Transformational and Transactional Leadership Models | Free Essay Example

Transformational and Transactional Leadership Models

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Topic: Business & Economics
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Introduction

Effective leadership is integral for the successful completion of activities carried out by a number of people. By definition, leadership is the process by which a person makes use of the support of others to accomplish set objectives. The role of effective leadership cannot be overstated in modern society where organizations play a major role.

Over the decades, management theorists have come up with a number of leadership models that can be used in various settings. This paper will define the transactional leadership and transformational leadership models, and demonstrate how the two relate to leadership in companies that I am familiar with. The paper will then discuss the role and impact of gender on the leadership styles adopted in an organization.

The Transactional and Transformational Leadership Models

Transformational leadership is a model that involves personally influencing followers to achieve organizational objectives while at the same time considering their individual needs. There are a number of distinct components present in transformational leadership. To begin with, the transformational leader has charismatic qualities (Katsioloudes & Hadjidakis 2007).

This means that he/she is respected, trusted and acts as a role model to the employees. The followers will not only admire the leader but want to emulate him. In addition to this, transformational leadership involves inspirational motivation. The followers are given a purpose and strong commitments to goals are formed.

According to McCleskey (2014), the transformational leader convinces his followers to transcend their self-interest for the sake of the organization. This model also encourages the followers to be innovative and act as problem solvers (Dyck & Neubert 2008).

Another important attribute of transformational leadership is that it takes into consideration the individual achievement needs of the followers. McCleskey (2014) notes that the transformational leader provides learning opportunities and creates a supportive climate for his followers. The leader provides opportunities for the followers to develop and attain their professional goals.

The transactional leadership model is based on clearly highlighting what is required of the followers and then using rewards and punishments to influence employee performance. According to Bass (2008), the primary focus in transactional leadership is the exchange that occurs between leaders and followers. Through these exchanges, the leaders are able to accomplish their performance objectives and complete the required tasks.

The relationship between the leaders and followers in the transactional model is a series of exchanges of gratifications designed to maximize organizational and individual gains. Transactional leaders are able to influence the behavior of followers through contingent rewards and negative feedback.

Bass (2008) declares that the main aspiration of the follower in the transactional model is to obey the leader’s instructions and therefore obtain rewards or avoid punishment. In transactional leadership, the followers are given a chance to fulfill their self-interest.

The follower knows which behavior will achieve the established organizational goals and bring about rewards (Hargis 2011). The individual can, therefore, concentrate on these clear organizational objectives to fulfill his/her self-interest. At the same time, the follower can avoid unnecessary risks that bring about punishment.

Transformational Leadership in Action

The transformational leadership model is effectively used by the Virgin Group of Companies. This company was founded by the English business entrepreneur, Richard Branson and it is best known for its world-renowned airline, Virgin Atlantic Airways. As a leader, Branson makes use of transformational leadership which is characterized by a keen interest in the motivations of the followers and an earnest desire to satisfy the followers’ higher needs.

According to Branson, the company’s staff are crucial to the success of the organization and he has a maxim which states “employees first, customers second, and shareholders third” (Kets de Vries 1998). For this transformational leader, the employees are the company’s greatest assets and taking care of their interests increases the likelihood of success.

The Virgin Group of companies is therefore noted for motivating its staff and encouraging their growth while maintaining low levels of criticism. Employees are given many opportunities to growth both personally and professionally. Branson views his employees as entrepreneurs in their own right instead of simple office workers (Dearlove, 2010, p.104).

Due to this perception, this leader does his best to help the followers to achieve their professional goals. In addition to this, Branson empowers followers to be successful by giving them opportunities for growth.

For example, when a company experiences significant growth and there is need to divide it into two entities, Branson gives the position of head manager in the new company to the assistant manager of the original company. This approach makes all employees work collectively to reach organizational goals since doing so will benefit them all.

Transactional Leadership in Action

The Automobile Association (AA), which is a British motoring association, makes use of the transactional leadership model. The company was formed in 1905 and it has experienced significant growth over the decades. However, as of 2004, the company was suffering from a decline in membership and productivity. The company, therefore, switched to a transactional leadership model in 2004 under the leadership of Tim Paker.

One of the actions that the company engaged in was firing people who were considered to be adding no value to the organization. In addition to this, the working hours for employees were reviewed to ensure increased efficiency. An important point is that the actions were undertaken by the company leader without consulting with the staff. Coercive power was used to implement sharp changes in the organization.

This is inline with the transactional model where the leader imposes change on staff instead of trying to sell the idea to the employees (Sosik & Dinger 2007). When this model was adopted, the company began to emphasize effectiveness among the patrolmen.

The organization clearly articulates the goals and objectives that the employees have to achieve. The management ensures that the company employees are aware of the rewards system in place. The followers, therefore, know what rewards they will get upon successful completion of certain tasks.

The AA leader has an in-depth understanding of what motivates his staff. Through this understanding, the leader can ensure that the reward systems in place are properly aligned with the desires of the followers. As a result of following the transactional leadership model, the employees work hard to achieve organizational goals and obtain rewards. This benefits the managers since the organization’s productivity is increased.

Impact of Gender on Leadership Style

Many studies suggest that there is a gendered nature of leadership in most organizations. According to this view, the leadership model adopted by a leader might be strongly influenced by his/her gender. With regard to transformational and transactional leadership, women are more likely to make use of transformational leadership since their gender is interested in working with the followers holistically.

Aldoory and Toth (2004) observe that women leaders might avoid transactional leadership since it is not effective in increasing followers’ job satisfaction or performance. In a study by Powell and Butterfield (2004) on the effects of sex on leadership style, it was found that female subjects exhibited more transformational leader behavior and less transactional leader behavior than male subjects.

Men are more likely to make use of the transactional leadership style. This authoritative leadership serves to articulate and establish positions held by the leader. The leader is not supportive and he/she provides clear direction for the followers (London 2002). Research indicates that men are more likely to use autocratic decision-making styles (Coder & Spiller 2013).

The transactional model is more autocratic since the leader imposes changes on the employees without consultation. On the other hand, women are more likely to use a democratic decision-making style. This style is compatible with the transformational style where the opinions of the followers are given due consideration.

Conclusion

This paper set out to discuss the transactional and transformational leadership models and show how the two are applied in some real-world organizations. The paper then discussed the role and impact of gender on the leadership styles adopted by individuals in an organization.

From the discussions made, it is clear that while transformational and transactional leadership styles differ significantly, each can be used to achieve positive results in an organization. Women leaders are more likely to use transformational leadership while men prefer transactional leadership.

However, it should be noted that this does not mean that all women adopt transformational leadership or that all men favor transactional leadership. There are many instances where men and women leaders do not follow these gendered expectations in their leadership styles.

References

Aldoory, L & Toth, E 2004, ‘Leadership and Gender in Public Relations: Perceived Effectiveness of Transformational and Transactional Leadership Styles’, Journal of Public Relations Research vol.16, no.2, pp. 157-183.

Bass, BM 2008, The Bass handbook of leadership: Theory, research, & managerial applications, Free Press, NY.

Coder, L & Spiller, S 2013, ‘Leadership Education and Gender Roles: Think Manager, Think’, Academy of Educational Leadership Journal vol.17, no.3, pp. 21-51.

Dearlove, D 2010, The Unauthorized Guide to Doing Business the Richard Branson Way: 10 Secrets of the World’s Greatest Brand Builder, John Wiley & Sons, NY.

Dyck, B & Neubert, M 2008, Management: Current Practices and New Directions, Cengage Learning, Boston.

Hargis, M 2011, ‘Developing Leaders: Examining the Role of Transactional and Transformational Leadership Across Contexts Business’, Organization Development Journal vol.29, no.3, pp. 51-66.

Katsioloudes, MI & Hadjidakis, S 2007, International business: a global perspective, Butterworth-Heinemann, NY.

Kets de Vries, MF 1998, ‘Charisma in action: The transformational abilities of Virgin’s Richard Branson and AAB’s Percy Barnevik’, Organizational Dynamics vol.26, no.2, pp. 6-21.

London, M 2002, Leadership Development: Paths to Self-Insight and Professional Growth, Routledge: NY.

McCleskey, JA 2014, Situational, Transformational, and Transactional Leadership and Leadership Development, Journal of Business Studies Quarterly vol. 5, no.4, pp. 117-130.

Powell, G & Butterfield, D 2004, ‘Sex Effects In Evaluations Of Transformational And Transactional Leaders’, Academy of Management Proceedings, vol. 2, no.4, pp.1-6.

Sosik, J & Dinger, S 2007, ‘Relationships between leadership style and vision content: The moderating role of need for social approval, self-monitoring, and need for social power’, The Leadership Quarterly vol.18, no.1, pp. 134–153.