Transactional leadership is an exchange process where the leader clarifies roles and task requirements and rewards or punishes followers based on performance. It assumes employees are motivated by rewards and punishments and that followers must be closely monitored. Transactional leadership emphasizes short-term goals and standard procedures without enhancing creativity. This style works best for simple, clearly defined problems. The relationship is transitory and based on monetary exchange rather than emotional bonds.

1. Transactional Leadership
• Definition:
It is an exchange process in which
leader clarify employee roles, task requirements
and then reward or punish followers based on
their performance.
This style can also be mentioned as telling style.

2. Assumptions of Transactional
Leadership
• Employees are motivated by reward and
punishment.
• The subordinate have to obey the orders of his
supervisor.
• The followers/subordinates are not self
motivated. They have to be closely monitored
and controlled to get work done.

3. Implications
• The transactional leadership emphasize
detailed and short-term goals, and standard
rules and procedures.
• Do not make an effort to enhance followers’
creativity and generation of new ideas.
• This kind of leadership style may work well
where organizational problems are simple and
clearly defined .

4. Implications Cont..
• The transactional leaders tends to be highly
directive and action oriented and their
relationship with followers tends to be
transitory and not based on emotional bonds.
• The Only transaction between leader and
follower is the money which the follower
receive for their compliance of effort.

5. Transformational Leadership
• Transformational Leadership is a leadership
style where one or more persons engage with
others in such a way that leaders and
followers raise one another to higher levels of
motivation and morality.

6. 4 I's of Transformational Leadership
Idealized Influence
Leader serves as an ideal role model for followers and is admired for this
Inspirational Motivation
Transformational leaders have the ability to inspire and motivate followers
Individualized Consideration
Transformational leaders demonstrate genuine concern for the needs and feelings
of followers which brings out the best efforts from each individual
Intellectual Stimulation
Transformational leaders challenges followers to be innovative and creative

7. Transactional vs Transformational
Leadership
Categories Transactional Transformational
Leader’s source of power Rank, position Character, competence
Follower reaction Compliance Commitment
Time frame Short term Long term
Rewards Pay, promotion, etc. Pride, self-esteem, etc.
Supervision Important Less important
Counseling focus Evaluation Development
Where change occurs Follower behavior Follower attitude, values
Where “leadership” found Leader’s behavior Follower’s heart

8. Transactional Vs Transformational Leadership
Leaders search for adaptive solutions to
engage hearts and minds in the change
process
Leaders often use technical knowledge to
determine the change process
Leaders possess good visioning, rhetorical
and management skills, to develop strong
emotional bonds with followers
Leadership depends on the leader’s power to
reinforce subordinates for their successful
completion of the bargain
Leaders create learning opportunities for their
followers motivate and stimulate followers to
solve problems
Leaders motivate followers by setting goals
and promising rewards for desired
performance
Leaders are distinguished by their capacity to
inspire and provide individualized
consideration, intellectual stimulation and
idealized influence to their followers
Leaders rely on standard forms of
inducement, reward, punishment and
sanction to control followers
Leadership is proactive and forms new
expectations in followers
Leadership is responsive and its basic
orientation is dealing with present issues
Leaders arouse emotions in their followers
which motivates them to act beyond the
framework of what may be described as
exchange relations
Leaders are aware of the link between the
effort and reward
Transformational LeadershipTransactional Leadership

9. Questions and Feedback