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 The transactional leadership style was first described by Max Weber in 1947 and again by Bernard M. Bass in 1981. If you've heard of the term transformational leadership, then one way to think of transactional leadership is this: It's at the opposite end of the leadership spectrum.
Transactional versus Transformational Leadership Theory
The transactional leadership theory developed by Weber and Bass later became part of a three style model - transformational, transactional and laissez faire. Bass believed each leader exhibited a style along a continuum and he later developed the Multifactor Leadership Questionnaire or MLQ to determine where leaders fell on this continuum.
Transactional Leaders
The transactional leadership style developed by Bass is based on the hypothesis that followers are motivated through a system of rewards and punishment. The transactional leader's view of the leader / follower relationship is one of quid pro quo - or this for that. If the follower does something good, they will be rewarded. If the follower does something wrong, they will be punished.
Transformational Leaders
The theory behind transformational leaders on the other hand is based on the hypothesis that leaders can exploit a need of the follower. These particular needs are not based on quid pro quo transactions, but higher order needs. These needs are those of the total person and are closely aligned with the internal motivational factors of the follower.
So at one end of the spectrum we have transactional leaders that are making many "deals" with those being led. On the other end of the spectrum we've got transformational leader that are looking to satisfy a greater need of an individual.
Laissez Faire Leaders
There was another leadership dimension later recognized by experts - the laissez faire leader. This type of leadership style allows for complete permissiveness and the group often lacks direction because the leader does not help in making-decision.
Working for a laissez faire leader gives the followers many opportunities to make decisions. However the lack of direction can lead to anarchy if it is allowed to remain in place for an extended period of time.
Transactional Leadership Agreements
At the extreme, the only relationship that develops between the transactional leader and the follower is based on an unwritten agreement that the sole purpose of the follower is to carry out the wishes of the leader. In fact, this unwritten agreement may begin to form very early in the manager or leader relationship.
Immediately after the hiring process it may be clear that the transactional leader is in charge and the follower can hope to get better raises by following orders. This type of agreement with the transactional leader may come about through consistent reinforcement of certain actions the follower takes.
For example, when the follower completes an important assignment on time and under budget, the transactional leader may reward them monetarily. But if a deadline is missed or a budget is "blown," then the leader may make it very uncomfortable for the follower.
This is not to suggest that all managers and leaders that exhibit the transactional leadership style are locked into what might seem like extreme relationships. As mentioned earlier, leaders will likely fall on a continuum and exhibit behaviors characteristic of other leadership styles too.
As discussed our article on Leadership Style and again in Situational Leadership, the success of the leader is usually assured through the use of different leadership styles that are aligned with the current work environment or the disposition of the followers.
Types of Transactional Leaders
The types of transactional leaders described by theorists include categories such as Opinion Leaders, Group Leaders, Governmental / Party Leaders, Legislative Leaders and Executive Leaders.
If you think about these categories, you should have a greater appreciation for what makes the transactional leadership style "tick." These are leaders we read about in the press all the time. They are constantly meeting new people, making deals (completing transactions) and moving on.
Again, we don't want to make it seem like transactional leaders as "shallow." Under certain conditions, this leadership style is extremely effective and most leaders operate on a continuum as mentioned earlier.
Transactional Leadership and Women
An interesting study conducted by Northwestern University with respect to transactional, transformational, and laissez fair leadership styles revealed that women are more likely to use transformational methods than male leaders. This means most women were more interested in working with people holistically, not just making deals.
The study also found that when female leaders used the transactional leadership style, they were more likely to focus on the rewards component of that style. On the other hand, when men utilized the transactional style, they were more likely to focus on the punishment aspects of that style.
Admittedly the study found the differences between men and women to be small; however the differences were consistent in one way. Women always exceeded men when it came to the positive aspects of a leadership style and men always exceeded women when it came to the negative attributes of the style. Translating - women always won when it was good to win and men always won when it was bad to win.
Regardless of winners and losers, the important thing for the leader is to understand the strengths and weaknesses of the style they use most frequently. To be effective in the workplace, the leader must also realize that switching between styles can make them a more effective leader too.
About the Author - Transactional Leadership
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