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Transformational and Transactional Leadership Essay

Transformational leadership is about implementing new ideas. These leaders continually change stay flexible and adaptable, and continually improve those around them. According to Tracey and Hinkin (1998), transformational leadership is a process that motivates people by appealing to higher ideals and moral values, defining and articulating a vision of the future, and forming a base of credibility. Tracey and Hinkin (1998) observed that characteristics of transformational leadership follow clear themes.

Transformational leaders emphasize new possibilities have an exciting vision of the future. Organizations that are trying to change who are led by transforming leaders appeal to human characteristics. Transformational leaders manifest passionate inspiration (Hersey & Blanchard, 1996) and visibly model appropriate behaviors (Kouzes & Posner, 1987). The goal is change that raises the organizations to new heights. To reach the goal, organizations must receive new energy and vision from their leaders.

Transformational leaders emphasize the need for understanding change as a process. A process mindset is the basis for effective transformation (Heckscher, Eisenstat, & Rice, 1994). The process mentality involves defining clear concepts (Keller, 1995). It also requires a future orientation toward problem solving (Smith, 1990). One of the key factors in the change process is for each person to become and remain a continual learner (Mink, 1992). These types of leaders influence unique human qualities. According to Covey (1991) transformational leaders are preoccupied with purposes, values, morals, and ethics. They align internal structures to reinforce values and goals. They seek to release human potential and lead into new directions. Transformational leaders have an impact on the psychology and behavior of followers in order to shape their values (Brown, 1994).

The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place (Transactional leadership, 2009).

The transactional leadership style was first described by Max Weber in 1947 and again by Bernard M. Bass in 1981. The transactional leadership style developed by Bass is based on the hypothesis that followers are motivated through a system of rewards and punishment. If the follower does something good, they will be rewarded. If the follower does something wrong, they will be punished (Transactional leadership, 2007).

The core of transactional leadership lies in the notion that the leader, who holds power and control over his or her employees or followers, provides incentives for followers to do what the leader wants (What is transactional leadership, 2008). These types of leaders are generally not interested in changing the work environment. They would rather keep everything constant except when problems arise. This is when this type of leader jumps into action.

Transactional leadership pursues a cost – benefit, economic exchange with followers (Sarros et al., 2001). In this system of exchange, a value is placed on something in return for another. Each person only recognizes each other as just a person and each party is aware of the power and resources each bring to the bargaining table. According to Wren (1995), transactional leadership does not bind leaders and followers together in a mutual and continuing pursuit of a higher purpose.

Transactional behaviors are largely oriented toward accomplishing the tasks at hand and at maintaining good relations with those working with the leader. When the task involves inspiring workers for change this is not the style that will get the job done. Transformational leaders guide and motivate workers during the organizational change process in the following ways.

They inspire people to look beyond fixed expectations toward new outcomes. They encourage people to look for means for achieving new goals. These leaders expand the needs of others beyond their own self-interests to those of the team, organization, and society. I embrace the transformational style of leadership. Transactional is about punishing for mistakes made not changing it for the better, while the transformational leader creates and shares strategic vision and strategies that guide and pave the way to change.


Brown, A. (1994). Transformational leadership in tackling change. Journal of General Management, 19, 1-12.

Covey, S. (1991). Principle-centered leadership. New York: Simon & Schuster.

Heckscher, C., Eisenstat, R. A., & Rice, T. J. (1994). Transformational Process. In Heckscher, C., & Donnellon, A. (Eds.), The post-bureaucratic organization: New perspectives on organizational change. (pp. 129-177). Thousand Oaks, CA: SAGE Publications.

Hersey, P., & Blanchard, K. H. (1996). The management of organizational behavior. (7th ed.). Englewood Cliffs, NJ: Prentice-Hall.

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Kouzes, J., & Posner, B. (1987). The leadership challenge. San Francisco: Jossey-Bass.

Mink, O. (1992). Creating new organizational paradigms for change. International Journal of Quality & Reliability Management, 9, 21-23.

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Smith, A. (1990). Good leaders. Business & Economic Review, 37, 10-12.

Tracey, J., & Hinkin, T. (1998). Transformational leadership or effective managerial practices? Group & Organization Management, 23, 220-236.

Transactional leadership. (2007). Retrieved April 12, 2009, from Money zine: http://www.money-zine.com/Career-Development/Leadership-Skill/Transactional-Leadership/Transactional leadership. (2009). Retrieved April 14, 2009, from Changing minds:

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