Determining Transformational and Transactional Leaders

Determining Transformational and Transactional Leaders

Sen-Pei Hsia
SUNY Empire State College

1
Determining Transformational and Transactional Leaders

Abstract

What is the difference between leadership and management? (Homrig, 2001).

Transformational Leadership

There is a wide debate on what constitutes management and whether or not it takes

a good leader to be a good manager. In the Human Resources practice, leaders are

highly sought after. Almost every corporation is looking for a specific leadership type that

can help transcend the company to higher realms - such as higher profits and a stronger

work culture. However, in order for us to examine and assess what a good leader is, we

must first define the term, Leader. According to James Mac Gregor Burns, the author of

the book, Leadership (1978), he states that, [leadership is defined by] leaders

inducing followers to act for certain goals that represent the values and the motivations

the wants and needs, the aspirations and expectations of both leaders and

followers (Homrig, 2001). What that means is that there is a common goal for all parties

involved - based on moral and ethical values that is set within the foundation of the leader

subordinate relationship.

In order to be a transformational leader, the leader themselves have to exhibit a

sense of altruism, ethical and moral value system that not only aligns with the

subordinate(s), but also motivates them to achieve beyond the goals set. In an article

published in the Journal of Business Ethics in 2011, it is stated that, Transformational

Determining Transformational and Transactional Leaders

leaders influence their followers by developing and communicating a collective vision

and inspiring them to look beyond self-interests for the good of the team and

organization (Groves and LaRocca, 2011). These sorts of leaders tend to follow four

leadership dimensions: 1) Charisma dimension - idealized attributes and idealized

behaviors, 2) inspirational motivation, 3) intellectual stimulation, and 4) individual

consideration.

Subordinates and followers of the transformational leader tend to respect the

leader based on the above mentioned leadership dimensions. For example, the

Charisma dimension, otherwise known as idealized attributes and idealized

behaviors, depicts leaders that have an ability to earn loyalty and respect by being

altruistic they consider their followers needs above their own, with an emphasis of the

importance of moral and ethical consequences of key decisions (Groves and LaRocca,

2011). That sort of relationship fosters a mutual respect of each party and allows us to

assume that the leader is not taking advantage of the follower.

The second characteristic of the transformational leadership is inspirational

motivation it is characterized by those that provide a sense of meaning and challenge

in their subordinates work and encourages followers to imagine attractive future states

for their work units and/or the organization (Groves and LaRocca, 2011). This means that

the leader is able to inspire and motivate the follower to look beyond their current system
Determining Transformational and Transactional Leaders

of thought and state of employment/ social position and imagine a higher position, social

or economic state both individually and for the organization.

The third characteristic is known as intellectual stimulation This sort of

leadership tactic encourages followers to be creative and innovative. This can be done by

questioning the status quo, assumptions of work problems (product, managerial, etc),

reframing problems and approaching old problems and issues in a new light. This is a

very sophisticated leadership style as it allows the follower the responsibility to rely on

their own creativity and mind, thus giving them the power and respect as an individual.

The fourth characteristic is individualized consideration this involves the

leader paying close attention to the immediate needs of the follower, especially with

regards to their own idea of achievement and growth. This will include mentoring,

teaching, coaching, and creating new learning opportunities that allows the follower to

blossom. This is highly regarded as positive conditioning for both ends, as the leader is

gaining satisfaction with the growth and loyalty of the follower and the follower is

gaining intellectually, spiritually and economically while being able to work for the

greater good.

There are many types of transformational leaders that display one, if not all, of

these attributes. Mahatma Gandhi displayed a high level of idealized influence, or the

Charisma dimension. He was able to employ his idea of non-violent civil disobedience to

enact change throughout India, gaining independence from the British in 1947. His
Determining Transformational and Transactional Leaders

altruistic leadership gained so many supporters, within India and outside, that it lead to a

trend of civil rights and freedom across the globe. He also used inspirational motivation

in order to motivate and guide his followers to work in a large collective for the greater

good (in their case, civil rights).

Another well-known transformational leader was Martin Luther King. King was

well adept within all four leadership dimensions. He worked within the frame of the

Charisma dimension in so which he followed Gandhis ideologies of non-violent civil

disobedience and was altruistic and selfless. He used intellectual stimulation, so that his

followers to questioned and perfected the system and the way they are to depict their civil

disobedience. He was also characterized as a strong inspirational motivator by

showing his followers that the greater good (again, civil rights) was beneficial to the

group as a whole. Lastly, he was adept at individualized consideration in which he

was known to work closely with his followers and take heed to their individual needs and

concerns.

It is my belief that Transformational Leadership is perhaps the most idealized

version of leadership in society but that it is most effective in social movements and

perhaps not entirely possible in a corporation. The reason this is the case is because it

depends on the amount of altruism the leader displays which is very difficult in a

corporate environment where the emphasis is on profit. There is also a debate on whether

or not there is such a thing as pure altruism. Either way, it has been proven within history
Determining Transformational and Transactional Leaders

that there is such a thing as martyrdom and selfless leaders and their cults of loyal

followers. However, when it comes to management (within a business, for example),

there may be a need for micro-management and an emphasis on superficial or economic

reward (re: transactional leadership discussed below).

Transactional Leadership

Transactional Leadership is a more realistic, widely used, practical form of

leadership that is most commonly found in corporations or middle management. They are

job or project-centric and have a rewards and punishment system. In Transformational

and Transactional Leadership: Association With Attitudes Toward Evidence-Based

Practice, by Gregory A. Aarons, Transactional leadership Is based more on

exchanges between the leader and follower, in which followers are rewarded for

meeting specific goals or performance criteria, (Burns, 1978, pages 3740). Rewards

and positive reinforcement are provided or mediated by the leader. Thus transactional

leadership is more practical in nature because of its emphasis on meeting specific targets

or objectives, (Burns, 1978, pages 4143). An effective transactional leader recognizes

and rewards followers accomplishments in a timely fashion. However, the subordinates

do not necessarily think in creative or innovative means, which is the main difference in

the two subordinate types of Transformational and Transactional leaders. The

Transformational leader will allow each and every subordinate to think beyond the box

and be creative, allowing the subordinate control of their own destiny, whereas the
Determining Transformational and Transactional Leaders

Transactional leader is task oriented and gives a rewards based on the outcome of each

task.

Deciphering Leadership

In order to decipher what sort of leader one is, the potentia candidate takes a

personality test or an assessment test called the MLQ, or, the Multi-factor Leadership

Questionaire (Bass and Avolio, 2015). It assesses the varying different personality types

or even combinations of leaderships styles - mostly for Transformational, Transactional

or Passive-Avoidant. This is a common assessment test used for development in

corporations or medical studies that allows us to assess ones abilities. Many large

corporations use the MLQ in order to assess management candidates. Most Fortune 500

companies try to assess what sort of personality types define certain types of leaders (All

this was listed above with Transformational and Transactional leaders).

Another way of deciphering leadership is using the The Motives, Values,

Preferences Inventory (MVPI) (Hogan Assessment, 2014). The MVPI, describes

personality from the inside the core goals, values, drivers, and interests that determine

what we desire and strive to attain. By assessing values, you can understand what

motivates candidates to succeed, and in what type of position, job, and environment they

will be the most productive. This is very important because the defining factor of a

leader and what sort of leader they will become is deciphered through their drive and

moral values.
Determining Transformational and Transactional Leaders

Examples in Leadership Acquisition: General Electric

One great company that assesses and develops a combination of transactional and

transformational leaders is GE, or, General Electric. Both the current and previous CEOs

(John Jack Welch and Jeffrey Immelt) are considered Transformational leaders with

transactional characteristics. When Jack Welch took over GE in 1982, his main goal was

to transform the company from a company in the red to have the largest market

capitalization of any company in the world (Lowder, 2006, page 3). In order to do so, he

knew he had to do a few things. Re: The evaluation of GEs transformational strategies

fall within the framework of four perspectives that include rational thought, revolutionary

thought, resource allocation, and technological processes, (Lowder, 2006, page 4). All

four of those perspectives are a combination of both Transformational and Transactional

qualities, both revolutionary and practical.

General Electric has a wide variety of Leadership development programs,

including the Early Career Leadership Programs in Communications, Engineering,

Finance, Information Technology, Manufacturing/Operations, Sales & Marketing and the

Commercial Leadership Program ( which offers a core curriculum that fosters the

development of commercial skills and techniques that are critical to success in all GE

businesses).
Determining Transformational and Transactional Leaders

Conclusion

In conclusion, as mentioned previously, it is my assumption that Transformational

leadership is highly sought after by corporations and subordinates alike, but not

necessarily practical - and it is also not necessarily easily attainable. It is in my opinion,

that the best sort of leader has qualities of both Transformational and Transactional

characteristics because it allows them to move their subordinates with revolutionary and

inventive thought as well as operate in tactically practical terms. It is in my opinion, that

GE was able to become the powerhouse it is now and maintain it because of ttheir

understanding of leadership operations. Using assessment tools like MLQ and the MVPI

tests have been instrumental in bringing the best and brightest leaders into Fortune 500

Companies and are continued to be in use today.

Determining Transformational and Transactional Leaders

References:

Homrig, Mark A., 2001, Transformational Leadership.

Groves and LaRocca, 2011, The Journal of Business Ethics, An Empirical Study of

Leader Ethical Values, Transformational and Transactional Leadership, and Follower Attitudes

Toward Corporate Social Responsibility.

Burns, James Mac Gregor, 1978, Leadership.

Aaron, Gregory, 2011, Transformational and Transactional Leadership: Association With

Attitudes Toward Evidence-Based Practice.

Bass, Bernad M. and Avolio, Bruce J., 2015, Multifactor Leadership Questionaire,

http://www.mindgarden.com/16-multifactor-leadership-questionnaire

Hogan Assessments, 2014, Motives, Values and Preferences Inventory, http://

www.hoganassessments.com/content/motives-values-preferences-inventory-mvpi

Lowder, Tim, 2006, Capella University, Masters of Change: Transformational

GrowthStrategies at General Electric from 1982 to 2006.