This is a document that will give you in depth knowledge about the leadership theories. It explains transformational and transactional leadership theories in detail and even shows the relationship between them.
ANALYSIS OF LEADERSHIP THEORIES
BY:- ANKITA PATIL
Title Page No.
1 LEADERSHIP 1
2 LEADERSHIP APPROACHES 2
3 TRANSACTIONAL LEADERSHIP 3
4 TRANSFORMATIONAL LEADERSHIP 5
5 REALATION BETWEEN TRANFORMATIONAL
AND TRANSACTIONAL LEADERSHIP
6 X AND Y THEORY 8
7 CONCLUSION 9
8 REFERENCES 10
“Leadership is to translate vision into reality” – Warren Bennis
Leadership has been described as, “a process for social influence where one
person can enlist the aid and support to another person in the accomplishment
of a common task.” by Chemers M. For some leader is simply some personality
whom others follow, while for others leader is someone who organizes his entire
team to achieve a common goal. Leadership is a part of management and one of
te most important factors for directing the organization. Leadership shows the
abstract qualities in a person. It involves a psychological process of influencing the
followers, subordinates and providing them with a solution to all their queries and
problems by guiding them.
“Leadership is lifting of a man’s visions to a higher sight, the raising of ma’s
performance to a higher standard, the building of man’s personality beyond its
normal limitations.” – Peter Drucker
Leading is not as same as managing. A leader may or may not be a manager but a
manager must be a good leader. Leadership is one of the four primary activities of
the influencing function and it is a subset of management. Managing focuses on
the non behavioral as well as behavioral issues and aspects. Leading emphasizes
mainly on the behavioral aspects and issues. Merely possessing managerial skills
is longer sufficient for succeeding in the corporate world. A manger makes sure
that a job gets done and a leader cares about and focuses the person who does
that job. And so, to combine management and leadership a demonstrated,
calculated and logical focus on organizational processes is required along with a
genuine concern for the workers as people.
Different leaders employ different leadership styles. They use different strategies to boost the
employee performances or accomplish internal changes. Many business analysts and
psychologists have formulated various frameworks that describe various approaches that
leaders employ to lead in effective ways. Understanding these frameworks help us understand
the effective approaches to leadership. We can use these approaches to become an effective
There are a number of theories and approaches to leadership. Trait theory, Attribute Pattern
Approach, Behavioral and style theories, Situational and contingency theories, Functional
Theories, Integrated Psychological Theories, Transactional Theory, Transformational Theory,
Leader-Member exchange Theory, Neo-Emergent Theory are few theories that have been
developed. According to the organizational culture and situation different theories and
approaches can be employed. Every theory has it pros, cons, assumption and limitations. Out of
the lot Transformational Theory and Transactional Theory are the ones that are followed
largely in the organizations.
Transactional Leadership is also known as managerial leadership focuses on getting the work in
hand done. It usually deals with the leader dealing with the followers in terms of rewards and
punishments. It focuses on the role of supervision, organizing and group performance. This
type of leadership doesn’t have much scope for the improvement of the organization in the
future. This type of leadership is effective at the time of crisis or emergency situations. It’s also
effective in the projects that need to be carried out in a very specific ways.
Transactional Leadership can be explained in context to Maslow’s hierarchy of needs.
Transactional leadership works at the very basic level of need satisfaction, where the leader
focuses on the lowest level of the hierarchy. Transactional leaders are more focused on the
processes rather that the innovative ideas. They focus on contingent rewards or contingent
penalization. Contingent rewards are given when the set goals are accomplished in-time or
before time or to keep the subordinates working at a good pace throughout the project. It
basically works as a motivating factor. Contingent punishments are given when the contingent
fails to meet the set goals in time or the quality and quantity of the output falls down. When a
set task is assigned to any subordinate by a transactional leader the subordinate is supposed to
be fully responsible for the outcome without considering the resources and capabilities to carry
it out. Transactional leaders often uses management by exception; which works on a principle
that if something is operating and performed in a defined manner then it does not need
attention; and exception to expectation require certain kind of rewards and praises for
exceeding expectations, similarly some kind of corrective action is required of performance
Qualities of transactional leaders are very simple. They accept goals, structures and culture that
is already existing in the organization. They are action oriented and directive. They are the ones
that are willing to work in the existing systems and negotiate the outcome within them. They
think inside the box at the times of problems. They are more or less result oriented without
paying much attention to their subordinates. They believe in gaining compliance from their
followers with rewards and punishments. They are extrinsic motivators and hence they hardly
can about any change in their subordinates. Transactional leadership is very passive.
The pros and cons of the transactional leadership is that the roles and expectations from the
leader and the subordinates are clearly defined. It also maintains the culture f the organization.
The rules and behavioral norms are strictly followed.
When the subordinate fail to deliver the output the consequences include absence of incentive,
other punishments; it can also lead to dismissal. The leadership style is very direct. The scope of
improvement is very low.
Transformational Leadership is leadership that inspires organizational success by profoundly
affecting followers’ beliefs in what an organization should be, as well as their values, such as
justice and integrity. This style of leadership creates a sense of duty within an organization,
encourages new ways of handling problems, and promotes learning for all members of the
organization. Transformational Leaders inspire followers to transcend their self interests for the
good of the organization and can have an extra ordinary effect on their followers. It enhances
the morale, motivation and job satisfaction of the subordinates through variety of mechanisms.
It includes connecting the followers sense of identity and self to the project and collective
identity of the organization; being a role model for the followers to get them interested and
inspires them; challenging the followers to take greater ownership of their work; understanding
the strengths and weakness of the subordinates so that the leader can align their tasks for
Transformational leadership is the concept that was first introduced by James McGregor Burns.
According to Burns Transformational Leadership can be seen when “leaders and followers make
each other to advance to a higher level of morality and motivation.” With the help of their
strength and vision transformational leaders are able to inspire their followers to change their
expectations, visions and perceptions to achieve common goals. This type of leadership is more
or less based on the leader and his personality, traits and ability to make change through
example and articulation of a very energizing vision and challenging goals. They pay attention to
the concerns and needs of individual followers; they change followers’ awareness of issues by
helping them look at the problem with a new outlook; and they excite and inspire them to put
out extra efforts to achieve the group goals. Kumar Mangalam Birla of the Aditya Birla Group,
Shiv Nadar of HCL Technologies, Naoroji Pirojisha Godrej of the Godrej Group, Andrea Jung at
Avon, and Richard Branson of Virgin Group can all be grouped together as the Transactional
Leaders. Effective transformational leadership can bring about dramatic changes in
It’s very effective in the long run as it develops positive mindset among the followers. It comes
useful during crises such as economic difficulties that hamper the growth of the organization.
When not properly implemented it can cause shortcomings like draining personnels. When a
wrong leader is chosen who doesn’t have the qualities of a transformational leader things the
entire team suffers.
The following Diagram explains the working of transformational and
transactional leadership and their interdependency.
RELATION BETWEEN TRANSACTIONAL AND TRANFORMATIONAL
Transactional and transformational leadership aren’t opposing approaches to getting things
done. They complement each other, though they are not equally important. Transformational
leadership builds on transactional leadership and produces levels of follower effort and
performance beyond what transactional leadership alone can do. But the reverse is not true. So
if one is a good transactional leader but do not have transformational qualities, he/she will
likely only be a mediocre leader. The best leaders are transactional and transformational.
The relationship between change and complexity to the amount of
transactional and transformational leadership required
X AND Y THEORY
Douglas McGregor’s Theory X and Theory Y can be compared to the transactional and
transformational leadership. Theory X can be compared to the transactional leadership where
managers need to rule by the fear and consequences. In X theory and transformational
leadership negative behavior is punished and the employees are motivated through incentives.
Theory Y and Transformational Leadership are found to be similar because both support the
idea of the leaders work to encourage to make their subordinates work. Leaders assume the
best of their employees. The leaders help their employees by supplying them with the
necessary tools they require to excel.
Complexity of the organization High
Initial studies portrayed Transactional and Transformational leadership to be mutually
exclusive, but later after the research done by the psychologists and others, Transformational
and Transactional leadership were found to be continuum rather than mutually exclusive. A
leader’s ability to effect positive change and inspire others to higher levels of achievement is
related to his or her leadership style in the practice setting and the leadership style that is
present across the organization. Hence we can conclude that the Transactional leadership is
more akin to the concept of management and the Transformational leadership adheres more
closely to the leadership values.
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