Transactional vs. Transformational Leadership

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One of the main qualitative aspects of today’s post-industrial living in the West is the fact that, as time goes on, more and more managers grow increasingly aware of the sheer beneficence of the specifically Transformational model of leadership. In its turn, this particular development can be referred to as such that has been predetermined by the very logic of the ongoing socio-economic progress. In this paper, I will aim to substantiate the validity of this suggestion at length.

There was a time when I held a part-time job (security) with one of the local car dealerships, which in the paper’s consequential parts will be referred to as the company or organization. The company’s top-officials clearly act within the conceptual framework of the Transactional theory of leadership. This theory is based upon the following conceptual assumptions:

The functioning of just about any organization is thoroughly objective and rationale-driven, which in turn presupposes that, in order to be able to qualify for employment with it, one must be willing to ‘fit’ into what happened to be this organization’s corporate culture.
The overall effectiveness of how a particular organization operates can be referred to as merely the sum of the affiliated employees’ professional performances.
While striving to motivate employees, managers should apply the so-called ‘stick and carrot’ approach. That is, the most productive employees should be rewarded (materially), whereas most non-compliant ones should be punished (administratively).
When addressing their professional responsibilities, employees expect to receive an adequate monetary reward. The latter serves employees as the main motivational incentive to continue applying an effort into increasing the quality of their professional performance (Weiss, 2011).

The fact that the leadership theory, appropriated by the company, is indeed best classified as Transactional can be exemplified in regards to the following incidence. Before I became hired, one of the company’s top-managers asked me whether I would be willing to remain fully observant of the dealership’s employment-related rules and regulations. This, of course, points out to the fact that, in full accordance with the provisions of the Transactional theory, the mentioned person considers the company’s organizational structure (and its operational mode) fixed. The main implication of this is that, while at work, the company’s employees are bound to be subjected to a number of ‘corrective interventions’ on the part of their superiors. I can confirm that this indeed was the case. Throughout the time of my employment with the company, I never ceased being provided with advice as to what accounts for a proper ‘workplace attitude.’

In the organization with which I used to be affiliated, the concept of ‘leadership’ is being deemed synonymous with the concept of ‘management.’ That is, while trying to increase the sales of cars by the mean of providing employees with additional incentives to remain professionally committed, the company’s mid-level managers are expected to ‘go by the book.’ For example, each of the company’s sales representatives is being assigned with a particular ‘rate’ (ranging from one to four), which in turn reflects his professional value and consequently – qualifies him for a 1%-4% salary-raise. However, as practice indicates, this particular incentive does not have much of a performance-stimulating effect whatsoever. Partially, this can be explained by the fact that each of the concerned salespersons has his own vision on what should be considered the indications of a high professional value on his part.

For example, the underachieving sales representatives (in the sense of how successful they are in selling cars) believe that they should be given credit for not being too ‘pushy,’ which in turn contributes towards strengthening the company’s overall reputation. This, of course, cannot result in anything else but in undermining the legitimacy of the mid-level managers’ leadership-authority in the eyes of their subordinates. As a result, many of the company’s entry-level employees are not being particularly motivated to act in accordance with how their immediate superiors would like them to. The reason for this is that the former consider the deployed score-based system (as the instrument of evaluating their performance) to be discursively outdated. The ultimate consequence of this is that, as time goes on, more and more of the company’s employees become increasingly non-receptive in regards to their superiors’ executive orders.

I would definitely recommend the adoption of another leadership-strategy by the company. The main reason for this is that the currently deployed one (Transactional) appears thoroughly arrogant of the provisions of the so-called ‘theory of systems,’ which applies to organizations. According to it, the overall quality of organizational performance only indirectly relates to what happened to be the quality of the concerned organization’s integral elements (such as employees), which in turn suggests that it should be discussed in terms of a ‘thing in itself. The phenomena in question can be explained by the fact that the very process of these elements remaining in the state of continuous interaction with each other results in the creation of an entirely new organizational reality, which does not quite correlate with the provisions of the Transactional theory of leadership.

For example, contrary to these provisions, while in the workplace, employees are not exclusively motivated by the prospect of receiving monetary enrichment. The reason for this is that, regardless of how strongly a particular organization happened to be commercially-focused, it is primarily a social entity and, as we are well aware of, the notion of ‘society’ overextends the notion of ‘profit.’ What it means is that, in order for managers to be perceived as true leaders, they need to be willing to apply a continual effort into trying to adjust the performance-enhancing incentives (offered to employees) to be fully consistent with whatever happened to be the anxiety of self-actualization, on the part of every individual employee. The above-suggested also implies that, while trying to prove themselves effective and well-respected leaders, managers do not have to be thoroughly aware of what accounts for the functional essentials of the organization’s every individual component while being simultaneously capable of supervising every component’s activity (this would prove impossible). Rather, these individuals’ qualification, as effective leaders, is being concerned with their ability to understand the phenomenological implications of the manner in which the organization’s integral parts collaborate (Lawler & Ashman, 2012).

Due to the earlier mentioned considerations, the company I used to work for would be much better off adopting the so-called Transformational theory of leadership. According to it, just about any socially integrated organization is best discussed in terms of a continually evolving organism, rather than in terms of a spatially fixed structure. This, of course, redefines the role of a leader from someone who is there to ensure that employees are administratively motivated enough to proceed with addressing their routine-tasks in a more or less predictable manner; to someone who is able to provide workers with the deep-seated intrinsic motivation to derive the sense of emotional pleasure, out of their affiliation with a particular professional career.

To exemplify the discursive validity of the proposed redefinition, we can mention Apple Inc. – the company, which was able to find itself ahead of the competition in its field due to its former CEO’s (Steve Jobs) willingness to adopt the Transformational paradigm of leadership as the essential part of the company’s operational mode. For example, after Jobs was reappointed as the CEO for the second time, he never ceased insisting that even the company’s low-ranked employees share the same corporate vision with that of Apple’s top executives. This insistence, of course, can be unmistakably defined as Transformationalist because it is based upon the assumption that the main precondition for a particular organization to remain functionally effective is the sense of corporate solidarity experienced by this organization’s affiliates, regardless of what happened to be their hierarchical position (Pedler, Burgoyne & Boydell, 2010). In essence, the main qualitative differences between the Transactional and Transformational theories of leadership can be identified as follows:

Transactional leadership	Transformational leadership
Presupposes a leader’s tendency to act in an authoritarian manner and to impose its will upon subordinates	Builds upon a leader’s willingness to think of the leadership-process, as such that is there to help followers to realize their full existential potential.
Relates to the discourse of ‘power/authority’ and endorses the assumption that the organization’s social structure should be highly hierarchical	This relates to the discourse of ‘ethics’ and advocates the idea that even the lowest-ranked employees are entitled to take part in the process of executive decision-making.
Focuses on the issues of tactical importance.	Primarily focuses on long-term projects.
Enforces rules and regulations within the context of how the relationship leaders and followers interrelate.	Places followers in the position to be able to affect the ways of their leaders, which empowers the former rather substantially.
Views one’s willingness to obey commands as the indication of his or her ability to act as an effective (subordinated) employee.	Regards the measure of one’s professional adequacy, as such that reflects that concerned individual’s ability to expand its intellectual horizons.

As can be seen, the Transformational model of leadership is much more adjusted to the realities of modern living than what happened to be the case with the Transactional one. The reason for this is quite apparent – due to what are the qualitative dynamics in the world’s economy, the measure of a particular company’s competitiveness can be considered reflective of the manner in which this company goes about trying to take advantage of all of its competitive strengths. Because the Transformational theory of leadership promotes the idea that employees should participate in the process of executive decision-making, and because it emphasizes the importance of creating an atmosphere of corporate solidarity among employees, the adoption of this particular theory by an organization will undoubtedly benefit the latter, in the sense of increasing the measure of its functional efficiency.

While keeping the earlier mentioned in mind, we can identify the following indications that a person in the position of managerial leadership indeed possesses what it takes to qualify for such a position in the first place:

One’s willingness to recognize the accomplishments of its subordinates in order for the latter to remain professionally committed.
One’s talent in convincing employees that they are being appreciated, which in turn intensifies the sensation of self-worth on the part of workers – hence, encouraging them to derive emotional satisfaction from addressing their professional duties.
One’s ability to endow subordinates with respect to the organization’s corporate values.
One’s understanding of the fact that he or she may never cease applying a highly personalized approach when the recognition of the concerned subordinates’ professional successes is being concerned.
One’s possession of the sense of perceptual/cognitive analytical news, which allows the individual in question to choose in favor of circumstantially appropriate incentives while motivating employees.
One’s thoughtfulness – truly effective leaders must be capable of knowing ahead of time what will account for the factual implications of the implementation of a particular managing-strategy, on their part.
One’s willingness to take a genuine interest in what appears to be the personal life-challenges on the subordinates’ part.
One’s ability to inspire employees by the mean of creating a ‘winning’ atmosphere in the workplace, which in turn is supposed to encourage workers to relate to the established team-goals as their own.
One’s recognition of the fact that, in order for employees to remain thoroughly committed, in the professional sense of this word, they may never cease being socially supported.
One’s the caring attitude towards its subordinates.
One’s positioning as a humble individual, who never treat subordinates in the matter that implies the inferiority of the latter.
One’s willingness to apply a continual effort into becoming ever more efficient, as a professional entrusted with the task of guiding others towards the accomplishment of a particular corporate objective.

Thus, there can be only a few doubts that the notion of Transformational leadership is indeed closely related to the notions of vision, mission, and strategy in the organization. After all, as the mentioned suggestions imply, a true leader is necessarily someone capable of understanding that just about any modern organization is nothing short of a communal entity. Therefore, it must be led in a highly intelligible way, thoroughly observable of the notions in question.

Thus, if I was a leader, I would definitely proceed with trying to prove my effectiveness, in this respect, in a manner consistent with the provisions of Transformational leadership. For example, instead of offering salespersons a 1%-4% salary-raise, I would qualify the most successful of them for a free dental plan or for a company-paid vacation. In addition, regardless of what happened to be their seniority status/managerial rank, I would also qualify all employees to be invited to participate in the company’s corporately held events, such as the on-premise celebration of the New Year, for example.

I believe that the earlier provided line of argumentation, in regards to the subject matter in question, is fully consistent with the paper’s initial thesis. Apparently, there are indeed a number of reasons to think that, unlike what happened to be the case with other models of leadership, the Transformational one is both: theoretically sound and practically valuable.

References

Lawler, J. & Ashman, I. (2012). Theorizing leadership authenticity: a Sartrean perspective’, Leadership, 8 (4), 327-344.

Pedler, M., Burgoyne, J. & Boydell, T. (2010). A manager’s guide to leadership: an action learning approach. McGraw Hill: Maidenhead.

Weiss, J. (2011). An introduction to leadership. San Diego: Bridgepoint Education, Inc.

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Transactional vs. Transformational Leadership

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