The best managers know how important it is to balance the transactional leadership style with transformational practices like managing employees by focusing on moral issues which include people’s needs so long as those necessities don’t interfere with company quotas.
Large corporations, such as Hewlett-Packard and others rely on transactional leadership. This style of management is also useful for high-ranking military officers, CEOs in large international companies, NFL coaches. The model’s output tone should be professional due to the importance of crises or projects that require linear processes with specific goals like HP during its turnaround phase when a company needs someone who can make decisions quickly but still have good relationships with employees.
Transactional vs. Transformational Leadership: How they complement each other
The year 2020 showed organizational leaders how rapidly accelerating change is happening. Transactional leadership can often fall short of innovation, strategy creation, and employee development.
Leaders that practice both transformational leadership and transactional leadership never felt like the business would collapse because transformational leadership empowers, motivate and inspire their employees without micromanaging them.
The ability of a leader to sustain great enthusiasm and passion for long periods is also key. Leadership in Transformation is about managing a team with vision-based management skills to guide them through a turbulent journey and successful change.
Examples of transactional leadership
Transactional models might be well adapted for crises and projects that require linear processes to meet specific requirements. This model has also been used by major corporations, NFL coaches, police agencies, first response organizations, and top military professionals:
In The Military
A good example of transactional leadership is seen in how Gen. Norman Schwarzkopf led his troops. He was born in 1934 and graduated from West Point and later went to Vietnam where he joined the Vietnamese army as an advisor. He got wounded twice and then rose to become a brigadier general and then commander in chief.
What better example than that of Vince Lombardi. As the coach of the Green Bay Packers, his team never lost. Under his leadership, the team managed a 98-30-4 record and championships. He compiled a winning percentage of 73.8% and 90%. After he died in 1970 from cancer he was enshrined in the pro football Hall of Fame and the Super Bowl trophy was named after him.
Bill gates was a transactional leader who delegated and offered guidance to his employees. He would lay it to them about what he wanted and gave his employees little freedom. Transactional leaders tend to be controlling and Bill Gates practiced this by giving his workers little freedom. His focus was on the completion of projects and achieving the target quickly and efficiently.
How do you know if transactional leadership is for you?
Do you find yourself offering contingent rewards to your employees for goals achieved and punishing them for not achieving their goals? If you do, then you are a transactional leader.
Transactional leaders are leaders that focus on practicing leadership skills by implementing reward programs for their teams.
This leadership style of reward program results in individuals that are motivated, productive, and well-liked. For this or other leadership styles to work, you should take into consideration the team’s personality when choosing a leadership style.
There are also four qualities involved with this leadership style: keeping promises, providing incentives, behaving fairly, and keeping lines of communication open. In order to be successful at utilizing this leadership style, you should be approachable.
These leaders sometimes practice active management to monitor the teams and find solutions to problems that may arise. They may also practice passive management by only intervening when they are needed, or when the goals are not met.
Transactional and Transformational Leadership Style
Transactional leaders focus on interpersonal relationships to maintain the group’s structure in order to maintain a good team and employee performance and by extension- group performance
Transactional managers are only focused on the task at hand while transformational leaders encourage positive development of team members, encourage high moral standards, and foster an ethical working environment.
In the business world, most leaders are more transactional than they are transformational.
A transactional leader does not seek to develop trusting relationships with followers or empower them in order to achieve business results.
The transactional model of leadership works well in places with crises that need urgent restructuring, and in large corporations.
A CEO with an authoritarian leadership style, for instance, may use threats of firing employees to get immediate compliance in the workplace. There are several characteristics that all transactional leaders share in common; clarity
Advantages of Transactional Leadership
Motivates team members to increase productivity
Transactional leadership rewards employees and they find it to be worth it. For some, staying employed is a way of pursuing passions and interests outside work or for those who enjoy what they do within their company enough that it feels like a hobby rather than just something you have to do. Others might really love being part of an organization with such potential as when working at Apple can positively influence lives all over the world through iPhones and iPads used by millions every day.
Allows Workers To Achieve Goals
For effective transactional leadership, Company management and team leaders should give their workers some input on what kind of incentives they could get. This would mean that if a worker wants more vacation time, then the company can offer them rewards for it like bigger paychecks or extra benefits workdays to make up for lost hours. Workers can maintain their status quo as long as they deliver their part of the bargain.
Lower Cost and Higher Productivity
Transactional leadership is a philosophy that focuses on production improvements and exercising cost-saving measures. Think of it as a “lean and mean” management style where employees work harder when they are given achievable short-term goals. When an employee successfully reaches their goal, there will be internal rewards such as confidence which makes them want to repeat this process once again making the business more successful in the long run!
This way, transactional leaders get to keep the ship afloat in case of a crisis and maintain the status quo. This is because the company will continue working as the backlog is delegated to employees with a promise of incentives.
The System Is Easy To Follow
The voice of your team must be professional when communicating in a transactional environment. There is little room for misinterpretation, due to the fact that regulations are rarely ambiguous and people know what they need to do. It’s up to you as an employee whether or not you will implement company instructions issued by supervisors.
Disadvantages of Transactional Leadership
Restriction of Creativity
It is a strict set of rules and regulations that need to be followed without bending or breaking them. Creativity usually comes from freedom which transactional leaders do not allow for, so those who come with this mindset may find it difficult to produce anything under such structure.
Increases number of followers rather than leaders
Companies should avoid this type of leadership because it puts too much responsibility into one person’s hands, making them at risk for burnout down the line due to nonstop pressure as well as possible abuse by power-hungry individuals who seek fleeting rewards instead of building up lasting relationships with anyone besides themselves.
Forgetting about empathy
Transactional leaders are also working in an environment where the work is not influenced by emotional responses. That means they cannot change any of these rules and regulations, so their emotions do not matter for production purposes. This philosophy then transfers to how people report up through this organizational structure – as long as you’re completing your tasks, it doesn’t matter what you think or feels about them at all!
In conclusion, it is important to understand that the most powerful management style is that of the strong leader or the strong decision-maker. There are no restrictions on transactional leadership but what matters most is that he or she sets the goals and gives clear instructions to his or her followers. He or she is not required to give exact instructions all the time. However, it is essential to make sure that the leader keeps everyone in the loop regarding the purpose of the system and the processes that have been established to make it work.