Transactional Leadership As the signifies, transactional leadership comprises the leadership style where the relationship between leader and histeam is ‘transactional’ in nature. This means, as Bass and Riggio (2006) note, that transactional leadership is when there is an exchange between the leader and his subordinate – ‘one thing for another’. The worker does a job for his leader and gets rewarded in return. Based on his job description, a worker can either perform or not perform; for the transaction to be complete, the leader has to give something in return to the subordinate, more precisely, reward for good performance and some sort of punishment for bad performance.
Transactional leadership is about the ‘abilities and skills of a manager’ (Kakabadse, Bank & Vinnicombe, p.144) which are important for the completion of everyday managerial activities such as ‘setting targets, appraising performance, giving constructive feedback and coaching team members’. This style determines how well the manager is able to transact with his team to achieve results. Fact of the matter is, daily activities and transactions form the culture of an organization and determine how well or how poorly the vision of the organization is pursued.
Good transactional leaders are able to monitor closely the performance of his team and take corrective measures as soon as they are needed to remedy a diverging situation. The talents of the leader bring us to the traits of the follower: This form of leadership works best on people who are more extrinsically motivated rather than intrinsically (Miner, p.198). They seek tangible rewards such as higher salary, power, status and bonuses and are motivated to perform better each time they are rewarded thus.
With obvious and achievable rewards upon the completion of the job, this becomes a cyclical, repetitive process with the transactions occurring between the leader and his team. An important aspect in transactional leadership is the articulation or clear expression, verbally and/or documentary, of the exact requirements for doing the job. This helps both the leader and the follower to determine whether the job completed deserves the reward or not. When the leader explains the requirement to others, he must also discuss the ‘conditions and rewards’ associated with the proper completion and fulfillment of the requirements (Bass & Riggio) because having a clear goal in mind allows the team to pursue a particular task better.
This specific aspect, I think, distinguishes transactional leaders from managers. Without it, there is no clear distinction between the two. Transactional leadership is limited in scope and consequently, short lived and non-visionary: it is limited to the specific job requirements and does not motivate or require the team members to perform over and above the call of duty.
The rewards are also linked to the achievement of specific responsibilities so it provides no basis to anyone, including the leader, to try and take on more responsibility. Other forms of leadership, such as transformational leadership, transcend the stated roles and foster creativity, problem solving and innovation. Another limitation to transactional leadership, as touched upon earlier, is that it focuses on extrinsic rewards and does not address the intrinsically motivated employees much, for whom things like work empowerment, responsibility, creativity and relationships with peers are very important. To sum it up, transactional leadership is important because it is one step ahead of management as it defines clear goals for the team and ensures they pursue it collectively.
It also monitors day-to-day activities which are essential for the completion of any and all projects. Standing alone, however, transactional leadership does not offer any motivation or reason for creativity or efficiency in employees. This means, this form of leadership needs to be taken in tandem with other forms such as transformational to be truly effective for the leader and the organization. References Bass, Bernard M. and Riggio, Ronald E.
(2006). Transformational Leadership (2nd ed. ). Mahwah, NJ: Lawrence Erlbaum Associates Inc. Kakabadse, Andrew, Bank, John and Vinnicombe, Susan (2004). Working in organizations (2nd ed. ). Burlington, VT: Gower Publishing, Ltd. Miner, John B. (2007). Organizational behavior. Armonk, NY: M.E. Sharpe