by Charles Ray

Created on: April 19, 2009

Effective leadership is essential to the success of any organization. Today, as never before, we are in need of effective leadership, from the White House to state houses, to the club house of the local Cub Scout troop.

There are essentially two main schools of leadership; the transactional and the transformational. Transactional leadership is based upon an exchange of value and upon authority relationships. The leader has something of value; salary, promotion, etc., which is given to the employee in exchange for performance of certain services. The flip side of the exchange of value in transactional leadership is the implication that failure to deliver value can result in negative consequences such as reduction in pay or dismissal. Transactional leadership, in simpler terms, can be expressed this way: I am the boss, and I tell you what to do. You do it, and I reward you. Fail to do it, and suffer the consequences. It is a zero-sum game.

Transformational leadership, on the other hand, is based upon the unconditional acceptance of workers as individuals. The transformational leader creates a compact with his followers. Instead of offering an exchange of value, he encourages them to take ownership of their work environment and create their own value. As opposed to transactional leadership, which is downward-directed and authoritative, transformational leadership allows followers to have input into the decisions that affect their lives. Transformational leadership is grounded in the principle of the leader as a servant of the followers, while transactional leadership views the leader as master.

Transactional leaders work within the organizational culture, ensuring enforcement of the organizational rules and behavioral norms. Transformational leaders change the organizational culture. and inspire everyone within the organization to continually grow and develop.

Does this mean that one type of leadership is superior to the other? Not necessarily. There are situations that require transactional leadership. Responding to a crisis, for instance, requires that everyone work in concert and do the things necessary to mitigate the crisis. Directive leadership (albeit with a light hand and an absence of micromanagement) is probably best in such situations. In a combat situation, a commander does not have the luxury to consult before issuing orders. On the other hand, in most work situations, transformational leadership yields superior long-term results. The key is to strike the proper balance between the two styles. The ideal model would be to develop as a transformational leader who is able to be directive when the circumstances call for it. If your dominant style is transformational, there will be less resistance to direction as your followers will normally have had input into the majority of the work decisions and will understand the need for direction.

Learn more about this author, Charles Ray.
Click here to send this author comments or questions.