2. DEFINITION
Transaction is the act of transacting within or between groups (as
carrying on commerical activities) – (Business dictionary, 2016)
Transactional leadership is a style of leadership in which the
leader promotes compliance of his followers through both rewards
and punishments. Also known as “Management theories” (Odumeru
& Ifeanyi, 2013)
3. HISTORY
First described by Max Weber in
1947.
Further developed by Bernard
M. Bass in 1981.
• This style is most often used by the managers.
• It focuses on the basic management process of controlling,
organizing, and short-term planning.
4. Some Assumptions Related to Transactional Leadership
Employees are motivated by reward and punishment.
The subordinates have to obey the orders of the superior.
The subordinates are not self-motivated.
The main goal of the follower is to obey the instructions of the leader. The style can
also be mentioned as a ‘telling style’.
5. Here, the exchange between leader and follower takes place to
achieve routine performance goal.
These exchanges involve four dimensions:
Contingent Rewards
Active Management
by Exception
Passive Management
by Exception
Leissez-Faire
6. Examples of Transactional
Leaders
Norman Schwarzkopf
Vince Lombardi
Bill Gates
Howard Schultz
Here are some of the
characteristics of transactional
leaders:
Focused on short-term goals
Favor structured policies and
procedures
Thrive on following rules and
doing things correctly
Revel in efficiency
Very left-brained
Tend to be inflexible
Opposed to change
7. The advantages and disadvantages
of transactional leadership
THE ADVANTAGES AND DISADVANTAGES OF
TRANSACTIONAL LEADERSHIP
8. ADVANTAGES
It can be very effective for motivating subordinates and eliciting
productivity.
Clear structured
Achieves short-term goals quickly
Rewards and penalties are clearly defined for workers
9. DISADVANTAGES
This type of leadership is flawed since it motivates
people only on the base level
Creativity is limited since the goals and objectives are
already set
Ego states are difficult to difine
Does not reward personal initiative
10. BENEFITS
• It is easy for workers to complete tasks successfully. This works
because transactional leadership is simple to learn and does not
require extensive training.
• It is also easier to apply in a crisis situation, where everyone must
know exactly what is required of them and how a task is to be done
under pressure.
11. CONCLUSION
The transactional style of leadership is viewed as insufficient, but
not bad, in developing the maximum leadership potential. It forms
as the basis for more mature interactions but care should be taken
by leaders not to practice it exclusively, otherwise it will lead to the
creation of an environment permeated by position, power, perks,
and politics.
12. References
Business Dictionary. (2016). Retrieved from
http://www.businessdictionary.com/definition/transactional-
leadership.html#ixzz40afhsheR
Maier, C. (n.d). The advantages of transactional leadership. Retrieved from
http://www.ehow.com/info_8460959_advantages-
transactionalleadership.html
Odumeru, J.A., & Ifeanyi, G.O. (2013). Transformational vs transactional leadership
theories: Evidence in literature. International Review of Management of
Business Research, 2(2), 355-361.