Forum (Spotlight Weekly)

Transactional or Transformational leaders?

By Moheindu Amiran Chemjong

Whether it is in the field of medicine, business, education, government or military service, the importance of leadership can hardly be underestimated. An organization without a leader is directionless and can become absolutely dysfunctional. Organizations seek leaders to plan, organize, establish goals, coordinate, solve problems as and when they arise, lead the organization and its employees towards the fulfillment of the organizational goals and hence create a success story. Therefore, it can be said that a leader can make a tremendous impact on the organization and that organizations cannot survive without leaders.

Leadership consists of, “influencing task objectives and strategies, influencing commitment and compliance in task behavior to achieve these objectives, influencing group maintenance and identification, and influencing the culture of the organization. A leader is a change agent and an influencer. A leader has to focus on individual as well as organizational goals and his/her effectiveness can be measured by the accomplishment of these goals. Though leaders come in many varieties-from charismatics with the vision to unassuming team leaders, they all help their subordinates work together for the fulfillment of the organizational goals. This is what differentiates a leader from the rest of the group. Though there cannot be a perfect leadership style to suit a particular organization, it can be said that different leadership styles can work at different job situations and at different types of workplace.

A successful leader is the one that is effective even when change is occurring and it is transformational leaders who handle change effectively than transactional leaders.

In today’s context, the leader is not restricted to any particular gender, color, creed, age or social class. Therefore, leadership style can greatly vary but is often characterized by transactional and transformational.

“The transactional leaders guide or motivate their followers in the direction of the established goals by clarifying the role and task requirements.” Transactional leadership is characterized by a leader-follower relationship and the focus is on structures and systems. For the transactional leader, effectiveness is restricted by rigid employee entitlement structures whereas for the transformational leader, there is littlie hindrance. Burns’ definition of transactional leadership makes it clear that the sum stays the constant but transformational leadership moves both the leaders and the followers to a higher level. Transactional leaders rely on contingent reward of management.

The transformational leaders provide individualized consideration and intellectual stimulation, and possess charisma. Transformational leaders are capable of shifting the beliefs, needs and values of the followers and their success depends on the ability to facilitate positive relationships between the employees and others throughout the organization. Transformational leadership looks at the future and is change-oriented whereas transactional leadership is oriented towards the maintenance of status quo. Burns introduced the notion that leadership should be judged by long-term social contribution. Successful transformational leadership results in the elevation of followers into leaders and transactional leadership keeps them in place. Bernard Bass expanded Burns’s definition of transformational leadership and said that the four factors that describe transformational leaders are charisma, individual attention, intellectual stimulation and individualized consideration. This definition implies that transformational leaders inspire through vision.

There is plenty of evidence supporting the evidence of transformational leadership over transactional leadership. For e.g., a number of studies of US military officers found, at every level, the former kind of leadership being more effective than the later counterparts. A classic example of a transformational leader can be Michael Eisner at Walt Disney. Under his leadership, the business has tremendously increased. He took risks and pushed the company along an unchartered path and transferred Walt Disney Company into an assertive, proactive company.

A transformational leaders looks into the future, he/she has a vision and sets a stage for continual improvement. His visionary skill will help him, his employees and the organization towards the fulfillment of the goals and ultimate success. The transformational leaders empower individuals and teams where these trained associated who work using systematic, scientific methods understand the boundaries, roles, responsibilities and give in their ultimate best in the interests of the organization. Transformational leaders understand the needs of change and hence welcome change by applying various strategies to cope up with them. They also inspire their subordinates and boost their energy levels. They motivate people, help them uncover their aspirations, provide them hope, positivity, and encouragement.

Today, transformational leadership is the most dynamic, most exciting and most legitimate leadership style. The overall evidence in practical life and the literature review illustrated that it is correlated with higher employee satisfaction and greater productivity. Thus transformational leadership is the very answer for competent leaders of today and tomorrow.