Leadership, being the core of management, is crucial to an organization’s success. However, no single definition includes all the aspects of leadership. In an attempt to portray the concept of leadership, various leadership models exist.
The intent is to explore theories and models that a leader can actually use in their organization. Several shifts occur in leadership studies, and subsequently, newer approaches emerge and have been embraced by leaders that attempt to develop and lead followers.
The evolution of leadership thought highlights the need for new and more commonly used modes of leadership. One common one is the concept of transactional leadership. Transactional leadership means just what it says. It is a quid pro quo type of relationship between the follower and leader. A carrot and stick approach.
The effectiveness of this leadership style is dependent on two conditions: One being that the current differences in organizational hierarchies and structures are accepted by subordinates and the second being that all the employees can work towards the mutual exchange of benefits where they are rewarded for achieving their determined goals.
Just as leaders need to sometimes be both autocratic and democratic, they also need to be both transactional and transformational at times too.
It is somewhat reactive, however, because a benefit can be held back or taken away if the follower did not achieve the determined goals. Scholars look at it as a passing fancy, a myth, or a schematic diagram that has not been tried and tested.
Unfortunately for scholars, this is not true. Millions of managers have been trained in transactional leadership, both from a performance and management level.
There is a plethora of leadership theories and models that attempt to consider leadership as an enabler of strong performance. There is an increased emphasis on the important role of leaders when interacting with followers and stakeholders.
Transactional leadership involves determining tasks, rewarding goal achievement, and punishing failure in attaining goals and is successful in developing mutual exchange between leaders and employees in organizations.
This leadership form actually assumes impersonal interactions in a reality where leaders do not consider higher humanistic desires or relationships between leaders and followers, and while it has its limitations it is still widely used in organizations. This leadership style is popular among practicing managers today.
Transactional leadership is linked with organizational effectiveness, particularly in terms of achieving goals. The key is for managers to use it sparingly, on occasion, when new details and tasks are assigned but not as the main type of leadership.
Another aspect of the transactional leadership style is that managers using this style are passive by exception or laissez-faire when applying leadership. Laissez-faire is characterized by managing the situation where a problem has occurred, and leaders take a reactive approach to correct mistakes or to overcome problems.
Transactional leaders do advocate for knowledge sharing and joint problem solving with subordinates. Laissez-faire leaders do not possess a high commitment to seeking the proposed solutions jointly with their subordinates.
When such leaders assume the responsibility or intervention to solve problems, they rarely consider the empowerment of their employees to assist in problem-solving and goal setting. To overcome this obstacle, leaders today should empower followers to engage in problem-solving.
Therefore, transactional leadership can be used to review tasks and goals, and requirements of subordinates. Leaders would begin using transactional leadership to set goals and determine tasks and then, when time allows, move toward more transformational leadership and place more emphasis on empowerment to engage followers.
Transformational leadership speaks to the importance when beginning a leader-follower relationship, downsizing, upsizing, onboarding, and making significant changes to the structure and organizational improvements, but leaders must be aware of its limitations.
Just as leaders need to sometimes be both autocratic and democratic, they also need to be both transactional and transformational at times too. Knowing both styles and when is best to use them is an important concern here and will debunk the myth of transactional leadership as being an adequate style of leading in and of itself.