“TRANSACTIONAL LEADERSHIP

THEORY”Group 7

Astin UtariZelvia Liska Afriani

Course: Leadership and

Educational Management

DEFINITION Transaction is the act of transacting within or between groups (as

carrying on commerical activities) – (Business dictionary, 2016)

Transactional leadership is a style of leadership in which the leader promotes compliance of his followers through both rewards and punishments. Also known as “Management theories” (Odumeru & Ifeanyi, 2013)

HISTORY First described by Max Weber in

1947. Further developed by Bernard

M. Bass in 1981.

• This style is most often used by the managers.• It focuses on the basic management process of controlling,

organizing, and short-term planning.

Some Assumptions Related to Transactional Leadership Employees are motivated by reward and punishment. The subordinates have to obey the orders of the superior. The subordinates are not self-motivated. The main goal of the follower is to obey the instructions of the leader. The style can

also be mentioned as a ‘telling style’.

Here, the exchange between leader and follower takes place to achieve routine performance goal.These exchanges involve four dimensions:

Contingent Rewards Active Management by Exception

Passive Management by Exception Leissez-Faire

Examples of Transactional Leaders Norman Schwarzkopf Vince Lombardi Bill Gates Howard Schultz

Here are some of the characteristics of transactional leaders:

Focused on short-term goalsFavor structured policies and

proceduresThrive on following rules and doing

things correctlyRevel in efficiencyVery left-brainedTend to be inflexibleOpposed to change

The advantages and disadvantages of transactional leadership

THE ADVANTAGES AND DISADVANTAGES OF TRANSACTIONAL LEADERSHIP

ADVANTAGES It can be very effective for motivating subordinates and eliciting

productivity. Clear structured Achieves short-term goals quickly Rewards and penalties are clearly defined for workers

DISADVANTAGES This type of leadership is flawed since it motivates

people only on the base level Creativity is limited since the goals and objectives are

already set Ego states are difficult to difine Does not reward personal initiative

BENEFITS• It is easy for workers to complete tasks successfully. This works

because transactional leadership is simple to learn and does not require extensive training.

• It is also easier to apply in a crisis situation, where everyone must know exactly what is required of them and how a task is to be done under pressure.

CONCLUSION The transactional style of leadership is viewed as insufficient, but

not bad, in developing the maximum leadership potential. It forms as the basis for more mature interactions but care should be taken by leaders not to practice it exclusively, otherwise it will lead to the creation of an environment permeated by position, power, perks, and politics.

References Business Dictionary. (2016). Retrieved from

http://www.businessdictionary.com/definition/transactional-leadership.html#ixzz40afhsheR

Maier, C. (n.d). The advantages of transactional leadership. Retrieved from http://www.ehow.com/info_8460959_advantages-transactionalleadership.html

Odumeru, J.A., & Ifeanyi, G.O. (2013). Transformational vs transactional leadership theories: Evidence in literature. International Review of Management of Business Research, 2(2), 355-361.