TRANSACTIONAL

LEADERSHIP THEORY
Dayo Odukoya
What is Transactional Leadership?

Transactional leadership, also known as

managerial leadership, focuses on
supervision, organization, and
performance;
Transactional leaders promote
compliance by followers with application
of reinforcement principles [rewards and
punishments]
adedayo.odukoya@covenantuniversity.edu.ng
What is Transactional Leadership?

Transactional leadership focuses

on results and conforms to the
existing structure of an
organization.
S/he sets the criteria for their
workers according to previously
defined requirements.
adedayo.odukoya@covenantuniversity.edu.ng
What is Transactional Leadership?

Transactional leaders have formal

authority and positions of
responsibility in an organization.
S/he is responsible for maintaining
routine by managing individual
performance and facilitating group
performance
adedayo.odukoya@covenantuniversity.edu.ng
What is Transactional Leadership?

Transactional or managerial leaders

work best with employees who know
their jobs and are motivated by the
reward-penalty system.
The status quo of an organization is
maintained through transactional
leadership.
adedayo.odukoya@covenantuniversity.edu.ng
What is Transactional Leadership?
Transactional leadership theory is based
on the idea that managers give
employees something they want in
exchange for getting something they
want.
It posits that workers are not self-
motivated and require structure,
instruction and monitoring in order to
complete tasks correctly and on time.[X]
adedayo.odukoya@covenantuniversity.edu.ng
What is Transactional Leadership?
The transactional model is likely to succeed in
a crisis situations or in projects that require
linear and specific processes.
The transactional model is likely to succeed in
a crisis or in projects that require linear and
specific processes. Many high-level members
of the military, CEOs of large international
companies are known to be transactional
leaders.
adedayo.odukoya@covenantuniversity.edu.ng
History of Transactional Leadership

Max Weber, German sociologist, made

an extensive study of leadership styles
and divided them into three categories:
traditional, charismatic and rational-
legal, or bureaucratic.
In 1947, Weber’s description of rational-
legal leadership later became known as
transactional leadership.
adedayo.odukoya@covenantuniversity.edu.ng
CHARACTERISTICS OF TRANSACTIONAL
LEADERSHIP STYLE
 Characteristics of Transactional
Leadership Style

Short-term focus Ideal for Structured Policies

Focused Favor
structured
on short-
policies and
term goals procedures
Characteristics of Transactional
Leadership Style

Follow Rules Quest for Efficiency

Thrive on
following
rules and
Revel in
doing things efficiency
correctly
Characteristics of Transactional
Leadership Style

Inflexible Fixated

Tend to Opposed
be to
inflexible change
ADVANTAGES AND DISADVANTAGES
OF TRANSACTIONAL LEADERSHIP
 Advantages of Transactional
Leadership Style
Reward Self Motivation Structure

Rewards
those who Provides an
unambiguous
are self- structure
motivated
 Advantages of Transactional
Leadership Style
Quick Achievement Clear Penalties

Achieves Rewards and

short-term penalties are
clearly
goals defined for
quickly workers
Disadvantages of Transactional
Leadership Style
Limited Creativity Low Personal Initiative

Does not
Creativity reward
is limited personal
initiative
More?
CLASSICAL TRANSACTIONAL
LEADERS
TRANSACTIONAL QUOTES
 “When placed in
command, take charge.”
- Norman Schwarzkopf:
 “The first rule of any technology used in a
business is that automation applied to an
efficient operation will magnify the efficiency.
The second is that automation applied to an
inefficient operation will magnify the
inefficiency.”
- Bill Gates
Transformational
Leadership Theory
Dayo Odukoya
Origin

Bass (1985) propounded the

theory of Transformational
leadership.
 It is the most researched and
well-known theory of leadership in
the last 20 years.
adedayo.odukoya@covenantuniversity.edu.ng
Definition

Leadership is recognised as
an interactive process,
which transforms both
leaders and followers
resulting in positive
organisational outcomes
adedayo.odukoya@covenantuniversity.edu.ng
The Four Components of Transformational
Leadership

1. Idealised influence 2. Inspirational motivation

The leader behaves The leader holds a

according to high strong vision for the
moral and ethical future; the leader
standards and so creates enthusiasm,
inspires confidence builds confidence
and loyalty in and inspires
followers followers
The Four Components of Transformational
Leadership

3. Intellectual stimulation 4. Individualised consideration

Leader is
Leader challenges concerned with the
organisational personal and
norms; the leader professional
encourages development of
subordinates to be subordinates; acts
creative and as mentor or
innovative coach; consults
with subordinates
 BASIC CHARACTERISTICS OF
TRANSFORMATIONAL LEADERSHIP

adedayo.odukoya@covenantuniversity.edu.ng
Basic Characteristics of Transformational
Leadership

Inspirational Mobilization

The leader can Because

inspire workers leadership can
to find better mobilize people
ways of into groups that
achieving a can get work
goal done
Basic Characteristics of Transformational
Leadership

Build Morale Conflict Resolution

transformational
leaders raise the They are
well-being and
motivation level
also good
of a group at conflict
through excellent resolution
rapport
Basic Characteristics of Transformational
Leadership

Inspire Autonomy & Authority

Transformational Gives workers

leadership autonomy over
inspires people specific jobs,
to achieve and authority to
unexpected or make decisions
remarkable once they have
results. been trained
RESEARCH FINDINGS
Empirical Support for Transformational
Leadership Theory
The relationship between transformational
leadership and outcome measures such as
subordinates' satisfaction and enhanced
performance in a range of organisational settings
has been confirmed (e.g., Bass, 1997, 1998).
Meta-analyses have provided strong support for
positive associations between transformational
leadership and leader effectiveness (Judge &
Piccolo, 2004; Lowe et al., 1996).
adedayo.odukoya@covenantuniversity.edu.ng
 Research Findings

Yukl (1998) Finding Kark, Shamir and Chen (2003)

Transformational Transformational
leadership achieves leaders have
its effects through
followers' their greatest
identification with the influence on
leader (personal followers
identification) and
with the work through their
group/organisation personality and
(social identification) behaviour
DIFFERENCES BETWEEN TRANSFORMATIONAL
LEADERSHIP AND OTHER LEADERSHIP STYLES
Differences between transformational
leadership and other leadership styles

Transformational Transactional

Work to Work
change within the
the system system
Differences between transformational
leadership and other leadership styles

Transformational Transactional

Wanting to Want to
know the
know what
step-by-step
has to approach
change
Differences between transformational
leadership and other leadership styles

Transformational Transactional

Maximizing
Minimize
their teams’
variation of
capability
the
and
organization
capacity
Differences between transformational
leadership and other leadership styles

Transformational Transactional

Solve Solve
challenges by
finding challenges
experiences by fitting
that show that experiences
old patterns do
not fit or work to a known
pattern
Differences between transformational
leadership and other leadership styles

Transformational Transactional

is a is a
“selling” “telling”
style style
 ADVANTAGES & DISADVANTAGES OF
TRANSFORMATIONAL LEADERSHIP STYLE

CAN YOU MENTION SOME?

Advantages of Transformational
Leadership Style

Good for Change New Ideas

Works well in
Excellent
organizations at
where communic
change is
ating new
needed
ideas
Advantages of Transformational
Leadership Style

Trust Strong Coalitions

Good at Good at
establishing building
mutual strong
trust coalitions
Advantages of Transformational
Leadership Style

Integrity Empathy

They have
They high
have emotional
intelligence
integrity (empathy)
 Disadvantages of Transformational
Leadership Style

Poor in Ad-hoc Situations Structure Stifled by Bureaucracy

Ineffective
in initial Require
stage or ad- an Bad fit in
bureaucratic
hoc existing
situations structures
[needs time] structure
Classical Transformational
Leaders

adedayo.odukoya@covenantuniversity.edu.ng