Transactional and Transformational Leadership

Perhaps a more potent type of leadership, which is seen as capable of bringing about
organisational change and development and for that matter the realisation of organisational
goals, is transformational leadership. According to Hackman and Johnson (2004) beginning in
the 1970s, the transformational approach appeared as a new perspective for understanding and
explaining leadership. Prior to 1978, leadership was often approached in the literature from an
exchange context. Leaders and followers interacted and influenced each other's Behaviour. In
1978, Burns introduced "transformational leadership" in his classic book on Leadership (Burns,
1978). Various authors have subsequently refined and expanded Burns' basic concepts of
leadership. Transactional leadership is generally defined as emphasizing the transactions or
exchanges that occur among leaders, colleagues and followers. Transformational leadership deals
with transformation or change in an organization (Bass, 1996). Bass and others emphasize that
transformational leadership is an expansion of transactional leadership. Understanding the
difference between transactional and transformational leadership is therefore vital in getting the
whole concept of transformational leadership theory.

Transactional leadership
This leadership style according to (Hackman & Johnson (2004), is based on the Assumptions that:
1. People are motivated by reward and punishment.
2. Social systems work best with a clear chain of command.
3. When people have agreed to do a job, a part of the deal is that they cede all authority to their
manager.
4. The prime purpose of subordinates is to do what their manager tells them to do.
In general, transactional leadership is characterized by the following:

It is primarily passive: Transactional leaders accept the goals, structure and culture of the existing
organization.

Transactional leadership is designed to satisfy basic human needs: It is designed to meet the
physiological, safety, and belonging needs of followers as in Maslows hierarchy of needs.

Clear chain of command: The transactional leader works through creating clear structures whereby it
is clear what is required of their subordinates. When the transactional leader allocates work to
subordinates, they are considered to be fully responsible for it, whether or not they have the resources
or capability to carry it out. When things go wrong, then the subordinate is considered to be
personally at fault, and is punished for their failure (just as they are rewarded for succeeding).

Contingent reward: A transactional leader exchanges rewards and privileges for desired outcomes.
This leadership style is based on contingency, in that reward or punishment is contingent upon
performance. They recognize good performance.

Management by exception: The transactional leader often uses management by exception, working on
the principle that if something is operating to defined (and hence expected) performance then it does
not need attention. Exceptions to expectation require praise and reward for exceeding expect ation,
whilst some kind of corrective action is applied for performance below expectation.

Maintaining the status quo: The style is not geared towards change. Transactional leaders tend to be
directive and sometimes dominating. They tend to be action oriented.

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Transformational leadership
Transformational leadership emerged in the late 1970s, which was first outlined by MacGregor Burns
(Hackman & Johnson, 2004). The transformational leader goes beyond satisfying the basic human
needs to satisfying the higher-level needs (Self-esteem and self-actualization needs).

Peters and Austin (1985), did some studies on successful leaders and identified they used
transformational leadership styles. The characteristics they identified were that transformational leaders
are creative, interactive, visionary, empowering and passionate.

1. Creative

Transformational leaders are innovative and foresighted. They challenge the status quo. To become
a creative leader, one must think creatively and help followers develop their creative abilities. To
achieve this, a leader must (1) adopt a problem-finding perspective, called problem-finding
orientation. (2) Keep in touch with sources both in and outside the organization that reveal gaps and
ask questions to challenge products to look for problems and listen to complaints. (3) Learn to
tolerate failure. Because every creative idea carries with it the risk of failure, there is the need to
tolerate mistakes if the hope is to foster creativity in leaders and those led. Such leaders believe that
failure is a significant learning tool. (4) Focus collective attention on innovation. The leader should
help followers focus on generating new products, ideas and procedures and reward creative efforts.

2. Interactive

Transformational leaders are masterful communicators able to articulate and define ideas and
concepts that escape others. They transmit their ideas through images, metaphors and models that
organize meaning to followers. The leader must be aware of the needs and motivations of
followers. Involvement with followers will help do things right. Peters and Austin (1985) suggest
management by wandering about (MBWA) act as a coach by listening, teaching, and helping
followers with problems. Also by interacting with followers and encouraging open communication,
a leader allows followers to share their ideas and insights with their superiors.

3. Visionary

Communicating compelling vision to followers is the most important act of a transformational

leader. A vision is a concise statement, or a description of the direction in which an individual,
group, or organization is headed. A compelling vision-provides people with a sense of purpose and
encourages commitment. It is important that the vision is desirable and attainable. According to
Kotter (1990), an effective vision is specific enough, yet vague enough to encourage initiative and
remain relevant under a variety of conditions. Bennis and Nanus (1985) maintain that
transformational leaders spend time talking with employees, clients, other leaders, and consultants
before developing a vision for their organization.

A Vision is different from a mission. A vision provides a sense of direction while a mission is a
statement of purpose, which describes who the organization is, and what it does.

4. Empowering

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 Transformational leaders empower others. They recognize the importance of followers by
encouraging participation and involvement. They exchange ideas and recognize the fact that
individual achievement and success is the basis for team achievement and success. They know how
to give power away and how to make others feel powerful. They also allow others to make
decisions instead of making all the decisions thus such autonomy encourages employees to take
ownership of their work. Followers will take ownership when there is sufficient trust, without fear
of reprisals.

5. Passionate

Transformational leaders are passionately committed to their work. They love their jobs and have a
great deal of affection for the people with whom they work. This motivates others to do their best.
They encourage others because first of all, they encourage themselves. Organizational consultant
Richard Chang (2001) suggests that passion is the single most important competitive advantage an
organization can have. Passion is a reflection of the organization and its leaders.

Differences between Transactional and Transformational Leadership

There are major cognitive differences between transactional and transformational leadership (Wofford
& Goodwin, 1994). Transactional leaders tend to think more about specific goals, work skills and
knowledge needed to accomplish those goals, work assignments, and various reward relationships. On
the other hand, transformational leadership places greater emphasis upon intellectual capability and
creativity. It tends to be more abstract, and emphasizes vision over goals.
The major components of transactional and transformational leadership are different (Avolio & Bass,
2002) and (Bass, 1996). Transactional leaders tend to be "contingent rewarding" through providing
rewards for followers if they meet performance standards set jointly or by the leader (or
controlling/punishing followers who do not). They all also tend to be active in "managing by
exception," whereby they monitor followers performance, and take any needed corrective action when
output falls below, or exceeds, expected "norms."
Transformational leaders, on the other hand, tend to be idealized, and oriented to change. They place
greater attention on organizational transformation and behavioural change of individuals.
Transformational Leaders work toward a common goal with followers; put followers in front and
develop them; take followers to next level; inspire followers to transcend their own self-interests in
achieving superior results.
Transactional and transformational leaders relate quite differently to their colleagues and followers
(Bass, 1996, p. 66). A major difference is that transformational leaders work to change the
organizational culture by envisioning new alternatives, and empowering colleagues and followers in
this change process. A cultural shift can only be accomplished through changes in leader, colleagues,
followers, and organizational skills and values. Transactional leaders work within the organizational
culture.
Characteristics of an effective leader
From the discussion so far, one may conclude that an effective leader is that leader who:
a. Studies the situation in which he finds himself and decides on the style of leadership most
appropriate to the situation.
b. Perceives the needs of the group and organizes the groups efforts towards the satisfaction of
those needs.
c. Attempts to make the organizational goals/objectives complementary to the groups objectives
and directs the groups efforts towards those objectives.

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 d. Employs appropriate techniques to motivate members of the group so that they work towards
achievement of the objectives of the organization.
e. Is sensitive to the needs to change when necessary
f. Knows when to delegate, to take action, and when to involve the group in decision-making.
i. Keeps the channels of communication in the organization open for a free flow of information.
In conclusion, it could be said that as far as the educational enterprise is concerned, it is more within an
atmosphere of cooperation and understanding practiced under democratic leadership that maximum
productivity could be expected of both teachers and students.