Extant scholarship on leadership and management demonstrates that transformational and transactional leadership styles are widely validated in business and industry owing to their impact on employees’ outcomes and performance (Ilies et al., 2006; Ismail et al., 2010). In this paper, I focus attention to comparing the two leadership models to prove that transformational leadership is the most effective type of leadership, though there are instances that call for the application of elements of transactional leadership for effectiveness to be achieved.
In providing a synopsis of the differences between the two leadership styles, I argue that leaders adopting transformational leadership style often inspire subordinates’ trust, loyalty, and respect, and motivate them to proactively engage in behaviors beneficial to the organization particularly in terms of performing beyond expectations to attain the designated outcomes (Ilies et al., 2006). This style of leadership, in my view, is different from the transactional leadership style, whereby a leader is charged with the responsibility of guiding subordinates’ to attain pre-determined objectives based on compensation methods, contingent reward, and management by exception (Ismail et al., 2010).
Drawing from the above scholarly exposition to provide examples of both styles of leadership, I argue that a manager who values his or her employees and influences them to reach the goals of the organization through idealized influence practices transformational leadership, whereas a manager who uses impersonal tools such as pay or rewards to instill and maintain performance among employees can only be said to practice transactional leadership. The first example, in my view, exemplifies transformational leadership owing to the capacity of the leader to value and influence employees using idealized influence (role-modeling, trust, and respect) rather than coercing employees to perform. I also argue that the second example exemplifies transactional leadership due to the use of an array of incentives (pay and rewards) to motivate employees to perform at their best and maintain the normal flow of operations (Ilies et al., 2006; Ismail et al., 2010).
Drawing extensively from the literature, I am of the considered opinion that transformational leadership is the most effective type of leadership in organizational settings, though there are instances when leaders need to incorporate some elements of transactional leadership to achieve optimal effectiveness. Although it is evident that both leadership styles have been found to be associated with such outcome variables as organizational justice, trust, the organizational commitment of subordinates’, and organizational citizenship behaviors, transformational leadership surpasses transactional leadership in terms of influence on work outcomes, mutually-motivational relationship between leader and follower, sacrificing self-interest for the sake of the organization, and encouraging intellectual and individual stimulation (Ilies et al., 2006; Ismail et al., 2010).
I contend that these capabilities, which are absent in transactional leadership, enable the leader to inspire employees to contribute to the organization in terms of higher ideals and concepts of morality, and also motivate employees to demonstrate trust, admiration, loyalty, and respect to their leaders. However, I feel that transactional leadership might be appropriate when leading employees on short-term contracts as no organizational commitment is required when motivating employees through contingent rewards and promotion, and also when the organization is performing poorly to the extent that management by exception seems to be the only viable option.
Lastly, as is the case with other leadership styles, transformational leadership has some negative consequences and implications for leaders. Drawing from the literature (e.g., Ismail et al., 2008), I am of the considered opinion that some of the potential negative consequences of transformational leadership include detail orientation challenges that can derail an effective long-term vision for an organization, overreliance on emotion and passion at the expense of truth and reality, misuse of influence as well as loss of inspiration.
Ilies, R., Judge, T., & Wagner, D. (2006). Making sense of motivational leadership: The trail from transformational leaders to motivated follower. Journal of Leadership & Organizational Studies, 13(1), 1-22. Web.
Ismail, A., Mohamad, M.H., Mohamed, H.A., Rajiuddin, N.M., & Zhen, K.W.P. (2010). Transformational and transactional leadership styles as a predictor of individual outcomes. Theoretical and Applied Economics, 17(6), 89-104. Web.