Transactional versus transformational leadership

Earlier this year I was asked by a student about the difference between transactional and transformational leadership, and realised that I had never done a blog post on the topic! After all these years of leadership training, too.

So I thought it was time.

Putting it simply, transformational leadership is characterised by the ability to bring about significant change in followers and the organisation. The language of transformational leadership is "more than influence"; it is about creating a transformation in attitudes, motivation and so behaviours. Think relationship. Think future. Think development. Think leadership (Daft, 2008; Jackson & Parry, 2018; Lowe et al., 1996).

Transactional leadership is about exchanging work for some reward. Transactional leadership is about compliance, reward, and performance. Think task. Think routine. Think now. Think management (Daft, 2008; Lowe et al., 1996).

However, we should not make the mistake that we can only do one of these. Effective and successful leaders are able to deliver on both sets of needs, and to balance both relationship and task needs well. Transactional leadership has been said to be "necessary, but not sufficient" (Jackson & Parry, 2018, p. 63), implying that the sufficiency is suppled by transformational leadership.

Transformational leadership can be defined as a leadership style which "causes change in individuals and social systems. In its ideal form it creates valuable and positive change in the followers with the leaders end goal of developing followers into leaders" (Langston University, 2021); or a leader "who engages with others in such a way that the leader and the follower raise one another to a higher level of motivation and morality" (Lowe et al., 1996, p. 386).

Transactional leadership has been defined as "a leader who initiates contact with subordinates in an effort to exchange something of value, such as rewards for performance, mutual support, or bilateral disclosure" (Lowe et al., 1996, p. 386).

There are four "i"s of transformational leadership (Lowe, Kroeck & Sivasubramaniam 1996):

1. individualized consideration (treating followers as individuals and helping them develop)
2. intellectual stimulation (challenging followers to think outside of the box and solve problems in creative ways)
3. inspirational motivation (articulating a compelling vision for the future, framing issues consistent with the vision), and
4. idealized influence (developing trust and emulation from followers).

I hope this helps!

Sam

References:

• Avolio, B. J., & Bass, B. M. (1995). Individual consideration viewed at multiple levels of analysis: A multi-level framework for examining the diffusion of transformational leadership. The Leadership Quarterly, 6(2), 199-218. https://doi.org/10.1016/1048-9843(95)90035-7
  
• Daft, R. L., (2008). The Leadership Experience (4th ed.). Thomson-South Western.
• Gomes, A. R. (2013). Transformational Leadership: Theory, research and application to sports. In C. Mohiyeddini (Ed.) Contemporary Topics and Trends in the Psychology of Sports (pp. 53-114). Nova Science Publishers, Incorporated.
  
• Jackson, B., & Parry K. (2018). A very short, fairly interesting and reasonably cheap book about studying leadership (3rd ed.). SAGE Publications Ltd.
• Lowe, K. S., Kroeck, K. G., & Sivasubramaniam, N. (1996). Effectiveness correlates of transformational and transactional leadership: A meta-analytic review of the MLQ literature. The Leadership Quarterly, 7(3), 385-42. https://doi.org/10.1016/S1048-9843(96)90027-2
• Langston University (2021). Transformational Leadership. https://www.langston.edu/sites/default/files/basic-content-files/TransformationalLeadership.pdf
• Young, S. (2011). MGT630 Topic 2 Leadership Styles Part 3, Transformational Leadership. https://youtu.be/x2CH7Puyg0c