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What to Opt? Transactional vs Transformational Leadership

The difference between transformational and transactional leadership is enormous. Essentially, transformational leadership involves participative long-term people approach where performance is fueled by motivation and inspiration. Whereas transactional leadership shows the opposite, treating people as part of machines to follow instructions and increase long-term goals.

What Is Transformational Leadership? 

Leadership expert James MacGregor Burns coined the concept of “ Transformational leadership” in the 1970s. Transformative leadership facilitates organizational collaboration and drives a vision forward. It is less focused on strategic planning and decision-making.

Also Read About: Inclusive vs Transformational Leadership: Are They the Same?

Characteristics of Transformational Leadership

There are 4 I’s identified as four characteristics of transformational leadership by psychologist Ronald E. Riggio. According to this, a transformational leader must have the following;

  1. Idealized influence: Transformative leaders show ethical behavior. They earn trust and respect through their moral conduct. This improves the entire organization.
  1. Inspirational motivation: Transformative leaders convey a unified vision that motivates team members to go above and beyond expectations. They provide the space for most motivated workers with sense of purpose.
  1. Individualized consideration: Transformative leaders listen to their employees and consider their needs. They provide adequate support to their employees. 
  1. Intellectual stimulation: Transformational leaders ask questions, take risks, and seek out the opinions and ideas of their team members. 
transactional vs transformational leadership

Examples of Transformational leadership

Following are the examples of transformational leaders;

Bill Gates: It is always clear that Gates aims to motivate his staff by stimulating their minds. He consistently solicits ideas from a range of people through Microsoft and his foundation.

John Gagliardi: A hall-of-fame college football coach, refrained from intimidating or yelling at his players. His teams achieved success without going to demanding boot camps. Most significantly, he allowed the quarterback to call the plays displaying a unique level of trust in football.

What is Transactional Leadership?

Transactional leadership is a style of leadership in which the goals and objectives are predetermined, and the leader uses reward and criticism to drive his followers. Outlining the procedures and managing organizational operations, it works to improve the organization’s current status. The main goals of this style of leadership are to improve present rules and procedures and reform existing business culture.

transactional vs transformational leadership

Characteristics of Transactional Leadership

According to an article about organizational leaders in the International Journal of Science and Research, there are the following characteristics of transactional leadership;

  1. Transactional leaders replace a leader’s needs with those of a follower.
  2. Transactional leaders can emphasize development while setting goals, direct employees, and strive to control results.
  3. Transactional leaders make important decisions.
  4. Transactional leaders must have strong personalities.

Example of Transactional Leadership

Transactional leadership functions best in the following scenarios;

  • Hierarchy structural organizations
  • Big Cooperations
  • Military institutions, and 
  • Educational and corporate environments. 

The Differences Between the Transformational and Transactional Leadership 

Transformational and transactional leadership styles are seen as opposites. There are substantial and visible differences between each other. The following are; 

1)Transformational Leadership Involves Multiple Leaders, Transactional Leadership Involves One Leader

In transformational leadership, there can be more than one leader in the team working on a particular project. Transformational leadership promotes collaboration and cooperation in an organization.  On the other hand, there is only one leader responsible for guiding and directing the team in transactional leadership. 

2)Transformational Leader Inspires, Transactional Leader Focuses on Accountability

Transformational leadership is based on inspiration, long-term growth, and vision. On the other hand,  transactional leadership is based on performance-related rewards and penalties. Transactional leadership concerns short-term results. 

3) Transformational Leaders Are Adaptive, Transactional Leaders Are Strict

Transformational leadership is based on change, creativity, and innovation. On the other hand, transactional leadership is based on employees performing duties while adhering to rigid rules and procedures.

transactional vs transformational leadership

4) Transformational Leaders Are Collaborative, Transactional Leaders Are Directive

The foundation of transformational leadership is inclusivity and participation in decision-making. They provide ground for team building and participation. On the other hand, transactional leadership lacks opportunities for team participation and is directive in nature

5) Transformational Leader Requires Change, Transactional Leader Focuses on Instant Measures

Transformational leadership is appropriate in circumstances requiring change and development. On the other hand, transactional leadership is appropriate in circumstances requiring quick measurements and precise tasks.

6) Transformational Leaders Are Slow, Transactional Leader Are Quick 

Transformational leadership takes longer and is more difficult to implement. On the other hand, transactional leadership can be done more quickly and is easier to implement. 

7) Transformational Leaders Are Proactive, Transactional Leaders Are Reactive

Transformational leadership is proactive. They cherish the people on their team, values their opposing opinions, and are receptive to fresh ideas. Transformational leaders depend on their team when taking any decision.  Transactional leadership is reactive. Transactional leaders take all the responsibility and resolve issues on their own. They don’t depend on other team members to take any decisions. 

Also Read About: How Can Great Leaders Change the World for the Better?

Which One Is Better? Transformational or Transactional Leadership

This depends on which one is better or more effective on the requirement of the organization. Despite the clear distinction between the two, neither is better than the other. Both, transformational and transactional leadership staples are effective in specific circumstances. They are dependent on the leader and the desired outcomes.

transactional vs transformational leadership

Both transformational and transactional leadership are useful in obtaining intended goals. Transformational leadership focuses on the development of employees and drives change in the organization. These leaders spend more time devising a plan and vision for the future, inspiring and motivating team members to embrace that vision, and ensuring that the plan is implemented.

While transactional leaders focus on organizational performance and employee supervision. They focus on maximizing productivity in the present and are not concerned about the long-term future. They focus on making the day-to-day business of an organization flow smoothly.

Can They Be Used at the Same Time?

Both transformational and transactional leadership styles are valuable in an organization. They can be used at the same time. In an organization where intellectual curiosity and trust building with a team are important, at the same time rewards and rules are essential for motivation which produces a harmonious workplace. The most effective leaders will ultimately identify and fully utilize the special combination of traits of both styles that best serves their objectives.

Learn Transformational and Transactional  Leadership With the Best Diplomats 

Both transformational and transactional are very famous styles of leadership. Both concepts are different and possess different characteristics. What do you want to be a transformational leader or transactional leader? Here we have the platform Best Diplomats which is providing you with the learning of both. 

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Some academics believe that transformational is the best, while others favor transactional leadership. Thus, the discussion of the two leadership philosophies never ends. There isn’t a universal leadership approach that works well in all situations. Consequently, a company shouldn’t rely solely on one type of leadership. It must use the appropriate leadership approach in accordance with its requirements and the situation at hand. 


What are the three traits of transformational leadership?

The traits of transformational leadership include; motivation, proactive and creative leadership.

What are the three traits of transactional leadership?

The traits of transactional leadership include; reward and punishment, push, and responsive leadership. 

Oleksandra Mamchii

Working as a academic lead at Best Diplomats.

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