Transactional leadership

The transactional leadership style was first described by Max Weber in 1947 and then reinforced by Bernard Bass’s work in 1981. Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest. Most of the time, the power of transactional leaders come from their formal authority and responsibility in the organization. The follower is expected to obey the instructions of the leader.

Transactional Leadership focus on the basic management process of supervision, control, organize, plan and ensure group performance. It promotes compliance of followers through both rewards and punishments. Generally leaders using the transactional approach display managerial attributes and are not looking to change the future. They accept goals, structure, and the culture of the existing organization. Transaction leaders tend t o be directive, action-oriented and pay attention to followers’ work in order to find deviations and ensure compliance. This type of leadership is effective in crisis and emergency situations, as well as for projects that need to be carried out in a specific way minimizing process variations.

To facilitate this, the transactional leader works t hrough creating specific structures whereby it brings clarity to what is expected from their subordinates and the rewards that they get for following orders. Although punishments are not always mentioned, they are also well-understood and formal systems of discipline in place. According to research, when female leaders use the transactional style, they are more likely to focus on the rewards component and men focus more on the punishment aspects. Early stage of transactional leadership is negotiating the contract whereby the subordinate is given a salary and other benefits, and the company (and by implication the subordinate’s manager) gets authority over the subordinate. When the transactional leader allocates work to a subordinate, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure and rewarded for success.

Since the functions of a transactional leader evolve around ensuring compliance and improving business efficiencies, this is more to be recognized as managerial leadership covering core functions in a business context as follows:

Analyzing & Interpreting the Vision - Acquiring cross functional awareness and demonstrating spatial awareness, capability to analyze and evaluate information, testing assumptions and investigating, producing solutions, making judgments, and demonstrating systems thinking.

Goal Alignment by Adapting & Coping - Adapting refers to responding to change, accepting new ideas, developing interpersonal style, showing cross-cultural awareness and dealing with ambiguity. Coping leads to perform under pressure and setbacks, showing emotional self- control, balancing work and personal life, maintaining a positive outlook and handling criticism.

Gaining Support & Cooperating

- This covers working with people, understanding others, adapting to the team, building team spirit, recognizing and rewarding contributions, listening, consulting others, communicating proactively, showing tolerance and consideration, showing empathy, supporting others, caring for others, as well as developing and communicating selfknowledge and insight.

Delivering Success through Organizing & Executing – Organizing comprises of setting objectives, planning, managing time, managing resources, and monitoring progress while delivering results, meeting customer expectations through focusing on customer needs and satisfaction, setting high standards for quality, monitoring and maintaining quality, working systematically, maintaining quality processes, maintaining productivity levels, and driving projects to results. Successful execution is achieved by following instructions and procedures, time keeping and attending, demonstrating commitment, showing awareness of safety issues, and complying with legal obligations.

When use on its own, transactional leadership model can be flawed due to factors such as assuming a worker’s behavior is consistently predictable because most workers are largely motivated by money and/ or other basic rewards. Some of the other limitations and drawbacks to be cognizant of are;

Limitations

The transactional leaders overemphasize detailed and shortterm goals through standard rules and procedures. This kind of a leadership style may work well where the organizational problems are simple and clearly defined and where individual contribution is predominantly prevalent such as military, manufacturing processes and construction. However i n certain work environments where team work culture is encouraged transactional leadership may have its own constraints. Implementing performance related rewards and punishments may lead to several constraints in some countries such as legal, ethical and cultural issues. For example if the group is rewarded for its collective performance, whereas there is a slacker in the group, employee morale may suffer as others may perceive an injustice. As a result, in future group projects some employees may decide to ride on the work of others. Transactional leadership can work in cultures such as North America where individualism is held in high esteem, it may be less successful in other cultures such as Japan, Sri Lanka that are more group-oriented.

Drawbacks

Transactional leadership focuses on control. The leader, rather than empowering his employees and leaving them to complete their work, is likely to be engaged in active management - controlling and watching them closely. Transactional leadership separates t he leader from the followers. Obedience is expected from followers. Since high performance is rewarded, one unintended outcome may be a reduction in quality if the focus is on quantity. Extreme care must be taken so cost cutting does not have negative consequences -- which require even more control. Transactional management may favor short-term profit at the expense of long-term performance. Because transactional leaders tend to be highly directive and action oriented, their relationship with the followers tends to be transitory and not based on emotional bonds.

Hence for transactional leadership to be more effective it may be necessary to; Respect Subordinates: It’s easy to end up as rigid as the rules to be enforced. It’s important that the leader stay fair and acknowledge that everyone brings something to the table, even if they don’t call the shots. Explain the rules: Employees know they have to follow procedure, but it helps them do a better job if they know why. Be consistent: If the leader’s role in the team is to enforce the company line, ensure same is done consistently and fairly. Educate before enforce: Having everyone understand the business expectations up front will mean less surprises down the road. Listen: It’s important to be clear that they are heard, no matter what the outcome is. This is not to say that transactional leaders are "shallow." Although transactional leadership is being applied to the lower-level needs and more managerial in style, it is a foundation for transformational leadership which applies to higherlevel needs of the individuals and organizations.

(This is the fourteenth article under the Leadership series. The writer Eng. Gamini Nanda Gunawardana B.Sc. Eng. (Hons.); M.B.A.; C.Eng.; F.I.E. (SL); M.C.S. (SL); M.I.D.P.M. (UK); F.I.A.P. (UK); M.B.C.S. (UK) is Management, HR, OD & ICT Consultant, Corporate Trainer, Executive Coach Consultant – HRDGoodhope Asia Holdings Ltd.. He can be contacted via E Mail : gamining@gmail.com or Skype : gamini7147)