Transactional Leadership

Transactional Leadership -



Transactional leadership tends to emphasize on the results, stays within the current organization’s structure and evaluates success based on that penalties and rewards system of that organization. The transactional leaders tend to hold the responsibility positions and formal authority in the institution. They are also responsible for sustaining the routine by facilitating the group performance and managing the performance of individuals. Managerial – transactional leaders set the expected standards for the employees and conducts performance reviews so that they can evaluate their performances.

Most top leaders utilize a certain style referred to as managerial leadership or transactional leadership. This is a style that focuses on the method of management and involves arranging, developing short term plans and directing. This particular system is mostly functional on the punishment and reward system. It is a style that is very popular among the managers and consists of clear structures which should be followed by the employees. People working for such kind of leaders tend to be deemed responsible for their activities even though they’ve been provided with clear instructions on a continuous basis.

Since transactional leadership happens to be a punishment and reward style, it’s good at motivating employees to become resourceful and constructive members of the team. The reward offered when the employees become productive is an amazing incentive. This management style also allows the employees be aware of the fact that the management is observing how they’re working and that they’re intent on achieving the expected maximum performance and the set goals. Failure of maintain the proper performance can result to punishment. Additionally, this style allows for setting of the short term plans to make sure that the vision of the company is met.

Managerial – Transactional Leadership

Managerial leadership – transactional leadership consist of a succinct and clear makeup. The company’s employees with this type of leadership style are familiar with the expectations that the company have on them. They’re also offered with straightforward instruction and they’re expected to follow the command chain that makes it easier for them in knowing the channels they should follow. Additionally, this makes them know that they’ll be offered rewards for completing their allocated tasks and following directives or punished when they don’t.

Transactional – managerial leadership is very useful in assisting production increase and cost reduction. It is a leadership style that consists of a precise structure that has unchangeable rules and policies.

Even the employees tend to have certain amounts independence and freedom in performing their tasks they’ve to perform them within parameters that are set by the management. Insubordination or complaints are not tolerated because of the expectations’ inflexibility. Such leaders generally get it challenging in adjusting to particular situations since they limit their creativity.

This style of leadership prevents the managers from acknowledging the creativity of employees which might have helped them in performing the job in a better manner. They also don’t accept suggestions that may be beneficial to the firm. Due to the fact that this style of leadership isn’t open for suggestions from individuals under management and rigid, it hinders the creativity of the employees who may have effective and high quality suggestions for improvement of an institution.

Transactional leaders should operate within boundaries that have been for them. They have also been set out so that managers can’t react to the employees’ emotions provided the tasks have been completed appropriately. These leaders effectively achieve their goals and objectives within specified timeframes although they’re unable to accept emotional ties with the employees, who then become inconsiderate to displaying concerns for the firm and solely focus on performing their tasks. Despite that fact that this style of leadership is still dominant, one will hardly ever observe a level 5 or 4 leader using this style.

Role Of The Transactional Leaders

Some of the roles that the transactional leaders do include;

Setting the goals and giving specific directions about their expectations from the employees and how their efforts will be rewarded.

Establishing and standardizing practices which will assist the firm to become productive and efficient

Provided productive feedback based on the performances of employees

Focusing on increasing efficiency of the established procedures and routines and showing concerns for following the current rules instead of making changes.

The transactional leaders also offer responses to the deviations from expected results and identify the corrective actions that can be employed to improve the performance.

Features Of The Transactional Type Of Leadership

• Transactional leadership is inflexible and revels inefficiency
• It is based on following the pre- determined rules and performing various tasks appropriately
• It also opposed to changes and focuses on the short term objectives and goals
• Favors the structured procedures and policies

Merits And Demerits Of The Transactional Leadership

The transactional type of leadership works perfectly in the organizations that consider their structure to be important. It may, however, not fit in the organizations that encourage incentives. The transactional leadership, therefore, has some merits and benefits that we will also look at in another article.

Merits Of The Transactional Leadership

First and foremost, this style of leadership rewards individuals who are inspired by their self interest to adhere to the instructions. It also involves penalties and rewards that have been defined for the employees. It gives a definite structure for the large institutions, environments that are infinitely reproducible and the systems that need repetitive tasks. Additionally, it helps in the quick achievement of the organizational short term goals.

Demerits Of The Transactional Leadership

This particular leadership style doesn’t reward personal incentives and limits creativity since the objectives and goals are pre- determined. Another limitation is the fact that this style of leadership rewards the employees on practical levels only like perks or money.


We can ensure that the transactional style of leadership establishes certain punishments and rewards so as to motivate the employees within a company. If the employees sufficiently meet the expectations and the goals of the leaders, they’ll receive rewards for their efforts at the organization. Contrarily, if they violate or fail to accomplish these expectations and goals, they might be punished or fined.