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Critique of Transformational & Transactional Leadership

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“Leadership without perspective and point of view isn’t leadership-and of course it must be your own perspective, your own point of view. You cannot borrow a point of view any more than you can borrow someone else’s eyes. It must be authentic, and if it is, it will be original, because you are original”. (Bennis, 1992, p.122)

This paper assesses two popular leadership theories: Transformational Leadership & Transactional Leadership. It further looks at the criticisms that are pitched against both theories. Extra emphasis will be placed on the criticisms that challenge both theories on the basis of certain flaws that are considered fundamental. It further draws out objective questions on how plausible all the empirical evidences are seen as there may have been some generalizing and misrepresentation in the parts of some critiques. In addition, pertinent claims of both theories have been addressed over time and its method of leadership have been brought to the fore and dissected. The Transformational Leadership theory has been built under four components which have been the yardstick of measuring how leaders conform under them. The theory is believed to be grounded under moral foundation.

These components are: i. the idealized influence, ii. inspirational motivation, iii. intellectual stimulation and iv. individualized consideration. Transformational leadership makes use of motivation towards satisfaction or a much greater level of achievement. Unlike transactional leadership that makes use of direct control, transformational leadership will require loyalty, trust, genuine concern and objective goals to achieve the much desired effect a leader wants to obtain from his employees. Transformational leadership is interested in a long term goal and vision, building and motivating people to take control of their leadership personalities, mentoring subordinates and using motivating words to persuade people to share the long term vision of the organisation. In Transformational leadership, the actual influence of the leader comes from the people’s loyalty and trust towards him and the goal they are certain he will motivate them towards achieving.

Transactional Leadership on the other hand is a leadership method that enforces the notion that there are rewards or consequences for any good or bad action. Transactional leadership is fostered on a reciprocated act in such a way that the relationship between a leader and his follower will only be built and nurtured based on expectations of the leader and the promised rewards for the employee to be effected only if performance target is met or exceeded and other forms of recognition that will serve as reward to the employee will be awarded. Most times, transactional leaders make use of processes, bureaucracy measures of climbing the corporate ladder and some other enforcing leadership skills to achieve desired results from employees with promises of physical rewards such as higher pay package, promotion promises or a business partnership in order to get the result that is craved for. In this kind of leadership, we can safely say the use of hierarchical reward to motivate employees is the key factor of engagement.

With the points used to explain and differentiate the leadership styles of both theories, it will be safe to say that while transformational leadership may be the desired way of leading in a dynamic era, transactional leadership is actually the operative leadership version of what takes place in most major companies in today’s dynamic era. Even though both theories share some generalization concepts with empirical evidence that cannot be farfetched from opinions of other critiques, it will be clear to know that transformational leadership is only a theory that needs to be objectively studied to enable one know how actually leadership ought to be in any environment while transactional leadership is the practical hands down approach on how leadership is being effected in companies of today. These concepts are quite interesting and of relevance to my work as they both share some certain work analogy yet both leadership methods are viewed in a parallel way.

Transformational leadership demands for productivity from its followers without coming out right to reward actions however at the end of every self-evaluation and ability to transcend above one’s self interest, a follower will perform more at his workplace which will increase productivity output and could lead to unsolicited rewards from employers. However many critics have come up to explain the difference that alienates one from the other, both theories juxtapose one another in such a way that one theory leans towards the other at the end and both leaders want same thing from the employee: optimum performance. Bass et al, 1999 argues that “to be truly transformational, leadership must be grounded in moral foundations”. Wren et 1998 also believe the “ethics of transformational leadership rests upon three pillars; the moral character of the leader, the ethical legitimacy of the values embedded in the leaders vision, articulation, and program which followers either embrace or reject and the morality of the processes of social ethical choice and actions that leaders and followers engage in and collectively pursue”.

Bass et al, 1988 believes that while transformational leadership models are grounded world view of self-interest of leaders even though some ethicists still believe exclusive pursuit of self-interest is questionable, transactional leadership provides a more reasonable and realistic concept of self- which is a self that is connected to friends, family, and community whose welfare may be more important to oneself than one’s own. Understanding the difference between Transformational & Transactional leadership is vital in understanding the concept of both theories. In general, a co-existing relationship between people is all about the exchange that is shared. The more the exchange, the stronger the relationship. This means anything done based on this exchange is concluded and thus generates reward, it means there is a transactional type of relationship. Hence, the recipient of such reward is the follower while the giver is the leader; a transactional leader. In today’s businesses, leaders announce rewards to maximise productivity output.

The relationship is all about requirements, conditions and rewards, or consequences as the case may be. Leaders exhibiting these methods are known as transactional leaders. Transformational leaders on the other hand work towards a common vision with employees/followers, believe in developing and motivating them and inspiring them to build their own self-interests so as to achieve expected results and even surpass them. Shamir et al (2005) further stated that “Transformational leaders base their actions on their values and convictions while Transactional leadership base their actions on rewards and hierarchy”. My personal perspective on leadership tilts towards believing every leader has the tendency to enforce control through reward while also motivating the employee with motivating words, coaching and allowing employee to build confidence while working towards getting the rewards set by employer.

While I understand that transformational leadership is the style of leadership that is aspired to be adopted in today’s organisations, what we currently have is the transactional leadership. In as much as critics may believe this method of leadership to be unethical, we can relate with Hollander, 1995 who argues that “transactional leadership is moral when the truth s told, promises are kept, negotiations are fair and choices are free”. He only considers it immoral when information that will be harmful to followers is deliberately concealed from them, when bribes are proffered, when nepotism is practiced and when authority is abused. (Bass et al, 1975 P.7). Bass further argues that “transformational leaders may be directive rather than participative as they attempt to align individual and organisational interest, if they grasp what is needed and can articulate what will align the interests of their followers and the organization”.

I lean towards supporting transactional leadership concept as I am well aware that most employees may oppose to working voluntarily without any financial reward or benefits as transformational leadership seems to suggest. As a leader who wants to get the best out of her employees, I will say it is more realistic to get more productivity if reward is attached to performance and knowing that all resilience and hard work will be rewarded at the long run will serve as motivating factor for any employee who wants to build a successful career. Conclusion

According to Bass, Valenzi et al 1975, “There is no best way to lead in all situations. Few leaders of organizations and movements give orders and direct without reasons. Many more give orders with reasons that are often persuasive reasons. Most often, leaders consult with followers before they, the leaders decide. Less frequently, they empower followers through delegation of responsibilities or participate with followers in shared decisions. Ordinarily, followers are more satisfied with consultative or participative decision-making but the effectiveness of the decisions will depend on how knowledge, wisdom and expertise are distributed between the leaders and followers”. Bass statement above actually shows that every leader has the tendency to be transactional and transformational. Both leadership methods juxtapose each other and a leader may experience peculiar challenges leading with just one of these two methods.

I will safely say that transactional method of leadership is what is operational in today’s business world while transformational leadership occurs mostly in relationships that are not within the working environment such as mother’s love to a child and nurturing the child without expecting payment, a mentor’s coaching of his ward and ensuring the war turns out right without any reward expectation. These methods of leadership can safely be said to be the only way a transactional leadership will be effected without any need to look out for a reward of any kin. As for profit making organisations, it will be dangerous and an unwise decision to operate a transformational kind of leadership as it will negate the whole idea of making profit if employees are not paid nor rewarded to meet up with expectations of clients and investors alike.

To conclude, it is pertinent to note that leadership, although a popular topic for discussion in its own right, is still a “tricky business” to define, according to Mintzberg. This paper has highlighted the values and similarities between transformational and transactional leadership and shown that many of the arguments of both theories however sensible can be challenged and discarded. I would argue that both theories share similar goals and at the end of the day, want the same things from their employees, Hence, one can safely say the empirical criticisms are quite mundane and unfounded considering that each theory ironically still share one goal: productivity, despite going about it in separate ways and methods as constantly being reminded by critics.


Bass, Bernard M & Steidimeier. Paul, Ethics, character, and authentic transformational leadership behaviour. 1999.p.1-15 Boas Shamir, Galit Eilam, “What’s your story?” A life-stories approach to authentic leadership development. 2005 p. 1-4 Gary Yukl, Managerial Leadership: A Review of Theory & Research. 1989

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