Exploring Transactional Leadership's Goals, Drawbacks, and Examples

Leadership is a complex concept that defies a precise definition. Countless individuals worldwide deliver speeches, pen articles, and author books every day on the topic of leaders and transactional leadership. Throughout history, various forms of leadership have emerged, with exceptional leaders leaving an indelible mark on their respective domains. These leaders have exhibited unique leadership styles, varying degrees of closeness with their teams, and distinct personalities and convictions.

Transactional leadership was conceptualized first by Max Weber in the year 1947 and later taken on by Bernard Boss in the year 1981.

Transactional Leadership

Transactional leadership is a prevalent leadership style utilized by managers in professional settings. This approach encompasses a straightforward exchange of actions and expectations. The leader's primary objective is to ensure the team functions effectively, conducts business in a constructive manner, and makes short-term plans. Transactional leadership involves motivating employees by focusing on their personal interests related to the task. The leader's authority is derived from their formal position, and subordinates are expected to comply with instructions due to the leader's higher standing and title.

Rewritten:

Transactional leadership relies on a system of rewards and punishments to motivate employees to meet or exceed expectations. While effective in some cases, this approach is often criticized for its purely transactional nature. In contrast, transformational leadership - exemplified by visionary and world leaders - prioritizes the growth and development of the entire team, with the leader serving as a guiding force.

Cons of transactional leadership

There are a few cons of transactional leadership has that stand out very clearly.

The focus of transactional leadership on rigid procedures and standard approaches can stifle innovation and limit the potential for creative problem-solving among employees. Innovation is often sacrificed in favor of efficiency, as experimentation and new product development may be seen as risky or disruptive to established routines. In contrast, transformational leadership emphasizes the importance of building personal connections and fostering a sense of shared purpose among team members. This approach can inspire individuals to exceed expectations and strive for continuous improvement.

The limitations of transactional leadership can hinder a leader's ability to be proactive and drive change within a team and organization. It's important to be ready for unexpected challenges and opportunities, rather than simply reacting to them. While adhering to the organization's established framework can be beneficial, there are instances where a more visionary and adaptable leader is necessary to drive innovation and reshape the company's culture.

Transactional leadership, despite its drawbacks, has demonstrated its effectiveness numerous times throughout the years. In fact, some of the cons associated with this style of leadership can actually be transformed into its greatest strengths, resulting in a highly professional and impersonal approach.

Some professionals are focused solely on business and do not waste time on anything else. They are quick to reward employees who take initiative to improve themselves and perform well, but they are just as quick to reprimand those who underperform. Check out this Marketing91 video on Transactional Leadership.

Different Examples of Successful Transactional Leadership

A few examples of successful and influential transactional leaders are given below –

Norman Schwarzkopf transactional leader

Norman Schwarzkopf was an advisor to the Vietnamese army and later also served as the commander in chief of the US forces for certain operations.

Bill Gates transactional leadership

Bill Gates is widely recognized as an influential figure in the tech industry. As the founder and Chairman of Microsoft, he is regarded as a successful transactional leader who holds his employees to high standards. Gates is known for challenging his employees and pushing them to provide satisfactory answers. However, he also trusts his employees to work independently as long as they meet their assigned targets.

Howard Schultz transactional leadership

CONTENT: Under his leadership, Starbucks has expanded globally and diversified its product offerings beyond coffee. Schultz is also known for his social and environmental activism, including initiatives to provide healthcare and education to employees. His leadership style has been praised for its focus on both financial success and social responsibility.

Transformational and Transactional

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