For any organization to be successful there is a requirement of an efficient management by a leader. Leadership is possibly one of the most significant aspects of management. It contributes enormously to the wellbeing of the organizations. It would never be successful in the absence an effectual and inspirational leader who can encourage them his/her cohorts to work towards achieving the goals of the organization (Hand et al., 2015). Several academicians have laid emphasis on two styles of leadership, through the years. One is transactional leadership and the other is transformational leadership. Both of them have been a popular topic of debate since several years. Transactional leadership styles are involved in the maintenance of the normal flow of processes. It can be illustrated as ‘keeping the ship afloat’. On the other hand, transformational leadership is proactive and it works to alter the culture of the organization by the implementation of new ideas (McCleskey, 2014). With the help of a comprehensive study, this essay will identify the most effective leadership style, between the two styles of leadership.
The concept of transformational leadership style was at first established by James MacGregor Burns who was a connoisseur of leadership and presidential biographer. According to him, transformational leadership can be seen when the leaders along with the followers make themselves to progress to higher level of moral and enthusiasm (Deichmann & Stam, 2015). The transformational leaders engage with their followers, lays stress on higher order fundamental requirements, and raise awareness regarding the importance of precise results along with new ways by which the results or outcomes might be attained (Lowe & Avolio, 2013).
The authors Bass and Riggio elucidated in their classic text ‘Transformational leadership’ that transformational leaders are those who encourage and stimulate their followers to achieve the outcomes that are extraordinary in nature and develop their individual capacity of leadership in the process. These type of leaders provide assistance to their followers to grow and develop as leaders by giving a response to the needs of the individual followers by empowering them and making them align with the goals and objectives of the individual cohorts, the group, the leader, as well as the larger organization (Baloch et al., 2014).
Transactional leaders make use of the disciplinary power along with a range of inducements to encourage the workforce to give their best performance. The term ‘transactional’ refers to the reality that this leadership style effectively encourages subordinates by means of offering incentives or awards for their overall performance (Odumeru & Ogbonna, 2013). A leader, who possesses transactional leadership style usually, does not look forward to guide intentionally an organization or company to a position of market leadership. These leaders are exclusively concerned with ensuring that all the operations flow efficiently. These types of leaders are aware of the association between the attempt and reward. This leadership style is responsive and its orientation deals with the existing issues. The transactional leaders rely on customary forms of rewards, incentive, punishment and approval to control their followers. They motivate their cohorts by setting targets and promising incentives for the required performance. This leadership style depends on the power of the leader to reinforce the followers so that they can successfully complete the bargain. These types of leaders often utilize technical knowledge to find out the process change. They exchange substantial incentives for their work and faithfulness of the followers (Deichmann & Stam, 2015).
Standards, procedures and rules are necessary in transactional leadership. The cohorts re not motivated to be inventive or to discover new resolutions to the problems. A study has found that transactional leadership style have a tendency to be most effectual in circumstances where problems are uncomplicated and defined clearly. It can be effective in a number of situations and it is considered an inadequate and may stop the leaders as well as the followers to achieve their complete potential (Odumeru & Ogbonna, 2013).
The benefit of transactional leadership style is that it evidently describes the roles and beliefs of the leader as well as the followers. It also makes sure that the organizational culture is maintained and the rules are followed strictly together with the behavioral norms (Zhu et al., 2012). Conversely, this style of leadership means that disappointment of delivering the expected output could lead to the consequences such as absence of additional benefits or bonuses, reductions in salary, or the worse, firing. This style of leadership is concerned with a direct approach and the leaders expect results from their followers who sequentially deliver except if they do not want to bear the consequences (Hamstra et al., 2014).
According to the approach of transactional leadership style, the leaders are in a position of influence since their skills and knowledge is superior in comparison to the rest of the team members. The models of transactional leadership style promote the leaders in planning, allocating tasks to the employees and making decisions. Specific setting of goals, with comprehensible standards for good as well as bad presentation, and definite agreements are made with respect to the responsibilities and expectations (Dai et al., 2013).
The transactional leaders consider that the method of getting staff for performance is by declaring clear incentives and penalties in place. This presumes that the followers will merely work for their own self-interest, more willingly than from a sense of purpose (Odumeru & Ogbonna, 2013). Positive feedback is provided throughout the plan, with the intention that the employees recognize whether they are performing the tasks sufficiently, and when progress is required. This style of leadership is perfect for the organizations that are established from a long time and have discovered the processes that lead to the production of the desired outcomes or results. In circumstances similar to this, there is frequently a detailed set of pre-agreed objectives that need to be accomplished, and the challenge is the completion of these tasks more proficiently (Hamstra et al., 2014).
On the other hand, the transformational leaders think that encouragement through incentive produces the least amount of effort needed. For instance, for the employees, their salary is reward and they will simply work hard to maintain their job as well as salary (Deichmann & Stam, 2015). Instead of utilizing awards and penalties as motivators, the attempt is to assist the members of the team in understanding and sharing the needs to get success. With an idea of the aim in the mind, the employees will feel motivated to attain it. The project then turns out to be an expedition rather than a simple process. In distinction with the transactional view in which the leader is an expert, transformational supporters consider each team member as an expert. Rather than being assigned to get instructions, the members of the team have been selected due to their area of expertise that adds to the overall ability of the team. Ever member of the team is expected to put in efforts in the process of making decisions and planning (Zhu et al., 2012).
The leaders having transformational leadership style aims to transform and not to maintain the status. Repetition of the similar procedures leads to the production of similar results; hence, new thinking ways are needed to meet the better and bigger objectives (Hamstra et al., 2014). The leaders having a transformational leadership style encourage the followers to think out of the box, in order to find the inventive ways of working. It can also challenge the existing culture of the organization and introduce new values as well as attitudes. This style of leadership is most efficient in the organizations that are new or in the organizations in which the old methods have gone stale and can no longer capable to produce results (Lowe & Avolio, 2013).
The essential features of a transformational leader, as illustrated by Dixon in the year 1998, are the key drivers behind efficient behaviors. His study revealed that the behavior of a leader is influenced by four factors: honesty, self-confidence, personal values and integrity (McCleskey, 2014). The primary force of driving behind effectual performance is involved with the ability of the leader to get associated with his/her experiences with transformational behaviours. One such association is established which leads to external transformation, resulting in the transformation of the organization. For instance, when the leaders begin to believe that their work can create a difference; their purposes exceed above the individual motives and are geared towards the greater good (Deichmann & Stam, 2015).
A higher motivation is appealed by transformational leadership style and it also improves the quality of existence for the organizational members. On the other hand, transactional leadership style is considered a best networking of power (Baloch et al., 2014). The leaders who possess a transformational leadership style are capable of exercising influence in the two primary areas namely, empathy and deep thinking, that appeal to the mind as well as the heart. Utilizing these persuasions, a transformational leader is capable of motivating his/her followers and acts on their behalf together with the requirements of others. In this leadership style, the leaders understand the developmental needs of their followers or cohorts. According to Jung et al. (2009), the leaders having a transformational leadership style are good mentors or advisors and provide guidance to their followers. As a whole, a transformational leader possess the ability to encourage his/her followers, makes every possible effort to for achieving excellence without utilizing authority or power and inspires the followers through his/her zeal and deep thinking (Odumeru & Ogbonna, 2013).
The leaders possessing a transactional leadership style utilizes coercive power and reward, whereas the leaders who possess a transformational leadership style utilize reward power as well as referent power (Deichmann & Stam, 2015). Reward power is illustrated as ‘targets insight with respect to the ability of the agent to control the resources and rewards of a valued organization.’ If an administrator rewards the workforce by making efficient utilization of power by giving rearwards to the staff who are able to take on accountability in an empowered manner, this should be observed positively since the individuals are getting rewards for being authorized for making decisions and taking actions. As a result, when the employees in an organization take an initiative, they get rewards and recognition. On the contrary, under the style of transactional leadership, getting awards for performance as per the expectations of the organization leaves no inspiration to go ahead of the sense of duty (Hand et al., 2015).
Coercive power is described as the target’s insight with respect to the ability of the agent to inflict different penalties or punishments. Transactional leaders are more probable to implement coercive power (Lowe & Avolio, 2013). This kind of power has been associated with unsuccessful leadership. The fear of demotion or working in fear of getting fired from the job makes an employee unproductive and ineffective because the employee spends more time thinking about the consequences if in case the leader’s expectations are not met. Referent power is illustrated as,’ a leader possessing referent power is a person whom the followers aspire to become and therefore follow him/her. The leaders having referent power are also associated with efficient leadership. To work with a leader who had attained referent power, the followers or cohorts enjoy an enormous deal of independence (Baloch et al., 2014).
In the end, considering all the aspects of both the styles of leadership it can be concluded that, Transactional leadership is more effective as the leaders who possess this style of leadership are more responsive. The transactional leaders consider that the method of getting staff for performance is by declaring clear incentives and penalties in place. They assist the employees in achieving the objectives of the organization through rewards and punishments. They motivate their followers or cohorts by appealing to their own self-interest. Transactional leadership styles are involved in the maintenance of the normal flow of processes. Transactional leaders make use of the disciplinary power along with a range of inducements to encourage the workforce to give their best performance. Hence, the organizations should rely on this style of leadership. It must make use of this leadership style as it can help an organization to achieve great heights of success in an efficient manner.
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