Transactional and Transformational LeadersAlthough current leadership theory emphasizes the distinction between transactional and transformational leadership, in fact, most leaders have a mixed profile of the full range of leadership styles. The best form of leadership is not only transformational or only transactional, but rather a combination of the two. However, in order to better understand each style’s pros and cons, they have to be discussed in terms of similarities and differences. This cross-analysis will reveal further inquiry topics. Most leaders and followers find themselves in transactional relations – leaders engage in an exchange process with followers: jobs for votes for example.
The leader rewards or punishes the follower on the basis of performance. The transforming leader is more effective, by looking for potential determination in followers, seeking to satisfy higher needs, and totally engaging the follower. The resulting relationship is mutually stimulating. (Goleman, D. 2000, pp. 78-90) This type of leadership has been considered to be superior, leading to higher efficiency. New systemic theories, however, show a slightly different perspective. Transactional leadership, on the other hand, involves extrinsic motivations. Followers are either positively motivated by praise and reward or they are negatively motivated through threats or disciplinary actions.
Performance is the only criteria taken into consideration in the case of transactional leadership. Everything is structured into activities, each characterized by a clear set of implicit or explicit rewards/punishments. Performance is monitored at all times. Management, in this case, can be either active, when followers’ mistakes are corrected during the process, preventively, or passive, in which case the managers wait for followers’ mistakes before taking corrective action. (Sarros, 2001, p383)Considering a complex adapting systems theory, these differences can be viewed from a different perspective.
New approaches on the subject state that human organizations are emergent systems of actions that transform themselves through social interaction. The systems’ leadership is an element of these organizations, a function of the whole (and not a person role) that provides for the system’s ability to co-evolve with its environment. Smith (1990, pp10-12) states that ‘the dissipative structure transformation can be viewed as a type of system evolution, one in which a whole-system change increases resilience and system functioning capacities within an environment’.
The dissipative change differs from evolution through adaptation and selection. It involves quick change. Both types of change are important at a certain moment in the development of the same system, just as both types of leadership are needed in diverse circumstances. Older management theories emphasize only the advantages of transformational leadership and disadvantages of transactional leadership, shedding a negative light on the latter. The paradigm of dissipative structure implies a change that takes place through the breakdown and rebuilding of a structural arrangement, within a turbulent environment. This aspect becomes a virtue of transactional leadership, as opposed to the transformational leadership which is based on continuous adaptation and evaluation.
(Keller, 1995, pp41-44) The complex adaptive systems perspective emphasizes the positive aspects of transactional leadership. There are seven conceptualizations of transformational leadership: articulating a vision of the future, encouraging group-oriented work, setting high expectations, challenging followers’ thinking, supporting follower’s individual needs and acting as a role-model.