Can the Transactional Leader survive?

9 01 2010
 
Transactional Leadership amid Current Trends –By Dr. Mark Ellis
 
In previous years, the transactional leadership model was the prominent leadership style throughout the 20th century. The rise of corporate America, no doubt, formed some of the most astounding business organizations in the history of humanity. Various transactional leaders formed what is identified as a bargained for exchange, based on reward and punishment of subordinates. This approach seemed to be the norm. However, due to the extreme changes in the 21th century can the transactional leadership model even survive? There seems to be a mixed consensus among scholar-practitioners who either endorse or decry transactional forms of leadership.
 
The assumptions of transactional leadership are that the performance of subordinates is based on a system of reward and punishment (Burns, 1979; Bass, 1985). Further, the assumption is also that leadership is highly effective in an organizational environment where there is a clear chain of command. As Bass (1985) observes, compliance clear and direct objectives and completion are all important factors that underlie a transactional leadership. Clarification of goals in the completion of tasks is an essential component of transactional leadership (Friedman, 2004).
 
The transactional leadership basically engages in a transaction with their subordinates requiring them to perform based on a previously negotiated compensation of reward (Bass, 1990). Expectations of the leader are communicated to the subordinate in clear and definite terms. Further, punitive action against subordinates is likewise communicated from the leader to the follower in the event that the follower fails to meet a certain criteria as set forth by the leader.
 
Unlike transformational leadership that encourages followers to look beyond self-interests the transactional leadership model requires compliance to specific standards which may appeal to the self-interests of individual stakeholders which in turn is motivated through incentives and rewards (Friedman, 2004). In the transactional environment, the emphasis is more management, rather than leadership oriented (Burns, 1978). The transactional leader may intervene and take corrective action and in essence, managed by exception when standards are not met or tasks are not completed or workers deviate from the rules and standards within the organization (Bass, 1990). Further Bass asserts that transactional leadership is a prescription for mediocrity (p. 20).
 
In an environment that is under the influence of a transactional leader, it is presumed that subordinates their authority to their leaders, whether it is immediate mid level or senior level superiors. In this model is the duty of the subordinates to comply with the leader’s directives as agreed on within the leader-follower contract. Avolio, Bass, Berson and Jung, (2003) identify a transactional leadership relationship with followers as such followers received praise, rewards, and resources or the avoidance of disciplinary action based on the follower’s performance.
 
One of the key characteristics of transactional leadership is that there is an exchange between the leader and the follower. Further, as Bass (1985) suggests, transactional leadership, unlike its transformational leadership counterpart is mostly based on contingent reward and order management by exception. According to Yammarino and Bass (1990), over the last several decades the dominant leadership style which has been prevalent in the world of modern business, has been transactional. Further, the transactional leader who induces a contingent reward system has a direct impact on followers affecting attitudes and performance as a result of a reward and punishment system (Avolio, Waldman, & Einstein, 1988; Waldman, Bass, & Yammarino, 1990). motivated through incentives and rewards (Friedman, 2004).
 
 In the transactional environment, the emphasis is more management, rather than leadership oriented (Burns, 1978). The transactional leader may intervene and take corrective action and in essence, managed by exception when standards are not met or tasks are not completed or workers deviate from the rules and standards within the organization (Bass, 1990). Further Bass asserts that transactional leadership is a prescription for mediocrity (p. 20).
 
In an environment that is under the influence of a transactional leader, it is presumed that subordinates their authority to their leaders, whether it is immediate mid level or senior level superiors. In this model is the duty of the subordinates to comply with the leader’s directives as agreed on within the leader-follower contract. Avolio, Bass, Berson and Jung, (2003) identify a transactional leadership relationship with followers as such followers received praise, rewards, and resources or the avoidance of disciplinary action based on the follower’s performance.
 
One of the key characteristics of transactional leadership is that there is an exchange between the leader and the follower. Further, as Bass (1985) suggests, transactional leadership, unlike its transformational leadership counterpart is mostly based on contingent reward and order management by exception. According to Yammarino and Bass (1990), over the last several decades the dominant leadership style which has been prevalent in the world of modern business, has been transactional. Further, the transactional leader who induces a contingent reward system has a direct impact on followers affecting attitudes and performance as a result of a reward and punishment system (Avolio, Waldman, & Einstein, 1988; Waldman, Bass, & Yammarino, 1990).
 
In closing, it will be interesting to see whether or not the transactional leadership style even survives over the course of the next several decades. With transformational, situational, pragmatic, and path-goal theories still at the table; the transactional leadership approach may give way to a more conducive leadership paradigm in order to facilitate the needs of organizations in the 21st century.
 
 

 

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