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Transactional Leadership: Healthy, Positive, and Highly Effective

By Edited May 14, 2015 0 0

In this day and age, if you take a college course on leadership theory, you are sure to study the idea of transformational leadership.

Transformational leadership theory emerged in the later part of the last century (1978) by a researcher named Burns. It was later championed by another researcher named Bass, and has taken hold as a dominant theory within the discipline of leadership.

Transformational Leadership in a Nut Shell

Transformational leadership is affected by visionary, highly charismatic leaders. These leaders engage and create a personal connection with subordinates, inspiring them to: 1) understand and believe in the importance and meaning of the organization and its mission, 2) transcend the traditional mechanics of employer-employee relations (work for pay), and 3) elevate work performance to an optimum level. The result is very highly motivated subordinates, inspired and behaving selflessly, exceeding the level of effort and performance that could reasonably be expected from persons in their positions and pay grades.

Burns further described transformational leadership, by contrasting it with transactional leadership. Transactional leadership, as described by Burns, is the shallow, meaningless exchange between leader and subordinate (quid pro quo), where the leader provides compensation (pay, benefits, et cetera), and the subordinate provides service (work).

Since this theory was introduced, it has been a major idea in the domain of leadership. I have seen it taught in leadership courses over and over again.

 Strengths of Transformational Leadership Theory

Transformational leadership theory has many positive aspects, including the following three:

1. Transformational leadership theory adds to our consideration of leader characteristics. As we work to understand what characteristics comprise effective leadership (who leaders are), many clues can be found in transformational leadership theory. The transformational leader is charismatic, people aware (has the ability to make connections with others), articulate and eloquent, charming, and visionary.

2. Transformational leadership theory suggests greater meaning in work. Work can (and should be) more meaningful to an employee than just a pay check; it can be a team, a mission, and a future that that employee believes in and aspires to.

3. Transformational theory acknowledges the capability of organizational exceptionalism. When extraordinary circumstances warrant, the team can pull together, transcend the conventional boundaries of employeeism, subordinate personal interests, and rise to excellence and mission accomplishment.

 A Critique of Transformational Leadership

While the theory of transformational leadership clearly has several positive aspects, I would argue that it also brings with it some negative aspects, which must be considered.

1. Transactionalism is now a bad thing. Since its introduction, transformational leadership theory has cast a negative connotation on transactionalism. Not only is this unfair, I would argue, but it is wildly unrealistic; though transactionalism (and quid pro quo) is espoused as shallow and petty, I would submit that it permeates every aspect of our lives, to include work.

2. Transformational methods can (and have been) used in an inappropriate manner. Charismatic, charming, articulate and eloquent sociopaths (like dictators and cult leaders) have employed many methods shared by transformational leadership (subordination of personal interests, collective unification around a vision, et cetera) to manipulate weak people and achieve personal gain.

3. Transformational methods can be unfair. Similarly to my second point, a charming leader can get employees to work above and beyond what they are being compensated for. While this is marvelous when done at critical points in an organization's operations, it becomes unfair when it morphs into the expected norm for day-to-day operations. It becomes downright exploitative when senior leaders cut resources and/or work force, counting on transformational leadership techniques (and extended subordinate effort that exceeds compensation) to account for the difference. For example, if the task is supposed to require five people and ten dollars, but we get it done one time in a pinch with four people and eight dollars, we have just proven that the task can be done with four and eight; why, then, would the efficiency experts ever give us five and ten to do that task again?

 Transformationalism: The Opposing Perspective

In conjunction with the above critique, allow me to offer an opposing perspective regarding transformational leadership:

Transformational leadership, except when employed in only the rarest of circumstances at decisive points in an organization's operations, can be an exploitative method that takes advantage of employees. Instead of routinely and constantly pushing employees to go beyond the boundaries of their job description and compensation (frequently to compensate for deliberate and intentional resource and personnel shortages), leaders should properly resource subordinates, hire more employees, and/or compensate employees commensurately with the work they perform.

 Transactionalism: The Opposing Perspective

Similarly to the above paragraph, here is what I think is a fair opposing perspective for transactionalism:

If negotiations and agreements are done fairly and properly, transactional leadership means a fair deal. A transactional framework is inherent in the employer-employee relationship: the employer provides resources, direction, and compensation; in return, the employee provides effort, service, and results. If leaders consistently and routinely deal fairly with subordinates, and don't consistently take advantage of them through transformational methods, those employees will appreciate the fair dealing, and will still rise to the occasion in those rare and obvious instances that the situation is critical, and extra effort is required.


In conclusion, we should think about these theories, from both supporting and opposing sides. Leaders with intellectual capacity and self-confidence can ask tough questions like 'are transformational practices exploitative?' and 'why is transactionalism espoused to be a bad thing?'.

I think it is reasonable to arrive at a conclusion that goes in contrast to the status quo: transformationalism carries with it some considerable negative aspects, and transactionalism does have some significant strengths worthy of note.

Exceptional leaders understand both sides of both theories, and know when to employ which one to accomplish the mission, take care of their Subordinates, and sustain their organization.




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