, transactional leadership style and organizational commitment among Nigerian banks employees. International Journal of Academic Research in Economics and Management Sciences , 2 (6), 96.
Men, L. R., & Stacks, D. W. (2013). The impact of leadership style and employee empowerment on perceived organizational reputation. Journal of Communication Management , 17 (2), 171-192.
Odumeru, J. A., & Ogbonna, I. G. (2013). Transformational vs. transactional leadership theories: Evidence in literature. International Review of Management and Business Research , 2 (2), 355.
Okçu, V. (2014). Relation between Secondary School Administrators' Transformational and Transactional Leadership Style and Skills to Diversity Management in the School. Educational Sciences: Theory and Practice , 14 (6), 2162-2174.
